This April 4th the U.S. Court of Appeals for the Ninth Circuit made a ruling in the NLRB V ADVANCED STRETCHFORMING case which is quite important to any employer selling or buying assets where there is a union involved.
This ruling has far reaching and possible long term effects for a new employer which is acquiring a business. It alerts us that as an employer we MUST do lots of planning BEFORE the sale... and that we MUST have the proper language in the buy/sell documents.
This ruling will make it more difficult and call for the use of caution in ANY takeover situation where the assets are acquired. Good planning becomes even more vital at this time.
Central to this case is the "Burns rule," which provides that when a new employer acquires a business, it is free, generally, to set the initial terms and conditions of employment, and is not bound by its predecessor's CBA. See Burns, 406 U.S. at 281-82, 287-88, 294-95.
One qualification to the rule in Burns is the "perfectly
clear" exception. The duty to bargain with an incumbent
union arises when it becomes evident that the union represents a majority of the employees hired by the new employer.