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Fisher Phillips Petitions U.S. Supreme Court Over Duty to Bargain With Union

9.14.18

New Orleans senior counsel Clyde Jacob has penned a petition with San Francisco partner Wendy Coats to the U.S. Supreme Court to clarify whether or not a company that purchases another company with an existing union, hiring a majority of the workforce, may set its own initial terms from which to negotiate with the union or must negotiate from the existing terms. Clyde and Wendy submitted the petition on behalf of Creative Vision Resources LLC in a case against the National Labor Relations Board (NLRB) on behalf of Local 100 United Labor Union.

Under the NLRB’s “successorship doctrine,” a company that takes over operations of another employer, retaining a majority of an organized workforce, has a duty to bargain with the incumbent union. However, with no statutory language addressing successorship rules, and a clear split among six circuit courts, questions about when and if a new employer has a union bargaining duty only from the initial terms it sets, not the predecessor’s existing terms, has been the concern of administrative law judges, the NLRB, and appeals courts for decades. 

The petition to the U.S. Supreme Court focuses upon Creative Vision Resources’ position that it had no duty to bargain with Local 100 United Labor Union from the existing terms because the union had not yet sent a bargaining demand before the time it announced and set its initial terms. The petition cites U.S. Supreme Court precedent holding that the "perfectly clear" exception requires two things: First, that a majority of the predecessor employer's union workforce is retained; and second, that a union bargaining demand is necessary to trigger a duty to bargain from the predecessor’s existing terms. Only if these two requirements are present, before a successor announces and sets its own terms, is the “perfectly clear” exception applicable, obligating a successor to maintain the predecessor’s existing terms and bargain to change them.

If the Supreme Court agrees to take the case when it meets on Sept. 24 to decide which cases it will review next term, it would give Fisher Phillips an opportunity to help define the balance within the law involving the important business transactions of mergers, acquisitions, and the assumption of contracts.

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