Opinion ID: 516427
Heading Depth: 2
Heading Rank: 2

Heading: The Successorship Doctrine

Text: 28 We are also troubled that the NLRB did not make clear whether it was applying successorship doctrine to this case and, if so, how it was to be applied, and what the justification was for applying it in a case in which there was no change of ownership. Under successorship doctrine, a new employer who takes over an ongoing business can be free of obligations to bargain with the union that represented its predecessor's employees if there has not been substantial continuity between the enterprises. Fall River Dyeing, 107 S.Ct. at 2236. 29 The ALJ, in his opinion, drew upon successorship principles in determining whether Morton was obligated to continue to bargain with the Union. The NLRB, in the text of its opinion, purported to affirm the ALJ's opinion in full. Slip op. at 1. However, the footnote to its opinion which refers to the specific and unique facts of the case, seems to indicate a less than wholehearted adoption of the ALJ's approach. Furthermore, in its brief to this court, the Board asserted that successorship doctrine was inapposite to the case at bar, but it failed to articulate what general principle had been applied. Given this incoherence, it is impossible for us to say with any certainty what it is the Board did, and thus it is impossible for us to assess the validity of the Board's approach. 4 30 Moreover, if the NLRB is applying successorship principles to the case at bar, it has not given a reason for this approach. The expansion of the doctrine of successorship to allow a single employer who changes its operations to be free of bargaining obligations could have a significant effect on the relationship between employers and unions. It could undermine the goal of stability and industrial peace which the continuing obligation to bargain fosters. See Fall River Dyeing, 107 S.Ct. at 2233. The Supreme Court noted that this doctrine of successorship safeguards the rightful prerogative of new owners to independently arrange their businesses without being unduly bound by the actions of their predecessors. Id. at 2234. This principle does not appear to apply, however, when there has been no change of ownership. Where the NLRB applies a doctrine in a radically new way, it is its responsibility to justify its conclusion. 5 31 Finally, we note that to the extent that the ALJ was applying successorship principles, he applied them incorrectly. In the first place, the ALJ relied on the fact that Morton's employees had no expectation of being rehired by Morton when Morton closed the facility for the mentally retarded. In Fall River Dyeing, the Supreme Court addressed the issue of when employees' expectations of continued representation are relevant to successorship analysis, as follows: 32 If the employees find themselves in a new enterprise that substantially resembles the old, but without their chosen bargaining representative, they may well feel that their choice of a union is subject to the vagaries of an enterprise's transformation. 33 Fall River Dyeing, 107 S.Ct. at 2234. We interpret this statement as indicating that employees' expectations of continued representation should be judged at the time they are rehired, rather than at the time that the old enterprise was terminated. 34 Second, it is not enough for the ALJ or the NLRB merely to describe changes in the business and then declare that the bargaining obligation has been terminated. Instead, the Board must assess whether there was an essential change in the business that would have affected employee attitudes towards representation. Premium Foods, Inc. v. NLRB, 709 F.2d 623, 627 (9th Cir.1983); accord Spencer Foods, 768 F.2d at 1470 (requiring the NLRB to state why the changes it identified would affect employee attitudes toward representation). As the Supreme Court has noted, the key question in applying successorship doctrine is whether from the employees' perspective their new jobs were so similar that the employees would have legitimate expectations in continued representation by their union. Fall River Dyeing, 107 S.Ct. at 2236. 35 In this case, the ALJ did not state how the changes he noted would have affected the employees' expectations of continued representation. In its brief, the Union points out that a number of the employees were doing essentially the same jobs under the new operation as under the old and that the largest number of employees--the nurses' aides--were spending their time feeding and dressing people instead of teaching them how to feed and dress themselves, a distinction, it submits, of no material difference. The ALJ has not explained why such differences in jobs would make a difference to employees with respect to their expectation of union representation. 6 Thus, even if we were to construe the Board's action as applying successorship principles to this case, we would still be unable to affirm the Board, because the doctrine, if applied, was applied incorrectly.