The Honor able Colleen Mc Mahon, of the United States District Court for the Southern * District of Ne w York, sitting by desig nation. 1 07-0080-c v L ocal 348 v. Me ridian Mana g ement



### UN ITED STA TES C OUR T OF AP PE ALS F OR TH E S EC ON D C IR C U IT

_____________________ August Term, 2007 (Argued: J une 20, 2008 De cided: Oc tober 2, 2009) Docke t No. 07-0080-c v

_____________________ L OCAL348-S, UFCW, AFL -CI O,

Plaintif f-Appellee ,

- v. - MERI DIAN MANA GEMENT CORP.,

De fe nd an t- Ap pe lla nt.

_______________________
BEF ORE: HAL L , L I VI

NGSTON, Circuit Judges , and McMAH ON, District Judge. *

_______________________ The district cour

t issued an orde r compe lling De fenda nt-Appellant Mer idian Manag ement Cor po ratio n ( “ Me ri dia

n” ) t o s ub mit

to a rb itr atio n th e iss ue of

wh e the r i t w a s b ound

by the te rm s
o f a c o ll e c ti v e b a

r g a in in ga g r e e me n t ( “ CB A ” ) b e tw e e nPl a inti f f
- Ap p e ll e e L o c a l 3 4 8
- S, U F CW ,2

AFL -CI O (“ L ocal 348” ) and Cristi CleaningService s, Inc. (“ Cristi”), Meridian’ s prede cessor employ er. O n appea l, Meridian ar g ues that it is not bound by the ar bitration provision contained in t he CB A b e c a

us e it w a s n ot a

pa rt y to t hat a g re e me nt. We h old

that, a s th e su c c e sso r o f C ri sti , Meridian is oblig ated to ar bitrate the que stion of whether and to what e x tent it is bound by the substantive terms of the CB A. Acc ording ly , the judg ment of the district cour t is AFF I RMED. J udg e L ivingston dissents in a sepa rate decision.

_______________________

Robert G. Rieg el, J r., Coffman, Colema n, Andre ws & Grog an, P.A., J acksonville, Florida , for Defendant-Appe llant
. J . Warren Ma

ng an, O’ Connor & Ma

ng an, P.C., New Roche lle, New Y ork, for Plaintif f-Appellee
.

_______________________ HAL L , Circuit Judge : Pla int if f- Ap pe lle e L oc a l 34 8- S, U F CW, A F L -C I O ( “ L oc a l 34 8” ) b ro ug ht s uit a g a ins t Def endant- Appellant Mer idian Manag ement Corporation (“Mer idian), alleg ing that Meridian had failed to c ontribute to the union’s Hea lth and Welfare Fund a s require d by a collec tive barg aining ag ree ment (“CB A”) that was be tween L ocal 348 a nd Cristi C leaningService s, Inc. (“ Cristi”), Meridian’ s prede cessor . The c omplaint sought an or der c ompelling Me ridian to arbitrate the fund dispute under

the terms of the CBA. The district court found that be cause Meridian wa s the
succe ssor employ er to Cristi, Meridian wa s require d to arbitrate the issue of whe ther it was bound by any of the ter ms of the CBA. O n appea l, Meridian urg es us to adopt the holdingof the Third Circuit in Am e riS

te e l Co rp . v . I

nte rn ati on al B ro the rh oo d o f Te am ste rs , 267 F.3d 264 ( 3d Cir . 2 00 1) , a

nd c on c lud e that, e ve n if

Me ri dia n is ob lig ate d to arb itr ate un de r t he CB A, be c a

us e3

it is notbound by

the spec ific terms of that ag ree ment, arbitration would be futile bec ause no arbitration awar d could re ceive judicial sanction. We disag ree , and hold that, while Mer idian’s status as Cristi’s successor doe s not automatically bind Meridian to the substantive ter ms of the pr e -e xistin gCB A, Me ri dia n is re qu ir e d to arb itr ate the iss ue of wh e the r a

nd to what e xtent it

is bound by the terms of that ag ree ment. We offer no opinion reg ardingthe extent to which Meridian is bound by

the substantive terms of the CBA be tween Cristi and L ocal 348. We leave that question to the arbitrator to decide in the first instance. A ccor dingly , the judg ment of the district court is AFF I RMED. BACK GR OUND I. Mer idian Managem ent Cor poration Contract s w ith Cristi Cleaning S ervic es, Inc. In October

2003, Meridian suc cessf

ully bid for a c ontrac t with the Port Authority of Ne w Yo rk and Ne w Je rs e y

to p ro vid e e ng ine e ri ngand ja nit or ia l se rv ic e s at th e Jama ic a Ai r T ra in Terminal ( the “Te rminal”) f or the pe riod from Oc tober 2003 until September 2006. Me ridian
e le c te d to pe rf

or m th e e ng ine e ri ngse rv ic e s it se lf and to s ub c on tr a c t th e janit or ia l se rv ic e s to Cristi under a contr act that wa s to beg in in Dece mber 2003 a nd continue until Dece mber 2004 and would ther eaf

ter a utomatically

rene w on a month-to-month basis until one party g ave the oth e r p art y 30 -d a y no tic e of its int e nt t o te rm inate the a g re e me nt. At the tim e of

the su bc on tr a c t be tw e e n Cr ist i and Me ri dia n, L oc a l 34 8 r e pr e se nte d Cr ist i employ ees who worke d at J FK I nternational Airport. The CB A betwe en Cristi and L ocal 348
re qu ir e d Cr ist i to c on tr ibute to L oc a l 34 8’ s H e a lthand Wel fa re F un d f or e a c h o f i ts f

ull -t ime employ ees. The CBA c ontained an a rbitration clause which provide d that all disputes betwee n Cristi and L ocal 348 would be resolved thr oug h arbitration. The terms of the CB A wer e binding4

upon Cristi and L ocal 348 a s well as their “ succe ssors.” Af ter Mer idian awa

rded Cristi the
su bc on tr a c t at th e Te rm ina l, L oc a l 34 8 a nd Cr ist i a g re e d to ame nd

the CB A t o a

pp ly to C ri sti
e mpl oye e s w ho wo rk e d at th e Te rm ina l. In September 2005, Me ridian g ave Cristi 30-day notice of its intent to terminate the
s u b co n tra ctfo r t h e j an i t o ri al s erv i ce s atth e T erm i n al , ef fe ct i v e N o v em b er

1 , 2 0 0 5
. Al th o u gh Meridian initially

acc epted bids fr om other cle aningservice s, it eventually elec ted to perf

orm the janitorial servic es at the Te rminal rathe r than subcontr actingthe work to a nother c ompany . Prior to November

1, 2005, Meridian hire d a majority of Cristi employ ees who had wor ked at the Terminal. Eve ntually , L ocal 348 soug ht from Meridian r ecognition as the barg aining repr esentative of the Mer idian employ ees who perf ormed the ja

nitorial work at the T erminal. Meridian de clined to re cog nize L ocal 348 a s the employ ees’ repr esentative. II. Local 348 Brings an Act ion S eeking to Arbitrat e the D ispu te In J anuar y 2006, L ocal 348 f

iled a complaint ag ainst Meridian pursua nt to the L abor Manag ement Relations Act ( “L MRA”), 29 U.S.C. §§ 141, et seq. , and the Employ ee Re tirement Income Sec urity

Act (“ ERI SA”), 29 U.S.C. §§ 1001, et seq . L ocal 348 a lleg ed that af ter November

1, 2005 there had “be en a c ontinuation of the Cristi cleaningservice s work” at the Terminal a

nd that employ ees r epre sented by L ocal 348 ha d “continuously perf ormed that wor

k by the same me tho ds .” Ac c or din gto t he c omp la int , a ft e r N ov e mbe r 1 , 2 00 5, Me ri dia n f a ile d to make the c ontributions to t he He alth and Welfar e F und that wer e re quired by the CBA. L ocal 34 8 a sse rt e d th at “ Me ri dia n, by its c on tin uatio n o f t

he c le anin gse rv ic e s w or

k” at th e Te rm ina l, had “a ssumed Cristi’s obli g ations under the CB A and . . . ha d a duty to contribute to the F und” as5

require d by

the terms of the CBA. The Union reque sted that the district court e nter judg ment compellingMeridian to submit the Hea lth and Welfare Fund dispute to ar bitration. In J uly 2006, L ocal 348 f

iled a motion for summary judgme nt in which it argued that the
arb itr atio n p ro vis ion

of the CB A a

pp lie d to Me ri dia

n b e c a us e the re wa s a

“ su bs tanti a l c on tin

uit y in the identity

of the business” be fore and af ter Mer idian assumed the janitoria l service s at the Terminal. The rea fter, Me ridian also soug ht summary judgme nt, arguing that it was not bound by the terms of the CBA be tween Cristi and L ocal 348. III. The District C ourt Com pels Mer idian to Ar bitrate with Local 348 In November

2006, the district court issued a n order g rantingL ocal 348’ s motion for summary judgme nt and deny

ing Me ridian’s motion for summary judgme nt. The cour

t ordere d Meridian to ar

bitrate. In doing so, the court de termined that ther e wa s “obvious continuity in the
wo rk fo rc e e mpl oye d b y

[Me ri dia n] and Cr ist i.” I t a lso c on c lud e d th at th e re wa s “ c on tin uit y in the wo rk pe rf or me d b y the te rm ina l e mpl oye e s u nd e r C ri sti and

[Me ri dia n],” no tin gthat, d e sp ite Meridian’ s claim that it had made “ swee ping c hang es” to the nature of the clea ning w ork at the terminal, “the fac t remains that Cristi and [Meridian] were r equire d by contra ct to perf

orm the exact same c leaningservice s at the terminal.” Noting that L ocal 348 soug ht contributions to the Fund “ for the pe riod following[Meridian’s] hiring only ,” the c ourt reje cted Me ridian’s c laim that beca use Cristi remained a

viable entity , L ocal 348 c ould have soug ht relief f rom that company
. The c ourt conc luded that “[b]ecause of the circ umstances pr esente d . . . it [ was] appropriate for the ar bitrator to dec ide if [Meridian] is bound, as a succe ssor, to any terms of the CB A beyond the obligation to arbitrate.” In Dec ember 2006, the district court issued a n order g ranting6

Meridian’ s motion for a stay of its order c ompelling the c ompany to arbitrate , pendingthe
outc ome of

thi s a pp e a l. Me ri dia n a pp e a ls. DI SCU SSIO N On a pp e a l, M e ri dia

n r a ise s thre e iss ue s to su pp or t it s a rg ume nt t hat it is n ot o bli g ate d to arbitrate in this case. Me ridian first ar g ues that the c ontinuing identity of the wor

kforc e betwe en Cristi and Meridian is not sufficient to bind Meridian to the te rms of the CB A betwe en L ocal 348 and Cristi. Second, it contends that if the district cour t’s analy sis were corr ect, it would bind
e ve ry su c c e sso r e mpl oye r t o th e te rm s o f a pr e -e xistin gCB A. Th ir d, a c c or din gto M e ri dia n, thi s Court should adopt the Third Circuit’s rea soning in AmeriStee l Corp. v. International Broth e rh oo d o

f Te am ste rs , 2 67 F .3 d 2 64 (3 d Ci r. 20 01 ), and fi nd that arb itr atio n is futil e be c a us e Meridian is not bound by the spec ific terms of the CBA a nd, thus, no awar d could re ceive judicial sanction. Th is C ourt

re vie ws a

dis tr ic t c ourt ’s g ra

nt o f s umm ary

jud g me nt de novo , viewingthe evidenc e in the lig ht most favorable to the nonmoving pa rty . See Coosem ans Specialities, Inc. v

. Ga rg iulo , 485 F.3d 701, 705 ( 2d Cir. 2007). In this case, the issue be fore this Court i s not the fac t-based que stion of whether Meridian is the succ essor e mploy er to Cristi. I n its brief and at oral a rgument, Meridian e x pressly denied that it was c halleng ing the district court’s c onclusion on this point . Rather, we consider the leg al issue of the e x tent to which a suc cessor employ er either 1) is obligate d to arbitrate under or 2) is bound by

the substantive terms of a CBA be tween a union and that suc cessor employ er’ s prede cessor . We review de novo the district court’s deter mination of this question of law. Id
.7

As discussed below, the development of the ca se law on this topic compels the conclusion that a suc cessor employ er is not automatica lly bound by the substantive terms of a pre- exis ting CB A, eve n if that succe ssor employ er r etains a ma jority of its prede cessor ’s
wo rk fo rc e . H ow e ve r, on

the un iqu e fa c ts o f t

his c a se , w e a g re e wi th t

he dis tr ic t c ourt

that th is particula r succ essor e mploy er ha s an oblig ation to arbitrate the issue of whe ther, a nd to what extent, it is bound by

the substantive terms of the CBA that g overne d the workf orce it inherited. I. John W

iley & Sons, In c. The Supreme Court first addre ssed the issue of suc cessor employ ers in John W

iley & Sons, Inc. v . Livingston , 376 U.S. 543 (1964). In that case , cer tain employ ees of

Interscie nce Publis hers, Inc. (“ Interscie nce” ) we re r epre sented by an AF L -CI O union with which Interscie nce had ente red into a CB A. In 1961, Interscie nce me rg ed with J ohn Wil ey & Sons, Inc. (“ Wil ey”), another publishing firm, a

nd cea sed to operate as a

separ ate e ntity . Although Wiley reta ined the majority of Interscie nce’ s former

employ ees, the company ref used to rec og nize the union as the employ ees’ barg ainingrepr esentative. Wil ey argued that the mer g er of the companie s had terminated the CBA a

nd that it had never

been a party to the CBA. The union filed a c omplaint under § 301 of

the L abor Ma

nag ement Relations Act ( “L MRA”), 29 U.S.C. §§ 141, et seq. , seekingto compel ar

bitration. The Supreme Court concluded that Wi ley was re quired to ar

bitrate with the union under the pre -existi ngCBA. 376 U.S. at 548. The Court beg an by acknow ledg ing “ the ce ntral role of arbitration in [ e]ffec tuating national labor policy ,” and notingthat it had previously “desc ribed arbitration as ‘the substitute for industrial strife’ and as ‘ part a nd parc el of the c ollective barg ainingproce ss itself.’” Id
. at5 4 9 (qu o t i n g Un ite d S te e lwo rk e rs o f A m. v . W

arrio r &Gu lf8

Navigation Co. , 363 U.S. 574, 578 (1960)). A ccor ding to the Court, “ [i ]twould derog ate f rom ‘[t ]he fe de ra l po lic y

of se ttl ingla

bo r d isp ute s b y

arb itr atio n’
. . . if

a c ha ng e in t he c or po ra te
s tru cture o r o wn er s h i p o f ab u s i n es s en t er p ri s e h adth e au t o m at i c c o n s equ en ce o f r em o v i n g a duty to arbitrate previously

established.” Id
. (qu o t i n g Un ite d S te e lwo rk e rs o f A m. v . E

nte rp ris e W heel &Car Corp. , 363 U.S. 593, 596 (1960)). Th e Court

the n p ointe d to the ne c e ssi ty of ba lanc ingthe int e re sts of bu sin e ss o wn e rs wi th those of the e mploy ees, noting“[t] he objec tives of national labor policy . . . require that the ri g htf ul p re ro g ativ e of

owne rs ind e pe nd e ntl y

to r e arr ang e the ir

bu sin e sse s a

nd e ve n e lim inate th em s el v es as em p l o y er s b e b al an ce d b y s o m e p ro t ec t i o nt o th e e mp l o y ee s fr o ma s u d d en ch an ge in the employ

ment relationship.” Id . A c c or din gto t he Court , in

thi s c on te xt, c on tin

uin gto resolve e mploy ees’ claims throug h arbitration would “ease [] ” the tra nsition from one employ er to another a

nd avoid “industrial strife .” Id . The Court ac knowledg ed that under g ener al pr inc ipl e s o f c on tr a c t la

w a no n- c on se nti ngsu c c e sso r w ou ld n ot n or ma lly be bo un d to the te rm s of a c ontrac t to which that party did not ag ree . Id . at 550. The Court noted, how ever , that “a collective ba

rg ainingag ree ment is not an ordinary contra ct,” a

nd that “the impre ssive policy considerations favoringarbitration [ wer e] not wholly overbor ne by the fa ct that” the suc cessor employ er ha d not signe d the contra ct beingconstrued. Id
. F ina lly , th e Court

a c kn ow le dg e d th at th e duty to a rb itr ate do e s n ot s ur

viv e in e ve ry

c a se in which cor

porate owner ship or structure chang es. The Court r ecognized that “there may be
case s in which the lac k of any substantial continuity

of identity

in the business enterpr ise befor e and af ter a chang e would make a duty to arbitrate something imposed f rom without . . ..” Id . at 551. The Court noted that in the c ase of Wil ey , “re levant similarity and continuity

of oper ation9

acr oss the chang e in owner ship [ was] adequately evidenc ed by

the wholesa le transf

er of Interscie nce e mploy ees to the Wiley plant, appar ently

without difficulty .” Id
. II. Burn s Intern ational Security Services, Inc. The Supreme Court next addre ssed the issue of a succe ssor employ er’ s obligations under a pre -existi ngCBA in NLRB v. Burns International Security Serv ices, Inc
. , 406 U.S. 272 (1972). In that case , Bur

ns International Security

Service s (“B urns”) took over the ta sk of providing
secur ity to a L ockhee d fac ility

in California. Secur ity

service s at the fa cility

had pre viously

been pr ov ide d b y

Wac ke nhut C or

po ratio n ( “ Wac ke nhut” ). At the tim e of

the c ha ng e ov e r o f s e c ur ity companies, Wac kenhut had r ece ntly enter ed into a CBAwith the United Plant Guard Worker s of Americ a (“ UPG”), which had be en re cently cer tified as the ba

rg ainingrepr esentative of Wackenhut guards. B urns chose to retain 27 of the former Wackenhut guards. The rea fter, B urns declined to r ecognize UPG as the employ ees’ barg ainingrepr esentative and re fused to honor the CBA be tween U PG and Wackenhut. UPG f iled an unfa ir labor pr actice char g e with the National L abor Relations Boar d (“N L RB”) . The NL RB conc luded that B urns had violated the National L a bo r R e latio ns Ac t ( “ NL RA ” ) b y fa ili ngto r e c og nize and

ba rg a in w ithUPGand

re fu sin gto honor the CB A. On re view, this Court held that the Boa rd had e x cee ded its powers by order ing Bur ns to honor the CBA. The Supreme Court affir

med this Court’s decision, concludingthat while B urns, as the
succe ssor employ er to Wacke nhut, had a duty to barg ain, the compa

ny was not bound by

the substantive terms of the CB A betwe en UPG and Wac kenhut. 406 U.S. at 281-82. The Court beg an by acknow ledg ing w ith approval the N L RB’s c onclusion that Bur ns, as Wackenhut’ s
succe ssor, had a

n obligation to barg ain with the union. Id . at 278-79. As the Court obse rved,10

“whe re the barg ainingunit remains uncha ng ed and a

majority of the e mploy ees hire d by the new employ er a

re r epre sented by

a re cently

cer tified barg ainingag ent there is lit tle basis for f aulting the B oa rd ’s imp le me ntatio n o f t

he e xpre ss m and ate s o f [the NL RA ] by or de ri ngthe e mpl oye r t o barg ain with the incumbent union.” Id . at 281. The Court also dete rmined, howe ver, that the duty to barg ain with the incumbent union did not ex tend to bind Burns to the substantive te rms of the e x isting CBA
. Id . at 281-82. The Court noted that “Cong ress ha s consistently declined to inter fer e with fre e collec tive barg aining
and ha s p re fe rr e d th at de vic e , o r v olu nta ry arb itr atio n, to t

he imp os iti on

of c omp uls or

y te rm s a s a means of a

voiding or

terminatinglabor disputes.” Id . at 282. The Court pointed to the NL RB’s prior dec isions which, to that point, had “consistently held that, althoug h succe ssor employ ers may be bound to re cog nize and barg ain with the union, they are not bound by

the substantive pr ov isi on s o f a

c oll e c tiv e -b a

rg a ini ngc on tr a c t ne g oti ate d b y the ir pr e de c e sso rs but no t a g re e d to or assumed by

them.” Id . at 284. III . Howard Joh nson In Howard Johnson Co. v. Hotel and Re staurant Employees , 417 U.S. 249 (1974), the Court revisited its holdings in W ileyand Burns . In Howard Johnson , the Grissom family enter ed int o a n a g re e me nt w iththe Ho wa rd John so n Co mpa

ny wh e re by the fa mil y wo uld se ll c e rt a in equipment to the company and lea se the c ompany

a re staurant a

nd motor lodge that had pr e vio us ly

be e n o pe rate d b y

the fa mil y and its wh oll y -o wn e d c or

po ratio n. Whe n th e fa

mil y operated the fa cilities, the employ ees of the re staurant a

nd motor lodge had bee n repr esente d by the Hotel & Restaura

nt Employ ees & Ba

rtende rs International Union (“Hote l & Restaur ant Em plo y e e s” ). In it s a g re e me nt w iththe Gr iss oms , H ow ard John so n e xpre ssl y

de c lin e d e ith e r t o11

rec og nize the CBA betwe en the Gr issoms and the union or to assume any obligations or liabiliti es ar ising fr om the CBA. How ard Johnson retained only nine of the f

orty -five e mploy ees who had wor

ked for the Grissoms. Charac terizing How ard Johnson’s failure to hire all of the Grissom’s employ ees a s an illeg al lock out, the union filed a complaint under § 301 of the L MRA, seekingto compel Howa rd Johns on to arbitrate the extent of its obli g ations to the Gr iss om e mpl oye e s und e r t he CB A. Th e dis tr ic t c ourt he ld t hat H ow ard

John so n w a s r e qu ir e d to arbitrate, and the Sixt h Circuit affir med. B oth the district court and the court of a ppeals re lied on the Court’s dec ision in W ileyto determine that Howar d J ohnson, as the succ essor e mploy er to the Grissoms, was re quired to ar bitrate with the union. The Supreme Court reve rsed the Sixt h Circuit’s decision and de cided that How ard J ohnson had no duty

to arbitrate under the CBA. 417 U.S. at 256. The Supreme Court acknow ledg ed the lowe r cour ts’ sug g estion that the holding in W iley – that a succ essor e mploy er is bound to arbitrate w ith an incumbent union– and the holdingin Burns – that a succ essor employ er is not automatica lly bound to the substantive terms of the CB A betwe en the prede cessor

employ er a

nd the incumbent union– wer e “to some e x tent inconsistent.” Id . at 254. Th e Court

re je c te d th e low e r c ourt s’ re a so nin gthat W ileycontrolled the r esult in Howard J ohnson’s ca se simply

beca use W ileyinv olv e d a

su it b ro ug ht u

nd e r § 30 1 o f t

he L MRA , whil e Bu rn s on the other ha

nd involved an NL RB orde r re sulting fr om an unfa ir labor pr actice char g e. Id . at 25 5. Th e Court

po int e d to its pr ior

de c isi on s h old ing

that, whil e § 3 01 of

the L MRA “author ized the fede ral c ourts to develop a f eder al common law r eg ardingenfor ceme nt of collective- barg ainingag ree ments,” it was “c lear that this feder al common law must be ‘fa shion[ ed] from the policy of our national labor laws.’ ” Id
. (c i t i n g an d qu o t i n g Te

x tile W or k e rs12

Un ion v . Li nc oln Mi lls , 3 53 U. S. 4 48 , 4 56 (1 95 7) ). Th e Court re a so ne d, “ [i]t w ou ld b e pla inl y inconsistent with this view to say that the basic policie s found controllingin an unfa ir labor prac tice conte x t may

be disreg arde d by

the cour ts in a suit under § 301, and thus to permit the ri g hts e njo y e d b y

the ne w e mpl oye r i n a

su c c e sso rs hip c on te xt to d e pe nd up on the fo rum in which the union pre sses its claims.” Id . at 256. Howeve r, the Court also conc luded that it was “unne cessa ry . . . to decide in the circ umstances of

th[ e] case whether

there is any

irrec oncilable c onflict betwe en W ileyand Burns ” beca use “e ven on its own terms, W ileydoes not support the dec ision of the courts below.” Id
. The Court we nt on to note severa l releva nt disti nctions betwee n the fa cts prese nted in Ho war d Johnson and the f

acts of W iley . O ne of

the se dis tin c tio ns wa s th at W ileyinv olv e d a

me rg e r, “ a s a result of whic h the initial employ ing e ntity completely

disappea red,” while Howard Johnson

“ inv olv e s o nly

a sa le of so me a sse ts[ ] and

the ini tia l e mpl oye rs re ma in i n e xiste nc e a s v ia ble corpor ate e ntities . . ..” Id . at 257. Acc ordingto the Court, this di stinction was rele vant bec ause,
as re cog nized in W

iley , New Y ork State law “ ‘embodied the g ener al rule that in merg er situations the survivingcorpor ation is liable for the oblig ations of the disappe aringcorpor ation.’” Id
. (qu o t i n g Burns , 406 U.S. at 286). F urthermor e, unlike the f ormer e mploy er in W

iley , beca use the former employ er in Howard Johnson c on tin ue d to e xist, the un ion

ha d “ a re a lis tic re me dy

to enfor ce the ir contra ctual oblig ations” ag ainst that former employ er. Id
. Acc ordingto the Court, the “more important” of the r eleva nt disti nctions betwee n the fac ts of W

ileyand the f

acts of Howard Johnson was that in W iley“the survivingcorpor ation hired a ll of the employ ees of the disappea

ringcorpor ation.” Id . at 25 8. Th e Court no te d th at, be c a us e JohnWile y

& Son s h a d h ir e d th e ma jor ity of its pr e de c e sso r’ s e mpl oye e s, “ [t]he c la ims13

which the union soug ht to compel Wil ey to arbitrate wer e thus the cla ims of Wi ley ’s employ ees as to the bene fits they

wer e entitled to re ceive in connec tion with their employ ment. I t was on this basis that the Court in W ileyfound that there was ‘substantial c ontinuity of identity

in the business enterpr ise’ . . . which it held ne cessa ry befor e the suc cessor

employ er c ould be compelled to ar

bitrate.” Id
. at2 5 9 (qu o t i n g W iley , 376 U.S. at 551). In Howard Johnson , howeve r, “the primary

purpose of

the Union in seekingarbitration . . . [ was] not to protect the rig hts of Howar d J ohnson’s employ ees,” but, rather , to protect the r ights of “ the forme r Grissom employ ees who wer e not hired by Howar d J ohnson.” Id . at 260. Ac c or din gto t

he Sup re me Court , b e c a

us e the re wa s n o “ su

bs tanti a l c on tin

uit y of ide nti ty in the business enterpr ise” be fore and af ter How ard Johnson assumed the opera tion of the hotel and re staurant, unde r W

iley , Howar d J ohnson had no duty to arbitrate under the CBA. Id . at 263 (qu o t i n g W

iley , 3 76 U. S. at 55 1) . In a rr ivi ngat th is c on c lus ion , th e Court ob se rv e d “ [t]his
c on tin uit y of ide nti ty in t he bu sin e ss e nte rp ri se ne c e ssa ri ly inc lud e s . . . a

su bs tanti a l c on tin

uit y in the identity

of the wor

k forc e ac ross the cha

ng e in owner ship. The W ileyCourt se e min g ly
re c og nize d th is, a s it

fo un d th e re qu isi te c on tin uit y pr e se nt t he re in r e lia

nc e on the ‘who le sa le transfe r’ of

Interscie nce e mploy ees to Wiley .” Id
. Ac co rd i n g t o th e C o urt , i n t er p re t i n g W ileyto focus on the c ontinuity

of the identity

of the wor

kforc e cor

rec tly balanc ed the inter est of wor kers wi th t he int e re st o f b us ine ss o wn e rs : This interpretation of W

ileyis c on sis te nt a lso wi th t he Court ’s c on c e rn

wi th aff ordingprotec tion to thos e employ ees who are in fac t retaine d in “[t] he transition from one c orporate org anization to another” f rom sudden cha

ng es in the terms and c onditions of their employ ment, and with its belief that industrial strife would be avoide d if these e mploy ees’ claims wer e re solved by arbitration rather tha n b y “ the re lativ e str e ng th .
. . of the c on te nd ingfo rc e s. ” At the same tim e , it re c og nize s th at th e e mpl oye e s o f t he te rm inatin ge mpl oye r h ave no le g a l r ig ht t o14

continued employ

ment with the new e mploy er . . .. This holdingis compelled . . . i f th e p r o t e c t i o na f

f o r d e d e mp l o ye e i n t e r e s t s i na

c h an g e o f

o w n e r s h i p b y W

ileyis to b e re c on c ile d w iththe ne w e mpl oye r’ s r ig ht t o o pe ra te the e nte rp ri se wi th h is own independe nt labor for ce. Id . at 264 (c itation omit ted). IV. Fall R iver The holding s of W

iley , Burns and Howard Johnson , ta ke n to g e the r, re fl e c t th e Court ’s identification of se vera l principles that must influence a ny consideration of a succ essor
e mp l o ye r ’ s o b l i g at i o n s un d e r a p r e - e x i s t i n gC B A
. T h e d e c i s i o n s , p art i c u l ar l y W iley , e mp h a s iz e the ce ntral role of

collective ba

rg ainingand ar

bitration in furtheringthe g oals of national labor policy – specific ally

by avoidingindustrial strife and e ncoura g ing the peac eful re solution of labor disputes. See, e .g., W

iley , 3 76 U. S. at 54 9; Burns , 406 U.S. at 282. They also demonstrate the Court ’s c on c e rn

wi th b a lanc ingthe int e re sts of the pa rt ie s mo st a ff

e c te d b y c ha ng e s in owne rs hip
or cor porate restruc turing : (1) the e mploy ees r epre sented by the incumbent union and ( 2) the
succe ssor employ er. In W iley , th e Cou

rt ide nti fi e d th e su c c e sso r e mpl oye r’ s d uty to a rb itr ate a s a
me ans by wh ic h th e e mpl oye e s r e pr e se nte d b y an in c umb e nt u

nio n w ou ld b e pr ote c te d f ro m a sudden cha

ng e in the employ

ment relationship. 376 U.S . at 549. In Burns , th e Court de c lin e d to bind a succ essor e mploy er to the substantive te rms of a pr e-e x isting CBA , thus emphasizing the
succe ssor employ er’ s rig ht to rear rang e or r estructur e its business. 406 U.S. at 281-82. Howeve r, eve n in decliningto ext end a suc cessor employ er’ s obliga

tions to i nclude the substantive terms of the CB A, the Court emphasized the important role of collec tive barg aining and ar bitration, pointing to Congr ess’s pre fer ence for the use of ar bitration and collec tive15

barg ainingover the imposit ion of compulsory terms as mea

ns of avoidinglabor disputes. Id . at 282. In Howard Johnson , th e Court re ite ra te d th e imp or

tanc e of the c on tin

uit y of the ide nti ty of the wo rk fo rc e a s a

be nc hma rk fo r d e te rm ini ngwh e the r a su c c e sso r e mpl oye r i s o bli g ate d to arbitrate under

the pre -existi ngCBA. In so doing, the Court ag ain stressed the nece ssity of balanc ing the interests of e mploy ees r epre sented by an incumbent union with the intere sts of a
succe ssor employ er. 417 U .S. at 264. Although in Howard Johnson the Court de c lin e d to extend W ileyto the fac ts presente d in that case , the Court’s explanation for that re fusal emphasized the importance of the wor kers’ interest in beingshielded fr om sudden cha ng es in the
e mpl oy me nt r e latio ns hip . T he Court ’s de te rm inatio n th at H ow ard John so n w a s n ot r e qu ir e d to arbitrate under

the CBA w as base d in larg e par t on the fac t that Howar d J ohnson’s work f orce was not composed of

the same pe ople as the G rissoms’ work for ce. I n other wor ds, the Howa

rd J ohnson’s worke rs on whose be half the union wa s advocating ha d not had an e mploy ment relationship wit h the Grissoms and, thus, did not suffer chang es in that relationship from which they neede d protec tion. Howard Johnson did not lim it the holding in W iley . Rather, in dec lining to compel the Howa

rd Johns on Company

to arbitrate , the Court relied on the policies identified
an d a d dr e s s e d

b y W iley’s rea soning a

nd deter mined that these policies would not have been further ed by

an orde r compe lling ar

bitration. The Court most rec ently

revisited the issue of

succe ssor employ ers in Fall River Dy eing &Finishing Corp. v. NLRB , 482 U.S. 27 (1987). The re the Court discussed the rationale for extending the ba

rg ainingobligation – and rec og nizi ngthe incumbent union’s pre sumption of
m aj o ri ty s t atu s – i nth i s co n t ex t . T h e C o urtd es cr i b eda u n i o n ’s p re ca ri o u s p o s i t i o nd uri n g a ch an ge i no wn er s h i p o r c o rp o ra t e r es tru cturi n g:16

Duri nga tr ans iti on

be tw e e n e mpl oye rs , a

un ion is i n a pe c uli arl y

vu lne ra ble position. I t has no forma l and established ba rg ainingrelationship wit h the new employ er, is unce rtain about the ne w employ er' s plans, and ca nnot be sure if

or when the ne w employ er must bar g ain with it. W hile beingconce rned w ith the future of its members with the new e mploy er, the union also must protect whateve r rig hts stil l exi st for its members under the collec tive-bar g aining ag ree ment with the prede cessor employ er. 482 U.S. at 39. Fur

ther, the Court noted that employ ees f acingsuch transitions “may well fe el that their choic e of a

union is subject to the vag arie s of an e nterprise ’s transf ormation. Thi

s feeling is not conduciveto industri al peace

. ” Id . at 39-40 (e mphasis added)
. In Fall River , the Court reiter ated the holdingof Burns that succe ssor employ ers a re not bound by the substantive terms of the ir prede cessor s’ CBAs. Id . at 40. I t also ext ended the barg ainingobligation to cases, unlike Burns , in wh ic h th e un ion ’s c e rt if

ic atio n w a s n ot r e c e nt: We now hold that a succ essor’s oblig ation to barg ain is not lim ited to a situation wher e the union in question has bee n rec ently cer tified. Where, a s here , the union has a r ebuttable pr esumption of majority status, this st atus continues despite the c ha ng e in e mpl oye rs . A nd

the ne w e mpl oye r h a s a

n o bli g atio n to ba

rg a in w ith that union so long a s the new e mploy er is in fa ct a suc cessor of the old employ er and the major ity

of its employ ees w ere employ ed by its predec essor. Id . at 41. The Court also re visited the fac t-based a pproac h to determiningwhether a new employ er is a succe ssor to a pre vious employ er. Id . at 43. I t acknowle dg ed, with appr oval, the NL RB’s
ana ly sis that f

oc us e d o n “ wh e the r t

ho se e mpl oye e s w ho have be e n r e ta ine d w ill un de rs tand a bly view their job situations as essentially unaltere d.” Id . (interna l quotation marks omitted). Ac c or din gto t

he Court , “ [t]his e mph a sis on the e mpl oye e s’ pe rs pe c tiv e fu rt he rs the [NL RA ’s ] policy of industrial pea ce. I f the e mploy ees f ind themselves in essentially the same jobs af

ter the employ er tra

nsition and if their leg itimate expectations in continued repr esentation are thwa rted,17

their dissatisfac tion may

lead to labor

unrest.” Id . at 43-44. Fall River demonstrates the continued applica

bility of the Court’s oft- stated intere st in affordingrepr esente d worke rs protec tion from chang es in an e mploy ment relationship t hat re sult from a cha ng e in owner ship. Th e de c isi on

a lso c on fi rm s th at im

po sin gon a su c c e sso r e mpl oye r a

duty to b arg a in o r a

rb itr ate
rema ins the most effec tive way to affor d employ ees that important protection. V. Synt he sis of C as e Law a nd t he P r e se ntCa se In view of the fore g oing, the district court prope rly conclude d that Meridian wa s obligated to arbitrate the question of whe ther, a nd to what extent, it m ust comply with the substantive terms of the CB A betwe en L ocal 348 a nd Cristi. Neither par

ty disputes that here , as wa s the ca se in W

iley , Meridian r etained a

majority of Cristi’s employ ees a fter a ssuming the clea ning duties pr eviously

perf ormed by Cristi; nor does a

ny one dispute that those employ ees
c o n ti nu e d to p e r f o r m s u b s ta n ti a ll y th e s ame d

u ti e s f o r M e r id ia na s th e y h a d f o r Cr is ti
. We acknow ledg e that in W

ileythe ide nti c a l si tuatio n c ame a bo ut a s a re su lt o f a

me rg e r, wh ile in t

his
case the re ason wa s the termination of Cristi’s subcontrac t. Howeve r, we do not believe that W ileyc an o r s ho uld

be lim ite d to sit

uatio ns in whic h a

me rg e r o c c ur s. Rathe r, a s th e Sup re me Court rec og nized in Howard Johnson , th e iss ue is whe the r t he re e xists a

“ su bs tanti a l c on tin

uit y of identify

of the wor

k forc e.” Howard Johnson , 417 U.S. at 263. The mer g er of two
c omp anie s, re su lti ng

in t he hir ingof

on e c omp any ’s e nti re wo rk fo rc e by the oth e r, un do ub te dly
c re ate s th e c on tin

uit y of ide nti ty c on te mpl ate d b y

the Court . B ut w e c an im a g ine oth e r w ay s in wh ic h th e same ide nti ty

c ou ld c ome a

bo ut. Th is c a se pr e se nts on e of the m. In acc ordanc e with the Supreme Court’s decision in Fall River , the exist ence or nonexis tence of substantial continuity in the context of assessing the duty to barg ain is determined by18

looking at: whether the business of both employ ers is esse ntially the same; whe ther the employ ees of

the new c ompany

are doing the same jobs in the same w orkingconditions under the same su

pe rv iso rs ; w he the r t

he ne w e nti ty

ha s th e same pr od

uc tio n p ro c e ss, pr od

uc e s th e same products, and ba sically

has the same body

of customer s. We have pre viously used the Fall River fac tors to make a f

act- specific finding that a succ essor c orporation was bound by a pre dece ssor’s CBA, at least to the extent of its arbitration clause. See Stotter Div . of Graduate Plastics Co. v. Dist. 65 , 991 F.2d 997, 1001 ( 2d Cir. 1993). L ooking a t those fac tors in this case, it is appare nt that th is p art ic ula

r e mpl oye r, Me ri dia

n, sh ou ld b e re qu ir e d to arb itr ate the de g re e to whic h it is otherwise bound by

the CBA. The ke y fac tor in our ana ly sis is a particular fac t that was not prese nt in any of the prior jurisprudenc e on this subject: at all times from the time that the e mploy ees r epre sented by L ocal 34 8 b e g an to wo rk

at th e Te rm ina l ( inc lud ingwh e n Cr ist i w a s th e e mpl oye r o f r e c or d) , th os e employ ees w ere essentially workingfor Me ridian. Mer idian had the c ontrac t to clean the terminal. Mer idian elec ted to fulfill its contractual oblig ations by reta ining Cristi – a shop that employ ed union worke rs pursuant to an e x isting CBA– to do Meridian’s wor k. Their wa g es
came from Cristi, of course , but Cristi was in turn paid by Meridian to per form the janitoria l service s require d by

the contra ct betwe en Mer idian and the Port Authority . Cristi was simpl y the mid dle man b e tw e e n M e ri dia n a nd tho se wo rk e rs . Put ot

he rw ise , whe n it

e nte re d into i ts ag ree ment with the Port Authority and oblig ated itself to provide janitorial servic es at the T erm i n al , M er i d i an kn o wi n gl y an d v o l un t ar i l y

el ec t edt o ca rry

o u ti t s o b l i gat i o nb y

h i ri n g a subcontrac tor that employ ed wor kers r epre sented by

L ocal 348, pur suant to a collec tive barg ainingag ree ment neg otiated by L ocal 348. Eve ntually , Meridian de cided to eliminate the19

mid dle man a

nd , in No ve mbe r 2 00 5, e nte re d into a dir e c t e mpl oy

me nt r e latio ns hip wi th approximately

three -quar

ters of the janitorial worke rs at the Te rminal. Otherw ise, nothing chang ed. The same pe ople went to the same locations and pe rfor med janitorial ser

vices that M e r i d i an- - n o tC r i s t i - - h a d a l l a l o n gb e e nc o n tr a c tu a l l y b o un d t o p r o v i d e f

o r th e P o rtA u th o r i ty. L ooking at the Fall River fac tors ag ainst the bac kdrop of this cruc ial fac t, it is clea r that the district court re ache d the cor rec t conclusion. F ir st, bo th M e ri dia

n a nd Cr ist i are in t

he bu sin e ss o f p ro vid ingjanit or ia l se rv ic e s to
commerc ial enter

prises in the Ne w York me tropolitan are a. Althoug h Meridian pr ovides more than just janitorial service s, as a pa rt of its more g ener al provision of building ma intenance
se rv ic e s, Me ri dia

n und e rt ake s to ke e p it s b uil din g s c le an. To the e xtent th at Me ri dia n u se s it s
own e mpl oye e s to pe rf

or m th at ta sk , it

is i n th e same bu sin e ss a s Cr ist i. Second, the e mploy ees who woke up one morning to find that they wer e now e mploy ed by Meridian r ather

than Cristi went to the same location -- the Te rminal -- a nd perf ormed the same job -- clea

ning - - in substantially

the same w orkingconditions as they alway s did. Th ir d, Me ri dia

n c on tin ue s to the us e tho se same wo rk e rs to p ro vid e the same pr od uc t to the same c ustomer. While Crist i, the prede cessor employ er, w as tec hnically providing janitorial service s to Meridian , n ot t he Por t Auth or ity , th at is a

dis tin c tio n w ith out a

dif fe re nc e , b e c a

us e Cristi was actingas Mer idian’s subcontra ctor for the purpose of

providing service s to the Port A u th o r i ty. I t is tr ue that Cr ist i w a s n ot e xtinguis he d a s a c or po ratio n whe n M e ri dia

n d e c ide d to supplant it as the provider of janitorial servic es. Ther e has be en no mer g er he re a nd there was
no t e ve n a

sa le of a sse ts. Our d iss e nti ngc oll e a g ue su g g e sts that L oc a l 34 8 c ou ld l oo k to Cr ist i to20

provide the be nefits the union see ks to obtain through a rbitration. In this case, howe ver, the continued existence of Cristi is irreleva nt. As in W

iley , L ocal 348 would likely have no w ay

of obtaining the relief

it has sought f

rom Meridian by

filing suit ag ainst Cristi. I n W iley , the orig inal
e mpl oye r c e a se d to e xist a ft e r t he me rg e r a

nd , th us , th e un ion

c ou ld n ot o bta in r e lie f b y fi lin gsu it ag ainst that orig inal employ er. H ere , beca use Christi no longer

employ ed the union member s afte r its ag ree ment with Meridian wa s terminated, Cristi had no leg al re sponsibili ty to make fu rt he r c on tr ibutio ns to t

he F un d. Th e re wo uld

thu s b e no ba sis up on

wh ic h L oc a l 34 8 c ou ld ob ta in t ho se c on tr ibutio ns fr om C ri sti . It is ne ith e r l e g a lly re qu ir e d n or

e qu ita bly a pp ro pr iate to forc e Cristi to pay

benef its that are owe d to Meridian’s e mploy ees f or work be ing pe rfor

med by Meridian. Give n the nature of L ocal 348’ s claims, only Meridian c an provide L ocal 348 with the relief it seeks. The Supreme Court identified interests to be ba lance d in Burns and Howard Johnson
. This, however , is not a case like Burns , whe re on e se c ur ity se rv ic e outbi d it s c omp e tit or and so obtained the r ight to provide secur ity service s to L ockhee d, the ultimate customer, a nd wher e the iss ue wa s w hic h o f t

wo un ion c on tr a c ts w ou ld p ro te c t th e se c ur ity g ua rd s. Ne ith e r i s th is a

c a se like Howard Johnson , wher e most of the pre dece ssor’s employ ees w ere fired a nd the union was actua lly seekingto vindicate the r ights of those displaced e mploy ees — not the r ights of the few who ac tually

rema ined on the job. In this case, the union is see king he alth and we lfare contributions for the e mploy ees who rema ined on the job, and who ha d a leg itimate expectation that they would continue to re ceive the same c ompensation (includingbenef its) for doingthe
s am e w o r k o nb e h a l f o f th e s am e u l t i m at e c o n tr a c t i n gp arty.21

Enforc ing a

duty to arbitrate the issue of Mer idian’s obliga tion to comply

with the substantive terms of the a g ree ment is the most effec tive way to balance those interests re cog nized by the Supreme Court in W

iley , as we ll as Burns and Howard Johnson . A rb itr atio n p ro vid e s a forum in which the two pa rties ca n offe r evide nce a

nd arguments reg ardingtheir dispute. Al tho ug h th e ob lig atio n to arb itr ate ari se s o ut o f t he a g re e me nt, and

the c a se law c le arl y establishes that a suc cessor is not automatically

obligated by

the substantive terms, re quiring
arb itr atio n o n th is i ssu e is the mos t e ff ic ie nt a nd fa ir me ans by

wh ic h th e pa

rt ie s c an s e ttl e the ir dispute, particular ly

in case s like this one where the dispute arise s out of the employ er’ s ref usal to h on or a pa rt ic ula r t e rm of the CB A. Th e duty

to r e c og nize the un ion

is s e pa ra te fr om t he duty to arbitrate g rieva

nces a rising out of

the exist ing CB A, and the two ha ve diffe rent purpose s. The former may lead to neg otiation of a newag ree ment betwee n the succ essor e mploy er a nd the incumbent union. The latter protec ts the established rig ht of union members to re ly on the protec tions neg otiated for the m by their union, at lea st until that union neg otiates a ne w ag ree ment with their new e mploy er. See H oward Johnson , 417 U.S. at 264 (noting that i n t er p re t i n g W ileyto require a succ essor e mploy er to a rbitrate “ is consistent . . . with the Court’s
conce rn with aff

ordingprotec tion to employ ees who are . . . reta ined in the transition from one corpor ate or g anization to another . . ..”) (interna l quotation marks omitted). The nar row issue befor e this Court arises fr om a dispute reg ardingthe substantive terms of the CBA, not whe ther Meridian violated its duty to barg ain or re cog nize L ocal 348. See W iley , 3 76 U. S. at 55 1 ( “ Th is Un ion do e s n ot a sse rt

that it ha s any ba rg a ini ngri g hts ind e pe nd e nt o f t he Inte rs c ie nc e a g re e me nt; it seeks to arbitrate claims base d on that ag ree ment . . . not to neg otiate a ne w agree ment.”). Acc ording ly , the district court’s or der of arbitration was appropr iate in this case in that it re quiredContrary to the dissent’s asser

tion, the balancingtest that we unde rtake is not 1
“ fr e e wh e e lin g .” Se e sli p d iss e nt at 11 . Rathe r, a s w e have e xpla ine d it a bo ve and a s w e a pp ly it here , its factors a

re those e stablished by

the Supreme Court. The situation before us, in which 22 the commenc ement of a

n arbitration that would decide two que stions: first, t he extent to which Me ri dia n is bo un d b y

the pa rt ic ula r p ro vis ion s o f t

he CB A at is su e , a

nd se c on d, if

Me ri dia n is bound, then the natur e of the relief available to L ocal 348. We note Meridian’ s argument that under the district court’s a naly sis all successor employ ers will be bound by the substantive terms of pr e-e x isting CBA s. This overstates the relief awa rded by the district court, howe ver, a s the very question to be consider ed by the
arb itr ator in t he fi rs t in sta

nc e is whe the r a

nd to what e xtent Me ri dia

n is re qu ir e d to c omp ly

wi th the terms of the pre- exis ting CB A. We emphasize that our holdingon this pointis a narr ow one. We do not intend a rule that binds all succ essor e mploy ers to the substantive terms of pree xistin ga g re e me nts be tw e e n th e ir pr e de c e sso rs and

the un ion s th at r e pr e se nt t he pr e de c e sso rs ’ employ ees. Rathe r, we conclude that, as in this case, where there are sufficie nt indicia of substantial continuity

of identity

of the wor

kforc e, it is possibl e that a suc cessor employ er w ill be bo un d at le a st b y

so me of the su bs tanti ve te rm s o f a

pr e -e xistin gCB A. De te rm ini ngthe e xtent to which the suc cessor

employ er is bound by

the pre exis ting a g ree ment, howeve r, is a question for the ar bitrator. See A meriStee l , 267 F.3d at 287-88 (“ W iley ’s ho ldi ngne c e ssa

ri ly me ans that, i n the rig ht circumstanc es, some substantive ter ms of a pre dece ssor’s CBAmay be imposed on an
un c o n s e n t i n gn o n - a l t e r - e g o s u c c e s s o r c o r p o r at i o n . . . . [ T ] h i s c a s e i n v o l v e s o n l y arbitrati ng the applicability

of the CB A . . ..”) (B ecke r, J ., dissenting) (empha sis in original). We of fer no op in io n regard in g the e x ten t t o wh ich Mer id ian is bo un d b y th e subs tan ti ve t erm s o f t he C BA betwee n Cristi and L ocal 348. We lea ve that question to the ar

bitrator. 1the employ ees r epre sented by L ocal 348 we re w orkingindirectly and then dire ctly

for Me ridian at all times that they

worke d at the ter

minal, presents a

rela tively unusual, if not unique, set of fa c ts t o whic h w e have a

pp lie d th at te st. 23 VI . Am eriSteel Meridian r elies on the Third Circ uit’s decision in AmeriStee l to argue that the district court improper ly

compelled it to arbitrate with L ocal 348. The fac ts of AmeriStee l are sim ple and, in this context , familiar. In 1999, AmeriSteel Corporation (“Amer iSteel”) purc hased
va ri ou s a sse ts o f B ro c ke r R e ba r, inc lud inga

fa c ili ty in Y or k, Pe nn sylva

nia , whe re c e rt a in employ ees w ere repr esente d by the Tea msters. Br ocker

Rebar ha d enter ed into a CBAwith the Teamsters prior to the purc hase of the fa cility

by AmeriSteel. That company hired a ll but si x of the employ ees r epre sented by the Tea msters. Despite this, AmeriSteel c onsistently maintained that be c a us e it w a s n ot b ound

by the su bs tanti ve te rm s o f t

he CB A, it w a s n ot r e qu ir e d to arbitrate under

the agree ment. Prior to the eff ective date of the a g ree ment betwee n AmeriSteel and B rocke r Rebar , the Tea msters filed a grieva

nce c halleng ing c hang es at the loc ation that
wo uld oc c ur a ft e r t he purc ha se a g re e me nt w a s c on summate d. Af te r t he pa rt ie s w e re un a

ble to resolve the dispute, the union reque sted arbitration pursuant to the terms of the CB A. AmeriSteel filed a

complaint in district court seekingan injunction prohibiting the union a nd the Americ an Ar

bitration Association from proc eedingto arbitration with Amer iSteel as a pa rty . The district cour

t gr anted Ame riSteel the injunction, finding that beca use Amer iSteel was not the
a lte r e g o o f B ro c ke r R e ba r a nd ha d n ot a g re e d to a

bid e by the te rm s o f t

he CB A, it h a d n o d

uty to arbitrate. On appe al, the Third Circuit agree d with the district court. 267 F .3d at 265. The c ourt beg an by examining the fa cts and holding s of W iley and Burns and by

asser ting that the two c ases24

“appe ar to be in direct c onflict.” Id . at 270. Acc ordingto the Third Circuit, “[o] n the one ha nd, the holding in W

ileynece ssarily

implies that uncontesting suc cessor employ ers may

be bound by the substantive terms of pr e-e x isting CBA s. But on the other hand, Burns endorse s the idea that unwilling succ essors ca

nnot be bound by

such terms.” Id . It w e nt o n to e xami ne the Sup re me Court’s holding in Howard Johnson , a nd c on c lud e d th at “

Howard Johnson does not bridg e the g ap betwe en W

ileyand Burns , nor does it establish broa dly applicable g uiding pr inciples that should be implemented whe n analy zing labor la

w succ essorship problems.” Id . at 272. Acc ordingto the Third Circuit, in Howard Johnson , the Supreme Court “ downplay [ed] the signific ance of W

iley ” and “ t[ ook] an ex pansive viewof Burns , r e pe ate dly e xtoll ingits
rea soning.” Id . The c ircuit court we nt on to presume that, bec ause – in that c ourt’s opinion – Howard Johnson relied he avily on Burns and limited the holding of W iley , “af ter Ho war

d Johnson , Burns rests on solid gr ound.” Id . at 27 3. F ina lly , th e c ourt c on c lud e d th at, b e c a

us e

“Burns . . . provides more persua sive guidance than the limited holding in W iley ,” Amer iSteel “ca nnot be bound by

the substantive terms of the CBA,” and “be cause AmeriSteel c annot be bo un d b y the su bs tanti ve te rm s o f t

he CB A, no arb itr atio n a

wa rd to t he Un ion – whic h o f c ours e would be base d on the substantive terms of the CBA – c ould rec eive judicial sa nction, and there fore AmeriSteel c annot be c ompelled to submit t o arbitration.” Id . at 273-74. Wit h all due re spect, we disag ree with the Third Circuit’s ana ly sis of Howard Johnson
. Whil e Howard Johnson argua bly did no t ann ounc e any

ne w p ri nc ipl e s in

thi s c on te xt, it

did reinfor ce the Supreme Court’s e mphasis on assessingthe protec table intere sts in question and the means by which those intere sts are most ef fec tively protec ted. In Howard Johnson , the Court discussed the rationale of W ileyat leng th and clea

rly established the c ontours of its holding. The25

Court considere d the re asoningand policies unde rlying both Burns and W ileyand re

jected ne ither
c a s e . A s d i s c u s s e d

a b o v e , i nd e c l i n i n gt o a

p p l y W ileyt o th e f

a c t s p r e s e n t e d

b y Howard Johnson , the Court descr ibed the policies unde rlying the rationale s of both W ileyand Burns . T his is further evidenc ed by

the Supreme Court’s de cision in Fall River , which re iterate d and extended a
succe ssor employ er’ s duty to arbitrate or bar g ain with an incumbent union. The re sult of the holding in AmeriStee l is clear , as it eviscer ates the pr otection of employ ees r epre sented by incumbent unions—a protec tion that has been w ell identified in the Supreme Court’s de cisions to this point. AmeriStee l ’s controllingrationale incorre ctly minimi zes the Supreme Court’s c lear rea soning in Howard Johnson and fa ils to account for the discussion in Howard Johnson of the importanc e of the policies first identified in W iley. Fur ther, AmeriStee l

do e s n ot a c c ount f

or the of t- re c og nize d im

po rt anc e of

the ro le of

arb itr atio n in settling labor

disputes. I n sum, the majority in AmeriStee l

misperce ived the re asoningof Howard Johnson and minimiz ed, if not ig nored, the Supreme Court’s re peate d descr iptions of the imp or tant i nte re sts at pl ay

in t he c on te xt of

su c c e sso r e mpl oye rs and the ir ob lig atio ns to incumbent unions. The re sult in AmeriStee l is one-sided in a w ay

that is in clear c onflict with the policies identified in W

ileyand re inforce d in Howard Johnson . We a g re e wi th t he dis se nt i n AmeriStee l

and will not adopt the majority ’s re asoningin that case “bec ause its log ical conseque nce f

latly contra dicts the holding of W iley. . ..” AmeriStee l , 267 F.3d at 281 (Be cker , J ., dissenting) . As discussed in Section V, su pra , imposing a duty

to arbitrate the issue of the
succe ssor employ er’ s obligations under the substantive ter ms of the CBA is the most ef ficient way of bala ncingthe intere sts recognized by the Supreme Court in W

iley , Burns , and Ho war

d Johnson . Acc ording ly , the district court did not err in concludingthat Meridian ha d an26

ob lig atio n to arb itr ate un de r t he CB A b e tw e e n Cr ist i and L oc a l 34 8, and

that it wa s a pp ro pr iate for a n arbitrator to determine the extent of Meridian’s oblig ation to comply with the substantive terms of the CB A. CO NC LU SION F or the re a so ns state d, we AF F I RM the jud g me nt o f t he dis tr ic t c ourt .27

D EB R A A. L I VI NGS TON , C i rc u i tJ u d ge, d i s s en t i n g:

The majority

opinion confuses the c ircumstance s in which a “ succe ssor employ er” has a duty

to rec og nize and barg ain with a labor union, with the much more limited circ umstances in which that employ er is bound to ar bitrate with a union unde r a c ollective barg ainingag ree ment to which it has not ag ree d. This confusion may be under standable, g iven “the diff iculty of the succ essorship question,” see H oward Johnson Co. v. Detroit Local Joint Exe cutive B d ., 417 U.S. 249, 256 (1974), and its history of bede viling cour

ts. See A meristeel Cor p. v . I nt’ l B hd . o f Te am ste rs , 267 F.3d 264, 267 ( 3d Cir. 2001) (re fer encingthe “tre ache rous
w at e r s ” o f

th e S u p r e m e C o urt ’ s l a

b o r l aws u c c e s s o r s h i p d o c tr i n e ) ; E dw ar d B
. R o c k & M i c h a e l L. Wachter, Labor L aw Succe ssorship: A Corporat e Law Approach , 92 Mich. L . Rev. 203, 203 (1993) ( “Courts have strug g led re peate dly to define the leg al obligations of the buy er of a bu sin e ss t hat ha s unio nize d w or

ke rs .” ). Th e fa c t r e ma ins , h ow e ve r, that th e ma jor ity misint erpr ets what until today had bec ome a se ttled, if not well-cha rted, a rea of law. This e rror leads the ma

jority to an er roneous r esult in this case, and to a n analy sis that either will confound the “suc cessor

employ er” labor lawof this Circuit indefinitely or that must be limited to “the unique fa cts of this case ,” slip op. at 7 — in which eve nt today ’s dec ision is l ittle more than an
a be rr atio na l and

un jus tif ie d d e pa rt ur e fr om p re c e de nt. * * * I t is we ll- se ttl e d th at a

“ su c c e sso r e mpl oye r” — i. e ., an e mpl oye r who se bu sin e ss ha s a “ su bs tanti a l c on tin

uit y ” wi th t hat of its pr e de c e sso r —

ha s a duty to r e c og nize and

ba rg a in with an exist ing union. Fall River Dy eing &Finishing Corp. v. NLRB , 482 U.S. 27, 40, 4328

(1987). This duty

arises a s a conse quence of fe dera l labor law, not fr om any contra ct, and whether the “substantial continuity ” test is met does turn on at lea st the main fac tors that the
m a j o r i ty o p i n i o nd i s c u s s e s . M e r i d i anh a s c o n c e d e d o na p p e a l th atth e “ s u

b s t an t i a l c o n t i nu i ty” t e s ti s m e ti nt o d ay’ s c a s e an d th atM e r i d i anth e r e f

o r e i s a s u c c e s s o r

e mp l o ye r . C o n s e qu e n t l y, Meridian c oncede s that it is obl igated to rec og nize and barg ain with the union, and I there fore do
no t f ind it n e c e ssa

ry to d isc us s th e a

pp lic atio n o f t

he “ su bs tanti a l c on tin

uit y ” te st t o th e se fa c ts.

“ Suc c e sso r e mpl oye rs ,” in s ome sit uatio ns — b ut n ot a ll, a s th e ma jor ity at po int s
a dmi ts — a lso are bo un d b y

the te rm s o f a

c oll e c tiv e ba

rg a ini nga g re e me nt ( “ CB A” ) e nte re d into by the pre dece ssor employ er, a nd there fore might be r equire d to arbitrate with the union (if that ag ree ment contains an a

rbitration provision). It is not necessar y exhaustively

to catalogthe situations in which a “succ essor e mploy er” might be bound by the pre -existi ngcollective b ar g a i n i n ga g r e e m e n t , b u tp r e v i o u s c a s e s g e n e r a l l y h av e r e qu i r e d a c o mp an y t o a

b i d e b y a collective ba

rg ainingag ree ment wher e ther e has be en a me rg er, where the company expressly or impliedly assumed the CB A, or whe re the “succ essor e mploy er” is in fact simply an alter eg o of the pre dece ssor employ er. See Howard Johnson Co. , 417 U.S. at 259 n.5 (discussingalter e g o); John W iley &Sons, Inc. v . Livingston , 3 76 U. S. 5 43 , 5 48 -4 9 ( 19 64 ) ( me rg e r) ; Southward v. South Cent. Ready M

ix Supply Corp. , 7 F.3d 487, 493 ( 6th Cir. 1993) (assumption of liability). All three the ories ar e widely acc epted outside the la

bor law c ontext as g rounds for imp os ing su c c e sso r l ia

bil ity on an e nti ty that ha s n ot i tse lf

e nte re d into a

c on tr a c t but is c los e ly related to another

entity that has. See1 Fletc her Cyc. Corp. § 41.10 (updated 2008) (“ The a lter
e g o d oc tr ine ha s b e e n a do pte d b y c ourt s in c a se s w he re the c or

po rate e nti ty

ha s b e e n u se d a s a subterfug e and to obse rve it would work a n injusti ce.” ); 15 id. § 7121(“[I ]n all j urisdictions29

today , the survivingcorpor ation in a statutory merg er ha s the statutory

obligation to assume the dutie s and

lia bil iti e s o f a

c on sti tue nt c or

po ratio n. ” ); id. § 7142 (“An implied assumption of lia bil iti e s is on e of

the e xce pti on s to the g e ne ra l r ule of no nli a bil ity fo r a c or po ra tio n th at me re ly purc ha se s th e a sse ts o f a

no the r c or

po ra tio n. ” ); cf. Howard Johnson , 4 17 U. S. 2 49 (d e c lin ingto impose liabilit y

under a CBA on a

corpor ation that mere ly

purcha sed the a ssets of the prede cessor

employ er, a lbeit on the theory that the “substantial continuity ” re quirement wa s not met). The majority in today ’s dec ision, however, nowhere sug g ests that Meridian wa s an “a lter eg o” of its pre dece ssor or that Mer idian expressly or impliedly

assumed the a g ree ment
at is su e he re , o r t

hat th e re wa s a

me rg e r. No r d oe s th e ma jor ity argue that so me oth e r w ide ly
a c c e pte d g ro un ds fo r i mpo sin gsu c c e sso r l ia bil ity on a c on tr a c t a

pp lie s to thi s c a se . O n th e fa c ts be fo re us , s uc h a

n a rgume nt i s n ot a

va ila ble . Ins te a d, the ma

jor ity se e ms t o h old

sim ply that, whene ver the re is a “ substantial continuity of identity

of the wor

kforc e” be tween a

prede cessor and succ essor e mploy er, the succe ssor employ er is bound at lea st by the ar bitration clause of

the CBA. In other wor ds, all succe ssor employ ers who hir e the bulk of a prede cessor ’s employ ees have a duty not only to barg ain with and re cog nize a union but also to arbitrate w ith it t he extent to which it is bound by

the pre vious CBA. This is appar ently the ca se eve n if the succ essor employ er, a s here , is simpl y a contr actor

who elec ts no longe r to subcontra ct work that another has per formed, a

nd wher e ther e has be en no mer g er, c onsolidation, stock acquisition, purchase of
a sse ts, or any vo luntary

a ssumpt ion , e xplic it o r i mpl ic it, of any te rm s o f t

he CB A, inc lud ingits arbitration provision.30 Th is i s h ard

to s qu are wi th what ha s g on e be fo re . T he Sup re me Court ha s h e ld that “althoug h succe ssor employ ers may be bound to re cog nize and barg ain with the union, they
are no t bo un d b y

the su bs tanti ve pr ov isi on s o f a

c oll e c tiv e -b arg a ini ngc on tr a c t ne g oti ate d b y the ir prede cessor s but not ag ree d to or assumed by them.” NLRB v. Burns Int’l Sec. Se rvs., Inc
. , 406 U.S. 272, 284 (1972). Gr anted, the Court ha s rec og nized that “in a var iety of circ umstances involving a me rg er, stock a cquisition, reorg anization, or assets purc hase,” a succ essor e mploy er may proper ly be found a s a matter of

fac t to have assumed the obligations of an exist ing CB A. Id . at 291. Such obliga

tions, however, do not “ ensue a s a matter of law fr om the mere fac t that
an e mpl oye r i s d oin gthe same wo rk in t he same pla c e wi th t

he same e mpl oye e s a s h is prede cessor . . . .” Id .; see also Fall River , 482 U.S. at 40 (“[A]lt houg h the succ essor ha s an obligation to barg ain with the union . . . it is notbound by the substantive provisions of the p re d ec es s o r’ s co l l ec t i v e- b ar gai n i n g agr ee m en t . ” ( ci t i n g Burns , 406 U.S. at 284)). I f they did, such oblig ations would amount to imposi ng“something. . . from without, not rea sonably to be found in the par

ticular ba rg ainingag ree ment and the a cts of the pa rties involved,” whic h the Court has made c lear

is impermissibl e. John W iley & Sons, Inc. v . Livingston , 376 U.S. 543, 551 (1964). The majority might have argued that an a rbitration clause is not a “substantive provision” of the c ollective-ba rg ainingag ree ment — a position that would at least have attempted to re concile the holding he re w ith releva nt Supreme Court authority . But e ven if the
arb itr atio n c la

us e we re no t a

“ su bs tanti ve pr ov isi on ” of

the c oll e c tiv e -b arg a ini nga g re e me nt, order ing a

rbitration when the Supreme Court has c lear ly held that the substantive provisions are
no t binding on a

succe ssor employ er w ould be futile and the ref ore unw arr anted. See A meristeel31

Cor p. v . I nt’ l B hd . o f Te am ste rs , 267 F.3d 264, 276- 77 (3d Cir. 2001). To avoid the evident futility of its order of

arbitration, the majority

sug g ests that “it is possibl e that a suc cessor
e mpl oye r w ill be bo un d at le a st b y so me of the su bs tanti ve te rm s o f a

pr e -e xistin gCB A. ” Slip op . at 22 . T he ma

jor ity c an f ind no a uth or ity , h ow e ve r, to s up po rt thi s c on c lus ion , at le a st ins of ar a s it su g g e sts that th e su

bs tanti ve te rm s o f a

CB A m ig ht b e bin din gon a su c c e sso r i n circ umstances a

nalog ous to those presente d here
. The majority

tries to justify

its result by

heavy relianc e on John W

iley &Sons, Inc. v. Livingston , 3 76 U. S. 5 43 (1 96 4) , b ut i n s o d oin gmis re a ds W ileyand ig nores se vera l subsequent Supreme Court case s that have inter prete d W ileynot to permit what the majority does today
. Cf. Howard Johnson , 417 U.S. at 253 (re versinglower c ourts that “re lied heavily on . . . W iley ”). In W

iley , th e Sup re me Court

he ld t hat, f oll ow inga

me rg e r, the me rg e d c omp any wo uld be bound to ar

bitrate pursua

nt to a collective ba

rg ainingag ree ment enter ed into by one of the prede cessor

companies. 376 U .S. at 548. This result can be understood as a straig htforwa

rd
a pp lic atio n o f t

he wi de ly a c c e pte d r

ule that a me rg e d c or

po ratio n is lia

ble on a ll c on tr a c ts o f b oth prede cessor

corpor ations. Although the Supreme Court did not rely principally

on common law
succe ssor liability

rules in W

iley , it did re fe r t o th os e pr inc ipl e s a s a pa rt ia l e xplanatio n f

or its result. See id . at 550 n.3. Moreove r, althoug h the Court did not touch on the question whether terms of the CB A other tha n the ar bitration clause mig ht also be binding on the merg ed corpor ation, g iven the state la w bac kg round rule, it would appe ar quite c lear that the ar

bitrator could indeed f

ind that the entire CB A was so binding . Arbitration wa s not futile in W ileya s it is here
.32 Inev ery s u b s equ en tca s e c o n s tru i n g W iley , the Supreme Court ha s g iven a c lear indication that lower c ourts should not read too much into W iley ’s fa ilure spec ifically

to gr ound its decision in common law succe ssor liability rules. The Court has emphasized that the background common law suc cessor liability rule was i mp o rt an tt o th e r e s u l ti n th atc a s e . In Burns , for instanc e, B urns International Security Service s, Inc. (“ Bur

ns”) suc cessf

ully competed for a contra ct to provide plant prote ction service s to L ockhee d Aircr aft Servic e Company (“ L oc kh e e d” ) a

nd re pla c e d th e Wac ke nhut C or po ratio n ( “ Wac ke nhut” ) a s L oc kh e e d’ s se c ur ity company . Bur

ns therea fter hir ed a substantial number of for mer Wacke nhut employ ees to do the
wo rk un de r i ts n e w c on tr a c t. T he NL RB inv ok e d p re c ise ly the po lic y

c on c e rn s th at th e ma

jor ity invokes today

— “the pe ace ful settlement of industrial conf licts” and prote ction of employ ees ag ainst sudden cha

ng es — to argue that B urns was bound to Wacke nhut’s collective ba rg aining ag ree ment with the union. 406 U.S. at 285. But the Supreme Court rejec ted this argument in no
un c e rt a in t e rm s:

[T] he claim is that B urns must be held boun db y t h e contract executed by

Wackenhut, whe t h er B urns has a g ree d to it or not and even though Bur

ns made it pe rfe ctly clea

r that it ha d no intention of assuming that contrac t. W iley sug g ests n o such open- ended ob lig atio n. I ts n arr ow e r h old ingde a lt w itha me rg e r o c c ur

ri nga g a ins t a ba c kg ro un d o f s tate law t hat e mbo die d th e g e ne ral rule th at in merg e r s it u ati o n s th e s ur

v iv in gc o r

p o r ati o nis li a

b le f o r the obligations of the disappea ringcorpor ation. Id. at 286. Simil arly , in Howard Johnson , the Court war ned ag ainst “an unw arr anted e x tension of W ileyb ey o n d

an y fa ctu al co n t ex ti tm ay

h av e c o n t em p l at ed , ” e mp h as i z i n g again the importance in that case of the state la w bac kg round rule a

bout merg er liability . 417 U.S. at 257.33 The majority

attempts to disti ng uish this precede nt by arguing that the prese nt
c a se is d if fe re nt i n th at th e me mbe rs of L oc a l 34 8 “ we re e sse nti a lly wo rk ingfo r M e ri dia

n” a ll
a lon gbe c a

us e Cr ist i w a s me re ly

Me ri dia n’ s su bc on tr a c tor . Sl ip o p. at 18 . T his argume nt i s in serious tension with Burns , howeve r, which involved a materia lly

indisti ng uishable contra cting
arr ang ement. L ockhee d terminated its exist ing c ontrac tor and sele cted a new one , which hire d a majority of the pre vious contrac tor’s employ ees. 406 U .S. at 275. Never theless, the new
c on tr a c tor

wa s n ot b ound

by any pr ov isi on

of the pr e vio us CB A. Th e ma jor ity ’s ana ly sis sug g ests that if L ockhee d had simply fired its first sec urity

company and then e lected to do the work itself, hiringmany

of that compa

ny ’s employ ees, the n it would have bee n bound by the CB A’ s arb itr atio n c la

us e . B ut Burns ho lds that if it h ir e d a ne w c on tr a c tor

to d o th e e xac t sa

me thing, ne ither that contra ctor nor L ockhee d would be bound. Burns no wh e re su g g e sts that it s holding turns on suc h formalities. Its reasoning— that succe ssor employ ers should not be bound by CBAs “ neg otiated by

their pre dece ssors but not ag ree d to or assumed by them,” 406 U.S. at 284 — applies just as rea dily to the former

case as it does to the latter. In other wor ds, in the major ca ses on which the ma jority itself focuse s, the Sup re me Court

ha s g ive n e ve ry

ind ic atio n th at a

su c c e sso r e mpl oye r g e ne ra lly wi ll o nly ne e d to arbitrate under

a CBAwher e some c ommon law theory would support succe ssor liability on the
c on tr a c t. And

un til tod ay ’s de c isi on , th e c ir c uit c ourt s a pp e ar t o h ave be e n in

a c c or d in interpre ting the la

w in this fashion. See 3750 Orange PlaceLtd. P’ship v. NLRB , 333 F.3d 646, 654 (6th Cir. 2003) (“ [A] new e mploy er is not bound by the substantive terms of a collective barg ainingag ree ment enter ed into by its predec essor a

bsent an e x press or implied assumption of the a g re e me nt . . . .” ); AmeriStee l , 267 F.3d at 277 (“Ame riSteel, which is not bound by the34

su bs tanti ve te rm s o f t

he CB A, c ann ot b e c omp e lle d to su bmi t to arb itr atio n . . . .” ); Road Sprinkler Fitters Local Union No. 669 v. Indep. Sprinkler , 10 F.3d 1563, 1567 ( 11th Cir. 1994) (“[A] successor is only

bound to collectively

barg ain and is not bound to any extent by an
e xistin gc on tr a c t be tw e e n th e un ion and the pr e de c e sso r. ” ); Ne w Engla nd Me c h. , I nc . v . La bo re rs Local Union 294 , 909 F.2d 1339, 1342 ( 9th Cir. 1990) (“The flaw in the district c ourt’s
rea soning is that it assumed that all succ essor e mploy ers will alwa y s be bound by

the terms of a prede cessor ’s CBA. H oweve r, the Supreme Court has continually indicated that a

succe ssor employ er is only

bound to bargain wi th a

un ion wh ic h h a d a

CB A w iththe pr e de c e sso r. ” ); Hosp. &Institutional

W orkers Local 250 v. Pasatiem po Dev . Corp. , 627 F.2d 1011, 1012 ( 9th Cir. 1980) (“ [A] succe ssor employ er is not bound by the substantive terms of a collective ba

rg aining ag ree ment unless it ex pressly or impliedly

assumes them. . . . Nor a re w e per suaded that the statut or y duty to b arg a in i n g oo d f

a ithob lig ate s a

n e mpl oye r i n Pa satie mpo ’s sit uatio n to
arb itr ate .” ); Int’l Union of Elec., Radio and M ach. W orkers v . NLRB , 6 04 F .2 d 6 89 , 6 93 (D .C. Cir. 1979) (“[T]he succe ssor employ er is bound to re cog nize and barg ain with the re prese ntative of his employ ees . . . . [but] is not bound by the pre dece ssor’s bar g ainingag ree ment . . . .”). Th e ma jor ity re a ds Howard Johnson ’s dis c us sio n o f a “ su bs tanti a l c on tin

uit y in identity of the wor

k forc e,” 417 U .S. at 263, as license to de part fr om this consensus. I ndeed, the
ma jor ity le a ds of f i ts s y nth e sis of the c a se law b y

statin gthat “ the iss ue is whe the r t he re e xists a ‘s u b s t an t i al co n t i nu i ty

o f i d en t i ty

o f t h e w o rkfo rc e. ’” S l i p o p . at1 7 (c i t i n g id. ). B ut Ho war d Johnson c ou ld n ot h ave ma de thi s the i s s u e w i th o u tex p re s s l y o v erru l i n g Burns , which made clea r that substantial continuity of identity

of the wor

kforc e “is a

wholly insufficient ba sis for imp lyinge ith e r i n f

a c t or in l aw that [th e su c c e sso r e mpl oye r] h a d a g re e d o r m us t be he ld t o35

have a g ree d to honor [the predec essor e mploy er’ s] collective-bar g ainingcontra ct.” Burns , 406 U.S. at 286. And Howard Johnson did no such thing. See A meriStee l , 2 67 F .3 d at 27 2 ( “ I t is important . . . to apprec iate the limited scope of the Court’s dec ision in Howard Johnson .”); So uth war d , 7 F.3d at 494 (“

Howard Johnson rea ffirme d the Burns holding a nd further limit ed W iley .”). A fter stating that the “ the re asoningof Bu rn s must be taken into ac count,” the Ho war d Johnson Court

me re ly he ld t hat “ W iley[di d] not ” apply

beca use, inte r a lia , there was no substantial continuity

of identity

of the wor

kforc e in that ca se. 417 U.S. at 256. Ho war d Johnson thu s tr e at s s u c hc o n t i nu i ty a s a n e c e s s ar y bu t no t su

ffi c ie nt condition for conc luding that
a succ essor e mploy er is bound to ar bitrate unde r a pr edec essor’s CB A. See A meriStee l , 267 F.3d at 269 (“ [T] he ‘substantial c ontinuity ’ conc ept . . . should proper ly be viewe d as a ne c essa ry but not a su ffi c ie nt c on dit ion

fo r t he imp os iti on

of arb itr atio n o n a

n unc on se nti ngsu c c e sso r. ” ). Th is does not underc ut the clea r languag e of Burns — which the major ity fails to cite, let alone
a c c ount f or in i ts a na ly sis
. The majority

purports to rely

on this Court’s decision in Stotter Division of Graduate Plastics Co. v. District 65 , 991 F.2d 997 ( 2d Cir. 1993), to support its holdi ng . In that
c a se , h ow e ve r, the “ su c c e sso r e mpl oye r” e nte re d it s o wn c oll e c tiv e ba

rg a ini nga g re e me nt w ith the un ion that “ e xpre ssl y

a do pte d th e pr ov isi on s o f t he [pr e de c e sso r’ s] Co ntr a c t w ithon ly immaterial exceptions.” Id. at 1002. Thus, this case pr ovides no support for the notion that an ag ree ment will become binding , so le ly ba se d o n a

“ su bs tanti a l c ontin

uit y ” of bu sin e ss o pe ratio ns . Be cause the succ essorship doctrine is a cre ature of fe dera l common law, fe dera l courts must decide exactly which theor ies of succ essor liability to rec og nize. See 1 Fletc her Cyc. Corp. § 41 (update d 2008) (“ The tests and f actor s that the courts c onsider to deter mine whether36

to d isr e g ard

the c or po rate fo rm

dif fe r f ro m st ate to s tate .” ); se e als o W iley , 376 U.S. at 548 (“ State law m ay

be uti lize d s o f

ar a s it is o f a id i n th e de ve lop me nt o f c or re c t pr inc ipl e s o r t

he ir application in a pa

rticular c ase, but the la

w which ultimately

results is fede ral.” (citation omitted)). B ut the Supreme Court has, in eve ry decision on point, indicated that the a rbitration provision of a CB A is a cr eatur e of c ontrac t and there fore there must be some principled ba sis for
sayingthat th e de fe nd ant t o b e c ha rg e d w iththe c on tr a c t e ith e r h a s a g re e d to it o r i s so c los e ly related to another

entity that has that it is appropriate , essentially , to pierce the cor porate veil and hold the defe ndant bound to the agree ment. The re peate d indication that a “suc cessor employ er” is n ot b ound

on the CB A m ake s c le ar t

hat th e me re “ su

bs tanti a l c on tin

uit y ” te st t hat th e ma

jor ity
re lie s o n —

wh ic h ma

ke s an e nti ty

a “ su c c e sso r e mpl oye r” bo un d to re c og nize and ba rg a in w ith the union — is not enoug h to make the e mploy er subjec t to the CBA.

I t is true that some courts have desc ribed W ileyas cr eatinga nar

row “ merg er” exception to the ge nera l rule that a suc cessor is not li able f

or the substantive ter

ms of a pre
ex i s t i n g C BA —

ra th er th an re ad i n g W

iley , a s I do , a s si mpl y

an a pp lic atio n o f t

he g e ne ra l r

ule that the entire CBA may

be bindingon the succ essor e mploy er when ther e is an a cce pted common law basis for

imposing contra ctual succ essor liability on the succ essor e mploy er. E.g. , Indep. Sprinkle r , 10 F.3d at 1567 (11th Cir. 1994) (“In some narr ow circ umstances [, i.e., if the status of succe ssor arise s out of a mer g er,] . . . there may be an e x ception to the rule that the
succe ssor inherits only

a duty to barg ain and doe s not inherit a pre exis ting c ollective bar g aining
c on tr a c t.” ); New England Mech. , 909 F.2d at 1342 (9th Cir. 1990) (“I n only one ca se has the Supreme Court indicate d that a succ essor e mploy er ma y be bound to some of the te rms of a p re d ec es s o r’ s C BA
. ” ( ci t i n g W iley )). B ut these par

ticulars make no differ ence in substance: the37

courts of a

ppeals, at least since Fall River , have he ld that neither the a rbitration provision nor any other ter ms of the CBA w ill be binding on a suc cessor employ er unle ss the succe ssor has assumed the c ontrac t, is an alter e g o of the pre dece ssor, is the product of a merg er w ith the pr e de c e sso r, or

ano the r a na log ou s b a sis e xists fo r i mpo sin gc on tr a c tua l li a bil ity . F ro m th is wi de ly un de rs too d s e t of

ru le s th e ma

jor ity tod ay de pa rt s, ba se d o n li ttl e mor e tha n a re fu sa l to follow the re latively

clea r interpr etation that the Supreme Court has g iven to W iley
. * * * The majority

tries to justify

its decision today

on the theory

that requiring arbitration “is the most effec tive way to balance those interests re cog nized by the Supreme Court in W iley , a s w e ll a s Burns and Howard Johnson .” Slip op . at 21 . T he ma jor ity thu s se e ms t o believe that whether

a duty to arbitrate will be imposed will depend on a f ree whee ling ba lancing te st i n whic h e a c h p ane l of thi s Co ur t is fr e e to d e c ide wh at r e su lt w ou ld m os t e ff e c tiv e ly “bala nce [the var ious] interests” at stake. In contra st, Irea d the Supreme Court’s discussion of the re levant policy

considera

tions as merely

a par tial expl anation for

the rule of

law that the Sup re me Court

wa s la yingdo wn

in t ho se e arl ie r c a se s —

no t a s a n invit atio n to the low e r c ourt s to decide whether

succe ssor employ ers a

re bound to a

rbitrate on a

n ad hoc basis, driven by

our perc eptions of what r esult in a g iven ca se will best balanc e the inter ests of employ ers a nd
e mpl oye e s. Ev e n if

it w e re a pp ro pr iate to c on sid e r s uc h p oli c y fa c tor s in de c idi ngwh e the r t o imp os e a duty to a rb itr ate in a

n in div idu a l c a se , th e ma

jor ity ’s dis c us sio n o f t

he m is unillumi nating , involving little more than the invoc ation of g ener alities about the importance of “avoidingindustrial strife and e ncoura g ing the peac eful re solution of labor disputes.” Slip op. at38

14 . T he ma

jor ity g ive s n o in dic atio n o f why it b e lie ve s th at th e se po lic y e nd s su pp or t it s r e su lt i n this case, a s opposed to in any other c ase in whic h a union might se ek ar bitration, and it g ives no g uid anc e to d istri c t c ourt s in thi s Ci rc uit

a s to ho w t o d e te rm ine wh e n th e se fa c tor s w ill or wi ll not require arbitration.

Indeed, a proper consideration of the very policy fac tors that the majority

relies on would support a contr ary

result in this case. W

ileyre c og nize d th at th e duty to a rb itr ate sh ou ld not be “somethingimposed from without, not reasona bly to be found in the pa

rticular ba

rg aining ag ree ment and the a cts of the pa rties involved.” 376 U.S. at 551. “ Saddling [a succ essor] employ er w ith the terms and conditions of employ ment contained in the old c ollective-ba rg aining contra ct may

make . . . c hang es impossible and may discourag e and inhibit the transf er of capital.” Burns , 4 06 U. S. at 28 8. Th e se fa c tor s st ro ng ly c ut a g a ins t im

po sin gan o bli g atio n to arbitrate in the circ umstances he re.

The majority ’s principa l policy fac tor in favor

of re quiring arbitration is t hat oth e rw ise , “ L oc a l 34 8 w ou ld l ike ly have no wa

y of ob ta ini ngthe re lie f i t ha s so ug ht .
. . [be c a us e the pr e de c e sso r e mpl oye r h a s] no le g a l r e sp on sib ili ty to m ake fu

rt he r c on tr ibutio ns to t

he [He a lth and Welfar e] Fund.” Slip op. at 20. Althoug h the Supreme Court did re cog nize such a fa ctor a s important in W

iley , wher e the pr edec essor e mploy er no long er e x isted in any form other

than the merg ed compa

ny , see 37 6 U .S. at 54 8, Cr ist i di d n ot c e a se to e xist whe n M e ri dia n te rm inate d it s relationship wit h the company . Moreove r, the c ollective bar g ainingag ree ment befor e us
e xpre ssl y a dd re sse s Cr ist i’ s o bli g atio ns in t he e ve nt o f a

take ov e r o r t

ra ns fe r o f i ts b us ine ss operation. SeeA g r e e m e n tB e tw e e nC r i s t i C l e an i n gS e r v s . & Lo c a l 3 4 8
- S U F C W A F L- C IO (ef fec tive J an. 1, 2002) ( “In the eve nt the entire ope ration or a ny part ther eof is sold, lease d,39

transfe rre d or take n over by the sale, tra

nsfer , lease , assig nment, rec eiver ship or bankruptc y pr oc e e din g s, su c h o pe ratio n s ha ll c on tin ue to b e su

bje c t to the te rm s a

nd c on dit ion s o f t

his ag ree ment for the life there of. . . . Employ ees w orkingunder this agree ment shall at all times be
e nti tle d, a c tin gthr ou g h th e Un ion a s th e ir re pr e se ntativ e , to ho ld t

he Em plo y e r d ir e c tly
re sp on sib le fo r t

he fu ll p e rf

or manc e of a ll t e rm s a

nd c on dit ion s o f t

his a g re e me nt. ” ). Ev e n if thi s pr ov isi on is n ot a pp lic a ble in t he c ir c ums tanc e s p re se nte d h e re , s imi lar p ro vis ion s a pp e ari ngin oth e r l a bo r c a se s to have re a c he d th is C ir c uit su g g e st that it

is n ot u nc omm on fo r u nio ns to protec t their interests by

requiringprede cessor s to ensure that succe ssors ag ree to the terms of exis ting c ollective bar g ainingag ree ments. See, e .g. , In re Chateaugay Corp. , 891 F.2d 1034, 1035 (2d Cir. 1989) (“ [E] ach E mploy er pr omises that its operations cover ed by this Agr eeme nt sh a ll n ot b e so ld, c onve y e d, or oth e rw ise tr ans fe rr e d o r a ssi g ne d to any su c c e sso r w ith out f

ir st
se c ur ingthe a g re e me nt o f t he su c c e sso r t o a ssume the Em plo y e r’ s o bli g atio ns un de r t his Ag ree ment.” (e mphasis omitt ed) ( quoting the N ational B ituminous Coal Wage Ag ree ment of 1984) (inter

nal quotation marks omitted)). The availability of such c ontrac tual protec tions str on g ly su g g e sts that la

bo r u nio ns have the a

bil ity thr ou g h b arg a ini ngto p ro te c t th e ir int e re sts ag ainst chang es in the employ er. Thus, e ven assumingit were appropr iate to re ly on such a fac tor g iven the ca se law that binds us, there is no need to do violenc e to the princ iple that the labor law s do not impose a duty to arbitrate “fr om without,” W iley , 3 76 U. S. at 55 1, in o rd e r t o pr ote c t un ion s. L a stl y , th e ma jor ity ’s po lic y

ana ly sis fo c us e s o n what se e ms b e st e xpo st for the particula r union befor e the c ourt, and fa ils to give due consideration to the e xan teincentives that the majority ’s rule w ill create. Employ ers who take over an oper ation, as Mer idian did here ,40

have no le g a l ob lig atio n to hir e the old un ion ize d e mpl oye e s o r e ve n to g ive the m pr e fe re nc e in hiring — even if

the entity plans to continue doingthe exact same w ork. See H oward Johnson , 417 U.S. at 261 (“[N]othi ngin the fede ral labor laws re quires that an e mploy er . . . who purcha ses the asse ts of a business be oblig ated to hire all of the e mploy ees of the pre dece ssor . . . .” (i nte rn a l qu otatio n ma

rk s o mitte d) ). I f t

he ne w e mpl oye r r e fu se s to re hir e mos t of the old unioniz ed employ ees, the new e mploy er w ill not be bound by the CBA, a

nd in fac t, it won’t have to rec og nize or barg ain with the union at all. Se e id . at 26 3 ( ho ldi ngthat “ c on tin uit y of ide nti ty in the business enterpr ise nec essar ily includes, we think, a substantial continuity in the identity

of the wo rk fo rc e a c ro ss t

he c ha ng e in o wn e rs hip ” ). Al tho ug h a ne w e mpl oye r c ann ot r e fu se to rehire the old employ ees solely beca use they are in a union, Iam not the first to note that
e mpl oye rs wi ll o ft e n b e a ble to f ind ampl e bu sin e ss r e a so ns to j us tif y re fu sin gto r e hir e old employ ees, r ender ing the protec tion affor ded by the majority

today more e phemer al than re al. See Sak s &Co. v. NLRB , 6 34 F .2 d 6 81 , 6 90 (2 d Ci r. 19 80 ) ( Me sk ill , J., dis se nti ng ) ( “ Al tho ug h it can be argued that discriminatory prac tices ar e conde mned by and ac tionable under

. . . the Natio na l L a

bo r R e latio ns Ac t, i t is ob vio us that th e pe rs pic a c iou s, we ll- c ouns e lle d e mpl oye r w ill hir e jus t f e w e no ug h o f t

he su bc on tr a c tor ’s e mpl oye e s to e lud e the g ra sp of the su c c e sso rs hip do c tr ine .” (c itatio n o mitte d) ); see also Fall River , 482 U.S. at 40-41 (“ [T] o a substantial extent the applica

bility of Bu rn s [, i .e., the suc cessor employ er’ s obligation to barg ain with the union,] rests in the hands of

the succ essor.” ). Certa inly , incre asingthe incentives f or would-be succe ssor employ ers to simply

fire the unioniz ed employ ees a nd start over

is hardly a manife st victory

for the ca use of or g anized labor. * * *41 In my view, the major ity

misreads Supreme Court prec edent. The ref ore, I
re sp e c tf ull y dis se nt.