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NLRB Overturns Successor Bar Rule

July 28, 2002

In a recent decision, the National Labor Relations Board (the "NLRB") limited the obligations of a successor employer to the union which represented its predecessor's employees. MV Transportation, 337 NLRB No. 129 (July 17, 2002). In a 1999 decision, St. Elizabeth's Manor, 329 NLRB 341 (1999), the NLRB ruled that an incumbent union was entitled to a reasonable period of time to bargain with a successor employer; during that period, the union would be completely insulated from any challenges to its majority status, whether in the form of a decertification petition initiated by the employees, a petition by a rival union, or a withdrawal of recognition by the employer. In MV Transportation, the NLRB overturned St. Elizabeth's Manor and reinstated the prior rule that a union in a successor employer situation is only entitled to a rebuttable presumption of majority support.

The case arose out of the acquisition by MV Transportation of a unionized company, Door to Door Inc., in July 2001. MV Transportation recognized the incumbent union, the Amalgamated Transit Union, as the bargaining representative of the workers. On August 29 and 30, 2001 the parties engaged in bargaining. On October 10, 2001, before the parties held any additional bargaining sessions, a bargaining unit member, dissatisfied with the representation being provided by the union, filed a decertification petition. Relying on St. Elizabeth's Manor, the NLRB's Regional Director concluded that the union had not been accorded a "reasonable period of time" to bargain, and he therefore dismissed the petition.

In a 3-1 decision, the NLRB overruled St. Elizabeth's Manor and ordered the Regional Director to process the decertification petition. The NLRB noted that, prior to the 1999 decision in St. Elizabeth's Manor, the NLRB had long held that a union in a successorship situation was not entitled to greater rights than it had with the predecessor; a union representing employees of a successor employer, therefore, was entitled only to a rebuttable presumption of continued majority status -- the same presumption applicable to its representation of the predecessor's employees. The NLRB went on to state that the analysis in St. Elizabeth's Manor was "faulty and…. plainly insufficient to warrant such an abrupt departure from long standing [NLRB] precedent." Specifically, the NLRB reasoned that by providing the union with an irrebuttable presumption of majority status and denying the employees the opportunity to change or reject their bargaining representative, the successor bar rule announced in St. Elizabeth's Manor improperly promoted the stability of bargaining relationships to the exclusion of the employees' right to choose their bargaining representatives. The three member NLRB majority therefore decided to "return to the previously well-established doctrine that an incumbent union in a successorship situation is entitled to -- and only to -- a rebuttable presumption of continuing majority status, which will not serve as a bar to an otherwise valid decertification, rival union, or employer petition, or other valid challenge to the union's majority status."

Pursuant to the Board's decision in MV Transportation, the successor bar rule announced in St. Elizabeth's Manor is no longer in effect. A union in a successor situation is only entitled to a rebuttable presumption of continued majority status. As such, such unions are now vulnerable to challenge by way of a decertification petition or a petition by a rival union. In addition, in some circumstances, where there is evidence that the union no longer represents a majority of the employees, an employer may withdraw recognition from an incumbent union or obtain an NLRB election to test whether the union continues to enjoy majority support. See NLRB Adopts New Standard Under Which Employers May Withdraw Recognition From Incumbent Union (April 5, 2001). Under MV Transportation, successor employers will also be entitled to take advantage of those options.