Opinion ID: 491025
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Heading Rank: 2

Heading: T & U's Successorship and Obligation Under the 1978-81

Text: Mill Cabinet Agreement 17 The Funds contend that T & U was a successor employer to Waiola and thus obligated to contribute to the employee benefit trusts under the 1978-81 collective bargaining agreement. T & U argues that it was not a successor and was not bound by the terms of the collective bargaining agreement. 18 In a series of cases, we have set forth the requirements for finding that a new employer is a successor employer. NLRB v. Jeffries Lithograph Co., 752 F.2d 459, 463-69 (9th Cir.1985); Kallmann v. NLRB, 640 F.2d 1094, 1100-01 (9th Cir.1981); Premium Foods, Inc. v. NLRB, 709 F.2d 623, 627 (9th Cir.1983). As the Supreme Court has stated, the focus is on whether there is 'substantial continuity' between the enterprises. Fall River Dyeing & Finishing Corp. v. NLRB, --- U.S. ----, 107 S.Ct. 2225, 2236, 96 L.Ed.2d 22 (1987). The inquiry we undertake is more functional than formal. 19 In Jeffries Lithograph, we listed a number of factors to be considered in making a determination of successorship. Those factors include:[Whether] [a] there has been a substantial continuity of the same business operations; [b] the new employer uses the same plant; [c] the same or substantially the same work force is employed; [d] the same jobs exist under the same working conditions; [e] the same supervisors are employed; [f] the same machinery, equipment, and methods of production are used; [g] and the same product is manufactured or the same service [is] offered. 20 752 F.2d at 463 (quoting Premium Foods, Inc., 260 NLRB 708, 714 (1982) (Barker, A.L.J.), enforced, 709 F.2d 623 (9th Cir.1983)). 21 Here, each Jeffries factor is present but one--the same supervisors. T & U argued before the district court that because Tanaka and Uyehara now owned the business and were acting as supervisors, T & U could not be considered a successor employer. 22 The primary question in successorship cases is whether, under the totality of the circumstances, there is substantial continuity between the old and new enterprise. The absence of one Jeffries factor does not cause us to conclude that T & U was not a successor. See, e.g., Trustees for Alaska Laborers-Constr. Indus. Health & Sec. Fund v. Ferrell, 812 F.2d 512, 516 (9th Cir.1987) ([O]n balance, the evidence indicates that Ferrell is a successor.). The factors that are present and point toward continuity are both more numerous and more compelling. In addition, we note that T & U represented itself as Imai's successor in its letter to his former customers. See Fed.R.Evid. 801(d)(2). Here, we hold that the undisputed facts demonstrate sufficient continuity in the enterprise to require the legal conclusion that T & U was the successor to Waiola. 6 23 T & U makes two additional arguments with respect to the 1978-81 Mill Cabinet Agreement. T & U argues that even if it were a successor: (1) it was not required to make trust fund contributions because it was not a party to any writing providing for employer contributions to the employee benefit trust funds, and (2) it was not bound to its predecessor's and the Union's agreement as to the terms and conditions of working at Waiola, and therefore is not liable for the allegedly delinquent fund contributions. 24 Section 302(c)(5) of the LMRA requires that payments by employers which are to be held in trust for the benefit of employees must be governed by a detailed written agreement specifying how payments are to be made. 29 U.S.C. Sec. 186(c)(5). The primary purpose of this requirement is to insur[e] that the trust funds [are] not tampered with or used for illicit purposes. Thurber v. Western Conference of Teamsters Pension Plan, 542 F.2d 1106, 1108 (9th Cir.1976). Where, as here, there is a valid original agreement and writing entered into by the predecessor employer, the requirements of a writing under the statute are satisfied as far as the successor employer is concerned. See Ferrell, 812 F.2d 512; Carter v. CMTA-Molders & Allied Health & Welfare Trust, 736 F.2d 1310, 1313 (9th Cir.1984); Arizona Laborers Local 395 Health and Welfare Fund v. Conquer Cartage Co., 753 F.2d 1512, 1520-21 & n. 13 (9th Cir.1985). 25 A successor employer is required to abide by the terms and conditions of employment established by its predecessor's collective bargaining agreement unless and until it has timely bargained to an impasse with the incumbent union. See generally Fall River Dyeing, 107 S.Ct. 2225; Carter, 736 F.2d at 1312; NLRB v. Edjo, Inc., 631 F.2d 604, 607-08 (9th Cir.1980). Here, T & U did not bargain with the union at all. Rather, according to Tanaka's affidavit: After purchasing the assets of Waiola on April 30, 1980, the Trust Funds continued to submit monthly trust fund assessment notices ... and we continued to make contributions [for the remainder of the contract term] on the belief we were obligated to do so. 7 26 We hold that T & U is liable for delinquent contributions to the Carpenters' Funds under the 1978-81 Mill Cabinet Agreement. 8 27