Document: 417 U.S. 249 94 S.Ct. 2236 41 L.Ed.2d 46 HOWARD JOHNSON COMPANY, INC., Petitioner,v.DETROIT LOCAL JOINT EXECUTIVE BOARD, HOTEL AND RESTAURANT EMPLOYEES BARTENDERS INTERNATIONAL UNION, AFL-CIO. No. 73—631. Argued March 19 and 20, 1974. Decided June 3, Syllabus Petitioner purchased the assets of a restaurant motor lodge under an agreement whereby sellers, who had been operating enterprises franchises from petitioner, retained real property leased it to petitioner expressly did not assume any sellers' obligations, including those collective-bargaining agreement. Deciding hire its own work force operate enterprises, hired 45 employees, but only nine 53 former employees none supervisors. Respondent Union, which agreements with sellers containing arbitration provisions, filed action § 301 Labor Management Relations Act, claiming that petitioner's failure all constituted 'lockout' in violation seeking injunctive relief order compelling arbitrate extent their obligations agreements. The District Court held was required arbitrate, denied union's motion for preliminary injunction requiring employees. Appeals affirmed arbitrate. Held: union circumstances this case, since there plainly no substantial continuity identity by express or implied assumption John Wiley & Sons v. Linvingston, 376 543, 84 909, 11 898, distinguished. right if so desired, NLRB Burns Intern. Security Services, 406 272, 92 1571, 32 61, cannot be circumvented asserting claims suit compel rather than unfair labor practice context. Pp. 253—265. 6 Cir., 482 F.2d 489, reversed. James D. Tracy, Detroit, Mich., petitioner. Laurence Gold, Washington, D.C., respondent. Mr. Justice MARSHALL delivered opinion Court. 1 Once again we are faced problem defining law 'successor' employer predecessors. In Howard Johnson Co. is bona fide purchaser lodge. Union bargaining representative previous operators, successfully concluded them. commencing operation restaurant, small fraction predecessors' question presented case whether may provisions signed predecessors, 2 Prior sale at issue here, Grissoms—Charles T. Grissom, P. L. Ben Bibb, Grissom Son, Inc., Belleville Restaurant Co., corporation wholly owned Son—had operated Johnson's Motor Lodge adjacent Belleville, Michigan, franchise Employees both were represented respondent Hotel Bartenders International Union.1 Grissoms entered into separate covering two establishments. Both contained dispute settlement procedures leading ultimately arbitration. also provided they would binding upon employer's 'successors, assigns, purchasers, lessees transferees.' 3 On 16, 1972, sell personal used connection ownership property, leasing premises Johnson. agree Grissoms' except four specific contracts relating 28, mailed letter, later acknowledged confirmed, clarifying '(i)t understood agreed Purchaser . recognize between Sellers organizations,' further 'the does liabilities resulting ..' 4 Transfer set midnight, July 23, 1972. 9, notified employment terminate as time. termination business. 11, advised existing 5 After reaching Grissoms, began hiring force. It placed advertisements local newspapers, posted notices various places, interviewing prospective on 10, first 18, training them facility Ann Arbor 20. sale, commenced operations 33 engaged 12 Of these, previously employed Grissoms. None supervisory personnel state courts 21. Characterizing agreements, sought temporary restraining enjoining court granted ex parte order, Company refused honor it, received adequate notice service, dissolved after hearing 24. 7 defendants subsequently removed federal ground brought 29 U.S.C. 185. At before August 7, admitted accordance terms should issue. 22, Court, memorandum unofficially reported 81 L.R.R.M. 2329 (E.D.Mich.1972), denied, however, Union's stay pending appeal. appealed arbitration, affirmed. 489 (CA6 1973). We certiorari, 414 1091, 720, 38 548 (1973), consider important presented. reverse. 8 below relied heavily Court's decision Livingston, 898 (1964). Wiley, representing disappeared through merger surviving corporation, merged corporation's continued enterprise substantially identical form merger, As experience difficult 'successorship' question, holding properly cautious narrow: 9 'We hold disappearance corporate has collective automatically rights covered agreement, that, appropriate circumstances, present successor agreement.' Id., 548, S.Ct., 914. 10 Harlan, writing emphasized central role effectuating national policy' preventing industrial strife, need afford some protection interests during change ownership. 549, recognized reasoning inconsistent our more recent 61 (1972). Bruns successful bidder contract provide security services Lockheed Aircraft plant, took majority ranks guards plant contractor, Wackenhut. refusing enforce Board's finding Burns' substantive negotiated Wackenhut practice, freedom bargaining—"private governmental supervision procedure alone, without official compulsion over actual contract"—was "fundamental premise" laws, id., 287, 1582, quoting H. K. Porter NLRB, 397 99, 108, 90 821, 25 146 (1970), therefore improper neither nor impliedly assumed. stressed new bound pre-existing might inhibit free transfer capital, employers must make changes enterprise. U.S., 287—288, 1582—1583. controlling here involved whereas like Although distinction fact suggested Burns, see 285—286, 1581—1582, do believe fundamental policies outlined can lightly disregarded. Textile Workers Lincoln Mills, 353 448, 77 912, 972 (1957), Act authorized develop common regarding enforcement But Mills envision freewheeling inquiry what find most desirable rule, irrespective congressional pronouncements. Rather, makes clear 'fashion(ed) policy laws.' 456, 918, Douglas described process analysis employed: 13 'The furnishes law. points out parties certain situations. Other problems will lie penumbra statutory mandates. Some lack sanction solved looking legislation fashioning remedy effectuate policy.' 457, 918. 14 view say basic found context disregarded 301, thus permit enjoyed successorship depend forum presses claims.2 Clearly taken account here. 15 unnecessary, decide irreconcilable conflict Burns. even terms, support below. 'turn(ed) great precise facts here.' 274, 1575. same observation could have made indeed case. development necessarily proceed cautiously, traditional case-by-case approach Particularly light difficulty myriad factual legal contexts arise, absence guidance resolution, emphasis each arises especially appropriate. obviously well aware guarded, almost tentative statement amply demonstrates. 16 When focus these cases, becomes apparent unwarranted extension beyond contemplated. true involve suits similarity ends there. result initial employing entity completely disappeared. contrast, involves assets, remain existence viable entities, revenues lease ordinarily basis distinguishing among mergers, consolidations, purchases problems, Golden State Bottling 168, 182—183, n. 5, 414, 424, 388 think distinctions relevant reasons. First, conducted 'against background embodied general rule situations liable disappearing corporation,' 286, 1581, suggests predecessor's fairly within reasonable expectations parties. Second, original meant unless afforded against means voluntarily undertaken vested prior promises intended service Here, because corporations continue entities realistic contractual obligations. Indeed, liability employees; presumably explore breached breach be.3 17 Even important, corporation. Although, entitled enterprise, plain not. arbitrator stated: 18 'Although effective October 2, 1961, Interscience perform products management place employer.' Encyclopedia, 55 Lab.Arb. 210, 218 (1970).4 Wiley's benefits receive employment. 'substantial business enterprise,' 551, 915, necessary compelled 20 decided select independent commence lodge.5 primary purpose protect rather, primarily seeks behalf position employ Grisson dismissed 'just cause' provision laid off seniority provision. manifest efforts obtain heart controversy oral argument, conceded making argument employees,6 prospect employees.7 21 What odds principles elaborated nothing laws 'requires obligated predecessor though possible such obligation assumed 280 1578. See 184 6, 425. '(a) potential willing take moribund he structure, composition force, nature supervision.' 1582. rejected part seemingly follow deemed successor, dischargeable subject grievance thereof. replace Wackenhut's permitted.' 288, Clearly, establishes desired.8 effort circumvent permitted. 22 requires case.9 enterprise' ownership, otherwise duty 'something imposed without, reasonably particular acts involved.' 915. This includes, think, across this, requisite reliance 'wholesale transfer' Wiley. Ibid. reflected lower hires determining Wiley.10 interpretation consistent concern affording '(t)he transition one organization another' sudden conditions employment, belief strife avoided employees' resolved "the relative strength contending forces." 914 United Steelworkers Warrior Gulf Navigation 363 574, 580, 80 1347, 1351, 1409 (1960). time, recognizes terminating employer, avoids difficulties inherent compelled, view, employee reconciled his 23 Since erred Accordingly, judgment 24 Reversed. DOUGLAS, dissenting. 26 Johnson, 1959 1960 Charles (hereinafter collectively Grissoms) Lodge. 1968 affecting motel sold 24, gave terminated 23. early July, when least 40 permanently replaced. issued affirmed, today reverses, employer. I down require affirmance, dissent. 27 suit, There company Interscience, another smaller publisher, whose union. contended affect represent negotiations guaranteed Interscience. purposes bargain never pointed every survive something supra, Wiley: '(T)he impressive considerations favoring overborne sign being construed. readily assimilated category whatever, related party obligatied.' 550, 28 fortiori explicitly successors bound,1 certainly continuity—indeed identity—of Under control business;2 stranger over. interruption location, offering public, name manner, number replacement members personnel, out, sheer 'boot-strap': '(Howard Johnson) argues refusal successor. employees.' 493. 30 said derogate settling disputes arbitration,' structure automatic consequence removing established 31 different result. Wackenhut, services, expiration bids providing union, 42 guards, NLRB's unlike 1581. Moreover, 'there dealings whatsoever contrary, competitors work, bidding Lockheed. became financial obligations.' All factors call affirmance purchase matter law, franchisee, seems successors. Any other nonsense majority, sole determinative factor, accepts bootstrap argument. effect allow determine himself bound, simple expedient arranging personnel. accept when, point compellingly conclusion Actually, officially while Local 705 Hotel, Motel Union. observed. '(w) hile unions named bear distinct names apparently interest goverance.' 491 3. throughout litigation Detroit Joint Executive Board. Supreme 1971 Term, 86 Harv.L.Rev. 1, 255 256 (1972); Christensen, Successorships, Unit Changes, Bargaining Table, Southwestern Leg. Found., 19th Institute Law, Law Developments 1973, pp. 197, 205—206. available i.e., moving enjoin Grisoms clauses National Maritime Commerce Tankers Corp., 325 F.Supp. 360 (S.D.N.Y.1971), vacated, 457 1127 (CA2 1972). mere bind either thereof, absent perfectly Subsequently, closed integrated arbitrator, relying remained long unit manner integration destroyed effectiveness Lab.Arb., 218—220. emphasize where 'alter ego' predecessor, 'merely disguised continuance old Southport Petroleum 315 100, 106, 62 452, L.Ed. 718 (1942). Such cases technical entity, frequently avoid management. little reality predecessor. supra; Herman Bros. Pet Supply, 68 1963); Ozark Hardwood 282 (CA8 1960); Lewis, 246 886 (CA9 1957). slightest suggestion sense paper transaction meaningful impact transaction. franchisee restraints aspects business, restrictions relations policies. record indicate participated way negotiating approving 'Question: You man break You've still got successorship. 'Mr. Gold (for Union): Well, that's right. show proper second 'Where isn't continuity, then clause deciding successorship, you put aside employees? Gold: Yes, Your Honor Tr. Oral Arg. 37—38 (emphasis added). your submission (employees back work? Honor. Which hire, perhaps (Y)ou bring along. no, rules just cause apply. That probably aspect standpoint. And if— taking quite bite suppose, cases.' 27, 33. Crotona Service 200 N.L.R.B. 738 course, discriminate retention membership activity 8(a)(3) 158(a)(3). Thus, owner refuse solely having 280—281, 1578—1579, K.B. J. Young's Super Markets 377 463 (CA9), cert. 389 841, 88 71, 105 (1967); Tri Maintenance Corp. 132 U.S.App.D.C. 368, 408 171 (1968). discriminated membership, activity, representation. stated face employer,' F.2d, 492, and, was, next 494, artificial division questions helpful problems. Johson simply abstract. course succeeded formerly is, facts, representative? answer issue, practices, etc. be, single definition applicable A words, others. 181, 423, (1973). Ass'n Machinists 134 239, 244, 1135, 1140 (1969) (Leventhal, J., concurring); Goldberg, Obligations Successor Employer, 63 Nw.U.L.Rev. 735 (1969); Comment, Contractual Successorship: Impact U.Chi.L.Rev. 617, 619 'successor employer' purpose. Printing Specialties Pride Papers Aaronson Paper 445 361, 363—364 1971); Plant Guard Workers, 332 954, 958 1964); U.S.App.D.C., 244 4, Boeing Machinists, 351 813 (M.D.Fla.1972); Owens-Illinois, Inc. 65, Retail, Wholesale Department Store 276 740 (S.D.N.Y.1967); Board, Joden, 262 390 (D.C.Mass.1966). 621. 'This Agreement shall successors, transferees Employer succession, assignment effected consolidation establishment remains line business.' 491. provided, example, approve standards construction, operation, time enter purpose; approval equipment supplies bearing 'Howard Johnson'; option sold, event opinion, 2329, 2330, App. 50a et seq.

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