Opinion ID: 596099
Heading Depth: 2
Heading Rank: 2

Heading: The Successorship Doctrine and Presumption of Majority Status

Text: 15 An employer violates sections 8(a)(1) and (2) of the Act by recognizing a union that does not represent a majority of the employees in an appropriate bargaining unit. See International Ladies' Garment Workers' Union v. NLRB, 366 U.S. 731, 737-38, 81 S.Ct. 1603, 1607-08, 6 L.Ed.2d 762 (1961). And a union without majority support violates section 8(b)(1)(A) of the Act by accepting such recognition. See id. at 738, 81 S.Ct. at 1607-08. When an employer and a minority union enter into a contract that contains a union security provision, the employer violates section 8(a)(3) of the Act, and the union violates section 8(b)(2) of the Act. See Local Lodge No. 1424, Int'l Ass'n of Machinists v. NLRB, 362 U.S. 411, 412-14, 80 S.Ct. 822, 824-25, 4 L.Ed.2d 832 (1960). 16 The Board's determination that Irwin and the Union violated these provisions of the Act was based on its finding that the Union was not entitled to a presumption of majority status and that, absent that presumption, the Union had failed to demonstrate that it represented a majority of Irwin's refinery maintenance employees. We reject this determination, because it is at odds with the successorship doctrine and the presumption of continued majority status that arises pursuant thereto. 17 Under the successorship doctrine articulated in Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 107 S.Ct. 2225, 96 L.Ed.2d 22 (1987), a union's majority status will be presumed following a change in employers if the new employer is a successor to the old employer and a majority of the new employer's workers were employed by its predecessor. Id. at 41, 107 S.Ct. at 2234-35. A new employer is a successor to its predecessor if there is substantial continuity between the two enterprises. Id. at 43, 107 S.Ct. at 2236. The inquiry into substantial continuity is primarily factual, and is based on the totality of the circumstances. Id. In particular, courts and the Board will examine 18 whether the business of both employers is essentially the same; whether the employees of the new company are doing the same jobs in the same working conditions under the same supervisors; and whether the new entity has the same production process, produces the same products, and basically has the same body of customers. 19 Id.; see also NLRB v. Burns Int'l Sec. Servs., Inc., 406 U.S. 272, 280 n. 4, 92 S.Ct. 1571, 1578 n. 4, 32 L.Ed.2d 61 (1972). 20 The fact-intensive inquiry into substantial continuity is undertaken with an emphasis on the employees' perspective. Fall River, 482 U.S. at 43, 107 S.Ct. at 2236; see also International Union of Elec. Workers v. NLRB, 604 F.2d 689, 694 (D.C.Cir.1979); Derby Refining Co., 292 N.L.R.B. 1015, 1015 (1989). The fundamental question is whether business operations, as they impinge on union members, remain essentially the same after the transfer of ownership. International Union of Elec. Workers, 604 F.2d at 694 (emphasis added). This focus on the employees' view promotes industrial peace, for [i]f the employees find themselves in essentially the same jobs after the employer transition and if their legitimate expectations in continued representation by their union are thwarted, their dissatisfaction may lead to labor unrest. Fall River, 482 U.S. at 43-44, 107 S.Ct. at 2236-37 (citing Golden State Bottling Co., Inc. v. NLRB, 414 U.S. 168, 184, 94 S.Ct. 414, 425, 38 L.Ed.2d 388 (1973)). 21 Viewed in light of the principles set out by the Court in Fall River, the facts of this case present a textbook example of successorship. There is no doubt that there was substantial continuity between Stockmar and Irwin. As the ALJ found, and the Board affirmed, 22 [the] same employees continued to be employed by an employer operating in the same industry, at the same locations, performing the same work, in the same job classifications, at the same pay rates, using the same tools and equipment, and subject to immediate site supervision by the identical individuals who had supervised them when employed by Stockmar prior to that date. 23 ALJ Decision at 12, reprinted in A. 756. The record could not indicate more clearly that, from the employees' perspective, Irwin was a successor to Stockmar. 24 In addition to the clear presence of substantial continuity between the enterprises, the Board also found the other requirements necessary for the presumption of continued majority status. The first requirement is that the majority of [the successor's] employees were employed by its predecessor. Fall River, 482 U.S. at 41, 107 S.Ct. at 2235. As we have noted, an acquiring company need bargain with the predecessor employees' union only when the union constitutes more than 50% of the new bargaining unit. Elastic Stop Nut Div. of Harvard Indus., Inc. v. NLRB, 921 F.2d 1275, 1282 (D.C.Cir.1990) (emphasis omitted). Here, the Board found that on the date that the Union demanded recognition, the majority of Irwin's refinery maintenance employees were former Stockmar employees. The second requirement is that the bargaining unit recognized by the successor must be appropriate. See International Union of Elec. Workers, 604 F.2d at 695; NLRB v. Band-Age, Inc., 534 F.2d 1, 3-4 (1st Cir.1976). The bargaining unit recognized by Irwin encompassed the former Stockmar employees at the Chevron and Texaco sites, and the existing Irwin employees located at other refinery sites. The Board found that this bargaining unit was clearly appropriate on traditional community-of-interest grounds.... Irwin Indus., Inc., slip op. at 7. In short, under the principles of Fall River and prior case law, there is no doubt that Irwin was Stockmar's successor. 25 The Board does not dispute any of the foregoing analysis. Instead, the Board claims that, as a condition precedent for presuming continued majority status, the employees acquired from a predecessor must constitute an appropriate bargaining unit on their own, prior to being merged with the successor's employees. The Board insists that the Stockmar employees at the Chevron and Texaco plants did not themselves constitute an appropriate bargaining unit, and, therefore, that the Union is not entitled to a presumption of continued majority status. See Irwin Indus., Inc., slip op. at 7. We reject the Board's decision because it is unsupported by substantial evidence and flatly at odds with prevailing Board precedent. 26 The Board concedes that, although the Stockmar employees at the Chevron and Texaco sites were acquired from a larger unit of employees, this fact alone is not dispositive of the successorship issue. See id. at 6 n. 4 ( '[s]uccessorship obligations are not defeated by the mere fact that only a portion of a former union-represented operation is subject to ... sale or transfer to a new owner' ) (quoting Stewart Granite Enters., 255 N.L.R.B. 569, 573 (1981)). Indeed, the Board itself has found successorship even when very small groups of employees have been acquired from large predecessor units. See, e.g., W & W Steel Co., 232 N.L.R.B. 74, 74-75 (1977), rev'd on other grounds, 599 F.2d 934 (10th Cir.1979) (67 steel employees at one plant, 37 of whom were acquired from bargaining unit of 980 employees at seven plants); Boston-Needham Indus. Cleaning Co., Inc., 216 N.L.R.B. 26, 26 n. 5, 27-28 (1975), enforced, 526 F.2d 74 (1st Cir.1975) (34 janitorial employees at one plant, 31 of whom were acquired from state-wide bargaining unit of 3000 such employees). The mere fact, therefore, that the 337 former Stockmar employees were drawn from a larger unit cannot defeat the successorship obligations that arose in this case. 27 The Board seeks to avoid this point by reiterating that there can be no presumption of continued majority status pursuant to a successorship unless the employees acquired from the predecessor employer constitute, by themselves, an appropriate unit for collective bargaining. See Irwin Indus., Inc., slip op. at 6 & n. 4. But the cases that the Board cites do not support this proposition. Rather, these cases appear to suggest nothing more than that the acquired employees must be in appropriate units both before and after successorship. This is made clear by the Board's recent decision in Hydrolines, Inc., 305 N.L.R.B. No. 40 (Oct. 15, 1991). 28 In Hydrolines, the Board found successorship where a new employer purchased water transportation routes from the predecessor and hired the predecessor's employees and equipment for those routes, while the predecessor continued to engage in the same business at other locations. See id., slip op. at 17 & n. 32, 22. The Board made no finding that the group of acquired employees, by themselves, constituted an appropriate unit for bargaining prior to the successorship; indeed, such a finding was belied by the facts of the case. Rather, in finding a successorship, the Board in Hydrolines focused on the substantial continuity in employment, the majority status of the acquired employees in the new unit and the appropriateness of the new unit: 29 An employer ... may take over only a part of the operations of the predecessor and still be deemed a successor employer.. Also, successorship is not precluded because the entire bargaining unit is not transferred to the new employer. 30