Court Throws Out Challenge to ‘Successor’ Finding in Trash-Collection Case



What are the makings of a “perfectly clear successor” in the sanitation services sector?

The question matters under NLRB case law because a “perfectly clear successor” must bargain with its employees’ union before changing terms and conditions of employment to which the prior employer agreed.

Declining to tidy up after the NLRB in one recent case, the Fifth Circuit suggested the key issue is whether the new employer gave employees enough timely notice of any intended changes to clarify that it was just an ordinary successor not bound by a duty to bargain. Creative Vision Res., LLC v. NLRB, 2017 BL 338791 (5th Cir. 2017).

Hoppin’ business in the Big Easy

The employer in the case, Creative Vision Resources, L.L.C., succeeded another contractor as the staffing provider for garbage trucks in New Orleans. Formed by the local trash-collection company, the employer distributed new employment applications and tax forms to about 20 garbage truck “hoppers” who had been employed by the prior contractor.

A little more than two weeks later, the union demanded that the employer recognize it as the hoppers’ exclusive bargaining representative, but the employer didn’t reply.

A garbage defense?

The union filed an unfair-labor-practice charge, and the NLRB found that the employer, as a perfectly clear successor to the contractor, violated the National Labor Relations Act by unilaterally imposing new terms and conditions of employment, including changing hoppers’ pay rate from $103 per day with no overtime to $11 per hour with overtime.

The company argued that it wasn’t a perfectly clear successor because its hiring process was “in flux” until it the moment it became clear how many hoppers would accept its new terms.

Perfectly clearly not enough

On this point, the Fifth Circuit held its nose. Finding that the company made no effort to hire employees from other sources and announced its new terms on the same day its operations began, the court concluded that the company's prior communications to employees—which included the tax forms attached to its new employment applications—didn’t give the majority of the hoppers enough notice of the changing employment terms to clarify that it was an ordinary successor.

The upshot for employers stepping into existing bargaining relationships is that it really matters what, and how quickly, the new employer communicates to its predecessor’s employees about the terms they’ll be accepting if they choose to hop back on board.

Bloomberg Law® helps labor and employment law practitioners provide rapid, accurate and complete advice to clients by bringing together trusted, market-leading Bloomberg BNA content like Daily Labor Report® and treatises like Covenants Not to Compete: A State-by-State Survey and The Developing Labor Law, with a fully integrated, innovative legal research platform.  Click here to request a free trial.