Court Opinion

ID: 8912383
Source: CourtListenerOpinion
Date Created: 2022-11-27 03:33:15.579896+00
Date Added: 2024-06-11T17:08:38.711453
License: Public Domain

MESKILL, Circuit Judge,
dissenting:
I respectfully dissent. The majority’s decision today expands the application of the successorship doctrine beyond the outermost boundary set by the Supreme Court in NLRB v. Burns International Security Services, 406 U.S. 272, 92 S.Ct. 1571, 32 L.Ed.2d 61 (1972). I believe that the facts of this case do not support the majority’s conclusion that Saks incurred a duty to bargain with the Union as a successor-employer. While the circumstances that surrounded the change in employer in this case on the surface may seem to satisfy the tests traditionally applied in successorship cases, a closer analysis of the facts and the law reveals the inappropriateness of its application here.
While we have stated that “[t]he key factor in determining whether an employer succeeds to an obligation to bargain with the incumbent union is the substantial continuity in the identity of the workforce,” Nazareth Regional High School v. NLRB, 549 F.2d 873, 879 (2d Cir. 1977), that statement was made in the context of a complete transfer of the ownership and control of an entire enterprise. In Nazareth, the lay faculty members of 9 diocesan schools, which comprised the M. Hald High School Association, were covered by a collective bargaining agreement. One of the schools, Nazareth, was taken over by a local community group. Forty-nine of the 56 teachers at Nazareth were retained by the new employer. We noted that a primary consideration in determining whether to impose upon a new employer a duty to bargain with an incumbent union is the continued majority status of such union. Nazareth, supra, 549 F.2d at 879. The continuity of workforce test, reflecting this consideration, was met in that case where only 7 out of the original staff of 56 teachers were not retained. Tests such as continuity of the business enterprise and identity of the workforce, however, also reflect the recognition by the courts that a purchaser of a business ordinarily is free to modify the nature of the business acquired and hire his own employees. In Howard Johnson Co. v. Hotel Employees, 417 U.S. 249, 94 S.Ct. 2236, 41 L.Ed.2d 46 (1974), Howard Johnson Co. purchased the Bellville Restaurant Co. but retained only 9 of Bellville’s 53 employees. The Supreme Court held that Howard Johnson Co. was under no duty to bargain as a successor-employer with the 9 employees’ collective bargaining representative, since the retention of 9 of 53 employees did not satisfy the continuity of workforce requirement.
The successorship doctrine originally was designed to prevent a change in ownership of a going concern from adversely affecting the rights of organized employees.1 See *689John Wiley & Sons v. Livingston, 376 U.S. 543, 84 S.Ct. 909, 11 L.Ed.2d 898 (1964). In Wiiey, where the predecessor employer disappeared in a corporate merger, the Court refused to permit a change in corporate ownership from infringing the rights of organized employees. The scope of the doctrine was expanded, in NLRB v. Burns International Security Services, 406 U.S. 272, 92 S.Ct. 1571, 32 L.Ed.2d 61 (1972), where one security guard company, Burns, displaced another, Wackenhut, by winning the contract to provide security services at a Lockheed plant. Burns retained 27 of Wachenhut’s 42 guards and brought in 15 of its own. The Court determined that Burns’ retention of a majority of its predecessor’s workforce bound Burns to bargain with the former Wackenhut employees’ union. Significantly, the Court stated that the “source of its duty to bargain with the union [was] not the collective-bargaining contract but the fact that it voluntarily took over a bargaining unit that was largely intact and that was certified within the past year.” 406 U.S. at 287, 92 S.Ct. at 1582 (emphasis added). Although Burns acquired neither assets nor a portion of Wackenhut’s business enterprise, the Court held that Burns’ hiring of a majority of the employees from the Wackenhut bargaining unit sufficed. Justice Rehnquist in his dissent opined that the Burns majority “stretched that concept beyond the limits of its proper application,” 406 U.S. at 296, 92 S.Ct. at 1586, and that he would confine the doctrine’s application to those cases where a transfer of tangible or intangible assets accompany the change in employer. 406 U.S. at 305, 92 S.Ct. at 1590. In any event, Burns suggests that, at a minimum, an employer must have retained a majority of the predecessor’s employees before incurring a duty to bargain as a successor-employer.
The majority here acknowledges that the 16 employees hired by Saks do not constitute a majority of Gimbels’ 35 alterations employees, yet, relying on Nazareth, nevertheless declares that “the appropriate test of continuity is whether a majority of the successor’s bargaining unit is composed of the predecessor’s employees.” (Majority op. at 685). The actual bargaining unit in this case consisted of 35 Gimbels and 75 Kaufman’s Department Store employees, totaling 110. Similarly, in Nazareth, teachers in the 9 schools that formed the Hald Association comprised the bargaining unit, and a majority of only one segment of that unit-a majority of the teachers at Nazareth High School-changed employer. The similarity to the case at bar and Nazareth becomes even closer when it is pointed out that the 16 employees hired by Saks came exclusively from the 28-man alterations department in Gimbels’ downtown Pittsburgh store. Thus, as in Nazareth where the successor hired a majority of the teachers from one discrete segment of the bargaining unit, the Nazareth High School, here Saks hired a majority of the alterations employees from one discrete segment of the bargaining unit, the downtown Pittsburgh store. But there the similarity between the two cases ends. As noted earlier, in Nazareth a complete going concern with all of its tangible and intangible assets accompanied the transfer of employees. In the case at *690bar, however, only a migration of employees occurred. Unlike Wiley and Nazareth, no business enterprise changed hands. Unlike Burns, a majority of the actual bargaining unit of 110 was not hired by Saks. Only 16 employees were hired.
I have great difficulty in imposing upon an employer a duty to bargain with a particular union where only a fraction of a collective bargaining unit has been hired. Where the net effect of the event is a movement of employees from one employer to another, it would be more prudent to circumscribe the scope and applicability of the successorship doctrine. Obviously, the simple hiring of several employees, who by happenstance belonged to the same union will not obligate an employer to bargain with that union. Such a rule would invite discrimination by potential employers against former union members. I believe the majority’s decision here, although well-intended, may precipitate similar results. If an employer who accepts applicants from a unionized subcontractor to perform services previously performed by the subcontractor automatically incurs a duty to bargain with their former union, discrimination will likely occur. Although it can be argued that discriminatory practices are condemned by and actionable under Section 8(a)(3) of the National Labor Relations Act, 29 U.S.C. § 158(a)(3) (1976), it is obvious that the perspicacious, well-counselled employer will hire just few enough of the subcontractor’s employees to elude the grasp of the successorship doctrine.
In the absence of the transfer of any tangible or intangible assets, a mere “migration” of employees from one employer to another should trigger the successorship doctrine only where a majority of the old bargaining unit is hired and the employees perform substantially the same work. Where fewer than a majority of the old bargaining unit are hired and perform substantially the same work, the successorship doctrine should apply only where a transfer of intangible or tangible assets accompanies the shift of employees. These two sets of circumstances represent the minimum conditions that warrant invoking the successor-ship doctrine. Where, as here, a mere fraction of a bargaining unit migrated to a new employer, application of the successorship doctrine is unwarranted.
If I agreed with the majority that Saks was a successor-employer, I would also agree that it nevertheless was not precluded from establishing different initial terms and conditions of employment for the reasons spelled out by Judge Bonsai above.

. The majority’s decision rests on the premise that only two criteria need be satisfied to invoke the successorship doctrine: 1) that a majority of the successor’s workforce consist of predecessor employees, and 2) that those employees perform substantially the same work. Their decision, however, eliminates several factors that the Board itself formulated even following the Supreme Court’s liberal application of the doctrine in Burns:
Whether there has been a substantial continuity of the same operations; (2) whether the new employer uses the same plant; (3) whether the new employer has the same or substantially the same workforce; (4) whether the same jobs exist under the same working conditions; (5) whether the new employer employs the same supervisors; (6) whether the new employer uses the same machinery, equipment and methods of production; and (7) whether the new employer manufacturers [sic] the same product or offers the same services.
Border Steel Rolling Mills, Inc., 204 N.L.R.B. 814, 815 (1973). Interestingly, even where a majority-of-the-successor-employees test was satisfied, in the absence of other factors that would establish that the business enterprise continued substantially the same as under the predecessor, the Board in the past repeatedly refused to impose a duty upon the purported successor employer to bargain. *689See. e.g., Cagle's Inc., 218 N.L.R.B. 603, 604 (1975); Co op Trucking Co., Inc., 209 N.L.R.B. 829, 831 (1974); Norton Precision, Inc., 199 N.L.R.B. 1003, 1007 08 (1972); Georgetown Stainless Mfg. Corp., 198 N.L.R.B. 234, 237 (1972). It is conceded that “continuity of the workforce” is the primary factor to be weighed in these cases; however, the overall test to be met is whether there has been “ ‘substantial continuity of identity of the business enterprise,’ ” Howard Johnson Co., supra, 417 U.S. at 259, 94 S.Ct. at 2241 -42 (quoting Wiley, supra, 376 U.S. at 551, 84 S. Ct. at 915). Thus while, as the majority suggests, the attitudes of the employees in this case toward representation by the Union hardly would have been “altered had Saks purchased Gimbels’ sewing machines or its stock of needles and thread,” Majority op. at 687, the purchase of such assets would certainly be relevant to determining whether substantial continuity of the business enterprise or employing industry occurred. While the continuity of the workforce requirement occupies a position of prominence among the factors to be evaluated in successorship cases, courts should not overemphasize this factor so as to reduce other relevant criteria to utter insignificance.