2001 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

9-26-2001

Ameristeel Corp v. Local Union 430

Precedential or Non-Precedential:

Docket 00-3366

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Recommended Citation

"Ameristeel Corp v. Local Union 430" (2001). 2001 Decisions. Paper 220.

http://digitalcommons.law.villanova.edu/thirdcircuit_2001/220
Filed September 26, 2001 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

No. 00-3366 

AMERISTEEL CORPORATION 

v. 

INTERNATIONAL BROTHERHOOD OF 

TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN 

AND HELPERS OF AMERICA, AFL-CIO, 

ARBITRATION ASSOCIATION 

International Brotherhood of Teamsters, 

Chauffeurs, Warehousemen and Helpers 

of America, AFL-CIO, Teamsters Local 430, 

 Appellant 

On Appeal from the United States District Court 

for the Middle District of Pennsylvania 

(D.C. Civil No. 99-cv-02131) 

District Judge: Honorable William W. Caldwell 

Argued November 30, 2000 

Before: BECKER, Chief Judge, RENDELL, 

and MAGILL,* Circuit Judges 

(Opinion Filed September 26, 2001) 

_________________________________________________________________ 

* Honorable Frank J. Magill, Senior Judge of the United States Court of 

Appeals for the Eighth Circuit, sitting by designation. 
 Ira H. Weinstock, Esq. [ARGUED] 

 Joseph P. Milcoff, Esq. 

 Ira H. Weinstock, P.C. 

 800 North Second Street, Suite 100 

 Harrisburg, PA 17102 

 Counsel for Appellant 

 John G. Creech, Esq. [ARGUED] 

 D. Rangle Moody, II, Esq. 

 Haynsworth, Baldwin, Johnson & 

 Greaves 

 918 South Pleasantburg Drive 

 Greenville, SC 29607 

 -and- 

 Mark J. Manta, Esq. 

 Klett, Rooney, Lieber & Schorling 

 810 Bear Tavern Road 

 Mountain View Office Park, 

 Suite 302 

 West Trenton, NJ 08628 

 Counsel for Appellee 

OPINION OF THE COURT 

RENDELL, Circuit Judge. 

I. Introduction 

This appeal presents the question whether a successor 

employer who has expressly refused to be bound by its 

predecessor's collective bargaining agreement may 

nonetheless be forced to arbitrate grievances pertaining to 

the agreement. Because an unconsenting successor cannot 

be bound by the substantive provisions of its predecessor's 

agreement, we hold that the successor in this case, appellee 

AmeriSteel Corporation, cannot be forced to arbitrate the 

extent of its obligations under the agreement. AmeriSteel, 

quite simply, has no obligations under the agreement-- 

and thus no arbitration award for the appellant, Teamsters 

 2 
Local 430, could possibly receive judicial sanction. In such 

circumstances, the arbitration forum designated in the 

collective bargaining agreement is an inappropriate vehicle 

by which to settle the parties' dispute. Therefore, we will 

affirm the District Court's order which enjoins the Union 

and the American Arbitration Association from including 

AmeriSteel as a party in pending arbitration proceedings, or 

any other arbitration proceedings involving the collective 

bargaining agreement. 

Our resolution of this case avoids creating the 

incongruous situation in which a successor employer may 

be forced to arbitrate the extent of its obligations under its 

predecessor's agreement, and yet the arbitrator is powerless 

to enforce these obligations because they are not binding 

on the successor employer. While we recognize the vital 

importance of arbitration as a means of settling labor 

disputes, we think it clear that arbitration should not 

proceed when ultimately it can serve no purpose. 

Furthermore, our decision recognizes the sound principle 

that arbitration cannot be used as a means to accomplish 

illegitimate ends. More specifically, given that AmeriSteel 

has no obligations under the collective bargaining 

agreement, any arbitration award to the appellant Union 

would necessarily reach beyond the agreement itself and 

into the realm of the arbitrator's own notion of industrial 

justice, a practice expressly forbidden by the United States 

Supreme Court. 

II. Facts and Procedural Background 

Appellee AmeriSteel is a Florida corporation engaged in 

the manufacture and sale of steel products. On April 29, 

1999, AmeriSteel purchased various assets of Brocker 

Rebar, including a manufacturing facility in York, 

Pennsylvania, and AmeriSteel commenced operations at the 

York facility on May 3, 1999. Appellant Teamsters Local 

430 ("Local 430" or "Union") represents certain employees 

at the facility, namely truck drivers, warehousemen, 

material handlers, and other helpers. A collective 

bargaining agreement ("CBA") existed between Local 430 

and Brocker Rebar, effective from December 1, 1996 to 

November 30, 1999. The purchase agreement between 

 3 
AmeriSteel and Brocker Rebar included various provisions 

expressly stating that AmeriSteel was not to be bound by 

the terms of the CBA. In its dealings with the Union, 

AmeriSteel has consistently and repeatedly maintained that 

it is not bound by the terms of the CBA, and therefore that 

it is not bound to arbitrate under the agreement. 

AmeriSteel hired roughly 50 employees to work in the 

York facility, and all but six members of Local 430 who had 

worked for Brocker Rebar were hired by AmeriSteel. In 

addition, AmeriSteel retained four Brocker Rebar 

executives. Because it had hired a majority of the Local 430 

members who had worked for Brocker Rebar, AmeriSteel 

was obligated to bargain with the Union. Bargaining with 

the Union broke down, however, on May 10, 1999, when 

AmeriSteel withdrew recognition of the Union based on a 

petition purportedly signed by a majority of the Union 

employees, in which they supposedly stated that they no 

longer wanted to be represented by Local 430. The Union 

then initiated an unfair labor practices action against 

AmeriSteel before the NLRB, but that action is not before 

us on appeal. 

Local 430 filed a grievance on behalf of all its members 

against Brocker Rebar and AmeriSteel on April 22, 1999, 

challenging unilateral changes that would occur in working 

conditions at the York facility when the AmeriSteel

purchase agreement was consummated. Closing under the 

purchase agreement occurred on April 29, 1999. In May 

1999, after the parties were unable to resolve the grievance, 

the Union requested arbitration pursuant to the arbitration 

clause in the CBA. AmeriSteel filed a Complaint and motion 

for injunctive relief in the United States District Court for 

the Middle District of Pennsylvania on December 9, 1999, 

seeking to enjoin Local 430 and the American Arbitration 

Association from proceeding to arbitration with AmeriSteel 

as a party. On March 17, 2000, the District Court granted 

AmeriSteel a preliminary injunction, reasoning that

AmeriSteel could not be bound to arbitrate under the preexisting CBA because AmeriSteel was not the "alter ego" of 

Brocker Rebar, nor had AmeriSteel agreed to abide by the 

CBA. App. at 256-57. 

 4 
Local 430 complains on appeal that the District Court 

should not have granted the preliminary injunction in the 

first place, and that the court compounded its error by, in 

effect, granting a permanent injunction without analyzing 

the applicable standard for granting a permanent 

injunction. Unfortunately, the District Court might have 

caused some unnecessary confusion by not explicitly

stating that it was, in fact, granting a permanent 

injunction, and not merely a preliminary one. We have in 

the past admonished district courts to avoid this type of 

oversight. E.g., CIBA-GEIGY Corp. v. Bolar Pharm. Co., 747 

F.2d 844, 847 (3d Cir. 1985) (observing that although the 

Third Circuit could convert the district court's opinion into 

a permanent injunction, "we would much prefer that the 

district court recast its own opinion in the language of the 

standard it is applying. This would eliminate the possibility 

of confusion as to what the district court intended and 

would, in the long run, promote judicial economy").

Nonetheless, it is apparent that the District Court

implicitly granted a permanent injunction, and we find no 

reversible error in the court's procedure. In its opinion, the 

District Court announced a legal standard under which 

Local 430 could prevail only if it could prove that

AmeriSteel was the "alter ego" of Brocker Rebar, or that 

AmeriSteel had agreed to abide by the CBA. It is 

undisputed that AmeriSteel is not the "alter ego"1 of 

Brocker Rebar and that AmeriSteel has expressly rejected 

the CBA. Thus, there were no triable issues of fact and no 

need for a trial on the merits. In other words, AmeriSteel 

_________________________________________________________________ 

1. Under the "alter ego" doctrine, a successor employer "is subject to all 

the legal and contractual obligations of the predecessor" when the 

successor is a mere "alter ego" of the predecessor, or nothing more than 

"a disguised continuance of the old employer." NLRB v. Omnitest 

Inspection Servs., 937 F.2d 112, 118 (3d Cir. 1991). An "alter ego" 

relationship exists "when there is a mere technical change in the 

structure or identity of the old employing entity, frequently to avoid the 

effect of the labor laws, without any substantial change in its ownership 

or management." Id. As the District Court observed, AmeriSteel's 

purchase of Brocker Rebar was a transaction involving two unrelated 

parties, and there "has been no suggestion that AmeriSteel is a sham or 

alter ego of Brocker Rebar." App. at 255. 

 5 
had already prevailed on the merits, and therefore the 

District Court's order, in effect, grants AmeriSteel a 

permanent injunction. Any further proceedings in the 

District Court would have served no purpose. 

Consequently, we are squarely presented with the question 

of whether AmeriSteel can be bound to arbitrate under the 

CBA. 

III. Jurisdiction and Standard of Review 

The District Court had jurisdiction over this action 

pursuant to 28 U.S.C. S 1331 and 29 U.S.C.S 185. Because 

the District Court's order, in effect, grants a permanent 

injunction, we have appellate jurisdiction pursuant to 28 

U.S.C. S 1291, which provides for appeals of all final 

decisions of the federal district courts. 

We review a district court's decision to grant or deny a 

permanent injunction under an abuse of discretion 

standard. E.g., ACLU v. Black Horse Pike Reg'l Bd. of Educ., 

84 F.3d 1471, 1476 (3d Cir. 1996). However, because an 

abuse of discretion exists where the district court's decision 

"rests upon a clearly erroneous finding of fact, an errant 

conclusion of law, or an improper application of law to 

fact," id., we apply plenary review to the District Court's 

legal conclusions. 

IV. Discussion 

This case requires us to navigate the treacherous waters 

of the Supreme Court's labor law successorship doctrine, 

which has, at times, imposed extra-contractual duties upon 

successor employers. Appellant Local 430 argues that 

AmeriSteel, as a successor employer to Brocker Rebar, 

must arbitrate grievances brought by the Union under the 

collective bargaining agreement between the Union and 

Brocker Rebar. AmeriSteel counters that it was never a 

party to the CBA, expressly rejected it during its asset 

purchase negotiations with Brocker Rebar, and has 

consistently maintained in its dealings with the Union that 

it is not bound by the terms of the CBA, including its 

arbitration clause. Accordingly, AmeriSteel argues that it 

cannot be compelled to submit to arbitration. 

 6 
As an initial matter, we note that labeling AmeriSteel a 

"successor employer" to Brocker Rebar does little to help 

resolve the issue in this case. As the Supreme Court has 

explained, a new employer, like AmeriSteel, "may be a 

successor for some purposes and not for others," and the 

question whether AmeriSteel is a successor to Brocker 

Rebar "is simply not meaningful in the abstract." Howard 

Johnson Co. v. Hotel and Restaurant Employees, 417 U.S. 

249, 262 n.9 (1974). Accordingly, the question we must ask 

is: what are the legal obligations of AmeriSteel to the 

employees of Brocker Rebar? Id. Or more specifically: does 

AmeriSteel have a duty to arbitrate with the Union under 

the CBA? As the District Court correctly noted, the

resolution of that latter question depends, in large part, on 

the proper interpretation of three decisions of the U.S. 

Supreme Court: John Wiley & Sons v. Livingston , 376 U.S. 

543 (1964), NLRB v. Burns International Security Services, 

Inc., 406 U.S. 272 (1972), and Howard Johnson Co. v. Hotel 

and Restaurant Employees, 417 U.S. 249 (1974). 

While other courts have tried to make sense of these 

three opinions, we find no analysis that charts a perfect 

course that we can readily follow. Accordingly, we will make 

our own way through the progression of the Supreme 

Court's reasoning. As the dissent points out, it is

unfortunate that the law in this area is unsettled, and 

ultimately, only the Supreme Court can silence the conflict 

that exists in the troubled trilogy of Wiley, Burns, and 

Howard Johnson. Given the tension that exists in this 

trilogy, no approach to reconciling these cases will be 

completely satisfying. Nevertheless, we think it significant 

that, as discussed below, our ultimate result (and the logic 

that underpins it) is supported by the majority of courts 

that have articulated the contours of labor law 

successorship. 

In Wiley, the Court introduced the idea that a successor 

employer could be bound by an arbitration clause in a 

collective bargaining agreement between the predecessor 

employer and its unionized employees. The predecessor 

employer, Interscience, had merged with John Wiley & 

Sons, and ceased to do business as a separate entity. The 

Union then brought suit against Wiley to compel arbitration 

 7 
under the collective bargaining agreement. Wiley , 376 U.S. 

at 544-45. The Court posed the legal issue as follows: 

"whether Wiley, which did not itself sign the collective 

bargaining agreement on which the Union's claim to 

arbitration depends, is bound at all by the agreement's 

arbitration provision." Id. at 547. The Court answered this 

question in the affirmative. Id. at 550-51. 

The Court acknowledged that "the principles of law 

governing ordinary contracts would not bind to a contract 

an unconsenting successor to a contracting party," but 

distinguished the case at hand by explaining that"a

collective bargaining agreement is not an ordinary 

contract." Id. at 550. The Court grounded this extracontractual duty in federal law -- specifically,"the policy of 

our national labor laws," id. at 548, which recognized both 

the "central role of arbitration" and the importance of 

"protect[ing] . . . employees from a sudden change in the 

employment relationship," id. at 549. Thus, the Court 

explained, "the impressive policy considerations favoring 

arbitration are not wholly overborne by the fact that Wiley 

did not sign the contract being construed." Id. at 550. 

The Court's holding is actually quite limited: 

 We hold that the disappearance by merger of a 

 corporate employer which has entered into a collective 

 bargaining agreement with a union does not 

 automatically terminate all rights of the employees 

 covered by the agreement, and that, in appropriate 

 circumstances, present here, the successor employer 

 may be required to arbitrate with the union under the 

 agreement. 

376 U.S. at 548. 

The Court then went on to note that "[w]e do not hold 

that in every case in which the ownership or corporate 

structure of an enterprise is changed the duty to arbitrate 

survives." Id. at 551. Rather, factors such as lack of 

"substantial continuity of identity in the business

enterprise" before and after the change could alter the 

result; so could the parties' conduct, if, for instance, the 

union fails to continue to make its claims known. Id. 

Without continuity, the duty to arbitrate would be 

 8 
"something imposed from without, not reasonably to be 

found in the particular bargaining agreement and the acts 

of the parties involved." Id. Thus, the"substantial

continuity" concept -- first alluded to by the Court after it 

announced its holding -- should properly be viewed as a 

necessary but not a sufficient condition for the imposition 

of arbitration on an unconsenting successor. 

The Court also observed that "[o]f course, the Union may 

not use arbitration to acquire new rights against Wiley" that 

were not grounded in the collective bargaining agreement 

itself. Id. at 555. Whether the Union's demands had merit 

was for the arbitrator to decide in light of the facts, yet 

arbitration would be inappropriate if "it can be seen in 

advance that no award to the Union could receive judicial 

sanction." Id. Such was not the case in Wiley -- because 

the Union's demands were not "plainly unreasonable" -- 

and therefore the Court permitted the demands to proceed 

to arbitration. Id. 

Although the Wiley holding, strictly speaking, addresses 

only the duty to arbitrate, we have in the past noted that 

a necessary implication of Wiley's holding is that Wiley, the 

successor employer, could possibly be bound by the 

substantive terms of the CBA. E.g., Local Union No. 249 v. 

Bill's Trucking, Inc., 493 F.2d 956, 960 (3d Cir. 1974). This 

conclusion "is manifest from the fact that the very question 

upon which the successor must, under Wiley, submit to 

arbitration, is the extent to which the other terms of the 

predecessor's contract are binding on the successor." Id. at 

960 n.20. If Wiley could not possibly be bound by the 

substantive terms of the CBA, arbitration would be a wholly 

pointless exercise. Moreover, if the terms could not possibly 

be enforced against Wiley, then no arbitration award to the 

Union "could receive judicial sanction," and thus the Wiley 

Court would not have permitted the case to proceed to 

arbitration in the first place. Wiley, 376 U.S. at 555. 

In Burns, the Supreme Court took a very different 

approach to the issue of whether a successor employer 

could be bound by the substantive terms of its 

predecessor's CBA. The predecessor employer, the 

Wackenhut Corporation, had provided plant protection 

services at a Lockheed Aircraft Service plant for several 

 9 
years before the successor, Burns International Security 

Services, took over this task after outbidding Wackenhut 

for the security contract. Burns, 406 U.S. at 274-75. A 

majority of the employees hired by Burns had been 

employed by Wackenhut, but Burns refused to honor the 

existing CBA between Wackenhut and these employees. The 

Union then filed an unfair labor practice charge with the 

NLRB, and the Board ordered Burns to comply with the 

CBA executed by Wackenhut. Id. at 275-77. 

In reversing the NLRB, the Supreme Court endorsed the 

Board's earlier, consistently-held interpretation that 

successor employers could not be bound against their will 

by the substantive terms of existing CBAs. Id. at 285-91. 

Specifically, the Burns Court noted that: 

 These considerations, evident from the explicit 

 language and legislative history of the labor laws, 

 underlay the Board's prior decisions, which until now 

 have consistently held that, although successor 

 employers may be bound to recognize and bargain with 

 the union, they are not bound by the substantive 

 provisions of a collective-bargaining contract negotiated 

 by their predecessors but not agreed to or assumed by 

 them. 

Id. at 284 (emphasis added). 

In reaching its decision, the Burns Court stated that the 

federal labor policy of preventing industrial strife did not 

outweigh "the bargaining freedom of employers and 

unions." Id. at 287. Therefore Burns, which had "in no way 

agreed" to the existing CBA, could not be compelled to 

accept contract provisions against its will. Id. at 282, 287. 

Moreover, the Court reasoned, forcing either a union or a 

successor employer to be bound by the substantive terms 

of an old CBA "may result in serious inequities." Id. at 287. 

For example, saddling successor employers with the terms 

and conditions contained in old CBAs "may discourage and 

inhibit the transfer of capital" because many potential 

employers will be willing to rescue moribund businesses 

only if they can negotiate their own CBAs. Id. at 287-88. 

Additionally, a union may have made concessions to a 

small or economically-troubled predecessor employer that it 

 10 
would not be willing to make to a large or economically 

powerful successor. Id. at 288. In sum, the balance of 

bargaining advantage between employers and labor should 

"be set by economic power realities," and the federal labor 

policy of avoiding industrial strife would be ill-served by 

binding either employers or employees to contract terms 

that "do not correspond to the relative economic strength of 

the parties." Id. 

Wiley and Burns, therefore, appear to be in direct 

conflict. On the one hand, the holding in Wiley necessarily 

implies that unconsenting successor employers may be 

bound by the substantive terms of pre-existing CBAs. But 

on the other hand, Burns endorses the idea that unwilling 

successors cannot be bound by such terms. As the 

principal means of distinguishing these two cases, the 

Burns Court offered the somewhat unsatisfying distinction 

that Wiley arose in the context of a suit to compel

arbitration, whereas Burns involved an unfair labor practice 

proceeding in front of the NLRB.2Id. at 285-86. Not

_________________________________________________________________ 

2. The Burns Court also suggested that Wiley and Burns could be 

distinguished on the basis that Wiley involved a merger, which triggered 

the general state law rule "that in merger situations the surviving 

corporation is liable for the obligations of the disappearing 

corporation." 

Burns, 406 U.S. at 286. In Wiley, the Court had noted that the union's 

argument -- which may well have influenced its specific holding -- was 

based on principles of corporate consolidation. Wiley, 376 U.S. at 547-48 

("The Union relies on S 90 of the N.Y. Stock Corporation Law, . . . which 

provides, among other things, that no `claim or demand for any cause' 

against a constituent corporation shall be extinguished by a 

consolidation."). In Howard Johnson, the Court again noted this 

distinction with approval, Howard Johnson, 417 U.S. at 257, yet the 

Court has since downplayed this distinction as determinative of a 

successor's labor law obligations, e.g., Fall River Dyeing & Finishing 

Corp. 

v. NLRB, 482 U.S. 27, 44 n.10 (1987) (noting that "the way in which a 

successor obtains the predecessor's assets is generally not 

determinative" of the successor's labor law obligations); see also Golden 

State Bottling Co. v. NLRB, 414 U.S. 168, 182 n.5 (1973) (observing that 

"[t]he perimeters of the labor-law doctrine of successorship" are not 

confined by the boundaries of state corporation law, and that "[t]he 

refusal to adopt a mode of analysis requiring the Board to distinguish 

among mergers, consolidations, and purchases of assets" is due to the 

fact that as long as there is "continuity in the employing industry, the 

 11 
surprisingly, in the aftermath of Burns, courts struggled to 

reconcile Burns with Wiley, and could do little more than 

repeat the Supreme Court's emphasis on the procedural 

distinction between the two cases. E.g., Bill's Trucking, 493 

F.2d at 961 (noting that "it was specifically emphasized in 

Burns that Wiley arose in the context of a . . . suit to 

compel arbitration, not in the context of an unfair labor 

practice proceeding," and that "Burns, then, cannot be read 

to foreclose absolutely the imposition upon a successor 

employer of the contract obligations entered into by its 

predecessor"). 

It is against this backdrop that, just two years after 

Burns, the Supreme Court took up the issue of labor law 

successorship in Howard Johnson. The Court began by

acknowledging the conflicting reasoning of Wiley and 

Burns, but rejected the idea that the cases could be 

distinguished on the basis of their procedural context, 

because distinguishing the cases in this manner would 

inappropriately "permit the rights enjoyed by the new 

employer in a successorship context to depend upon the 

forum in which the union presses its claims." Howard 

Johnson, 417 U.S. at 256. With this distinction repudiated, 

the Howard Johnson Court appeared to be squarely faced 

with an irreconcilable conflict between Wiley and Burns: 

either the substantive terms of an existing CBA could be 

imposed against an unconsenting successor, as is implicit 

in Wiley, or they could not, as stated by Burns. 

The Howard Johnson Court, however, chose not to deal 

with this conflict, and instead walked a very narrow path. 

Rather than deciding "whether there is any irreconcilable 

conflict between Wiley and Burns," the Court decided the 

case on the ground that "even on its own terms, Wiley does 

not support the decision of the courts below," which had 

compelled the successor employer, Howard Johnson, to 

_________________________________________________________________ 

public policies underlying the doctrine will be served by its broad 

application"). We have ourselves implicitly indicated that no special 

significance should be attached to the fact that Wiley involved a merger. 

E.g., Bill's Trucking, 493 F.2d at 957-61 (applying Wiley in the context 

of 

a sale of capital stock). 

 12 
submit to arbitration pursuant to a CBA between its

unionized employees and the predecessor employer, the 

Grissoms. Id. at 256. In other words, even on its own 

terms, Wiley did not compel the conclusion that Howard 

Johnson must proceed to arbitration against its will, and 

likewise could not justify imposing the substantive terms of 

the CBA against Howard Johnson. 

The Howard Johnson Court contrasted the facts of its 

case with Wiley, noting that the most important distinction 

is that in Wiley, "the surviving corporation hired all the 

employees of the disappearing corporation," whereas in 

Howard Johnson the successor "hired only nine of the 53 

former Grissom employees and none of the Grissom 

supervisors." Id. at 258, 260. The Court emphasized that, 

because Howard Johnson had hired so few of the Grissom 

employees, there was no "substantial continuity in the 

identity of the work force across the change in ownership," 

which placed the case outside the realm of Wiley . Id. at 

262-63. Wiley had stated that the lack of "substantial 

continuity" would remove the situation from the ambit of its 

holding, and the lack of substantial continuity thus 

dictated the result. 

It is important, for the purposes of this appeal, to 

appreciate the limited scope of the Court's decision in 

Howard Johnson. As explained above, the Court did not 

reconcile the conflict between Wiley and Burns. The

Howard Johnson Court simply pointed out that, consistent 

with Wiley, and on Wiley's own terms, the lack of 

substantial continuity meant that the Court needed to look 

no further. Accordingly, Howard Johnson does not bridge 

the gap between Wiley and Burns, nor does it establish 

broadly applicable guiding principles that should be 

implemented when analyzing labor law successorship 

problems.3 

_________________________________________________________________ 

3. Our main point of disagreement with our dissenting colleague is in our 

view that Howard Johnson's focus on substantial continuity does not 

make it the sole basis for finding a continuing duty to arbitrate or 

making agreements binding, but, rather, as one sine qua non. There is 

a difference: while the existence of substantial continuity is a necessary 

ingredient, its presence does not necessarily render the new entity 

 13 
Still, Howard Johnson does give some indication as to the 

Court's thinking on the conflict between Wiley and Burns. 

Throughout the opinion, the Court downplays the 

significance of Wiley, describing its holding as a "guarded, 

almost tentative statement," id. at 256, and focusing on the 

limited factual context in which Wiley arose, id. at 256-64. 

In contrast, the Court takes an expansive view of Burns, 

repeatedly extolling its reasoning. Stating at the outset that 

"[c]learly the reasoning of Burns must be taken into 

account here," id. at 256, the Howard Johnson Court goes 

on to observe that "[w]hat the Union seeks here is 

completely at odds with the basic principles this Court 

elaborated in Burns," id. at 261, and that the reasoning in 

Burns "established that Howard Johnson had the right not 

to hire any of the former Grissom employees, if it so 

desired," id. at 262. In short, the best reading of Howard 

Johnson is that it does not resolve the conflict between 

Wiley and Burns, but it does much to strengthen and

reaffirm the reasoning of Burns, and certainly does nothing 

to call into question Burns' assertion that successor 

employers "are not bound by the substantive provisions of 

a collective-bargaining contract negotiated by their 

predecessors but not agreed to or assumed by them."

Burns, 406 U.S. at 284. 

Nevertheless, one might argue (at least in theory) that 

Burns has somehow been modified by Howard Johnson, 

based on the reasoning that Howard Johnson's emphasis 

on "substantial continuity in the identity of the work force" 

_________________________________________________________________ 

bound. (If one is not 35 years of age, one cannot be President of the 

United States; this is a sine qua non. However, if one is 35 years of age, 

he or she does not necessarily qualify. Being a native-born citizen is 

another sine qua non, in fact.) The difficulty, having explored the three 

"guiding" cases, is that we must determine what are all the sine qua 

nons. We cannot subscribe to the dissent's view that these cases equate 

substantial continuity with successorship or "mandates" such a finding 

here. Clearly, as Wiley itself indicates, other factors must also be 

considered. See Wiley, 376 U.S. at 551. Burns says that contractual 

understandings are important, but the dissent discredits that concept. 

While we concede that the scope of the directive of Burns may not be 

crystal-clear, we suggest that the directives of Wiley and Howard 

Johnson are clearly narrower than the dissent's view would allow. 

 14 
necessarily implies that if such "substantial continuity" 

does exist, then arbitration under the existing CBA would 

be appropriate. And if such arbitration were to go forward, 

it follows that the substantive terms of the CBA could be 

enforced, and thus Burns cannot survive intact.4 

In our view, however, this reading of Howard Johnson 

would stretch its carefully circumscribed holding beyond 

recognition. As explained above, the holding in Howard 

Johnson does nothing more than simply point out that on 

the facts of the case, not even Wiley (and certainly not 

Burns) could justify forcing Howard Johnson to submit to 

arbitration against its will. In other words, because the 

Court was able to base its result on the lack of"substantial 

continuity," it simply did not reach the issue of whether, 

had there been "substantial continuity," the successor 

employer would have been forced to arbitrate and 

necessarily could have been bound by the substantive 

terms of the CBA. Indeed, nothing in the Howard Johnson 

opinion calls into question either the reasoning or the 

holding of Burns -- as explained above, there is much in 

the opinion that reaffirms Burns -- and thus we cannot 

accept any interpretation of Howard Johnson that either 

explicitly or implicitly modifies Burns' conclusion that a 

successor employer cannot be bound against its will by the 

substantive provisions of its predecessor's CBA. Here, the 

parties specifically agreed that the CBA would not be 

binding, and Burns teaches that we must respect that 

agreement. 

Our reading of Burns and Howard Johnson is confirmed 

by the Supreme Court's observations in Fall River Dyeing & 

Finishing Corp. v. NLRB, 482 U.S. 27 (1987). In reviewing 

the principles of labor law successorship, the Court 

reiterated Burns' assertion that "the successor . . . is not 

bound by the substantive provisions of the predecessor's 

_________________________________________________________________ 

4. While the dissent does not frame its argument in precisely these 

terms, nonetheless this reasoning is implicit in the dissent's conclusion 

that "there is sufficient `substantial continuity of identity in the 

business 

enterprise,' between Brocker Rebar and AmeriSteel to justify holding that 

AmeriSteel is bound to the arbitration provision (and possibly to the 

substantive provisions) of Brocker Rebar's CBA with Local 430." 

Dissenting Op. at 37. 

 15 
collective-bargaining agreement."5 Fall River, 482 U.S. at 40 

(citing Burns, 406 U.S. at 284). Significantly, in the very 

next sentence, the Court cited Howard Johnson , so it 

cannot be argued that the Fall River Court somehow 

overlooked Howard Johnson when reaffirming Burns. 

Rather, the only conclusion that can be drawn is that after 

Howard Johnson, Burns rests on solid ground. 

This conclusion, however, serves to illuminate the 

perplexing issue presented by this appeal -- namely, that 

while the validity of Burns cannot be doubted, Burns 

nonetheless conflicts with the implications of Wiley. The 

most we can say with assurance regarding this conflict is 

that while the contours of Wiley are narrow, and its status 

not entirely clear, Burns' language and logic have been 

reinforced in later cases. Accordingly, we believe the clear 

mandate of Burns -- that an unconsenting successor 

employer cannot be bound by the substantive terms of a 

CBA negotiated by its predecessor -- provides more 

persuasive guidance than the limited holding in Wiley. That 

being the case, AmeriSteel cannot be bound by the 

substantive terms of the CBA at issue here, which was 

negotiated between Brocker Rebar and the Union and 

which AmeriSteel's purchase agreement specifically stated 

would not be binding on it. And because AmeriSteel cannot 

be bound by the substantive terms of the CBA, no 

arbitration award to the Union -- which, of course, would 

be based on the substantive terms of the CBA -- could 

receive judicial sanction, and therefore AmeriSteel cannot 

be compelled to submit to arbitration.6 Wiley, 376 U.S. at 

555. 

_________________________________________________________________ 

5. The dissent attempts to downplay the significance of this statement by 

characterizing it as a "cryptic piece of dicta." Dissenting Op. at 36 n.2. 

While it is arguably dicta, there certainly is nothing "cryptic" about it. 

This is a simple, straightforward statement that makes a general 

observation about successors, taken almost word-for-word from Burns. 

The dissent would re-write the statement as referring to only "Burns-type 

successors," but we see no reason to believe that the Fall River Court 

meant anything other than what it said. 

6. In reaching this conclusion, we are not, as the dissent appears to 

indicate, overstepping our authority as a lower federal court by 

"emasculat[ing] Wiley." Dissenting Op. at 28. Rather, when faced with a 

 16 
While there is no directly controlling authority in our 

Circuit, nonetheless we think the result that we reach here 

flows logically from our existing Circuit precedent. For 

example, in Stardyne, Inc. v. NLRB, 41 F.3d 141 (3d Cir. 

1994), we observed that a successor has an obligation to 

recognize and bargain with the union that represented its 

predecessor's employees, but that a successor is"not 

bound by its predecessor's collective bargaining agreement." 

Id. at 145 n.3. Similarly, in Pick-Mt. Laurel Corp. v. NLRB, 

625 F.2d 476 (3d Cir. 1980), we noted that when analyzing 

labor law successorship, the Supreme Court has held"that 

a successor does not stand in the same shoes as its

predecessor because it will not be bound to the previously 

bargained for terms, [and] the Court construed the relevant 

policies to prevent imposing on the successor an obligation 

to be bound by past events and arrangements." Id. at 484. 

And, as explained above, if AmeriSteel cannot be bound by 

these "past events and arrangements" in the form of

Brocker Rebar's CBA, then it necessarily follows that 

arbitration under the CBA is inappropriate because no 

award for the Union "could receive judicial sanction."7 

Wiley, 376 U.S. at 555. 

_________________________________________________________________ 

body of Supreme Court precedent that is, as the dissent points out, 

"discordant in [ ] overall tone and approach," id. at 24, we are simply 

choosing what we believe to be the best interpretation. And in so doing, 

we are performing our appropriate role as a federal appellate tribunal in 

the most basic sense. (The dissenting opinion arguably emasculates 

Burns in similar fashion when it urges that the sales agent expressly 

repudiating the CBA is "irrelevant to the analysis." Dissenting Op. at 

32.) 

Moreover, we do not agree that our result in this case necessarily 

emasculates Wiley, or relegates it "to the dustbin of history," Dissenting 

Op. at 30, although we do decline to give Wiley as broad a reading as 

does Chief Judge Becker. We suggest that one who reads Wiley on its 

own, start to finish, would be struck by its careful and restrictive 

analysis, which leads to its equally narrow holding, which we quoted 

above, that collective bargaining agreement provisions do not 

automatically go by the wayside when a corporate consolidation occurs. 

Wiley, 376 U.S. at 548. 

7. Several other cases in our Circuit have addressed the labor law 

successorship doctrine, but we find these decisions of limited utility. 

For 

 17 
Moreover, we find it significant that our resolution of this 

case is supported by the decisions of our sister circuit 

courts of appeals. Indeed, in the time since Fall River, every 

one of our sister circuits that has addressed the issue has 

concluded that an unconsenting successor employer cannot 

be bound by the substantive terms of an existing CBA.8 

_________________________________________________________________ 

example, in Local Union No. 249 v. Bill's Trucking, Inc., 493 F.2d 956 (3d 

Cir. 1974), we addressed Wiley and Burns , but we distinguished the two 

cases based on their procedural distinction. Id. at 961. As explained 

above, the Court has since rejected this means of distinguishing the 

cases. Supra p. 13. In American Bell Inc. v. Federation of Telephone 

Workers, 736 F.2d 879 (3d Cir. 1984), we touched upon the 

successorship doctrine, but ultimately did not reach the issue because 

we concluded that the doctrine did not apply. Id. at 888. And in 

Teamsters Local Union No. 430 v. Cement Express, Inc., 841 F.2d 66 (3d 

Cir. 1988), we construed Burns somewhat narrowly, but we think it 

unwise to place any particular emphasis on this case. As a case 

primarily concerned with the imposition of Rule 11 sanctions, Cement 

Express did not give labor law successorship a thorough treatment, as 

evidenced by the fact that in our discussion, we did not mention Howard 

Johnson or Fall River. Id. at 69. Moreover, in distinguishing Wiley and 

Burns, we relied on the procedural distinction between the two cases 

that the Court has repudiated. Id. 

In concluding that AmeriSteel had no duty to arbitrate, the District 

Court appeared principally to rely upon our decision in NLRB v. Phoenix 

Pipe & Tube, 955 F.2d 852 (3d Cir. 1991), which the District Court 

characterized as standing for the proposition that"by retaining the 

workforce of a prior employer, a subsequent employer becomes obligated 

to bargain with a union, but not to abide by the collective bargaining 

agreement." App. at 257. This is a puzzling statement, however, because 

Phoenix Pipe does not support this proposition, and the District Court 

included no supporting citation to the case. Given that Phoenix Pipe says 

nothing regarding a successor's obligations under its predecessor's CBA, 

we conclude that the case is not relevant to the issues presented by this 

appeal. Accordingly, while we agree with the District Court's ultimate 

conclusion that AmeriSteel cannot be compelled to arbitrate, we disagree 

with the reasoning that the District Court employed to arrive at that 

result. 

8. The dissent states that the case law from other courts of appeals "cuts 

in both directions," Dissenting Op. at 38, but, we cannot agree. It 

references only two appellate cases that supposedly cut in its favor, id. 

at 38 n.4, but neither case is particularly relevant. Boeing Co. v. 

 18 
E.g., Local 7-517 v. Uno-Ven Co., 170 F.3d 779, 781 (7th 

Cir. 1999) (stating that when a successor purchases a 

predecessor's business, the successor "would not be bound 

by the collective bargaining contract"); NLRB v. Hosp. San 

Rafael, Inc., 42 F.3d 45, 50 (1st Cir. 1994) (observing that 

"[w]here, for example, a unionized business is acquired by 

a new owner unaffiliated with the old one, the new 

employer may not be bound by a collective bargaining 

agreement with the old one"); Southward v. S. Cent. Ready 

Mix Supply Corp., 7 F.3d 487, 495 (6th Cir. 1993) (asserting 

that the Supreme Court has "repeatedly recognized that a 

successor corporation may be bound by the substantive 

terms of its predecessor's CBA only if the successor is the 

alter ego of the predecessor or the successor has expressly 

or impliedly assumed the obligations of its predecessor's 

contract"); Sullivan Indus. v. NLRB, 957 F.2d 890, 895 (D.C. 

Cir. 1992) (noting that "[w]hile a successor has a duty to 

bargain with an incumbent union, it is not bound by the 

substantive terms of the previously negotiated collectivebargaining agreement"); New England Mech., Inc. v. Local 

Union 294, 909 F.2d 1339, 1342 (9th Cir. 1990) (explaining 

that a successor employer "is not bound by its 

predecessor's collective bargaining agreement," and that 

"the Supreme Court has continually indicated that a

successor employer is only bound to bargain with a union 

which had a CBA with the predecessor"). District courts in 

our Circuit have come to the same conclusion. E.g.,

_________________________________________________________________ 

International Association of Machinists and Aerospace Workers, 504 F.2d 

307 (5th Cir. 1974), predates Fall River, and therefore is of limited 

utility. 

And in Stotter Division of Graduate Plastics Co. v. District 65, 991 F.2d 

997 (2d Cir. 1993), the court based its determination that Stotter was a 

successor employer not only on continuity, but also on the fact that the 

obligations at issue arose before the transfer, and the fact that Stotter 

had "entered into an agreement with the Union which adopted (with 

immaterial exceptions) the provisions of the [CBA]." Id. at 1002. Thus, 

Stotter is not persuasive on this issue. The dissent can cite no post-Fall 

River case in our sister circuits that has bound an unconsenting 

successor employer to the substantive provisions of an existing CBA. We 

submit there are none. Indeed, were the dissent's interpretation to 

prevail, it would place us squarely at odds with every court of appeals to 

consider this issue, as noted above. 

 19 
Philadelphia Joint Bd. v. After Six, Inc., No. 92-4294, 1992 

WL 202166, at *2 (E.D. Pa. Aug. 6, 1992) (maintaining that 

"if an employer takes over another business, the employer 

is not bound by its predecessor's collective bargaining 

agreements. At most, the employer will be required to 

bargain with any unions that the predecessor employer had 

recognized."); Local Union No. 4 v. Owens-Illinois, Inc., 758 

F.Supp. 962, 973 (D.N.J. 1991) (observing that "[u]nder 

Wiley and Burns, although [the successor] had an 

obligation to recognize and bargain with the Union .. . [the 

successor] could not be required to assume [the 

predecessor's] labor contract"). Additionally, many

commentators are in accord. E.g., Burton F. Boltuch, 

Workplace Closures and Company Reorganizations: 

Enforcing NLRB, Contract and Noncontract Claims and

Obligations, 7 Lab. Law. 53, 78 (1991) (explaining that 

"[c]ourts and arbitrators since Burns do not hold the 

`unconsenting' successor to the CBA"); Claiborne Barksdale, 

Successor Liability Under the National Labor Relations Act 

and Title VII, 54 Tex. L. Rev. 707, 711 (1976) (arguing that 

a "successor will not be bound . . . by the substantive 

terms of the predecessor's contract with the employees 

unless it either explicitly or impliedly ratifies the 

agreement"); Wilson McLeod, Rekindling Labor Law 

Successorship in an Era of Decline, 11 Hofstra Lab. L.J. 

271, 308-09 (1974) (explaining that "courts are firmly 

opposed" to enforcing the substantive terms of a 

predecessor's CBA against a successor, and that if the 

Burns holding rests on solid footing, then "there is no 

principled reason why successors should be forced to 

arbitrate at all"). 

Given the prevailing case law supporting our view, and 

given the teachings of Wiley and Burns that expose the 

futility and inappropriateness of arbitration when the 

substantive terms of the bargaining agreement cannot be 

binding on the new entity, we are curious as to what 

purpose is to be served by arbitration? How can we hold, as 

the dissent would, that such a pointless exercise is 

mandated, especially given the fact that the specific 

contractual provisions between the parties did in fact not 

merely "shed" the prior agreement containing the 

 20 
arbitration provisions, but specifically contracted them 

away? 

Finally, we think it is important to note that our decision 

in this case does not overlook the vital importance of 

arbitration as a means of settling labor disputes. We have 

in the past observed that federal labor law elevates labor 

arbitrators "to an exalted status," Ludwig Honold Mfg. Co. 

v. Fletcher, 405 F.2d 1123, 1126 (3d Cir. 1969), and that 

"courts play an extremely limited role in resolving labor 

disputes," News Am. Publ'n, Inc. v. Newark Typographical 

Union, Local 103, 918 F.2d 21, 24 (3d Cir. 1990). Moreover, 

an arbitration award must be enforced "[a]s long as the 

arbitrator has arguably construed or applied the contract," 

News Am., 918 F.2d at 24 (emphasis in original), which is 

in accord with the Supreme Court's instruction that an 

arbitration award is legitimate as long as it "draws its 

essence from the collective bargaining agreement," United 

Paperworkers Int'l Union v. Misco, Inc., 484 U.S. 29, 36 

(1987). 

What distinguishes this case, however, is that because 

AmeriSteel cannot be bound by the substantive terms of 

the CBA between Brocker Rebar and the Union, there 

simply is no contract for the arbitrator to construe. While 

we must respect the vital role that arbitration plays in 

settling labor disputes (and the correspondingly broad 

authority granted to arbitrators), we think it goes without 

saying that courts should not compel parties to submit to 

arbitration when there is nothing to arbitrate. To hold 

otherwise would create the paradoxical situation in which 

AmeriSteel would be forced to arbitrate the extent of its 

obligations under the CBA, and yet, because it has no such 

obligations, the arbitrator would be powerless to enforce 

these obligations. 

One might argue that even though AmeriSteel has no 

obligations under the CBA, this case should still proceed to 

arbitration on the theory that an arbitrator could 

conceivably grant an award to the Union based on some 

general sense of equity or fairness. Even granting this 

possibility, such an award would be illegitimate because it 

would "simply reflect the arbitrator's own notions of 

industrial justice" and would not "draw its essence from the 

 21 
contract" itself. Misco, 484 U.S. at 38. As Chief Judge 

Becker has highlighted, an arbitrator's authority is quite 

broad, but it is not unlimited, because courts cannot 

"permit[ ] the arbitrator to transform the contractual 

arbitration into an equitable dispensation of his own brand 

of industrial justice, an endeavor expressly forbidden by the 

Supreme Court's decision in United Paperworkers Int'l 

Union v. Misco, Inc., 484 U.S. 29 (1987)." News Am. Publ'n, 

Inc. v. Newark Typographical Union, Local 103, 921 F.2d 40, 

41 (3d Cir. 1990) (Becker, J., dissenting from denial of 

rehearing en banc). 

Our decision here recognizes the sound principle that 

arbitration, while critically important to settling labor 

disputes, nonetheless cannot be used as a means to 

achieve illegitimate ends. Were we to permit this case to 

proceed to arbitration, we would be guilty of "wav[ing] a 

wand" over the arbitration proceedings by engaging in the 

fiction that an arbitrator could legitimately grant an award 

for the Union. Id. at 42. But when arbitration is placed 

within its proper limits, there is no escaping the conclusion 

that AmeriSteel, which is not bound by the substantive 

terms of the CBA, cannot be compelled to submit to 

arbitration because no arbitration award to the Union could 

receive judicial sanction. 

Accordingly, the March 17, 2000 order of the District 

Court will be AFFIRMED. 

 22 
BECKER, Chief Judge, dissenting. 

It is surprising that thirty-seven years after John Wiley & 

Sons v. Livingston, 376 U.S. 543 (1964), in which the 

Supreme Court first tackled the issue of successorship 

liability in labor cases, the law in this area is still unsettled. 

Wiley established that the notion of "substantial continuity 

in the identity of the business enterprise" is the principal 

criterion for determining successorship liability, and held 

that, in appropriate circumstances, successor employers 

can be required to arbitrate with their employees' union 

under the terms of the collective bargaining agreement 

(CBA) that the union had with the predecessor employer. 

Id. at 548, 551. 

In NLRB v. Burns International Security Services, Inc., 406 

U.S. 272 (1972), and Howard Johnson Co. v. Hotel and 

Restaurant Employees, 417 U.S. 249 (1974), the Court 

considered how the Wiley doctrine applied in different 

factual contexts. In American Bell, Inc. v. Federation of 

Telephone Workers of Pennsylvania, 736 F.2d 879, 888 (3d 

Cir. 1984), this Court used Wiley and Howard Johnson as 

the basis for developing a six-factored test for determining 

whether substantial continuity in the identity of the 

business enterprise is present: (i) continuity of work force, 

(ii) continuity of business operations, (iii) continuity of 

supervisory personnel, (iv) continuity of physical plant and 

location, (v) continuity in the nature of the product or 

services, and (vi) continuity in the methods of production, 

sales, or inventorying. 

As counsel for AmeriSteel had to concede at oral 

argument, the record in this case is crystal clear that in the 

transition of ownership of the York plant from Brocker 

Rebar to AmeriSteel, there has been not only substantial 

continuity but utterly no change in any of the American Bell 

factors except possibly for the methods of sales, which 

AmeriSteel's counsel represented had changed (although he 

was unclear as to how and to what degree). In other words, 

after closure for a three-day weekend, a new business 

appeared at 1700 Seventh Avenue in York that was the 

exact same enterprise as the one that had been there four 

days before in virtually all respects. Despite these 

uncontroverted facts and their close similarity to those in 

 23 
Wiley, the majority holds that the successor corporation, 

AmeriSteel, is not bound by the arbitration provision of its 

predecessor's CBA. 

Judge Rendell's thoughtful opinion makes clear that

resolving this case requires an analysis of Wiley, Burns, 

and Howard Johnson, the Supreme Court's cases 

addressing when a successor can be bound to the terms of 

a predecessor's CBA. Her opinion also demonstrates the 

difficulty of reconciling those cases and, implicitly at least, 

underscores the problems with choosing one path of 

reconciliation over another. I cannot join the majority's 

opinion because I believe that the case before us is 

controlled by the Supreme Court's decision in Wiley, which 

involved a fact pattern that is similar in all relevant aspects 

to the facts in the case at bar, just as the other key cases 

involved quite different facts. While I do not suggest that 

AmeriSteel is duty-bound to accept the CBA that Brocker 

Rebar signed with Teamsters Local 430 (the union 

representing Brocker's employees), I do believe that Wiley 

mandates that we hold that AmeriSteel is bound to 

arbitrate with the union as to whether it is bound by any 

of the CBA's provisions. 

In other circumstances, the foregoing might well suffice 

for a dissenting opinion. But Wiley, Burns, and Howard 

Johnson are difficult to harmonize if not discordant in their 

overall tone and approach, and I disagree with the 

majority's attempt to fit these opinions together. I believe 

that the Supreme Court would do well to revisit this area 

which remains unclear twenty-seven years after Howard 

Johnson, the latest of the trilogy. Under these 

circumstances, I think it useful to explain my disagreement 

with the majority in some detail. 

I. 

In Wiley, a publishing firm, Interscience, entered into a 

CBA with a union that represented its employees. 

Interscience then merged with another publishing firm, 

John Wiley & Sons, and ceased to do business as a 

separate entity. The union and Wiley were unable to agree 

what effect the merger had on the CBA, so the union

 24 
brought an action to compel arbitration under the CBA in 

order to determine the effect. Wiley pointed out that it did 

not sign the CBA, and argued that it therefore should not 

be bound by the CBA's arbitration clause. The Court, 

however, ultimately held that "in appropriate 

circumstances, present here, the successor employer may 

be required to arbitrate with the union under the 

agreement." Wiley, 376 U.S. at 548. As the majority rightly 

points out, Wiley also states that to send the case to 

arbitration (as it did), the union's demands under the 

substantive terms of the CBA must not be "so plainly 

unreasonable that . . . it can be seen in advance that no 

award to the Union could receive judicial sanction." Id. at 

555. Wiley nonetheless holds that "in appropriate 

circumstances," a successor employer can be held bound to 

the arbitration clause of its predecessor's CBA, and 

possibly can be held bound to the substantive terms of the 

CBA as well--despite the fact that (like AmeriSteel) the 

successor never agreed to be so bound and was not the 

alter ego of the predecessor. 

The key question for our purposes is what are these

"appropriate circumstances" in which a CBA can be 

enforced against a successor employer. Wiley is brief in its 

description of these circumstances, but it does state that 

there must be "relevant similarity and continuity of 

operation across the change in ownership" so that there is 

"substantial continuity of identity in the business

enterprise before and after [such] a change." Id. at 551. In 

Wiley, this continuity of identity and operation of the 

business enterprise was "adequately evidenced by the 

wholesale transfer of Interscience employees to the Wiley 

plant, apparently without difficulty." Id. 

The Court did not address the notion of "substantial 

continuity of identity in the business enterprise," in the 

next case in the trilogy, Burns, because it was clear in that 

case that there was absolutely no continuity between the 

predecessor and the successor. See Burns, 406 U.S. at 286 

("Here there was no merger or sale of assets, and there were 

no dealings whatsoever between Wackenhut and Burns."). 

In Howard Johnson, however, the Court elaborated on that 

concept. In that case, the Grissom family ran a Howard 

 25 
Johnson's restaurant and motor lodge and entered into a 

CBA with the union representing their employees. The 

Grissoms thereafter sold to the Howard Johnson Company 

all of the personal property that they had been using to run 

the restaurant and lodge. By the terms of the sale 

agreement, Howard Johnson assumed four specific 

contracts relating to the operation of the restaurant and 

lodge but specifically declined to assume the CBA. Howard 

Johnson then hired its own workforce to staff the 

restaurant and lodge; it hired forty-five employees, only 

nine of whom had previously been working for the 

Grissoms at the restaurant (the Grissoms had had fiftythree employees), but hired none of the Grissoms' 

supervisory employees. See Howard Johnson, 417 U.S. at 

250-52. 

The union filed suit, seeking an order to compel Howard 

Johnson to arbitrate the extent of its obligations to the 

former Grissom employees under the terms of the CBA. The 

Court ruled against the union, holding that the substantial 

continuity between the predecessor and successor 

corporations that was present in Wiley was missing in the 

case before it. See id. at 264-65. In particular, the Court 

noted that in Wiley the successor corporation hired all of 

the predecessor's employees and did not make substantial 

changes in its operation of the enterprise, as Interscience's 

former employees "continued to perform the same work on 

the same products under the same management at the 

same work place as before the change in the corporate 

employer." Id. at 258 (quoting Interscience Encyclopedia, 

Inc., 55 Lab. Arb. 210, 218 (1970) (the arbitrator's opinion 

in Wiley)). In contrast, Howard Johnson selected and hired 

its own independent work force to run the restaurant and 

lodge. 

The case before us involves the same sort of "substantial 

continuity of identity in the business enterprise" that was 

present in Wiley but missing in Howard Johnson. The

predecessor corporation, Brocker Rebar, negotiated a CBA 

with Local 430. Brocker Rebar then sold substantially all of 

its assets to AmeriSteel, including "the Business as a going 

concern and all of the assets, properties, and rights of the 

Sellers constituting the Business or used by the Sellers 

 26 
therein, of every type and description, real and personal, 

tangible and intangible, wherever located." Asset Purchase 

Agreement between AmeriSteel and Brocker Rebar at 3. The 

assets purchased included Brocker Rebar's steel plant and 

equipment located at 1700 Seventh Avenue in York, where 

Local 430's members worked, along with all of Brocker 

Rebar's contracts and leases, except the CBA and 

individual employment contracts. 

Instead of selecting and training its own work force (as 

the successor did in Howard Johnson), AmeriSteel hired all 

but six of Brocker Rebar's former employees to work at the 

same plant (50 workers are needed to run the plant), doing 

the same jobs that they performed before the sale. 

AmeriSteel also hired Brocker Rebar's top supervisory 

personnel at the plant (again in contrast to Howard

Johnson, where the successor hired none of the 

predecessor's supervisors). The York plant is situated in 

exactly the same location where it was before and produces 

the exact same product using the same inventory, the same 

equipment, the same physical set-up, and the same 

production methods that it did when it was Brocker Rebar's 

plant. In short, insofar as the plant's workers were 

concerned, virtually nothing changed at the plant when 

AmeriSteel took over except for the name on the door. 

In my view, this almost total continuity in Brocker

Rebar's and AmeriSteel's operation of the York plant brings 

this case under Wiley's rule binding a successor 

corporation to the arbitration clause in its predecessor's 

CBA when there is almost total continuity of the business 

enterprise. As was the case in Wiley, the employees in the 

case at bar " `continue[ ] to perform the same work on the 

same products under the same management at the same

work place as before the change in the corporate 

employer.' " Howard Johnson, 417 U.S. at 258 (quoting 

Interscience Encyclopedia, Inc., 55 Lab. Arb. at 218). 

Moreover, as the majority recognizes, the Supreme Court 

has held that the one potentially relevant difference 

between this case and Wiley--in Wiley the predecessor was 

merged into the successor, while here there was no merger 

but a purchase of assets--is irrelevant in the context of 

successor liability. See Maj. Op. at 11 n.2; see also Fall 

 27 
River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 44 

n.10 (1987); Golden State Bottling Co. v. NLRB , 414 U.S. 

168, 182 n.5 (1973). 

One implication of Wiley is that a successor that is 

bound by the arbitration clause of its predecessor's CBA 

may end up being bound by (at least some of) the 

substantive provisions of the CBA as well. The majority is 

concerned that a potential problem with such a regime is 

that corporations may be hesitant to purchase the assets of 

other corporations if they thought they might be saddled 

with the other corporations' labor agreements. I share that 

concern. However, Wiley struck a balance between 

corporate freedom and the protection of workers, 

recognizing that arbitration was an important means of 

maintaining labor peace and that "employees who are in 

fact retained in `[t]he transition from one corporate 

organization to another' " need to be afforded protection 

"from sudden changes in the terms and conditions of their 

employment." Howard Johnson, 417 U.S. at 264 (quoting 

and describing Wiley). The implication of the majority 

opinion is that Wiley is virtually a dead letter confined to its 

specific facts, essentially overruled. But it is not within our 

power to emasculate Wiley--only the Supreme Court can do 

that. See State Oil Co. v. Khan, 522 U.S. 3, 20 (1997) 

(holding that the Court of Appeals was correct to apply a 

Supreme Court precedent despite the precedent's 

"infirmities, [and] its increasingly wobbly, moth-eaten 

foundations," because "it is this Court's prerogative alone to 

overrule one of its precedents") (internal quotation marks 

omitted).1 

_________________________________________________________________ 

1. The majority attempts to refine its position with the argument that the 

"substantial continuity" concept in Wiley "should properly be viewed as 

a necessary but not a sufficient condition for the imposition of 

arbitration on an unconsenting successor." Maj. Op. at 9; see also Maj. 

Op. at 13-14 n.3. It adds, "Clearly, as Wiley itself indicates, other 

factors 

must also be considered." Maj. Op. at 14 n.3. With all respect, I believe 

that this reading of Wiley conflicts with Howard Johnson's treatment of 

Wiley. In Howard Johnson, the Supreme Court applied the analytical 

precepts of Wiley, interpreting Wiley as making "substantial continuity 

in 

the identity of the business enterprise" the centerpiece of the analysis 

of 

when a successor can be bound to arbitrate under a predecessor's CBA. 

 28 
II. 

Turning to a global analysis of the majority's decision, it 

is based upon the following two premises: (1) a successor 

corporation cannot be bound to the substantive terms of a 

predecessor's CBA unless it agrees to be so bound or is an 

"alter ego" of the predecessor; and (2) a successor

corporation that is not bound by the substantive terms of 

a CBA should not be bound by an arbitration provision in 

that CBA either, because any decision by the arbitrator 

enforcing the CBA could not "receive judicial sanction" and 

thus arbitration could "serve no purpose." Maj. Op. at 3, 9, 

16. Because it is undisputed that AmeriSteel did not agree 

to be bound by the CBA and there is no evidence that 

AmeriSteel is the alter ego of Brocker Rebar, the majority 

concludes that AmeriSteel cannot be bound by the 

arbitration provision in Brocker Rebar's CBA with Local 

430. However, a simple exercise in deductive logic reveals 

that premises (1) and (2) lead inexorably to the conclusion 

that an arbitration clause of a CBA can never be enforced 

against a successor corporation unless the successor 

_________________________________________________________________ 

The Court held in Howard Johnson that the successor corporation was 

not bound to arbitrate under the predecessor's CBA because there was 

insufficient substantial continuity in the business enterprise, and the 

clear implication of the opinion is that, if there had been such 

substantial continuity, then the successor would have been so bound. I 

see nothing in Howard Johnson that would lead me to the conclusion 

that the Court would have held that the successor was not bound to 

arbitrate even if there had been such substantial continuity, because the 

"other factors" present in Wiley were missing there. See Howard 

Johnson, 417 U.S. at 264-65 ("Since there was plainly no substantial 

continuity of identity in the work force hired by Howard Johnson with 

that of the Grissoms, and no express or implied assumption of the 

agreement to arbitrate, the courts below erred in compelling the 

Company to arbitrate the extent of its obligations to the former Grissom 

emloyees."); see also id. at 258 (" Even more important, in Wiley the 

surviving corporation hired all of the employees of the disappearing 

corporation.") (emphasis added); id. at 263 (noting that the Court's 

holding "is reflected in the emphasis most of the lower courts have 

placed on whether the successor employer hires a majority of the 

predecessor's employees in determining the legal obligations of the 

successor in S 301 suits under Wiley"). 

 29 
agreed to be bound by the CBA or is the predecessor's alter 

ego. I cannot accept the majority's reasoning because its 

logical consequence flatly contradicts the holding of Wiley, 

see supra Part I. 

Although the majority denies that it has relegated Wiley 

to the dustbin of history, it is abundantly clear from its 

opinion that it is doing just that. In order to get around the 

fact that Wiley's holding is implicated in the case at bar 

because of the very close similarity of fact patterns in this 

case and Wiley, the majority concludes that (1) Wiley is in 

"direct" and "irreconcilable conflict" with Burns because 

"Burns endorses the idea that unwilling successors cannot 

be bound" by "the substantive terms of pre-existing CBAs"; 

(2) Howard Johnson "downplays the significance of Wiley" 

while "tak[ing] an expansive view of Burns," thus strongly 

reaffirming Burns while casting Wiley into doubt; so (3) 

Burns's dicta rather than Wiley's holding provides the 

relevant rule for this case because Burns's dicta provides 

"more persuasive guidance" than Wiley's "limited holding," 

whose "status [is] not entirely clear." Maj. Op. at 11, 12, 14, 

16. I disagree with all three steps in this analysis. 

A. 

First, the majority's finding of an irreconcilable conflict 

between Wiley and Burns depends upon its erroneous 

characterization of Burns as establishing"the clear

mandate . . . that an unconsenting successor employer 

cannot be bound by the substantive terms of a CBA 

negotiated by its predecessor." Maj. Op. at 16. The majority 

relies on the following language in Burns: 

 These considerations, evident from the explicit 

 language and legislative history of the labor laws, 

 underlay the Board's prior decisions, which until now 

 have consistently held that, although successor 

 employers may be bound to recognize and bargain with 

 the union, they are not bound by the substantive 

 provisions of a collective-bargaining contract negotiated 

 by their predecessors but not agreed to or assumed by 

 them. 

Burns, 406 U.S. at 284. 

 30 
When this passage is considered in its entirety, it

becomes clear that this is not Burns's holding and that to 

read it as establishing a "clear mandate" is a 

misinterpretation of Burns. As I read Burns, its holding is 

much more narrow, constrained by the Court's caution that 

its "[r]esolution [of the case] turns to a great extent on the 

precise facts involved here." Id. at 274. Unlike in Wiley, the 

Court in Burns did not recite an explicit holding; rather, the 

Court's actual conclusions in Burns are narrowly tailored to 

the particular facts of that case and carefully avoid any 

broad, sweeping statements of what the law is in this area. 

The overarching focus of the Court's reasoning in Burns is 

to show that Wiley does not control in Burns's fact situation 

because of the differences in the predecessor-successor 

relationships and in the legal claims made by the unions. 

See id. at 285-87, 291 (setting out the Court's own

conclusions, which center on distinguishing Wiley). In sum, 

Burns does not "clear[ly] mandate . . . that an unconsenting 

employer cannot be bound by the substantive terms of a 

CBA negotiated by its predecessor." Maj. Op. at 16.

The majority further concludes that if a predecessor and 

successor explicitly agree that the predecessor's CBA will 

not be binding on the successor, "Burns teaches that we 

must respect that agreement." Maj. Op. at 15. I do not 

understand Burns to support this conclusion, and in fact 

this reading of Burns conflicts with the majority's own 

characterization of the law in this area. As the majority 

itself observes, Wiley recognized that "an unconsenting 

successor" can owe an "extra-contractual duty," grounded 

in " `the policy of our national labor laws,' " to arbitrate with 

a union under the predecessor's CBA. Maj. Op. at 8 

(quoting Wiley, 376 U.S. at 548). It is clear that this duty, 

if implicated, is owed by the successor to the union, since 

the duty requires the successor to arbitrate with the union 

and the union can sue the successor to enforce the duty. 

However, the majority seems to believe that the successor's 

extra-contractual duty to the union can be abrogated by an 

express contractual provision in an agreement between the 

successor and its predecessor, with which the union was in 

no way involved. See Maj. Op. at 17, 20 ("[T]he specific 

contractual provisions between [AmeriSteel and Brocker 

Rebar] did in fact not merely `shed' the prior agreement 

 31 
containing the arbitration provisions, but contracted them 

away[.]"). I find no support in either Supreme Court 

precedent or legal reasoning for the position that an extracontractual duty owed to an entity can be nullified by a 

contract to which that entity is not a party. Therefore, I 

believe that the provision in the AmeriSteel-Brocker Rebar 

sales agreement expressly repudiating the CBA is irrelevant 

to the analysis. 

B. 

The majority's treatment of Howard Johnson is similarly 

flawed because it is based on the view that Howard 

Johnson "downplays the significance of Wiley," and "takes 

an expansive view of Burns." Maj. Op. at 14. On this basis, 

the majority implicitly holds that Burns effectively overruled 

Wiley. See Maj Op. at 16 ("[W]hile the validity of Burns 

cannot be doubted, Burns nonetheless conflicts with the 

implications of Wiley. . . . Accordingly, we believe the clear 

mandate of Burns -- that an unconsenting successor 

employer cannot be bound by the substantive terms of a 

CBA negotiated by its predecessor -- provides more 

persuasive guidance than the limited holding in Wiley."). I 

cannot agree with this reasoning. 

The majority concedes that the centerpiece of Howard 

Johnson's analysis involved applying the precepts of Wiley 

to the facts before the Court. See Maj. Op. at 13. I note that 

this is hardly consistent with the view that Howard

Johnson "downplays the significance of Wiley." 

Furthermore, if Burns effectively overruled Wiley, then why 

would Howard Johnson (decided after Burns) use Wiley's 

analytical structure to reach its decision? If the majority's 

analysis is correct, then surely the Howard Johnson Court 

would have simply stated that Burns overruled Wiley and 

then based its decision on Burns's "holding" that 

unconsenting successor employers (who are not an alter 

ego of the predecessor) are never bound by the substantive 

terms of a predecessor's CBA. The Supreme Court has not 

been reluctant to overrule its own decisions when satisfied 

that they were wrong or based on outdated or anachronistic 

reasoning. See, e.g., State Oil Co. v. Khan, 522 U.S. 3, 20 

(1997). Tellingly, however, Howard Johnson did not do this, 

 32 
but instead rested its decision upon Wiley's analytical 

structure. The clear implication of this, I believe, is that the 

Howard Johnson Court did not understand Burns to have 

overruled Wiley. I thus cannot understand how the majority 

now purports to hold implicitly that Wiley is overruled. 

Moreover, Howard Johnson's description of Wiley's 

holding as a "guarded, almost tentative statement," see 

Maj. Op. at 14 (quoting Howard Johnson, 417 U.S. at 256) 

is not made in the context of downplaying the Wiley's 

significance, but instead is actually a laudatory comment 

praising Wiley's careful reasoning. This description of 

Wiley's holding is made in the course of the Court's 

observation that, in every case in this area (including Burns 

and Howard Johnson itself), "we must necessarily proceed 

cautiously, in the traditional case-by-case approach of the 

common law. . . . [E]mphasis on the facts of each case as 

it arises is especially appropriate." Howard Johnson, 417 

U.S. at 256. Howard Johnson then reaffirms Burns's 

statement that Burns's decision " `turn[ed] to a great extent 

on the precise facts involved here' " (hardly an "expansive 

view" of Burns), and concludes that this sentiment applies 

equally well to all cases in this area of the law. Id. (quoting 

Burns, 406 U.S. at 274) Howard Johnson interprets Wiley's 

"guarded, almost tentative statement of its holding" as 

demonstrating that the Wiley Court was properly aware of 

the need for the Court to constrain its holding to the 

particular facts of the case. Id. In short, Howard Johnson 

does not bury Wiley, but praises it. 

Finally, Howard Johnson specifically notes that its

interpretation of Wiley (based on the notion of "substantial 

continuity of identity in the business enterprise," see supra 

Part I) preserved for Wiley a substantial role in the 

protection of union members' rights: 

 This interpretation of Wiley is consistent also with the 

 Court's concern with affording protection to those 

 employees who are in fact retained in "[t]he transition 

 from one corporate organization to another" from 

 sudden changes in the terms and conditions of their 

 employment, and with its belief that industrial strife 

 would be avoided if these employees' claims were 

 33 
 resolved by arbitration rather than by "the relative 

 strength . . . of the contending forces." 

Id. at 264 (quoting Wiley, 376 U.S. at 549). I think the 

above passage clearly communicates the Court's intention 

in Howard Johnson that Wiley should continue to protect 

employees from "sudden changes in the terms and 

conditions of their employment" in situations like the one 

before us--where there is a change in corporate ownership 

but the employees and the running of the business remain 

overwhelmingly the same. Again, this is just not consistent 

with an interpretation of Howard Johnson as"downplay[ing] 

the significance of Wiley." Maj. Op. at 14. 

III. 

I think that a much better reconciliation of the trilogy can 

be developed from a passage in Howard Johnson discussing 

the concept of successorship that the majority quotes early 

in its opinion but then promptly ignores. See Maj. Op. at 7. 

In this passage, Howard Johnson states that the lower 

court's division of issues into (1) whether Howard Johnson 

was a successor employer, and (2) whether a successor is 

required to arbitrate under its predecessor's CBA, was 

artificial and unhelpful, because "successor" is not a 

monolithic concept. 

 The question whether Howard Johnson is a "successor" 

 is simply not meaningful in the abstract. Howard 

 Johnson is of course a successor employer in the sense 

 that it succeeded to operation of a restaurant and 

 motor lodge formerly operated by the Grissoms. But 

 the real question in each of these "successorship" 

 cases is, on the particular facts, what are the legal 

 obligations of the new employer to the employees of the 

 former owner or their representative? The answer to 

 this inquiry requires analysis of the interests of the 

 new employer and the employees and of the policies of 

 the labor laws in light of the facts of each case and the 

 particular legal obligation which is at issue, whether it 

 be the duty to recognize and bargain with the union, 

 the duty to remedy unfair labor practices, the duty to 

 arbitrate, etc. There is, and can be, no single definition 

 34 
 of "successor" which is applicable in every legal context. 

 A new employer, in other words, may be a successor 

 for some purposes and not for others. 

Howard Johnson, 417 U.S. at 262 n.9 (emphasis added). In 

my view, this passage, along with Burns's admonition that 

its decision "turns to a great extent on the precise facts 

involved here," 406 U.S. at 274, serves as a clear warning 

to lower courts not to read these opinions as providing 

expansive rules about successors in general; instead, the 

rules of these cases should always be understood in the 

context of the facts of the particular case. The majority 

appears to recognize this point when it quotes from the 

above passage and states that "labeling AmeriSteel a 

`successor employer' to Brocker Rebar does little to help 

resolve the issue in this case." Maj. Op. at 7. But the 

majority then ignores its own direction when it interprets 

Burns as making a general pronouncement that successors 

are never bound by the substantive terms of their 

predecessors' CBAs, thus treating all successorship

situations as legally identical. 

I think the best reconciliation of the Wiley-Burns-Howard 

Johnson trilogy is that the cases set out a"sliding scale" for 

what types of burdens can be imposed on what types of 

successors. That is, the successorship relationships in 

these three cases were very different, and the burdens 

imposed on the successors varied with the corresponding 

strength of the successor relationship, thus providing an 

outline for deciding future cases. In Burns, there was a very 

weak relationship of succession between the corporations-- 

as the Court noted, "there was no merger or sale of assets, 

and there were no dealings whatsoever between Wackenhut 

[the predecessor] and Burns [the successor]," Burns, 406 

U.S. at 286; the successor merely took over the security job 

that the predecessor had performed and hired a portion of 

guards who had been employed by the predecessor. In a 

situation with such a weak succession relationship, the 

Court held that the successor corporation only had the 

duty to bargain with the union representing the employees, 

and was not bound by the substantive terms of the 

predecessor's CBA. 

 35 
In Wiley, there was a very strong relationship of 

succession between the corporations--the predecessor 

merged into the successor--so the Court held that the 

successor was bound by the arbitration provision of the 

predecessor's CBA, and, as the majority recognizes,

implicitly recognized that the successor corporation could 

be bound by the substantive terms of the predecessor's 

CBA as well (if the arbitrator were to so decide). The 

relationship of succession in Howard Johnson was not as 

strong as in Wiley--while there was a sale of assets by the 

predecessor to the successor, there was not nearly as much 

continuity of business operations as there was in Wiley (or 

here)--so the Court held that the successor was not bound 

to arbitrate under the predecessor's CBA.2 

_________________________________________________________________ 

2. This approach to interpreting the trilogy has the added benefit of 

clarifying a cryptic piece of dicta on the successorship issue in Fall 

River 

Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27 (1987). Fall River 

addressed the question whether Burns's holding that a successor 

corporation has a duty to bargain with the union that represents the 

predecessor's employees extended to a situation in which the union had 

been certified by the employees long before the transition in ownership. 

In discussing the background of the successorship doctrine, the Court 

said the following about Burns: 

 We observed in Burns that, although the successor has an 

 obligation to bargain with the union, it "is ordinarily free to set 

 initial terms on which it will hire the employees of a 

predecessor," 

 and it is not bound by the substantive provisions of the 

 predecessor's collective-bargaining agreement. 

Id. at 40 (citations omitted). 

The first thing to note about this passage is that it clearly plays no 

part in Fall River's holding; it is simply a description of Burns 

contained 

in a general discussion of the development of successorship law, so it 

must be understood in that context. Although the majority contends that 

the statement it relies on from Fall River is only "arguably" dicta, Maj. 

Op. at 16, n.5, the majority fails to explain how this statement from Fall 

River was necessary to the decision in that case and therefore fails to 

offer any argument that it is not dicta. 

Some courts have interpreted this passage as standing for the 

proposition that a successor may never be held bound to the substantive 

terms of a predecessor's CBAs unless the successor consents or is the 

alter ego of the predecessor, see, e.g., Southward v. South Cent. Ready 

 36 
The question before us, then, is which type of successor, 

Wiley, Burns, or Howard Johnson , is AmeriSteel most like? 

As I argued in Part I, I believe that AmeriSteel is much 

more like a Wiley successor than a Howard Johnson 

successor. In other words, in my view there is sufficient 

"substantial continuity of identity in the business

enterprise," between Brocker Rebar and AmeriSteel to 

justify holding that AmeriSteel is bound to the arbitration 

provision (and possibly to the substantive provisions) of 

Brocker Rebar's CBA with Local 430. Howard Johnson, 417 

U.S. at 259 (quoting Wiley, 376 U.S. at 551). 

Unfortunately, we derive no assistance from our own

jurisprudence in resolving this dispute. The cases from 

within this circuit that interpret the Supreme Court case 

law can best be described as "dueling dicta": as I describe 

in the margin, no Third Circuit case has issued a square 

holding on this issue, although several have espoused one 

view or the other in passing.3 

_________________________________________________________________ 

Mix Supply Corp., 7 F.3d 487, 493 (6th Cir. 1993), and in fact the 

majority cites to this passage as support for its view. See Maj. Op. at 

15-16. I think it preferable to read the passage as making an observation 

about Burns-type successors particularly (i.e., these types of successors 

are not bound to the substantive terms of their predecessors' CBAs), 

rather than a point about all successors generally, because such a 

reading more closely fits with the carefully circumscribed reasoning and 

overall approach of the Wiley-Burns-Howard Johnson trilogy. Given that 

the Court was so careful to limit the holdings of each case in the trilogy 

to "the precise facts involved here," Howard Johnson, 417 U.S. at 256 

(quoting Burns, 406 U.S. at 274), it would seem incongruous to read Fall 

River as effecting, via dicta, an expansion of the holding of one of the 

trilogy beyond its "precise facts" into a general rule that covers all 

successors in the abstract--despite Howard Johnson's clear admonition 

that the concept of "a `successor' is simply not meaningful in the 

abstract." Id. at 262 n.9. Interpreting Fall River as effecting such an 

expansion would do violence to the principles and approach that 

underlie the Wiley-Burns-Howard Johnson trilogy. 

3. Compare Shaffer v. Mitchell Transp., Inc. , 635 F.2d 261, 266 (3d Cir. 

1980) ("The successorship doctrine simply allows the court to imply 

certain contractual duties from the predecessor's collective bargaining 

agreement and impose them on the successor."), Local Union No. 249 v. 

Bill's Trucking, Inc., 493 F.2d 956, 960 (3d Cir. 1974) ("Analysis of the 

 37 
I thus agree with the majority's conclusion that no

previous Third Circuit case controls our decision in this 

case, see Maj. Op. at 17, and that our decision must be 

based on an in-depth interpretation of the Supreme Court 

trilogy rather on an earlier panel's off-the-cuff musing on 

this issue. And because our cases are contradictory on the 

issue of a successor's liabilities on a predecessor's CBA, I 

cannot agree with the majority that its decision"flows 

logically from our existing Circuit precedent." Maj. Op. at 

17. The case law cuts both ways, so a decision on this 

issue must stand solely on the substance of the analysis of 

the Wiley-Burns-Howard Johnson trilogy. 

The case law from other courts of appeals also cuts in 

both directions, likewise noted in the margin.4 None of the 

_________________________________________________________________ 

Burns opinion convinces us, however, that its significance is largely 

limited to the particular facts of that case. . . . That there is no 

absolute 

bar to the enforcement of labor agreements against`successor' employers 

in section 301 actions, such as this, is amply illustrated by the decision 

in John Wiley and Sons, Inc. v. Livingston."), and Teamsters Local Union 

No. 430 v. Cement Express, Inc., 841 F.2d 66, 69 (3d Cir. 1988) ("Burns 

did not deal with the question of when successorship doctrine may bind 

a transferee of assets to the procedural duty to submit to arbitration the 

question of whether the successor has somehow assumed any of the 

obligations of the old bargaining agreement."), with Stardyne, Inc. v. 

NLRB, 41 F.3d 141, 145 n.3 (3d Cir. 1994) (stating that a "successor [is] 

not bound by its predecessor's collective bargaining agreement"), NLRB v. 

Rockwood Energy and Mineral Corp., 942 F.2d 169, 174 (3d Cir. 1991) 

("[A] successor is not bound by the substantive terms of its predecessor's 

labor agreement."), and United Steelworkers of Am. v. New Jersey Zinc 

Co., 828 F.2d 1001, 1010 (3d Cir. 1987) ("[A] successor employer is not 

automatically required to adopt its predecessor's collectively bargained 

agreements, see NLRB v. Burns."). 

4. Compare Stotter Div. of Graduate Plastics Co. v. District 65, 991 F.2d 

997, 1001 (2nd Cir. 1993) (holding that a successor corporation had a 

duty to arbitrate the extent of its obligations under its predecessor's 

CBA 

because there was substantial continuity in the business enterprise), 

and Boeing Co. v. Int'l Ass'n of Machinists and Aerospace Workers, 504 

F.2d 307, 314-16 (5th Cir. 1974) (stating that "[w]e are confident, 

however, that even at the most Burns has not overruled the principles of 

Wiley," which give broad protection to employees "against sudden 

changes in the employment relationship" by enforcing against successors 

 38 
cases from other circuits that the majority cites in support 

of its decision engages in the detailed, in-depth analysis of 

the troubled trilogy that this case calls for. Additionally, 

none of the cases from other Circuits recognizes, as the 

majority does, that Wiley's holding necessarily means that, 

_________________________________________________________________ 

the duty to arbitrate under a predecessor's CBA), with Southward v. 

South Cent. Ready Mix Supply Corp., 7 F.3d 487, 493 (6th Cir. 1993) 

(stating that Burns and Fall River support the view that a successor is 

not bound to the substantive terms of its predecessor's CBA). 

Although the majority seeks to distinguish Stotter by the fact that the 

successor employer "entered into an agreement with the Union which 

adopted (with immaterial exceptions) the provisions of the [CBA]," Maj. 

Op. at 19 n.8, it is the prior CBA (coupled with successorship status), 

not the new CBA, that informs the ratio decidendi: 

 [The successor employer] asserts that it could not be made a party 

 to the arbitration because it was not a party to the contract with 

the 

 Union until May 29, 1990. . . . This argument essentially merges 

 with the broader question whether the arbitrator correctly 

 determined that GPC was a "successor" to Stotter. 

 In Wiley, the Supreme Court held that the surviving corporation 

 of a merger was obliged to arbitrate disputed issues under a 

 collective bargaining agreement between the merged (and no longer 

 existing) corporation and the union that represented the merged 

 corporation's employees, even though the surviving corporation had 

 not signed the contract and the contract did not contain an express 

 provision binding successors. 

Stotter, 991 F.2d at 1001. Stotter then undertook an extensive 

"substantial continuity of identity in the business enterprise" analysis, 

and based its decision on its finding that "such continuity clearly 

exists" 

between the predecessor and the successor. See id.; see also Chartier v. 

3205 Grand Concourse Corp., 100 F. Supp. 2d 210, 213 (S.D.N.Y. 2000) 

("[T]he Supreme Court has made it clear that one who succeeds to the 

business of an employer that was a party to a CBA, in appropriate 

circumstances, may be held to have succeeded also to its obligation to 

arbitrate under a CBA irrespective of any intention to do so."). 

The majority also argues that Boeing is"of limited utility" because it 

predates Fall River. Maj. Op. at 19, n.8. As I argue supra note 2, the 

language from Fall River that the majority relies on is not only dicta, 

but 

ambiguous dicta. Therefore, in this case I believe that it is Fall River 

that 

is of limited utility. 
 39 
in the right circumstances, some substantive terms of a 

predecessor's CBA may be imposed on an unconsenting, 

non-alter-ego successor corporation. I add only that, 

whatever the viability of the preceding proposition, this case 

involves only arbitrating the applicability of the CBA, and in 

the thirty-seven years since Wiley, one area of doctrine that 

has grown stronger in that period is the Supreme Court's 

recognition of the importance of arbitration in a number of 

fields, including labor. 

IV. 

It is manifest from my dispute with the majority that, in 

its current state, the federal common law on this issue--in 

particular the Wiley-Burns-Howard Johnson trilogy--does 

not provide a clear answer in certain cases. If Wiley has 

been implicitly overturned by later Supreme Court cases, 

the Court should say so; but if, as I believe, it still plays a 

viable role in protecting the rights of "those employees who 

are in fact retained in `[t]he transition from one corporate 

organization to another' from sudden changes in the terms 

and conditions of their employment," Howard Johnson, 417 

U.S. at 264 (quoting Wiley, 376 U.S. at 549), the Court 

should reaffirm that fact. I hope that the Supreme Court 

will clarify the law in this area. In the meantime, I believe 

that the better interpretation of Supreme Court precedent is 

that the rule of Wiley is still in force and that rule should 

be applied to the case at bar to enforce the arbitration 

provision of the CBA against AmeriSteel. Indeed, if Wiley 

has continuing viability, its rule would apply here if it 

applied anywhere. I would reverse the judgment of the 

District Court and remand with directions to order this 

matter to proceed to arbitration. For the foregoing reasons, 

I respectfully dissent. 

A True Copy: 

Teste: 

 Clerk of the United States Court of Appeals 

 for the Third Circuit 

 40