Washington Administrative Code › Title 192 - Employment Security Department › UNEMPLOYMENT INSURANCE › Chapter 192-350 - Transfer of business › Section 192-350-020 - What are examples of when a predecessor-successor relationship exists?

Current through Register Vol. 24-14, July 15, 2024
The following examples are intended to illustrate factors
				  that the department may consider in determining whether or not a
				  predecessor-successor relationship exists.
(1) Business A, a sole proprietor widget
				manufacturer, sells its operations to new business B, a corporation. B plans to
				continue in the same type of widget manufacturing business as A. The sale
				includes the name of the business, goodwill, existing inventory, manufacturing
				equipment, and an ongoing lease. All employees of A transfer to B. This is a
				predecessor-successor relationship.
(2) Business A, a sole proprietorship
				retailer, goes out of business. It decides to sell some of its assets,
				including a company car. Business B, a retailer in a different business,
				decides to buy the car. It does not acquire any other assets, including
				employees, from A. Even though B has acquired an asset from A, there is no
				predecessor-successor relationship because the only relationship is a single
				asset which is incidental to the primary business of the employers.
(3) Business A and business B are independent
				corporations, but subdivisions of another entity C. C reorganizes and decides
				to eliminate A, lay off some employees, and transfer the remaining employees to
				B. B is the successor to A.
(4)
				Business A, a small sole proprietorship taxicab company, sells its one taxicab
				to business B, a much larger taxicab company. No employees transfer, but B
				tries to retain as much of A's customer base as possible. B is in the same
				business as A and is in a predecessor-successor relationship.
(5) Business A, a large taxicab company,
				sells one of its many taxicabs to business B, a small sole proprietorship
				taxicab company. No employees transfer, but B tries to retain as much of A's
				customer base as possible. B is in the same business as A and has acquired part
				of a predecessor employer's operating assets, so B is a partial
				successor.
(6) Business A, a
				sit-down restaurant for families which operates in a leased facility, closes. A
				month later business B, a family restaurant operating under a different name
				and under a new lease reopens in the same location. One of five servers laid
				off when business A closed is rehired by business B. If this is the full extent
				of the relationship between business A and business B, this is not a
				predecessor-successor relationship. Examples of some of the factors which might
				change this to a predecessor-successor relationship are: If business B shares
				some of the same ownership with business A; the extent to which they advertise
				the same, use the same suppliers, maintain the same restaurant motif and decor,
				or use the same menu; the extent to which they use the same equipment and
				dishes; the extent to which the terms of the new lease appear to continue the
				previous one; and the extent to which other key employees continue from one
				employer to the other.
Statutory Authority:
					 RCW
					 50.12.010,
					 50.12.040, and
					 50.29.064. 07-23-131, §
											192-350-020, filed 11/21/07,
					 effective 1/1/08.