Court Opinion

ID: 9478608
Source: CourtListenerOpinion
Date Created: 2023-08-05 06:53:04.374736+00
Date Added: 2024-06-11T17:46:30.970072
License: Public Domain

DUGGAN, District Judge,
dissenting. I respectfully dissent.
The majority opinion discusses many of the factors to be considered in determining whether successor liability should be imposed. It does not, however, place appropriate significance on the fact that Local 5741 did not voluntarily choose to become the successor to Local 9639. The majority opinion acknowledges that it is “probably true” that Local 5741 did not become the successor voluntarily. In fact, the NLRB admitted that Local 5741 “... was obligated to accept valid transferees as members.” (NLRB brief, p. 4.) This factor, in my opinion, distinguishes this case from those relied upon by the majority and by the NLRB.
Implicit in the Supreme Court’s decision in Golden State Bottling Co. v. N.L.R.B., 414 U.S. 168, 94 S.Ct. 414, 38 L.Ed.2d 388 (1973) is the fact that the successor chose to become the successor. The same is true in the Perma Vinyl decision (Perma Vinyl Corp., 164 N.L.R.B., 968 (1967)), which the Supreme Court cited with approval in Golden State. The Supreme Court, quoting Perma Vinyl Corp., stated:
The imposition of this responsibility upon even the bona fide purchaser does not work an unfair hardship on him. When he substituted himself in place of the perpetrator of the unfair labor practices, he became the beneficiary of the unreme-died unfair labor practices. Also his potential liability for remedying the unfair *739labor practices is a matter which can be reflected in the price he pays for the business, or he may secure an indemnity clause in the sales contract which will indemnify him for liability arising from the seller’s unfair labor practice.
Golden State at 172, n. 2, 94 S.Ct. at 419, n. 2 (emphasis added). The courts’ tacit assumption, in the Golden State and Per-ma Vinyl opinions, is that the application of successor liability is inequitable unless the successor voluntarily agreed to assume the position of its predecessor, including the predecessor’s liabilities.
The majority states that the NLRB first applied its successor liability doctrine to labor organizations in Local Union No. 46, Metallic Lathers (Cement League) 259 NLRB 70, (1981). Yet on appeal, the Second Circuit, while specifically declining to reach the “troublesome question whether there was a ‘substantial continuity of identity’ ” between the predecessor and successor, refused to impose successor liability on the Carpenter’s Union because it found that the Carpenter’s Union had no knowledge of the unfair labor practices charges pending against its predecessor at the time the two unions affiliated. NLRB v. Local Union No. 46, Metallic Lathers, 727 F.2d 234, 237-38 (2nd Cir.1984). The same principle on which the Golden State and Per-ma Vinyl courts relied is evident (although unexpressed) in Local Union No. 46, Metallic Lathers; that is, in the absence of a knowing, voluntary assumption of a predecessor’s debt, a successor cannot equitably be held liable.
In sum, when a successor has no knowledge of the predecessor’s liability, or when the successor has no choice but to substitute for the predecessor, as in the present case, I believe that it is unjust to burden the successor with the financial obligations of the predecessor.
Although it is undisputed in the instant case that after the transfer of members, Local 5741 began receiving a portion of each active member’s dues, ranging from $11.00 per year to $14.00 per year,1 these future dues presumably were to cover the cost of future services to be rendered to these members. Even assuming that there were no increased administrative cost in absorbing these 55 members, the annual income received from the new members would total less than $800.00. At the same time, however, Local 5741 was required to absorb a debt of the predecessor local in excess of $10,000. Because the membership of Local 5741 could not refuse to accept Local 9639’s former members, the financial burden of the defunct local should not be imposed upon Local 5741. The Board’s decision to impose successor liability on an entity that did not choose to become a successor is not supported by substantial evidence on the record as a whole and I believe such decision to be clearly erroneous. The Board’s petition for enforcement should be denied.

. The record also reflects that a number of idle or retired members of Local 9639 also transferred to Local 5741, but the record is silent as to what amount of dues, if any, Local 5741 collects from these members.