Companies Acquiring Unionized Businesses Face Increased Scrutiny by the NLRB

Companies acquiring unionized businesses are likely to face increased scrutiny from the National Labor Relations Board (“Board”). On May 9, 2014, NLRB General Counsel Richard F. Griffin, Jr., issued a memorandum instructing Board offices across the country to be on the lookout for appropriate cases in which the Board may sue buyers. General Counsel Griffin, previously general counsel for the International Union of Operating Engineers, explained, “I have a particular interest in seeking injunctive relief in appropriate cases involving a successor’s refusal to bargain and, more importantly, successor refusal-to-hire cases.”

A company that buys or otherwise acquires the operations of a unionized workplace can become a “successor” to the seller’s union relationship. While it does not necessarily become bound by the seller’s collective bargaining agreement (CBA), it may at least be bound to a relationship that requires it to bargain with the union for a CBA of its own.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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