The National Labor Relations Board in Road & Rail Services Inc., 348 NLRB No. 77 (Nov. 30, 2006), recently held that a new employer did not unlawfully recognize a union and enter into a collective bargaining agreement with that union before hiring its work force because this employer was a “perfectly clear successor” to the prior employer.

The decisions of the NLRB and courts defining the rights and obligations across the change in ownership and when the new employer takes over the service contract work performed by its predecessor constitute the law of successorship. This law provides neither a fixed definition of “successor” nor a uniformly accepted set of obligations that flow from the determination that, in certain circumstances, an employer is a “successor.” Successorship issues typically arise over allegations that a new employer violated its duty to recognize and bargain with the representative of the employees of the former owner. See 1 John Higgins, The Developing Labor Law (5th Ed. 2006) at 1103-04.

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