Successorship Clause in Collective Bargaining Agreement

Following the establishment of these new terms and conditions of employment (including the dismissal provision), the employer hired the employees represented by the previous employer. As a result, the employer initiated dismissals without first negotiating with the union. The Committee noted that under the new terms and conditions of employment, the employer was not obliged to negotiate with the union the decision to initiate the dismissals. However, the new terms and conditions of employment did not relieve the employer of its obligation to negotiate with the union for the effects of the dismissal decision. Instead, the NLRB ruled that an employer can take any action “reasonably covered by unilaterally implemented initial terms and conditions of employment” without notifying and negotiating with a pre-established union. In a legal dispute between Tramont Manufacturing, LLC (the “Employer”) and United Electrical, Radio and Machine Workers of America, Local 1103 (the “Union”), the employer took over the manufacture of diesel engines and parts from a predecessor. As the successor employer, the employer was not bound by the provisions of the collective agreement between the union and the predecessor employer in NLRB v. Burns International. Since the employer succeeded Burns, he was free to unilaterally introduce new terms and conditions of employment, which he did in the form of an employee handbook containing a provision setting out the employer`s power and procedure to unilaterally implement the dismissals.

Any collective agreement between an employer and a work organization is enforceable by law or in equity, and a breach of such a collective agreement by a party is subject to the same remedies, including injunctive relief, as are available under other contracts in the courts of that state. The NLRB has ruled that a successor employer can legally take any action “reasonably covered by the original terms” established prior to negotiations with an established union, but a successor employer`s right to make redundancies does not exempt it from having to negotiate the effects of the dismissals. Tramont Manufacturing issued an unfair labour practices charge filed on July 8, 2015. The NLRB adopted a supplementary decision in the Tramont case clarifying the legal standard applicable to the assessment of the legality of unilateral action by a successor employer after the establishment of the initial terms and conditions of employment but before the negotiation of collective agreements. The majority of the Commission also rejected the idea that their broad participation could expose local detention laws to preventive prosecution, noting that such possibilities are not a “sufficient reason”. to identify a special exception in the case law that has succeeded us. Id. at p. 7.

If a buyer is a successor, that is, he is required to recognize and negotiate with the union representing the employees of the predecessor, if he always clearly indicates to the union concerned and to the workers before or at the time he makes offers of employment whether he intends to be bound by the collective agreement of the predecessor. If a buyer misleads the union or workers and believes that they will be held under the same terms of employment, the buyer must adopt the existing collective agreement and loses its right as a successor to set its own initial terms of employment. Similarly, the clear and unambiguous waiver standard used to determine whether an employer`s unilateral actions are consistent with contract language, bargaining history and past practices does not apply in the context of a burns successor because, by definition, the union and the subsequent employer have no bargaining history or past practices. Accordingly, the Committee noted that terms and conditions of employment unilaterally implemented by a successor employer cannot constitute a waiver of a union`s right to negotiate mandatory bargaining matters. (b) For the purposes of this section, “successor employer” means any acquirer, transferor or acquirer of an enterprise whose employees are subject to a collective agreement where the acquirer, transferor or acquirer carries on substantially the same commercial activity or offers the same service and uses the same physical facilities as the contractual employer. More than five years and a pandemic later, the National Labour Relations Board (NLRB) clarified a successor employer`s union bargaining obligations with respect to layoffs under the National Labour Relations Act. Tramont Manufacturing, LLC, 369 NLRB No. 136 (July 27, 2020). A majority of the Commission rejected the argument that succession status should be determined after the expiry of the 90-day retention period required by law. GVS legally fired some of its predecessor`s employees after the 90-day retention period expired, and at that time its workforce was not in the majority among its predecessor`s employees.

If the succession decision had been taken at the end of the 90 days, the GVS would not have been obliged to recognise or negotiate with the union. Instead, the Commission concluded that the question of whether GVS maintains sufficient continuity of the workforce to become a successor should be decided at a time when it “takes control of the predecessor`s activities and hires the predecessor`s employees.” 362 NLRB No 194, to 1. Therefore, the Commission found that GVS violated sections 8(a)(5) and (1) of the NLRA by refusing to negotiate with the union representing the employees of its predecessor during the employee retention period required by local law. The board concluded that the fact that the buyer was legally obliged to retain the seller`s employees was not relevant to the determination of the succession. (d) An employer who is a party to a collective agreement containing a successor clause has a positive obligation to notify each subsequent employer of the existence of such an agreement and clause. This disclosure obligation is satisfied by the fact that a declaration is included in each purchase contract, purchase contract or similar transfer instrument that the successor employer is bound by the succession clause in the collective agreement. The successor doctrine to the National Labour Relations Board (“NLRB” or “Board”) requires that a buyer or new employer in a wealth transaction recognize and negotiate with the union representing a seller`s employees if the new employer: (i) continues to operate its predecessor in essentially unchanged form, and (ii) hires predecessor employees by a majority of its workforce at closing. 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 is not required to comply with the collective agreement of its predecessor if it specifies to the union and the employees, before or at the time of the offer of employment for the seller`s employees, that it does not intend to be bound by the existing collective agreement.

In these circumstances, new employers can establish initial working conditions that deviate from the existing collective agreement and then negotiate a new collective agreement with the union. See Burns, 406 U.S. at 273. The standard set by the NLRB in this case is similar to the “contractual coverage” standard, which applies in cases where the terms have been set out in a collective agreement. Here, however, the successor has the opportunity to unilaterally set the first conditions. This gives the successor employer the advantage of using a language of its choice – a language that can “reasonably include” the needs expected to make unilateral business decisions free from the obligation to negotiate those decisions. .