United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 1, 2019 Decided September 3, 2019

No. 18-1091

FIRST STUDENT, INC., A DIVISION OF FIRST GROUP AMERICA,

PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT

UNITED STEEL, PAPER AND FORESTRY, RUBBER,

MANUFACTURING, ENERGY, ALLIED INDUSTRIAL & SERVICE 

WORKERS INTERNATIONAL UNION, AFL-CIO/CLC, LOCAL 

9036,

INTERVENOR

Consolidated with 18-1153

On Petition for Review and Cross-Application 

for Enforcement of an Order of

the National Labor Relations Board

David A. Kadela argued the cause for petitioner, First 

Student, Inc. With him on the briefs was Erik Hult.
2

Angelo I. Amador, Robert S. Seigel, Howard M. Bloom,

Michael T. Mortensen, and Collin O’Connor Udell were on the 

brief for amicus curiae Restaurant Law Center in support of 

petitioner/cross-respondent.

David Casserly, Attorney, National Labor Relations 

Board, argued the cause for respondent, National Labor 

Relations Board. With him on the brief were Peter B. Robb, 

General Counsel, John W. Kyle, Deputy General Counsel, 

David Habenstreit, Assistant General Counsel, and Kira 

Dellinger Vol, Supervisory Attorney.

Maneesh Sharma argued the cause for intervenor Union. 

With him on the brief was Amanda M. Fisher.

Before: ROGERS and WILKINS, Circuit Judges, and 

SILBERMAN, Senior Circuit Judge.

Opinion for the Court by Circuit Judge ROGERS. 

Opinion concurring in part and dissenting in part filed by 

Senior Circuit Judge SILBERMAN.

ROGERS, Circuit Judge: This case involves a successor 

employer and application of the “perfectly clear” successor 

doctrine stemming from NLRB v. Burns International Security 

Services, Inc., 406 U.S. 272 (1972). First Student, Inc. is the 

largest provider of school transportation services in North 

America. Its bid to provide transportation services for Saginaw 

Public School District was first selected in October 2011, but

the School District decided not to proceed because the 

academic year had already begun. First Student’s bid was 

again selected in February 2012 and contract negotiations 

began. A few weeks later, First Student representatives met 

with School District transportation employees who were
3

covered by a collective bargaining agreement and stated it 

would offer employment to existing employees, and expressed 

the desire to retain as many of them as possible. First Student 

now petitions for review of a Decision and Order of the 

National Labor Relations Board finding it was a “perfectly 

clear” successor employer and violated the National Labor 

Relations Act by changing the terms and conditions on which 

it would hire the incumbent employees without bargaining with 

their union. First Student contends that the Board applied the 

wrong legal standard, departed without justification from its 

precedent, and made factual findings regarding notice of the 

new terms and conditions that are not supported by substantial 

evidence. The Board has cross petitioned for enforcement of 

its Order. We deny First Student’s petition and grant 

enforcement of the Board’s Order in full.

I.

Congress enacted the National Labor Relations Act to 

“redress the perceived imbalance of economic power between 

labor and management . . . by conferring certain affirmative 

rights on employees and by placing certain enumerated 

restrictions on the activities of employers.” Am. Ship Bldg. Co. 

v. NLRB, 380 U.S. 300, 316 (1965). Section 7 of the Act

provides that employees have certain rights, including the right 

“to bargain collectively through representatives of their own 

choosing.” 29 U.S.C. § 157. Section 8(a)(1) provides that it 

“shall be an unfair labor practice for an employer to interfere

with, restrain, or coerce employees in the exercise of” their 

Section 7 rights. Id. § 158(a)(1). Similarly, Section 8(a)(5)

makes it “an unfair labor practice for an employer to refuse to 

bargain collectively with the representatives of his employees.” 

Id. § 158(a)(5). Consequently, an employer violates Section 

8(a)(1) and (5) of the Act if it changes terms and conditions of 

employment unilaterally, i.e., without giving employees an 
4

opportunity to bargain collectively through their union. Enter. 

Leasing Co. v. NLRB, 831 F.3d 534, 546 (D.C. Cir. 2016) 

(citing NLRB v. Katz, 369 U.S. 736, 743 (1962)).

The “perfectly clear” successor doctrine has its origins in 

the Supreme Court’s decision in NLRB v. Burns International 

Security Services, Inc., 406 U.S. 272 (1972). Burns concerned

unionized security guards employed by the Wackenhut 

Corporation, which provided security for a Lockheed Aircraft 

Service facility from 1962 to 1967. Id. at 274. In April 1967, 

the guards’ union entered into a three-year collective

bargaining agreement with Wackenhut. Id. at 275. Shortly 

thereafter Lockheed decided not to renew its security contract 

with Wackenhut and awarded a new contract to Burns 

International Security Services. Id. Burns hired 27 of the 

guards formerly employed by Wackenhut and brought in 15 

other guards to work at the facility. Id. The incumbent union

“demanded that Burns recognize it as the bargaining 

representative of Burns’ [guards] at Lockheed and that Burns 

honor the collective-bargaining agreement between it and 

Wackenhut,” but Burns refused to do either. Id. at 275–76.

The Board agreed with the union. Burns was a “successor 

employer” to Wackenhut because the business of providing 

security for Lockheed “remained essentially the same despite 

the change in ownership.” William J. Burns Int’l Detective 

Agency, Inc., 182 NLRB 348, 349 (1970). The incumbent 

union retained its position as representative of the security 

guards at the Lockheed facility because, the Board reasoned, 

the incumbent guards made up a majority of Burns’ workforce 

and there was no reason to believe the change in management 

would affect the guards’ selection of the union. Id. at 349–50; 

see 29 U.S.C. § 159(a). 
5

The Supreme Court upheld the Board’s determination that 

Burns, as a successor employer, had an obligation to recognize 

and bargain with the incumbent union. Burns, 406 U.S. at 277–

81;see Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 

27, 43–44, 46–47 (1987). Given that obligation, Burns’ failure 

to recognize and bargain with the union violated Section 

8(a)(1) and (5) of the Act. Burns, 406 U.S. at 281. But, the 

Court made clear, Burns’ obligation to bargain with the union 

“did not mature” until it had “hired [a] full complement of 

employees”; only then did it become “evident” that the union 

“represent[ed] a majority of the employees in the unit.” Id. at 

295. Because Burns had no duty to bargain with the union until 

it finished hiring, it was “free to set initial terms on which it 

[would] hire the employees of [its] predecessor.” Id. at 294–

95. Critically for present purposes, the Court acknowledged

that there are situations in which prior to hiring “it is perfectly 

clear that the new employer plans to retain all of the 

[predecessor’s] employees.” Id. Under those circumstances, 

the Court stated it is “appropriate to have [the successor] 

initially consult with the employees’ bargaining representative 

before he fixes terms.” Id. at 295.

The Board first interpreted the Supreme Court’s statement 

about “perfectly clear” successorship in Spruce Up Corp., 209 

NLRB 194 (1974), enforced, 529 F.2d 516 (4th Cir. 1975). 

Spruce Up Corporation employed a unionized workforce in 19

barbershops on a military base. Id. at 194. In early 1970, the 

base decided not to renew its contract with Spruce Up and 

awarded a new contract to Cicero Fowler. Id. When the 

incumbent union “learned that Fowler was the lowest bidder 

and likely to take over the operation of the Spruce Up barber 

shops, it requested Fowler to recognize and bargain with it.” 

Id. Fowler told the union that he would have no duty to bargain 

until he began operations, that he intended to pay different rates 

of commission than Spruce Up had paid, and that he hoped to 
6

hire all incumbent barbers who were willing to work. Id. A 

few days before Fowler took over the barbershops, he sent 

letters to the incumbents inviting them to work for him on the 

basis of the new rates. Id. 

The Board found that Fowler was not a “perfectly clear” 

successor to Spruce Up because he “made it clear from the 

outset that he intended to set his own initial terms, and that 

whether or not he would in fact retain the incumbent barbers 

would depend upon their willingness to accept those terms.” 

Id. at 195 (emphasis added). The Board reasoned that Fowler’s 

announcement of new terms created uncertainty about whether 

incumbents would elect to retain their jobs after the change in 

management. Id. As a result, it was not “perfectly clear” that 

Fowler “plan[ned] to retain all of” Spruce Up’s former 

employees. Id. (quoting Burns, 406 U.S. at 294–95). Spruce 

Up thus restricted the “perfectly clear” successor doctrine “to 

circumstances in which the new employer has either actively 

or, by tacit inference, misled employees into believing they 

would all be retained without change in their wages, hours, or 

conditions of employment,” or “has failed to clearly announce 

its intent to establish a new set of conditions prior to inviting 

former employees to accept employment.” Id.

Since then, the Board has refined the nature and scope of 

the “perfectly clear” successor doctrine. For one thing, the 

Board has long held that “perfectly clear” successor status may

attach not only where a new employer “plans to retain all the 

[incumbent] employees” but also where it plans to hire “a lesser

number but still enough to make it evident that the union’s 

majority status will continue.” Spitzer Akron, Inc., 219 NLRB 

20, 22 (1975) (first quoting Burns, 406 U.S. at 295),

enforced, 540 F.2d 841 (6th Cir. 1976); see, e.g., Nexeo 

Solutions, LLC, 364 NLRB No. 44, slip op. at 5 n.19 (July 18, 

2016). First Student does not contest this. 
7

In addition, a host of post-Spruce Up decisions clarify that

if a new employer “expresses an intent to retain the 

predecessor’s employees,” then it becomes a “perfectly clear” 

successor unless the new employer “clearly announce[s] its 

intent to establish a new set of conditions prior to, or 

simultaneously with, its expression of intent” to retain the 

employees. Nexeo, 364 NLRB No. 44, slip op. at 6; see, e.g.,

Creative Vision Res., LLC, 364 NLRB No. 91, slip op. at 2–3

(August 26, 2016), enforced, 882 F.3d 510 (5th Cir. 2018);

Fremont Ford Sales, Inc., 289 NLRB 1290, 1296–97 (1988); 

Starco Farmers Mkt., 237 NLRB 373, 373–74 (1978). An

employer that fails to make such an announcement “forfeit[s] 

the right to set initial terms” of employment. Fremont Ford, 

289 NLRB at 1296; see Dupont Dow Elastomers LLC, 332 

NLRB 1071, 1074 (2000), enforced, 296 F.3d 495 (6th Cir. 

2002). The Board has explicitly rejected the view that an 

employer can avoid becoming a “perfectly clear” successor by 

announcing new terms prior to “the extension of unconditional 

offers of hire to the predecessor employees.” Canteen Co., 317 

NLRB 1052, 1053 (1995), enforced sub nom. Canteen Corp. v. 

NLRB, 103 F.3d 1355 (7th Cir. 1997); see Elf Atochem N. Am., 

Inc., 339 NLRB 796, 796, 807–08 (2003); Roman Catholic 

Diocese of Brooklyn, 222 NLRB 1052, 1055 (1976), 

enforcement denied in relevant part sub nom. Nazareth Reg’l

High Sch. v. NLRB, 549 F.2d 873 (2d Cir. 1977). Instead, the 

Board has concluded that an employer can become a “perfectly 

clear” successor before it begins its hiring process. See, e.g.,

Paragon Sys., Inc., 364 NLRB No. 75, slip op. at 2 (Aug. 26, 

2016); E G & G Fla., Inc., 279 NLRB 444, 452 (1986) (citing 

CME, Inc., 225 NLRB 514 (1976)). For example, the Board 

concluded in CME, Inc. that an employer became a “perfectly 

clear” successor by expressing an unqualified intent to retain 

all incumbents when it had not yet offered them jobs or even 

distributed employment applications. 225 NLRB at 514.
8

This court has affirmed the Board’s interpretation of the 

“perfectly clear” successor doctrine. See Int’l Ass’n of 

Machinists & Aerospace Workers, AFL-CIO v. NLRB, 595 

F.2d 664, 672–676 (D.C. Cir. 1978). In Machinists, the court 

observed that the doctrine protects “a successor employer’s 

freedom to alter — even remake — the acquired enterprise” by 

unilaterally imposing new terms of employment. Id. at 673. At 

the same time, the doctrine affords incumbent employees “an 

important measure of protection” by ensuring that “they are 

apprised promptly of impending reductions in wages or 

benefits” over which the union will have no opportunity to 

bargain. Id. at 674. More recently, the court reaffirmed that 

the doctrine “prevent[s] an employer from inducing possibly 

adverse reliance upon the part of employees it misled or lulled 

into not looking for other work.” S & F Mkt. St. Healthcare 

LLC v. NLRB, 570 F.3d 354, 359 (D.C. Cir. 2009). 

Our sister circuits have also affirmed the Board’s 

interpretation, acknowledging that “when it is clear that the 

new employer intends to hire the employees of the predecessor, 

those employees will place significant reliance on that situation 

and forego other employment opportunities.” Canteen Corp. 

v. NLRB, 103 F.3d 1355, 1364 (7th Cir. 1997) (citing 

Machinists); see Creative Vision, 882 F.3d 510, 518–19, 525–

26 (5th Cir. 2018) (citing Machinists); Dupont Dow, 296 F.3d 

495, 501–06 (6th Cir. 2002). These courts accept the Board’s 

view that “perfectly clear” successor status may attach when a 

new employer expresses an intent to retain incumbents even if 

this precedes the formal hiring process. See Creative Vision, 

882 F.3d at 518–19; Dupont Dow, 296 F.3d at 502; Canteen 

Corp, 103 F.3d at 1363–64. Of the circuits to address the issue, 

only one — in a pre-Machinists decision — has taken the more 

restrictive view that “perfectly clear” successorship cannot 

attach “solely on the basis of an expression of intention to 
9

rehire [the] predecessor’s employees.” See Nazareth Reg’l

High Sch. v. NLRB, 549 F.2d 873, 881–82 (2d Cir. 1977).

II.

Through 2011, Saginaw Public School District directly 

employed approximately 55 bus drivers and other 

transportation employees. These employees (hereinafter “unit 

employees”) were jointly represented by the United Steel 

Workers International Union and Local 8410 (collectively “the 

Union”). The most recent collective bargaining agreement 

(“CBA”) between the Saginaw Board of Education and the 

Union covered the period of August 27, 2010 through August 

31, 2012. The Board of Education voted in October 2011 to 

accept First Student’s services but the School District’s

Superintendent decided not to proceed for that academic year;

in November the School District informed First Student that it 

planned to open a new bidding process in 2012. It did, and 

First Student submitted a new bid on February 3, 2012. The 

School District again selected First Student as the winning 

bidder, and the parties began negotiating a transportation

services contract. 

While contract negotiations were ongoing, the School

District arranged for First Student officials to discuss the 

impending transition in management with the unit employees. 

On March 2, 2012, approximately 40 of the 55 unit employees

attended a meeting with Douglas Meek, First Student’s area 

general manager, and Daniel Kinsley, its development 

manager. Meek told the employees that once the contract was 

approved, First Student would offer employment to current 

employees who submitted an application and met its hiring 

criteria, which included a background check, physical 

examination, and drug screening, criteria that the Board found

were similar to the School District’s hiring criteria and
10

common throughout the bus transportation industry. In 

responding to employees’ questions, Meek testified that he told

the employees that First Student “wanted to hire as many 

individuals as possible,” that it would recognize the Union if it 

hired “51 percent of the existing workforce,” and that it 

“typically” hires “80 to 90 percent of the existing workforce.” 

Hr’g Tr. 420 (July 25, 2013). With respect to how many hours 

of work employees would be guaranteed, Meek stated that First 

Student “would know more about that” once it established bus 

routes for the coming year, which it would do “using the 

[School] District’s routing system.” Id. at 421. Meek also said 

matters such as paid time off, vacation pay, and sick pay would 

be “subject to negotiations.” Id. at 421–22; see id. at 460 (July 

26, 2013).

The School District and First Student reached agreement 

on a five-year transportation services contract in early May 

2012. On May 16, the Board of Education held a public 

meeting to consider whether to approve the contract. In 

response to Board questions, Kinsley stated that First Student

would hire unit employees if they met its hiring criteria, that it

“intended to maintain their current wages,” and that if 51 

percent or more of the incumbents were hired it would 

recognize the Union. Id. at 463–64, 480. The Board of 

Education voted to approve the contract. Later that day, 

Kinsley spoke with a Union representative and several unit 

employees, repeating that First Student’s goal was to hire all 

unit employees who met the hiring criteria, that it would 

“recognize the Union if [it] hired 51 percent or more” of them, 

and that “their wages would be maintained.” Id. at 466, 483. 

By its terms, the contract was a binding agreement as of May 

16. The School Superintendent signed it on May 24 and First 

Student signed it on June 1.
11

On May 17, the day after the Board of Education approved

the contract and it took effect, First Student officials met with 

nearly all the unit employees. The officials distributed a 

memorandum inviting them to apply for employment. The 

terms and conditions of employment set forth in the 

memorandum deviated from the CBA in important respects. 

For example, the memorandum stated that First Student would

maintain incumbent employees’ current hourly rate of pay for 

transportation duties but reduce the rate of pay for “non-student 

transportation duties,” such as “attending training, employee or 

school meetings, clerical work, bus washing, etc.” Also, 

significantly, it guaranteed fewer hours of work than the CBA. 

Incumbent employees were instructed to submit employment 

applications no later than May 23 in order to retain their 

seniority and current wages.

On May 18, the Union contacted First Student requesting 

to bargain over the terms of a new labor agreement, using the 

existing CBA as a starting point. First Student responded that 

it did not know whether it would hire enough of the unit 

employees to trigger its obligation to recognize and bargain 

with the Union. The Union agreed to follow up in July, when 

First Student would be further along in its hiring process. 

During July and August, the Union’s repeated attempts to 

schedule bargaining with First Student produced no response.

Meanwhile, First Student began hiring employees. After 

conducting interviews and background checks, it made offers 

of employment to 42 of the approximately 55 unit employees. 

Two offer letters were issued on June 27, a third on July 11, 

and the remainder on August 1. By August 17, 2012, First 

Student had hired 38 employees, 36 of whom had formerly 

worked for the School District. When First Student began its 

operations for the 2012–2013 academic year on August 27, it 

had hired 51 employees, 41 of whom were unit employees. 
12

That same day, First Student announced an employee 

attendance policy that differed from the policy in the Union’s 

prior CBA with the School District. In late August, the Union

renewed its request to bargain, but First Student still did not 

come to the bargaining table.

On September 21, the Steel Workers Union (acting 

through another Local) filed charges with the Board’s Regional 

Office alleging that First Student had violated Section 8(a)(1) 

and (5) of the Act by “refus[ing] to recognize and bargain with”

the Union and by failing to negotiate “over initial terms and 

conditions of employment” even though it was a “perfectly 

clear” successor to the School District. On September 25, First 

Student offered to schedule collective bargaining negotiations

in November. The Union responded that it would agree to wait 

until November provided First Student would abide by the 

terms of the prior CBA in the meantime. First Student replied 

that it had no obligation to abide by the CBA and offered to 

begin negotiations in October if the Union would drop the 

pending unfair-labor-practice charges. Although the Union did 

not drop the charges, the parties began collective bargaining 

negotiations on October 17, 2012.

On April 30, 2013, the Acting General Counsel issued a 

complaint alleging that First Student had engaged in unfair 

labor practices in violation of Section 8(a)(1) and (5) of the Act. 

An administrative law judge (“ALJ”) held an evidentiary

hearing on July 24–26, 2013. The ALJ found that First Student 

was a successor to the School District but not a “perfectly 

clear” successor because it had announced new terms of 

employment when it distributed employment applications to 

unit employees on May 17. First Student, Inc., No. 07–CA–

092212, slip op. at 24, 2013 WL 6576819 (N.L.R.B. Div. of 

Judges Dec. 13, 2013) (“ALJ Decision”). The ALJ also found 

that Meek’s statements on March 2 sufficed to notify 
13

employees that First Student planned to implement new 

working conditions. Id. at 22–23. The ALJ further found that

First Student “had an obligation to recognize and bargain with 

the Union as of August 17,” id. at 27, by which time it had

“hired a substantial and representative complement of its 

employees,” a majority of whom had previously worked for the 

School District, id. at 18 (citing Fall River, 482 U.S. at 52–53).

Because of that obligation, the ALJ found that First Student 

violated Sections 8(a)(1) and (5) of the Act by “delaying 

bargaining from August 17, 2012, to October 17, 2012” and by 

“unilaterally implementing attendance policies on August 27, 

2012, and September 4, 2012.” Id. at 31; see id. at 27–29. Both 

parties filed exceptions.

The Board affirmed the violations of the Act found by the 

ALJ and also found, contrary to the ALJ (and over a dissent),

that First Student was a “perfectly clear” successor to the 

School District as of March 2, 2012, and that First Student 

violated Section 8(a)(1) and (5) by failing to provide the Union 

with notice and an opportunity to bargain before imposing 

initial terms and conditions of employment for unit employees. 

First Student, Inc., 366 NLRB No. 13, slip op. at 1 (Feb. 6, 

2018) (“Decision”). Quoting its precedent, the Board stated 

that “perfectly clear” successor status attaches “when a 

successor expresses an intent to retain the predecessor’s 

employees without making it clear that employment will be 

conditioned on acceptance of new terms.” Id. at 3 (quoting 

Nexeo, 364 NLRB No. 44, slip op. at 6). The Board found:

From the very beginning of the transition process, 

well before the formal hiring process began, [First 

Student] clearly and consistently communicated its 

intent to retain the School District’s unit employees. 

At the March 2 meeting, [First Student] stated that it 

would offer employment to all existing employees 
14

who completed applications and met its hiring criteria 

which, the record establishes, are consistent with the 

School District’s criteria and industry-wide standards. 

[First Student] underscored this intent by informing 

the employees that it typically hired ‘80 to 90 percent’ 

of an existing workforce when taking over 

transportation duties from another employer. [First 

Student] also stated that it planned to recognize the 

employees’ existing union representative, so long as 

‘51 percent’ of the existing workforce was hired by 

[First Student]. Thereafter, in comments during and 

following the May 16 Board of Education meeting, 

[First Student] reaffirmed its intention to retain the 

unit employees and further stated that it would be 

maintaining their existing wages.

Id. (footnote omitted). 

The Board also found that First Student had not “‘clearly 

announc[ed] its intent to establish a new set of conditions’ prior 

to or simultaneously with its March 2 expression of intent to 

retain the unit employees.” Id. (alteration in original) (quoting 

Spruce Up, 209 NLRB at 195). Meek’s statement at the March 

2 meeting that applicants would have to pass First Student’s

hiring criteria gave the unit employees “no reason to doubt that 

they would be hired” because they “had all been hired under 

similar industry standards by the School District.” Id. at 3 n.8. 

And the ALJ had “misinterpreted the import of” Meek’s 

statement that “matters such as paid time off, vacation pay, and 

sick pay ‘would be subject to negotiations,’” taking it to mean 

that First Student ‘“would not be adopting the School District’s 

[CBA] and that new working conditions would be 

implemented.’” Id. at 3 (quoting ALJ Decision at 23). The 

ALJ’s reasoning was “based on an incorrect premise,” the 

Board concluded, because a statement that employment terms 
15

will be “subject to negotiations” is not inconsistent with 

“perfectly clear” successor status. Id. It is merely “a statement 

of law”; a “perfectly clear” successor is obligated “only to 

maintain the status quo . . . until it bargains to agreement or 

impasse with the representative union.” Id. Thus, Meek’s 

statement did not notify the unit employees of First Student’s 

plan to change terms without negotiating. See id. Nor, the 

Board found, did Meek’s statement about guaranteed hours and 

routes provide sufficient notice. Id. at 4. First Student had 

made no “affirmative statement that terms of employment 

[would] be changed,” instead stating that it “did not have 

information regarding routes at that time.” Id. 

In addition, the Board found that the ALJ had “misapplied 

well-established precedent in finding [First Student]’s 

subsequent announcement of new initial terms and conditions 

of employment on May 17 was a timely exercise of the Burns

successor’s right to unilaterally establish initial terms and 

conditions of employment.” Id. Under longstanding Board 

precedent, an employer that has become a “perfectly clear” 

successor cannot vitiate that status by subsequently announcing 

its intent to unilaterally impose initial terms, even if the 

announcement is “made before formal offers of employment 

are extended, or before the successor commences operations.” 

Id. (citing Creative Vision, 364 NLRB No. 91, slip op. at 3 & 

n.10 (collecting cases)).

Because First Student became a “perfectly clear” 

successor on March 2, the Board found that it violated Section 

8(a)(1) and (5) by unilaterally changing terms and conditions 

of employment on and after May 17. Id. at 5. The Board found, 

alternatively, that First Student “became a ‘perfectly clear’ 

successor on May 16, when it reiterated its previously 

expressed intent to retain the predecessor’s employees without 

simultaneously clearly announcing an intent to establish 
16

different initial terms of employment.” Id. at 5 n.13. The 

Board also unanimously found that First Student violated 

Section 8(a)(1) and (5) by “conditioning bargaining on the 

Union’s withdrawal of an unfair labor practice charge.” Id. at 

5. By Order, the Board directed First Student to cease and 

desist from failing and refusing to bargain in good faith with 

the Union and to take certain affirmative actions, including 

making no changes to wages, hours, or other terms of 

employment without notifying the Union and allowing it to

bargain; rescinding changes it had made; making the unit 

employees whole, with interest and compensation for adverse 

tax consequences if necessary; and posting a notice describing

its statutory violations and employees’ rights for 60 days in 

conspicuous places. See id. at 5–6.

Then-Chairman Kaplan partially dissented, taking the 

position that “perfectly clear” successor status does not attach 

“when ‘a successor expresses an intent to retain the

predecessor’s employees’” but rather when it issues formal 

offers of employment. Id. at 7 (quoting Nexeo, 364 NLRB No. 

44, slip op. at 6). He acknowledged that his position was

contrary to at least three Board decisions. See id. (citing 

Creative Vision, 364 NLRB No. 91; Nexeo, 364 NLRB No. 44; 

Canteen Co., 317 NLRB 1052). 

The Board majority offered three responses: First, the 

dissent’s “more restrictive interpretation” of the “perfectly 

clear” successor doctrine “is inconsistent with the express 

language of the Supreme Court in Burns.” Id. at 4. In Canteen 

Co., 317 NLRB at 1053, the Board pointed out that Burns did

not limit “perfectly clear” successorship “to such a late point in 

the transition from one employer to another; instead, the status 

attaches, the Supreme Court stated, when it is evident “that the 

new employer plans to retain all of the [incumbent] 

employees,” 406 U.S. at 294–95. Second, the dissent’s 
17

position “does not take into account the significant reliance 

employees may place on statements of intent to hire, to the 

exclusion of other employment opportunities.” Id. By 

contrast, the Board explained, its practice of “[h]olding a 

successor to its initial statements of intent, even when those 

statements are made before formal offers of employment are 

extended or the transfer of ownership or operations is complete, 

prevents prospective employers from inducing such reliance, 

only later to reveal that the employees’ terms of employment 

will be changed.” Id. at 4 & n.12 (citing S & F Mkt. St., 570 

F.3d at 359; Machinists, 595 F.2d at 674–75). Third, the 

Board’s interpretation in its precedent “serves the important 

statutory policy of fostering industrial peace in what the 

Supreme Court has recognized may be an unsettling transition 

period for unions and employees alike.” Id. at 4 (citing Fall 

River, 482 U.S. at 39–40).

First Student petitions for review of the Board’s Decision 

and Order. The Board cross petitions for enforcement of its

Order.

III.

First Student contends that the Board’s Decision must be 

vacated because it misstated the legal standard for “perfectly 

clear” successorship, deviating without justification from 

Board and court precedent. None of First Student’s arguments

that the Board erred as a matter of law is persuasive. In 

addition, First Student contends there is not substantial 

evidence to support the Board’s finding that Meek’s statements 

of March 2 provided insufficient notice to unit employees of

First Student’s intent to unilaterally impose new terms. That 

too is unpersuasive. First Student does not challenge the 

Board’s findings of its other violations of the Act, and the 

Board is therefore entitled to summary enforcement of those
18

portions of its Order, see, e.g., Carpenters & Millwrights, 

Local Union 2471 v. NLRB, 481 F.3d 804, 808 (D.C. Cir. 

2007).

The Supreme Court has repeatedly recognized that the 

National Labor Relations Board “has the primary responsibility 

for developing and applying national labor policy,” NLRB v. 

Curtin Matheson Sci., Inc., 494 U.S. 775, 786 (1990), and 

consequently its interpretations of the Act are “entitled to 

considerable deference” by the courts and must be upheld if 

“reasonably defensible,” Sure-Tan, Inc. v. NLRB, 467 U.S. 

883, 891 (1984); see NLRB v. Ky. River Cmty. Care, Inc., 532 

U.S. 706, 711–12 (2001); NLRB v. Town & Country Elec., Inc., 

516 U.S. 85, 89–90 (1995). This court similarly “yield[s]

deference” to the Board’s interpretation of the “perfectly clear” 

successor doctrine emanating from Burns. Machinists, 595 

F.2d at 672–73 & n.41. Congress, in turn, has determined that 

the Board’s findings of fact “shall be conclusive” “if supported 

by substantial evidence on the record considered as a whole.” 

29 U.S.C. § 160(e). It also has required that all objections first 

be presented to the Board, otherwise the court lacks jurisdiction 

to consider them. Id. § 160(e)–(f).

A.

The Board stated: “To avoid ‘perfectly clear’ successor 

status, a new employer must clearly announce its intent to 

establish a new set of conditions prior to, or simultaneously 

with, its expression of intent to retain the predecessor’s 

employees.” Decision at 3 (quoting Nexeo, 364 NLRB No. 44, 

slip op. at 6). First Student views this as “a reengineered test”

that “fundamentally alter[s]” and “conflicts with” Spruce Up. 

Pet’r’s Br. 23–25. According to First Student, Spruce Up 

presumes that a successor retains the right to unilaterally 

impose terms and conditions of employment, and permits a 

finding of “perfectly clear” successorship only where “the 
19

presumption [is] overcome by evidence that [the] successor, by 

word or deed, misled the predecessor’s employees.” Id. at 24. 

First Student maintains that under this standard, Meek’s 

statements to the unit employees at the March 2 meeting were 

not sufficiently misleading to trigger “perfectly clear” 

successorship. Id. at 30.

The Board’s articulation of the “perfectly clear” test in

Nexeo does not conflict with Spruce Up as First Student 

suggests. In Spruce Up, 209 NLRB at 195, the Board expressly 

declined to “delineat[e] . . . the precise parameters” of the 

“perfectly clear” successor doctrine. It concluded only that a 

new employer may avoid becoming a “perfectly clear” 

successor by “clearly announc[ing] its intent” to unilaterally 

impose new terms of employment. Id. A wealth of subsequent 

Board decisions summarize and clarify that a new employer 

must “clearly announce” such an intent in order to preserve its 

right to unilaterally impose new terms of employment. See, 

e.g., Nexeo, 364 NLRB No. 44, slip op. at 5–6. This 

clarification is consistent with Spruce Up’s statement that

“perfectly clear” successorship may occur where a new 

employer “has either actively, or by tacit inference, misled 

employees.” 209 NLRB at 195 (emphasis added); see, e.g., 

Dupont Dow, 332 NLRB at 1073–75. As this court has 

recognized, it is also consistent with the rationale behind the 

“perfectly clear” successor doctrine: incumbent employees 

may be “lulled into a false sense of security” by an employer’s 

“announcement of job-availability” even if they “are not 

affirmatively led to believe that existing terms will be 

continued.” Machinists, 595 F.2d at 674–75; see Creative 

Vision, 882 F.3d at 518–19, 525–26; Dupont Dow, 296 F.3d at 

501–02, 506; Canteen Corp., 103 F.3d at 1364. 

First Student also contends the Board departed from its 

own precedent regarding the earliest point at which “perfectly 
20

clear” successor status can attach. See Pet’r’s Br. 24–25. The 

Board found that First Student became a “perfectly clear” 

successor when it initially “expressed its intent to retain 

employees on March 2.” Decision at 3. First Student interprets

Spruce Up not to allow “perfectly clear” successor status to 

attach “prior to [the successor’s] inviting former employees to 

accept employment.” Pet’r’s Br. 25 (alteration in original) 

(quoting Spruce Up, 209 NLRB at 195). It maintains, 

therefore, that it avoided becoming a “perfectly clear” 

successor by announcing new terms when it distributed 

employment applications to unit employees at the May 17 

meeting. See id. at 30–31.

First Student overreads the relevant portion of Spruce Up.

There, the Board had no occasion to specify when “perfectly 

clear” successor status can attach because Fowler announced 

his intent to unilaterally implement new commission rates 

when he first “expressed a general willingness to hire” the 

incumbent barbers. Spruce Up, 209 NLRB at 194–195. 

Subsequently confronted with the issue, the Board settled on 

the position that a successor becomes “bound . . . to bargain 

about initial terms” upon expressing its “intent to hire all of the 

predecessor’s employees” without concurrently announcing 

new terms. Canteen Co., 317 NLRB at 1053–54; see, e.g.,

Creative Vision, 364 NLRB No. 91, slip op. at 3; Fremont 

Ford, 289 NLRB at 1296–97; Starco Farmers Mkt., 237 NLRB 

at 374–75. As the Board has explained and three of our sister 

circuits have affirmed, this prevents a new employer from 

misleading incumbent employees between an initial expression 

of intent to retain them and a formal offer that they apply for or 

accept employment. See Creative Vision, 882 F.3d at 518–20; 

Dupont Dow, 296 F.3d at 502–06 & n.1; Canteen Corp., 103 

F.3d at 1363–64.
21

First Student further contends it was legal error for the 

Board to find that it became a “perfectly clear” successor 

before it had finalized its transportation services contract with 

the School District. See Pet’r’s Br. 18–23; Reply Br. 3–9. It 

suggests its circumstance “is not materially different” from 

four Board decisions “in which a prospective successor’s precontract communications were not found to trigger perfectly 

clear successor status.” Pet’r’s Br. 20. But in all four cases,

the Board had no occasion to resolve whether the status can be 

triggered by pre-contract statements because it found 

“perfectly clear” successor status based on post-contract 

statements. See Morris Healthcare & Rehab. Ctr., Inc., 348 

NLRB 1360, 1360 & n.2, 1362–64, 1367 (2006); Hilton’s 

Envtl., Inc., 320 NLRB 437, 437–38 (1995); Fremont Ford, 

289 NLRB at 1296–97; Spitzer Akron, Inc., 219 NLRB at 22–

23 (1975). Other Board precedent indicates that a pre-contract

expression of intent to rehire incumbent employees can trigger 

“perfectly clear” successorship. In Elf Atochem, 339 NLRB at 

798–800, for example, an incoming employer expressed its 

intent to retain incumbents after signing a “nonbinding letter of 

intent” to acquire the predecessor company. The Board held 

that the employer became a “perfectly clear” successor at that 

time, id. at 796, even though the parties had only announced “a 

planned sale,” not a contract, and the acquisition was not 

finalized until several weeks later, id. at 798, 800. The Sixth 

Circuit in Spitzer Akron, 540 F.2d at 843–45, was similarly 

satisfied that the employer became a “perfectly clear” 

successor while it was still negotiating the terms on which it 

would purchase the predecessor business.

Not only is the Board’s finding that First Student was a 

“perfectly clear” successor consistent with Board precedent, it 

also rests on a reasonable interpretation of the “perfectly clear” 

successor doctrine. To begin, the Board’s interpretation is 

consistent with the Supreme Court’s understanding that the 
22

doctrine applies where “it is perfectly clear that the new 

employer plans to retain all the employees in the unit.” Burns, 

406 U.S. at 294–95 (emphasis added). Nothing in Burns 

prevents the doctrine from applying where, as here, an 

employer’s bid to provide transportation services has been 

selected and while it is working out the details of a final

contract it informs incumbent employees that it plans to retain 

them. 

The Board’s interpretation also furthers the purpose of the 

“perfectly clear” successor doctrine, which is to protect

incumbent employees from being “lulled into a false sense of 

security” when a new employer expresses interest in retaining 

them. Machinists, 595 F.2d at 674–75 & n.49; see S & F Mkt.

St., 570 F.3d at 359. “Holding a successor to its initial 

statements of intent, even when those statements are made 

before . . . the transfer of ownership or operations is complete, 

prevents prospective employers from inducing [employee] 

reliance, only later to reveal that employees’ terms of 

employment will be changed.” Decision at 4. Here, First 

Student induced such reliance from March 2 through May 16. 

See id. at 3–5 & nn.8, 13. Had unit employees learned of the 

impending wage and guaranteed-hour reductions at the March 

2 meeting, they might have sought other employment or even 

urged the Board of Education to reject the proposed contract

with First Student. But First Student did not announce the 

impending changes to the terms and conditions of employment 

under the Union’s former CBA until after the Board of 

Education had approved the contract; to the contrary, First 

Student had publicly declared that it “intended to maintain the 

wages for the current work force.” Hr’g Tr. 466, 480 (Kinsley). 

Not until May 17 — six days before First Student’s application 

deadline for unit employees desiring to keep their wage rates

and seniority — did First Student inform employees that it 

intended to decrease their wages and guaranteed hours. Under 
23

the circumstances, the Board could reasonably conclude that 

First Student had engaged in the sort of misleading conduct that 

the “perfectly clear” successor doctrine is meant to prevent.

Neither does the Decision unduly burden a successor

employer’s right to unilaterally set the initial terms on which it 

will hire incumbent employees, as First Student and amicus 

suggest, see Pet’r’s Br. 22, 25; Amicus Br. of Restaurant Law 

Ctr. 11–15. The Supreme Court has observed that a new 

employer controls whether it will be obligated to recognize an 

incumbent union at all. See Fall River, 482 U.S. at 40–41. The 

employer incurs that obligation only if it “makes a conscious 

decision to maintain generally the same business and to hire a 

majority of its employees from the predecessor.” Id. at 41. The 

Board’s interpretation allows a likely successor that has not yet 

finalized its contract to acquire an existing business — First 

Student’s situation as of March 1 — to control whether it will 

retain its right to unilaterally set initial terms of employment. 

See Dupont Dow, 296 F.3d at 503; Canteen Corp., 103 F.3d at 

1364–65. First Student could have declined to meet with the 

unit employees on March 2 or told them that it planned to 

exercise the right to set initial terms and conditions of 

employment. Nor has the Board’s interpretation deprived an 

incoming employer of the flexibility to adjust its formal offer 

to potential employees based on the outcome of its own 

services contract negotiations. The employer need not specify 

the new terms during its initial communication with 

employees. Rather, the employer need only convey its intent 

to make unilateral changes; it can determine the details later. 

See Banknote Corp. of Am., 315 NLRB 1041, 1043 (1994), 

enforced, 84 F.3d 637 (2d Cir. 1996). The Board’s approach,

leaving the successor employer in control, has reasonably 

balanced employers’ rights against employees’ reliance 

interests. See Dupont Dow, 296 F.3d at 505–06 n.1; 

Machinists, 595 F.2d at 674–75. 
24

In sum, First Student fails to show that the Board’s 

Decision rests on a legally erroneous interpretation of the 

“perfectly clear” successor doctrine.

A few words about the dissent. Heeding the Supreme 

Court’s frequent admonition that “balancing competing 

interests to effectuate national labor policy . . . is a delicate 

responsibility committed primarily to the Board,” this court has

held that the Board’s interpretations of the “perfectly clear” 

successor doctrine are entitled to considerable deference. 

Machinists, 595 F.2d at 672–73 & n.41 (citing NLRB v. Local 

Union No. 103, Int’l Ass’n of Bridge, Structural & Ornamental 

Iron Workers, AFL-CIO, 434 U.S. 335, 350 (1978)). Such 

deference is appropriate, this court reasoned, because Burns 

provides “minimal guidance” about the doctrine and fleshing 

out its details squarely implicates the Board’s area of expertise. 

Id. at 673 n.41. The dissent’s suggestion that in Machinists the 

court was “actually deferring to the Board’s evidentiary 

finding,” Dis. Op. 3, is clearly in error. The court’s opinion 

speaks clearly for itself, expressly stating it “yield[s] deference 

to the Board’s construction” of Burns, which the court 

concluded “reasonably implements the considerations reflected 

in Burns considered as a whole,” describing itself as 

“constrained” to accept the Board’s interpretation because it 

was not “unreasonable.” Machinists, 595 F.2d at 672–73 & 

n.41, 675–76. That is the law of the circuit absent en banc 

review. See LaShawn A. v. Barry, 87 F.3d 1389, 1395 (D.C. 

Cir. 2006). 

Further, this court is without jurisdiction to consider any 

“objection that has not been urged before the Board.” 29 

U.S.C. § 160(e); see id. § 160(f). First Student has never 

challenged the Board’s longstanding position that a “perfectly 

clear” successor need not plan to hire all incumbent employees, 
25

but rather to hire “enough to make it evident that the union’s 

majority status will continue” after the change in management, 

Spitzer Akron, 219 NLRB at 22. Our dissenting colleague 

acknowledges that First Student “expressly waived” any such 

challenge, yet despite the jurisdictional bar engages in a 

lengthy discussion of his views. Dis. Op. at 1–5. Neither has 

First Student argued that the Board’s approach could lead a 

new employer to violate Section 8(a)(2) of the Act; its briefs 

do not even mention that provision. Our dissenting colleague 

raises the issue himself, volunteering that First Student would 

have violated Section 8(a)(2) if it had begun negotiating with 

the Union on March 2. See Dis. Op. 8–9. This is not the 

appropriate occasion for the court to address these arguments 

by our dissenting colleague, for, contrary to the congressional 

design, the Board has had no opportunity to do so in the first

instance.

Coming to an issue that First Student did preserve, the 

dissent argues that First Student could not have been obligated 

to bargain with the Union as of March 2 because “it was still in 

negotiations.” Dis. Op. 8 see id. at 8–9. But our dissenting 

colleague glosses over the distinction between an employer’s 

duty to “bargain with the employees’ representatives before it 

changes any terms to which its predecessor had agreed,” S & F 

Mkt. St., 570 F.3d at 358; see Burns, 406 U.S. at 295, and a 

duty to immediately begin bargaining. Here, the Board 

concluded that First Student had only “an obligation to bargain 

over initial terms,” Decision at 5 (emphasis added), as of 

March 2; that is, First Student “forfeited the right to set initial 

terms” as of that date, Fremont Ford, 289 NLRB at 1296. The

Board acknowledges in its brief to the court that First Student 

could have waited to begin bargaining until it had finalized its 

contract with the School District or even until it had hired a 

substantial and representative complement of its workforce, so 

long as it maintained the status quo in the meantime. Resp’t’s 
26

Br. 36. The dissent’s approach would permit an incoming 

employer to mislead employees about its intentions until it 

finalizes its acquisition of the predecessor. The Board has 

reasonably prevented such misleading conduct by allowing 

“perfectly clear” successorship to attach when an incoming 

employer “expresses an intent to retain the predecessor’s 

employees,” even if it has not yet finalized the acquisition. See, 

e.g., Nexeo, 364 NLRB No. 44, slip op. at 6.

Our dissenting colleague “can’t imagine” that unit 

employees could have been disadvantaged by First Student’s 

false promise to maintain their wages because it came just one 

day before First Student announced it would unilaterally reduce 

their wages. Dis. Op. 8. Record evidence indicated the critical 

nature of, and the Board of Education’s reliance, on First 

Student’s misrepresentations when voting to approve the 

transportation services contract on May 16, 2012, as did the 

Union representative and unit employees in attendance at its

public meeting. The Assistant Superintendent of the School 

District pointed out that “the focus of the [Board of Education]

meeting was ensuring that the employees received the same 

rate of pay and . . . comparable benefits because that was the 

concern of the Board [of Education] and of the superintendent.” 

Hr’g Tr. 386 (July 25, 2013) (Dr. Kelley Peatross). Given the 

evidence that employees were disadvantaged by First Student’s 

misrepresentations at the May 16 meeting, the Board could 

reasonably conclude that even if First Student had not become 

a “perfectly clear” successor on March 2, it would have become 

one on May 16. Decision at 5 n.13. And like the employer in 

Canteen Co., 317 NLRB at 1052–53, First Student could not 

vitiate its “perfectly clear” successor status by announcing new 

terms the following day. 
27

B.

Alternatively, First Student contends that Meek’s 

statements at the March 2 meeting gave unit employees 

adequate notice of its intent to impose new terms of 

employment because the Board’s contrary finding is not 

supported by substantial evidence. Pet’r’s Br. 28–29; Reply 

Br. 13–17. In assessing the adequacy of a successor 

employer’s statements about whether and on what terms it will 

retain incumbent employees, the court will not reverse the 

Board’s factual findings, in view of the Board’s expertise,

unless “the record is ‘so compelling that no reasonable fact 

finder could fail’ to find to the contrary.” Bally’s Park Place, 

Inc. v. NLRB, 646 F.3d 929, 935 (D.C. Cir. 2011) (quoting 

United Steelworkers of Am. v. NLRB, 983 F.2d 240, 244 (D.C. 

Cir. 1993)). That is not the situation here, for the Board’s

dismantling of the ALJ’s findings supports its finding that First 

Student did not “clearly announce its intent to establish a new 

set of conditions,” Spruce Up, 209 NLRB at 195.

To avoid becoming a “perfectly clear” successor, First 

Student had to “convey its intention to set its own terms and 

conditions rather than adopt those of the previous employer.” 

S & F Mkt. St., 570 F.3d at 361; see, e.g., Ridgewell’s, Inc., 334 

NLRB at 37–38. First Student contends that it conveyed such 

an intention at the March 2 meeting. See Pet’r’s Br. 29. It

considers the “most important[]” evidence to be Meek’s 

statement that “certain matters about which employees asked, 

including paid time off, vacation pay and sick pay, would be 

‘subject to negotiation[].’” Reply Br. 15 (quoting Hr’g Tr. 

421–22); see Pet’r’s Br. 4. It also points to Meek’s statement

that the company “did not know how many hours would be 

guaranteed to employees but that it would know more once 

routes were established.” Pet’r’s Br. 4 (quoting ALJ Decision 

at 22).
28

The Board found Meek’s declaration that certain matters 

would be “subject to negotiations” did not notify unit 

employees that First Student planned to unilaterally change 

their terms of employment. See Decision at 3 & n.9 (citing 

Road & Rail, 348 NLRB 1160). It explained that the statement 

“contain[ed] no mention or reservation of the right to act 

unilaterally.” Road & Rail, 348 NLRB at 1162. Instead, the 

Board concluded, First Student’s expressions of intent to 

negotiate with the Union suggested that it would not make 

changes unilaterally. See id. Neither was Meek’s statement

about guaranteed hours “an affirmative statement that terms 

and conditions [would] be changed,” Decision at 4, especially 

since it was accompanied by assurances that First Student 

would continue to use the District’s routing system, see Hr’g

Tr. 421. 

First Student views its case as indistinguishable from 

Banknote Corp., 315 NLRB 1041, and Marriot Management 

Services, Inc., 318 NLRB 144 (1995). Pet’r’s Br. 28–29; Reply 

Br. 16–17 & n.7. In Banknote, the incoming employer sent 

incumbent employees a letter stating that it intended “to 

attempt to hire its initial workforce from among” their ranks 

but had not agreed to recognize the incumbent union or be 

bound by the existing CBA. 315 NLRB at 1047. The Board 

found this statement to provide adequate notice of new terms 

and conditions. Id. at 1043. In Marriott, the incoming 

employer was even more explicit, stating that it “would not 

adopt the extant collective-bargaining agreement” and “that the 

health and welfare package and the pension plans would have 

to be changed.” 318 NLRB at 144. The Board concluded, 

understandably, that Meek’s remarks on March 2 were far less 

clear than the statements in Banknote and Marriott. Instead of

announcing that First Student would unilaterally impose new 

terms and conditions, they suggested “that the status quo 

[might] change as a result of negotiations, but not in advance 
29

of them.” Decision at 3. Therefore, the Board did not 

impermissibly depart from precedent by finding that First 

Student failed to clearly announce on March 2 its intention to 

impose new terms and conditions of employment.

First Student’s attempt to analogize its case to S & F 

Market Street, 570 F.3d 354, where the court reversed a 

“perfectly clear” successor finding on substantial-evidence 

grounds, see Pet’r’s Br. 25–28, fares no better. In that case, the 

incoming employer concluded that it would need to “replace 

the staff” but could not do so all at once. S & F Market Street, 

570 F.3d at 356. It therefore distributed job applications 

informing incumbents that it “intend[ed] to implement 

significant operational changes,” that any employment would 

be temporary and at will, and that it could “change benefits, 

policies and conditions at any time.” Id.; see id. at 360. Given 

these statements, the court observed that when the employer 

expressed interest in retaining the employees “no employee 

could have failed to understand that significant changes were 

afoot.” Id. Nothing of the kind can be said here, because First 

Student repeatedly stated its intent to retain the unit employees 

and publicly promised to maintain their wages but then 

unilaterally imposed new terms, including wage reductions, the 

day after the Board of Education approved its transportation 

services contract with the School District.

The dissent reaches its contrary factual finding, see Dis. 

Op. 5–7, by applying the wrong legal standard. The dissent 

claims that “the basic question” is First Student’s “intention,” 

i.e., “whether or not it planned to maintain the municipality’s 

compensation package.” Id. at 6. But the relevant question is 

not one of subjective intention; rather, it is the objective 

question whether First Student gave the employees sufficiently 

clear notice that it was going to unilaterally change terms and 

conditions of employment. See S & F Mkt. St. at 360; 
30

Machinists, 595 F.2d at 674–75; Creative Vision, 364 NLRB 

No. 91, slip op. at 5; Dupont Dow, 332 NLRB at 1074–75. The 

inquiry is conducted “from the perspective of employees,” Fall 

River, 482 U.S. at 43–44, because the “perfectly clear” 

successor doctrine protects employees from being “misled or 

lulled into not looking for other work,” S & F Mkt. St., 570 F.3d 

at 359. Further, the dissent fails to conform its analysis to the 

court’s deferential standard of review of Board findings. It

mischaracterizes the ALJ’s finding that First Student did not 

mislead employees as a “judgment on credibility,” Dis. Op. 7, 

and ignores substantial evidence supporting the Board’s factual 

finding that First Student’s statements were not “sufficiently 

clear to put [unit employees] on notice that there would be 

[significant] changes in the initial terms and conditions of their 

employment.” Decision at 4.

Moreover, our dissenting colleague’s attempt to ignore the 

Board’s factual findings, and the attendant limited nature of the 

court’s scope of review, e.g., Dis. Op. 2,6,7,10, is ultimately to 

no avail. The dissent concedes that if the second employer had 

stated that it planned to hire all of the predecessor’s bargaining 

unit employees (and that would be majority of its workforce), 

employees would be entitled to assume that their wages and 

working conditions would remain unchanged. Dis. Op. 5. The 

Board found that First Student had stated it planned to hire the 

bargaining unit employees, who had previously met standard 

criteria First Student identified, and a majority of its employees 

were the predecessor’s bargaining unit employees. Because 

there is substantial evidence in the record considered as a whole 

to support the Board’s findings, its findings are “conclusive.” 

29 U.S.C. § 160(e).

Accordingly, we deny First Student’s petition for review 

and grant the Board’s cross-petition for enforcement of its 

Order in full.
SILBERMAN, Senior Circuit Judge, concurring in part and

dissenting in part: Before I discuss the parties’ positions, it is

necessary to explain the governing law because, in my view, the

Board has essentially ignored it. The important cases are NLRB

v. Burns International Security Services, Inc., 406 U.S. 272

(1972), Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S.

27, 43 (1987) and International Ladies’ Garment Workers’

Union v. NLRB (Altmann), 366 U.S. 731 (1961), and two

opinions of our Court, International Ass’n of Machinists &

Aerospace Workers v. NLRB, 595 F.2d 664 (D.C. Cir. 1978),

and S & F Market Street Healthcare LLC v. NLRB, 570 F.3d 354

(D.C. Cir. 2009). Burns established that if an employer takes

over another business organized by a union and a majority of its

new work force constituted employees who were previously part

of the predecessor’s bargaining unit, and are performing

essentially the same work, the new employer becomes a

“successor,” with an obligation to bargain with the union. The

determination as to whether the second employer has hired a

majority of its employees from the previous bargaining unit is

determined when the secondary employer has reached its normal

operation and has hired a “substantial and representative

complement.” See Fall River, 482 U.S.

However, in a nod to a dynamic economy, the Court

modified the Katz Doctrine – whereby an employer cannot

unilaterally introduce changes in wages, hours, and working

conditions, see NLRB v. Katz, 369 U.S. 736, 743 (1962) – to

permit a successor to put into effect its own working conditions

package. Of course, it would still have an obligation to bargain

with the union, but the status quo from which bargaining would

proceed would be the employer’s package.

The Court, however, set forth what we described as a

“narrow” exception to this employer right. See Machinists, 595

F.2d at 673. Normally, the new employer would not be a

successor until it actually hired a majority of bargaining unit

employees, but the Court recognized that sometimes it is
2

“perfectly clear that the new employer plans to retain all of the

employees in the unit” (and that the previous employees will

constitute a majority), in which case it is obliged to consult

(bargain) with the union before making changes. Burns, 406

U.S. at 294-95. (In other words, Katz would apply.)

It is crucial to note that the only factor the Supreme Court

relied on to distinguish a so-called “perfectly clear successor”

from an ordinary successor was the employer’s plan to hire all

of the bargaining unit employees, presumably as a group.1

 In

our case, both the ALJ and the Board found Petitioner

anticipated hiring only a majority of employees, not that it

planned to hire all of the bargaining unit employees. In a

meeting on March 2, Petitioner’s representative emphasized

applicants would have to pass its hiring criteria, and that in past

cases where Petitioner had taken over in a conversion, between

80 and 90 percent of the existing work force was hired. Still,

Petitioner’s representative warned that it would only bargain

with the union if it hired a majority of the bargaining unit

employees. 

The majority observes that the hiring criteria used by the

former employer (the School District) was essentially the same,

so it would be expected that the employees would qualify, but

that ignores a new organization’s possibly different application

of criteria, such as driving tests. It is clear to me that the

Petitioner intended to make individual decisions rather than

planned to hire all the bargaining unit employees as a group –

which is what the Supreme Court contemplated. Indeed, only

41 out of 55 were actually hired. The ALJ determined that

under Fall River, it was not until August 17 that Petitioner

became an ordinary successor. 

1

Of course, even if a successor plans to hire all the bargaining

unit employees, one or more might drop off.
3

The Board implicitly recognized this hole in its case by

arguing before us that the Burns test for a “perfectly clear

successor” could be satisfied if an employer planned to hire most

of the bargaining unit employees (apparently some number

between a majority and all). Resp’t’s Br. 21. But that just flies

in the face of the Supreme Court’s language and represents a

regulatory agency’s rebellion. Indeed, in both Machinists, 595

F.2d at 673, and S & F Market Street, 570 F.3d at 358-59, we

reiterated the requirement that the perfectly clear successor is

one that plans to hire all the bargaining unit employees of the

predecessor. 

The majority reasons that in Machinists, we determined that

we were obliged to defer to the Board’s interpretation of the

perfectly clear successor concept. A careful analysis of the

opinion reveals that the Court did not actually defer to the

Board’s interpretation of the term “perfectly clear successor,”

but rather to what indications would be relevant in determining

whether or not an employer planned to hire all of the incumbent

bargaining unit employees.2

 We affirmed the Board’s

determination that Boeing, the successor employer, was not a

“perfectly clear successor” because it had announced before

taking over that it would pay lower wages and benefits. The

Board reasoned – which we thought logical – that the employer

who announced that it would pay lower wages and benefits was

not planning to retain all of the bargaining unit employees. We

recognized, Machinists, 595 F.2d at 673 n.41, that deferring to

a Board’s interpretation of a Supreme Court opinion was not

equivalent to the level of deference we give an agency’s

interpretation of a statute, but we noted that the Board’s

2

As a part-time law school professor, I am struck by the impact

of the decline of the Socratic method and the reliance on computers – 

which pick up stray comments in opinions – leading to the atrophy of

legal analysis.
4

reasoning was consistent with the spirit and purpose of the

Supreme Court’s short definition of a perfectly clear successor. 

So we were actually deferring to the Board’s evidentiary finding

that the employer did not meet the Supreme Court’s test. 

Of course, if the second employer were to, in accordance

with Burns, indicate that it planned to hire all of the

predecessor’s bargaining unit employees (and that would be a

majority of its workforce), employees would be entitled to

assume that their wages and working conditions would remain

unchanged. And if the successor were to institute new wages

and working conditions upon the transition, the Board’s concern

with misleading employees would be legitimate.3

To be sure, this is not the first case in which the Board has

asserted its “less than all” position, see, e.g., Spitzer Akron, Inc.,

219 NLRB 20, 22 (1975), enforced, 540 F.2d 841 (6th Cir.

1976), but I believe the Board is clearly wrong as a matter of

law. Unfortunately for Petitioner, it forfeited – even expressly

waived at oral argument – a challenge to the Board’s

transformation of the word all to a much lesser number. 

Therefore, I agree with the majority concerning the failure of

Petitioner to preserve this argument. I have, nonetheless, written

about this troubling Board effort to frustrate the Supreme Court

and our Court’s interpretation of a perfectly clear successor for

the benefit of a subsequent case. I would not ordinarily discuss

a matter not raised, but it is impossible to understand what the

Board has done without realizing how convoluted has been its

abandonment of the Supreme Court’s test. 

In that regard, I believe the Board’s further expansion of its

perfectly clear successor doctrine is also illegal. The Board, as

3

The majority’s accusation that my position is indifferent to the

misrepresentation of employees is inaccurate. Maj. Op. 26.
5

in this case, now asserts that a successor – who expects to hire

some number more than a majority – is a perfectly clear

successor unless it makes clear that it intends to alter the

bargaining unit’s compensation or working conditions. 

Otherwise, in the Board’s view, employees could be “misled,”

thinking the status quo would be maintained and thereby

encouraged to remain. The Board, as should be apparent, has

taken the logic of Machinists and reversed it. Whereas

Machinists approved the Board concluding that a successor who

proposed a diminution of compensation or working conditions

could not be thought to hire all of the bargaining unit

employees. Now the Board – having ignored the “all”

requirement – concludes that a successor who plans to hire some

number more than a majority is a perfectly clear successor if it

does not affirmatively state that it plans to change the

compensation package. 

If the Board had properly applied Burns, Machinists, and S

& F Market Street limiting the perfectly clear successor to a

successor who planned to hire all of the bargaining unit

employees, this would have been totally inapposite. Let me

explain. If the record showed that a successor planned to hire all

of the predecessor’s bargaining unit employees as a group and

nothing more about its plans, it would be assumed, legitimately,

that a planned seamless transition is contemplated in which

compensation and benefits would be maintained (which is what

the Supreme Court obviously envisioned). It would only be if

the successor announced an intention to lower the wages and

benefits that one could conclude, as was true in Machinists, that

the employer did not plan to hire all of the bargaining unit

employees. Once the Board illegally expanded the concept to

include an employer who plans to hire most of the bargaining

unit employees — only those who qualify – then it further

expanded the perfectly clear successor doctrine by determining

that the successor employer was stuck with a perfectly clear
6

successor restraint unless it affirmatively stated that it intended

to change wages and working conditions.

Petitioner did object to the Board’s imposition of the burden

on the successor, who wished to avoid perfectly clear successor

status, to affirmatively state that it planned to change the

employment conditions. It argued that the Board’s requirement

goes far beyond any concern with misleading employees and is,

therefore, arbitrary and capricious.4

 I agree, but as I have

explained, the Board’s concern would be irrelevant – at least

with regard to the definition of a perfectly clear successor – if

the Board had legitimately applied Burns.

* * *

Still, even assuming the Board’s convoluted interpretation

of Burns was legitimate and Petitioner was obliged to signal that

it wished to make changes in working conditions in order to

avoid being classified as a perfectly clear successor, I think the

Board’s determination that Petitioner did not disclose that it

planned a change lacked substantial evidence. Petitioner gave

every indication that should it take over, working conditions

could change. Besides indicating that it wouldn’t even have an

obligation to bargain unless it hired 51 percent of the employees,

in response to questions, it said that working hours would be

determined by the school district’s routing system and that

employment conditions, like paid time off, vacation pay, and

sick pay, would be subject to negotiations – which certainly

indicates that Petitioner did not intend to commit to the same

conditions. The majority determines that First Student’s

statement that certain matters – terms and conditions of

employment – would be subject to negotiations with the union

4

For instance, I do not understand how it could be said that an

employer who was silent about his plans misled employees.
7

indicates that it did not intend to put in those terms initially. But

that conclusion misunderstands labor law. Even if a successor

employer is allowed under Burns to put in place terms and

conditions unilaterally, it would be obliged to bargain with the

union; it just means it can bargain from its own base. The

sufficiency of these statements is particularly clear given the

context in which they were made. The transition from a public

to private employer would put any reasonable employee on

notice that economic “changes were afoot.” S & F Market

Street, 570 F.3d at 360. Why else would the municipality make

the change?

I am emboldened in my view that the Board’s factual

conclusions lack substantial evidence because the basic question

is the employer’s intention – whether or not it planned to

maintain the municipality’s compensation package. We should

bear in mind that the ALJ – whose judgment on credibility

issues must be weighed heavily by the Court of Appeals, see

Universal Camera Corp. v. NLRB, 340 U.S. 474, 496-97 (1951)

– concluded that Petitioner did not mislead employees and gave

fair indication that working conditions would not necessarily be

continued under its auspices. The majority thinks that the ALJ’s

determination, as to what plans Petitioner had, is not as

important as how its views were understood by employees,

relying on Fall River. But Fall River is a case dealing with a

much more complicated question as to whether a new company

is a successor, not a perfectly clear successor. It involves a

range of issues and the Supreme Court did conclude that how

the employees, who leave one company and end up at a second,

see their status is very important in determining whether the

second company is a successor, but at no time did the Supreme

Court ever suggest that Fall River, in any way, modified Burns,

or its narrow exception. The perfectly clear successor test relies

entirely on the successor’s plans, not the employee’s views.
8

Still, even if the employee’s view of the Petitioner’s plans

are determinative, the Board’s hypothesis that Petitioner’s plans

were not “sufficiently clear to put [the employees] on notice that

there would be changes in the initial terms and conditions of

their employment” – even given the Board’s expertise – is

arbitrary and capricious. See First Student, Inc., 366 NLRB No.

13, slip op. at 4 (Feb. 6, 2018). I can’t imagine that any

employee was misled into believing that existing terms and

conditions were sacrosanct. The Board is simply putting an

unreasonable burden on a successor inconsistent with the

Supreme Court’s clear objective. 

* * *

That brings me to the most important issue that Petitioner

did preserve. It argued that it was a legal error for the Board to

conclude that it was a perfectly clear successor as of March 2.

I agree. At that point, Petitioner was not even an employer – it

was still in negotiations. To be sure, if in March Petitioner had

unequivocally stated that it planned to hire all of the bargaining

unit employees, it would be legitimate to determine that it was

a perfectly clear successor when it did complete the transition. 

Yet the Board determined that it had, as of March 2, a

bargaining obligation with the union. In my view, that is

ridiculous. That was four months before the ALJ, in accordance

with the Fall River standard. determined that Petitioner was an

ordinary successor. 

Indeed, if at that stage it had entered into negotiations with

the union, it would have violated Section 8(a)(2).5 See Altmann,

366 U.S. at 737-40 (concluding employer violated the Act by

5

To the extent the Board has endorsed a contrary view in Road &

Rail Services, Inc., 348 NLRB No. 77 (Nov. 30, 2006), its reading, to

which we owe no deference, is incorrect.
9

recognizing union that claimed, but did not demonstrate, that it

represented a majority – notwithstanding employer’s good

faith); see also Majestic Weaving Co., 147 NLRB 859, 860-61

(1964) (holding that employer violated the Act when it

negotiated agreement with union contingent upon union gaining

majority support), amended by, 149 NLRB No. 135 (Dec. 9,

1964), enforcement denied, 355 F.2d 854 (2d Cir. 1966). The

majority implies that my reference to Altmann is a new

argument, but relying on a Supreme Court case that supports

Petitioner’s argument is never a new argument. See Amax Land

Co. v. Quarterman, 181 F.3d 1356, 1363 (D.C. Cir. 1999). And

since Petitioner made the contention that it could not become a

perfectly clear successor as of March 2, it is quite permissible to

draw attention to a case illustrating why that argument is sound. 

It is black letter labor law that a bargaining obligation

includes the requirement to bargain over a union’s proposal,

including one to change the status quo. Yet simply by

recognizing and bargaining with the union, First Student would

be in violation of Section 8(a)(2) because it would be telling

employees who was their bargaining representative before the

employees have chosen. In other words, to simply recognize a

union as the bargaining agent – without the necessary showing

of employee support – is a violation of Section 8(a)(2) – whether

or not a new agreement is reached. 

The majority suggests, based on statements of the Board’s

counsel (who did not object that 8(a)(2) was a legitimate

consideration), that the March 2 bargaining obligation was not

really a bargaining obligation in which an employer must

respond to a union’s proposal, but that is simply inconsistent

with the Board decision. See First Student, 366 NLRB No. 13,

slip op. at 5 (finding “that the General Counsel has met his

burden of proving that the Respondent became a ‘perfectly

clear’ successor, with an obligation to bargain over initial terms,
10

on March 2”); see also id. at 4 n.13 (concluding that “there is no

impediment to holding that the Respondent’s bargaining

obligation attached on March 2”). And that it was only some

months later that First Student was determined to have delayed

bargaining in violation of the Act, which the majority

emphasizes, is absolutely irrelevant as to its legal status on

March 2. The majority acknowledges that First Student had an

obligation, but it was only an obligation to bargain over initial

terms, but that is exactly what the Supreme Court has held to be

illegal without a showing of majority status. The Board’s

counsel’s suggestion that Petitioner could have waited to bargain

until it had hired a substantial and representative complement of

its workforce is a post hoc explanation and inconsistent with the

Board’s opinion.

The Board seems to have recognized that it was on thin ice

relying on March 2 because it suggested an alternative date that

Petitioner became a perfectly clear successor. That date was

May 16 – only the day before Petitioner announced its actual

working conditions package. Even if the Board’s theory that a

company becomes a perfectly clear successor if it plans to hire

most, rather than all, and moreover, does not affirmatively state

that the employment conditions will be significantly different

were correct, relying on May 16 statements, is arbitrary and

capricious (unreasonable). After all, the Board’s theory is such

statements are necessary so that employees are not misled to

their detriment, and it is pure fantasy to imagine that anyone

would be disadvantaged by a statement on May 16 that was

different from the actual terms and conditions announced on

May 17. 

The majority suggests that even if employees were not

misled on May 16, only one day before Petitioner invited

applications, nevertheless the Board of Education, with whom

Petitioner was contracting, relied on Petitioner’s statements on
11

May 16. But what that has to do with disadvantaging the

employees, or even the price of tea, is beyond me. The

majority’s creative suggestion is not part of the Board’s

decision, nor could it be. It has nothing to do with the

employer’s labor relations or the National Labor Relations Act.

* * *

This case discloses a rather disturbing effort on the part of

the Board to substantially nullify a right given to employers, 

under a Supreme Court opinion, by vastly expanding a narrow

exception to that right.