Successorship Clause In Collective Bargaining Agreement

The National Labor Relations Board`s (NLRB) succession doctrine requires a buyer/new employer in a wealth transaction to recognize and negotiate with the union representing a seller`s workers if the new employer: (i) continues the activity of its predecessor in a virtually unchanged form and (ii) like the majority of its staff after closure. GVS Properties, LLC, 362 NLRB No. 194 (August 27, 2015); NLRB v. Burns Int`l Security Servs., 406 U.S. 272 (1972). However, a new employer will not be required to comply with its predecessor`s collective agreement if it specifies to the union and the workers, before or at the time of the offer of work for the seller`s workers, that it does not intend to be bound by the existing collective agreement. Under these conditions, new employers can set the first terms of employment that deviate from the existing collective agreement and then negotiate a new collective agreement with the union. See Burns, 406 U.S. at 273.

Where a buyer is a successor, i.e. is required to recognize and negotiate the union representing the workers of his predecessor, he should always make a job offer to the competent union and the workers before or on that date, if he intends to be bound by the collective agreement of the predecessor. When a buyer misleads the union or workers into believing that they are being kept in the same terms of employment, the purchaser must resume the existing collective agreement and lose his right to succeed him to set his or her own original terms of employment. The majority of the Board of Directors also rejected the idea that its broad participation could expose local conservation statutes to preventive actions, and found that such possibilities are not “sufficient reason … “to create a particular exception in our inheritance law.” Id. at 7. In its decision, the board relied on the long-established precedent that the purchaser`s trial periods for workers do not affect the finding of an estate and that such decisions should be made before the end of the trial period. It also referred to cases in which the buyer was contractually required to retain the seller`s staff for some time after the closure. The board concluded that this case “did not present any reason to depart from [its] precedent with respect to the trial period and mandatory withholding, simply because the probation period and the commitment of the workers were themselves prescribed by a status of workers` employment and not by the employer alone or by contract.” Id.

at 5. A majority of the Board of Directors rejected the argument that successor status should be set at the end of the statutory 90-day retention period. The GVS legally terminated some of its predecessor`s employees after the 90-day retention period expired and, at that time, the staff did not consist of the majority of its predecessor`s employees. If the succession decision had been made at the end of the 90 days, GVS should not have recognized the union or negotiated with it. Instead, the Commission found that the question of whether GVS maintained sufficient staff continuity to become a successor should be determined at the time when “it takes control of its predecessor`s activities and has hired the staff of its predecessor.” 362 NLRB Nr.