Document: 482 U.S. 27 107 S.Ct. 2225 96 L.Ed.2d 22 FALL RIVER DYEING & FINISHING CORP., Petitionerv.NATIONAL LABOR RELATIONS BOARD. No. 85-1208. Argued March 2, 1987. Decided June 1, Syllabus This case involves interpretation of the ruling in NLRB v. Burns International Security Services, Inc., 406 272, 92 1571, 32 61 that new employer, succeeding to another's business, had an obligation bargain with union representing predecessor's employees. Sterlingwale Corp., which operated a textile dyeing and finishing plant, laid off all its production employees February 1982 finally went out business late summer. During this period, one former officers president major customers formed petitioner company, intending engage aspect Sterlingwale's take advantage assets work force. Petitioner acquired real property, equipment, some remaining inventory, began operating facilities hiring September 1982, initial goal full shift workers. In October represented maintenance for almost 30 years requested recognize it as bargaining agent petitioner's begin collective bargaining. refused request. At time, majority were ex-Sterlingwale employees, also was true mid-January 1983, when met By mid-April reached two shifts, and, first minority. The same working conditions existed under Sterlingwale, over half came from customers. November filed unfair labor practice charge National Labor Relations Board, alleging refusing violated § 8(a)(1) (5) Act (NLRA). An Administrative Law Judge (ALJ) concluded (1) "successor" (2) proper date determining whether (necessary require union) not mid-April, shifts working, but obtained "representative complement" (3) union's demand trigger obligation), although premature, "of continuing nature" still effect mid-January, (4) thus committed bargain. Board affirmed ALJ's decision, Court Appeals enforced Board's order. Held: 1. A employer's is limited situation (as ) where question only recently certified before transition employers. Where, here, more than year has rebuttable presumption status, status continues despite change Although employer bound by substantive provisions agreement, so long fact successor old employed predecessor. Pp. 36-41. 2. Sterlingwale. approach question, approved Burns, based upon totality circumstances requires focus on there "substantial continuity" between enterprises, particular emphasis retained employees' perspective their job situations are essentially unaltered. determination here supported substantial evidence record. It dispositive 7-month hiatus demise start-up, or hired through newspaper advertisements rather employment records. 42-46. 3. representative rule—which fixes moment be made successor's predecessor, triggers obligation—is reasonable successorship context. Petitioner's proposal determined instead at "full stage would have voice selection fails consider significant interest being soon possible. Nor does rule place unreasonable burden employer. application facts case, moreover, record evidence. 46-52. 4. "continuing demand" rule—whereby premature until acquires bargain—also places minimal makes sense light position. make no repeatedly renew hope having correspond date, when, little trouble, can regard previous one. 52—54. 775 F.2d 425 (CA 1 1985), affirmed. BLACKMUN, J., delivered opinion Court, BRENNAN, MARSHALL, STEVENS, SCALIA, JJ., joined, Parts I III WHITE, joined. POWELL, dissenting opinion, REHNQUIST, C.J., O'CONNOR, post, p. 54. Ira Drogin, New York City, petitioner. Louis R. Cohen, Washington, D.C., respondent. Justice BLACKMUN Court. we confronted issue decision consistent (1972). ruled another, Id., 278-279, S.Ct., 1577. We must decide employers, applies entitled support. Our inquiry then pro- 2 WHITE joins opinion. ceeds three questions concern rules developed First, determine support conclusion Second, rule, designed identify arises, reasonable, applied properly case. Finally, examine principle that, if presented bargaining, 3 * For plant Fall River, Mass. Its consisted basically types dyeing, called, respectively, "converting" "commission." Under converting process, 1981 accounted 60% 70% see App. 149, bought unfinished fabrics own account, dyed finished them, sold them apparel manufacturers. 123. commission remainder owned according specifications. 124. financing marketing aspects different. Converting capital purchase sales force promote products. however, both dyeing. 98. 4 1970's textile-dyeing including Sterlingwale's, suffer adverse economic foreign competition. After 1979, took serious turn worse because loss export market, id., 127-128, company reduced number 192-195. primarily longer continue business. 77-78, 104, 130-132. skeleton crew workers supervisors ship goods order maintain corporation's building machinery. 147-148. months following layoff, Leonard Ansin, president, liquidated inventory corporation looked partner whom he could "resurrect business." 114-115, 146-147. Ansin felt owed community keep operation. 103-104. 5 been existence, United Textile Workers America, AFL-CIO, Local 292 (Union). 60-61. most recent collective-bargaining agreement negotiated 1978 due expire 1981. dated 1980, response financial difficulties suffered Union agreed amend extend expiration year, April without any wage increase improve productivity. 353-355. final officials problems involving action, particular, failure pay premiums group-health insurance. 66-67, 86, 131. addition, during meetings told him future helping meeting prospective buyers. 67-68, 6 summer assignment benefit creditors, 115, 147, Ansin's mother, who officer holder mortgage 113, Massachusetts Capital Resource Corporation (MCRC), held security machinery 113-114. professional liquidator dispose company's assets, mostly auction. 115. 7 employee officer, Herbert Chace, Arthur Friedman, customers, Marcamy Sales (Marcamy), River Dyeing Finishing Corp. resigned worked years, vice time his departure, participated tenure 189, 232. Chace Friedman intention engaging strictly commission-dyeing taking availability 203-204, 223-224. Accordingly, acquire MCRC mother 238-272, convey petitioner, 278-289.1 liquidator's 200-202, 290-293. became operations president. 190, 8 206-207. advertised local newspaper, 197-198, personally got touch several supervisors, 197. 12 there. 196, 220-222. decisions into consideration recommendations these employee's attain workers, meant 55 60 208. planned "see how be" after permitted, expand shifts. Ibid. spent approximately four six weeks start-up additional month experimental production. 156-157, 207, 226-227. 9 letter 19, 360. request, stating view, request "no legal basis." 362. 18 21 See 272 N.L.R.B. 839, 840 (1984). complete range jobs, process operation, handling customer orders, 225-226; attained 225, 227. Of shift, eventually hire, 36 Tr. Oral Arg. 28. continued force, minority just barely (52 53 employees). 294-302; 10 engaged exclusively experienced they unchanged machines, building, classifications, virtually supervisors. 152-156, 205-206. Over volume Marcamy. 314-316. 11 On refusal §§ (NLRA), 49 Stat. 452, amended, 29 U.S.C. 158(a)(1) (5).2 hearing, decided N.L.R.B., 840. He observed therefore noted making ALJ acknowledged necessary bargain, Union's nature." iIbid. Thus, view ALJ, duty arose effect. brief order, member dissenting, decision. 839.3 First Circuit, divided vote, (1985). court found, 428-430, "supported record." F.2d, 430. observed: "The differences [petitioner's] sufficiently finding continuity enterprise, viewed standpoint, broken." longstanding standard, 431, attempt establish method where, clear will reach complement employees." 430-431. According court, "employed workforce mid-January" reasonable. 431. found treating "practical" deference. 432-433.4 13 Because importance law, our cases, granted certiorari. 476 1139, 106 2243, 90 690 (1986). II 14 Fifteen ago (1972), dealt about transition, security-guard Wackenhut chosen Wackenhut. Wackenhut, lost service contract certain airport property Burns. proceeded hire guards 42-guard operation airport. condition employment, join already agreements other locations. When brought charges against union. 15 "In election few before, designated unit identical unit. undisputed knew relevant aware certification existence contract. circumstances, conclude represent reasonably entertained good-faith doubt fact. Burns' terms stemmed Wackenhut's certification." 16 reasoning tied there, 274, 1575, suggested analysis equally applicable even cited approval, 279 281, 1578-1580, "ha[d] consistently mere employers ownership employing industry such 'unusual circumstance' affect within normal operative period management preceding employer." 279, Several cases involved short date. See, e.g., Auto Ventshade, 276 303, 305 (CA5 1960); Tom-A-Hawk Transit, Inc. NLRB, 419 1025, 1026 (CA7 1969). 17 Moreover, defining "the period," U.S., 1577, referred presumptions regarding certification. n. 3, 1578, bargaining-unit representative, usually conclusive ibid., citing Brooks 348 96, 98-99, 75 176, 178-179, 99 L.Ed. 125 (1954); 159(c)(3) ("No shall directed subdivision twelve-month valid held"). Celanese 95 664, 672 (1951). These much absolute certainty erode certification, policy overriding NLRA "industrial peace." 103, 181. further "promot[ing] stability relationships, impairing free choice Terrell Machine Co., 173 1480 (1969), enf'd, 427 1088 (CA4), cert. denied, 398 929, 1821, 26 91 (1970). essence, enable concentrate obtaining fairly administering worrying unless produces immediate results, lose decertified. 100, 179. remove temptation part avoid delaying, undermine among Gorman, (1976).5 upshot permit unions develop stable relationships pursue goals members, pursuit, turn, industrial peace. 19 rationale behind particularly pertinent understandable them. peculiarly vulnerable formal established relationship uncertain plans, cannot sure it. While concerned members protect whatever rights exist predecessor employer.6 unsettling needs safeguard members' successor. 20 position supports situation. If find themselves enterprise substantially resembles old, may well feel subject vagaries enterprise's transformation. feeling conducive layoff initially maintaining jobs. fact, might inclined shun union, especially believe jeopardize jobs blame associated it.7 Without wide variety corporate transformations possible, use way getting rid exploiting hesitant attitude towards eliminate presence. addition recognizing traditional careful " 'the rightful prerogative owners independently rearrange businesses.' Golden State Bottling Co. 414 168, 182, 94 414, 424, 38 388 (1973), quoting John Wiley Sons, Livingston, 376 543, 549, 84 909, 914, 898 (1964). "is ordinarily set predecessor," 294, 1585, agreement. 284, 1580. explained subject, course, restriction discriminate hiring. 280, 5, 5; Howard Johnson Hotel Employees, 417 249, 262, 8, 2236, 41 46 (1974). extent applicability rests hands conscious generally 8(a)(5) activated. considers intends trained predecessor.8 freedom structure representation now hold certified. And predecessor.9 23 rules, adopted given considerable authority interpret NLRA. Financial Institution 475 192, 202, 1007, 1012, 89 151 adopts rational Act, deference courts. record, courts should enforce Beth Israel Hospital 437 483, 501, 98 2463, 2473, 57 370 (1978); Universal Camera 340 474, 488, 71 456, 464, 456 principles guide review action 181, 423. 24 taken accepted respect indeed old. 280-281, 4, 1578-1579, approach, factual nature situation, "acquired continued, interruption change, operations." 184, 425. Hence, enterprises. examines factors: same; doing supervisors; entity products, body 4; Aircraft Magnesium, Division Grico 265 1344, 1345 (1982), 730 767 (CA9 1984); Premium Foods, 260 708, 714 709 623 1983). 25 conducting analysis, keeps mind "those understandably unaltered." 425; Jeffries Lithograph 752 459, 464 1985). furthers Act's legitimate expectations thwarted, dissatisfaction lead unrest. challenge contest Essentially reasons Appeals, 430, materials.10 introduced product line. significance did change. abandoned exclusive favor alter essential process. classifications those Sterlingwale; petitioners' machines direction express purpose do determinative start-up. argues hiatus, coupled advertisements—not records, transferred it—resolves question. Brief 16-17, 20-22; 439 (dissenting opinion). Yet factor calculus indicia discontinuity. Band-Age, 534 (CA1), 429 921, 97 318, 50 288 (1976). Conversely, factors indicate "totality circumstances" suggest present Daneker Clock 516 315, 316 (CA4 1975); C.G. Conn, Ltd., 197 442, 446-447 474 1344 1973). 28 above, companies hiatus. Here, somewhat less certain. plant. creditors summer, seeking resurrect buyer efforts. Viewed perspective, therefore, seven months. advertisements, often relied formerly intended force.11 settled arose. B "triggering" composition force.12 arose: expired services July 275, 1576. situations, while gradually builds hires approval Courts fixing made.13 If, moment, employees.14 31 represents effort balance objective insuring maximum participation permitting quickly possible.' 430-431, Pre-Engineered Building Products, 603 134, 136 (CA10 1979).15 deciding exists factors. studies "whether filled production." 623, 628 takes size expected elapse larger . relative expansion." contends unreasonable, injures many burdens successor, unsure arise. 24-31; Chamber Commerce States Amicus Curiae 21-25. stage, reveal truly focuses selected account latter heightened representative. Having refuse "disrupts morale, deters organizational activities, discourages membership unions." Franks Bros. 321 702, 704, 64 817, 818, 88 1020 (1944). fail.16 33 refuses once attained, risks violating 8(a)(5). Furthermore, recognizes reached, recognition constitute violation 8(a)(2), organization. 158(a)(2). And, unlike 15, supra, rule. 34 conclude, best follow criteria straightforward.17 know tolerable filled, begun standard advocated necessarily easier apply complement." expansionist dreams entrepreneurs, difficult limits hopes, acknowledge production—the identified rule.18 35 "had least fifty percent ultimately employ 431-432. expansion contingent expressly growth then. C triggered demand. rejected remains attains 1345, 9; Spruce Up 209 194, (1974), 529 1975). 37 Such considered along Once appropriate complement, then, triggered, unaware plans hiring, likely premature. one.19 reasonableness demonstrated asked inform become learned fait accompli. surprising Union, obligation: November. responded denying Rather confused arise, stuck it—that never Union.20 39 judgment 40 ordered. THE CHIEF JUSTICE O'CONNOR join, dissenting. 42 Today holds (a)(5) 158(a)(1), claims agrees (NLRB Board) defunct similar line theory my misconstrued doctrine misapplied test. dissent.1 43 A. 44 describes background great detail, gives insufficient critical facts. 12, financially troubled ceased indefinitely retaining orders liquidate inventory. (CBA) allowed April, paying workers' life health insurance premiums. Attempts obtain afloat unsuccessful. commenced liquidation sell public mid activity ceased, permanently closed doors. 45 incorporated end August 1982. machinery, furniture, fixtures. portion auction.2 Three later recruiting placing ads newspaper. means large percentage off.3 decisions, applicant's experience either plants, 223; consulted applied, group received preference. performed exclusively, 60%-70% business.4 another deference, conclusions upheld 423, (1973). businesses. 1984). 279-281, 1577-1579, Here sufficient equipment (1984) (decision Judge). reaching conclusion, give weight discontinuity, think overwhelming. 47 shows completely separate There break August.5 apparent direct contractual 205. outbidding buyers open market. Also, purchases sale tangible assets. buy trade name goodwill, nor assume liabilities. (measured dollars) apparently skill services. transfer lists, 9-month interval ended November, natural attracted No explanation offered. Cf. Lincoln Private Police, 189 717, 719 (1971) (finding clients, "it independent solicitation"). Any standing alone defeat successorship, together persuasively demonstrate incorrect.6 48 nevertheless unpersuaded. views distinctions directly affecting though CBA since expired. (emphasizing perception "essentially unaltered"). simply continuation certainly expectation—that ever reopen. expect failed resumed existence. renegotiate it, benefits left unpaid. possibility disappeared entirely Darlington Manufacturing 380 263, 85 994, 1002, 827 (1965) (the "closing entire ends employer-employee relationship"). organized, move hardly reinstated positions. sum inevitably negative "effect rehire." 1346. Radiant Fashions, 202 938, 940 smaller, fewer hours per prior job. personnel favorable presumably deferring NLRB's today extends manner anticipated enterprises extensive here. Even genuine substantial, agree Court's As past, survive ownership, shown 2244, justification assuming wish all. 196 200 (member Kennedy, concurring part); Saks 634 681, 685-686 (CA2 1980). Indeed, otherwise. contrary basic presume election. 51 acknowledges completed 50% finds earlier middle January complement," adequately staffed categories filled. 52 measure unsupportable. test serve useful role sporadic, speculative. But recognized evident unit." 295, 1586. feasible wait complement—as here—it clearly fairer so. provides estimate imperfect relying obvious. examined contains disproportionate result deprived favors, required accept want. delay uncertainty frustrate early representation—a here—there every reason employed. measuring unsupportable, affirmance choice, curious. positions St. God Hospital, 905 (1982). imminent definite. to, subsequently did, staff second shift. "contingent" conditions, neither finding.7 operations. ("In [petitioner] started shift"); allegedly arose, nearly doubled 50-odd needed unexpected; instead, closely tracked original forecast business.8 Thus basis selecting known commence bargaining.9 54 notes, reflects need possible." Ante, ---- (citations internal quotation marks omitted). "balances" interests overprotecting ignoring former. ensure elected stated, denied opportunity choose dissent. buildings used 200-201, acquire, 195. read part: "§ 158. Unfair practices "(a) "It employer— "(1) interfere with, restrain, coerce exercise guaranteed section 157 title; "(5) collectively representatives 159(a) title." member, complaint dismissed 839 judge argued rejected, "good faith doubt" relieved 434-441. amicus curiae overlooks ignores acceptance significance, contend "turned case—the arguably provided presuming wanted union," 17, "that workforce." 18-19. misunderstanding leads Chamber's arrives gradually, forced petition again 26. Acceptance views, advocate rejection presently understood, logically whenever doubts regardless remained same. difficulty faces employer-transition graphically exhibited layoff. 64. willing meet unsuccessfully attempted honor commitments dealing benefits. 78-86. desire participate dark acquisition. 68-69. appears inability benefits, payment insurance, severance pay, vacation failing 174, 179-180. 18, infra. negotiations, "may lawfully withdraw negotiation show grounded command support." Harley-Davidson Transp. 273 1531 doubt. support, 198, 1011, (1986); 101, 180, (1954). Last term, struck down requiring nonunion permitted vote affiliate voting, compel reorganized 201, 1012. conflict whereby affiliation voted unions. 199-200, 1011-1012. rejecting '[t]he sought unnecessarily disrupted adjustment displacement employer-bargaining relationship.' 202-203, 1013, Canton Sign 174 906, 909 enf. grounds, 457 832 (CA6 1972). changes precipitated affiliation." 203, 1013. "[t]he assumes maintained allowing affiliated raises representation. contravenes assumption, invoke perceived procedural defect cease succeeds organization chose, decertify presents status." 209, 1016. earlier, relations instant purchased "open market." 17. Petitioner, acquiring accomplished parent transferring So continuity," obtains 257, 2241, (1974); (1973); 122 Similarly, general sales, 20, relationship. That liabilities name, 16, outweigh (1976); Zim's Foodliner, 495 1131, 1133-1134 (CA7), 838, 66, 65 reduction size, comparison 17-18, Union. Middleboro Fire Apparatus, 590 (CA1 1978). confusion concerning holding. unclear Compare 1579 ("[A] agent"), 278, 1577 ("[T]he Burns"). 2244 ("[S]uccessor employees"); 6, 425, (same). interpretation. Maintenance Mfg. 214 529, 532-534 684-686, nn. 1980) (and therein); Note, Appropriate Standards Successor Employer Obligations Wiley, Johnson, Wayne L.Rev. 1279, 1299 (1979). Indianapolis Mack Service, 690, 694-696 (1984), 802 280 1986); 467 1985); Hudson Aggregates, 246 197-198 (1979), 639 865, 870 1981). 22, 29-31; 20-21. rely argument reference complement": "Although instances perfectly retain consult terms. 9(a) 159(a)." 294-295, 1585-1586. remark, resolved examining setting employment. using term distinguishing exceptional alluded sentence, involvement. lends mean arises employ. originated context faced expanding contracting Clement-Blythe Companies, 182 502 (1970), 77 LRRM 2373 1971). follows: what sometimes conflicting desiderata, agent, unduly existing very last board. pointless relatively multiply times." 502. Similar hand, allow possible frustrated. Long ago, (1954), "To formally [of peace], inimical it." powerless reject commands 1011. distinction context, itself lies partly supervising Law, 46-49. contrast, involvement limited. err prematurely, 8(a)(2) remedial Garment 366 731, 740, 81 1603, 1608, 762 (1961). belief yet likewise enter collateral consequences decertification bar. remedies available supra. offers, opposed petitions signed days hearing May 1983. 25; 364-367. approve Appeals' treatment petitions. 177-178. "once unlawfully withheld defend pointing intervening foreseeable consequence practice." 433. undermined led testified fear proceeding raise. 183. produced rely. unit, compelling whether, majority. access information—whether issued occurred, actions filing complaint. Curtiss-Wright Wright Aeronautical Div. 347 61, 73-74 (CA3 1965). preliminary matter, ----. immediately company. concludes remote weaker retains event, auction, $13,000 worth $30,000 sold. 200-201. More 150 1982; perhaps 92-93; 428 laid-off "seemed like thousands" applications ads. 198. switch work, thought ante, 46, 11. difference determinative, irrelevant. retail outlet cloth, allocate purchasing material. past considerations indirect impact Gladding 192 200, (change suppliers); (1973) (substantial identity customers). dismisses important "other discontinuity." (citing (1976)). text, "indicia discontinuity" us bears resemblance alleged location, supervisory personnel, (i) "lengthy" 21/2 shut production; (ii) ongoing enterprise; (iii) served different market; (iv) sale. 940-941. industry, work. future. testified: "We goal, we'd be, [sic] March, up changing goal. reliance puzzling facts, "substantial" "representative" point 106-109 accurate back January, acted differently appeared words, May—an proved erroneous

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