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National Labor Relations Board v. Lily Transportation Corp.

United States Court of Appeals, First Circuit

March 31, 2017

NATIONAL LABOR RELATIONS BOARD, Petitioner,
v.
LILY TRANSPORTATION CORPORATION, Respondent.

         APPLICATION FOR ENFORCEMENT OF AN ORDER OF THE NATIONAL LABOR RELATIONS BOARD

          Jared David Cantor, Counsel, with whom Kira Dellinger Vol, Supervising Attorney, Richard F. Griffin, Jr., General Counsel, Jennifer Abruzzo, Deputy General Counsel, John H. Ferguson, Associate General Counsel, and Linda Dreeben, Deputy Associate General Counsel, were on brief, for petitioner.

          Kay H. Hodge, with whom Alan S. Miller, Katherine D. Clark, and Stoneman, Chandler & Miller LLP were on brief, for respondent.

          Before Kayatta, Circuit Judge, Souter, Associate Justice, [*] and Selya, Circuit Judge.

          SOUTER, Associate Justice.

         The National Labor Relations Board applies for enforcement of its bargaining order against Lily Transportation Corporation. We grant the application.

         I.

         Pumpernickel Express, Incorporated, carried automotive parts from warehouses in Mansfield, Massachusetts, to Toyota and Chrysler dealerships in the region. Pumpernickel's drivers were represented by the International Association of Machinists and Aerospace Workers, AFL-CIO, District Lodge 15, Local 447.

         In October 2013, Pumpernickel filed for bankruptcy, and Lily subsequently obtained the portion of Pumpernickel's business that involved distributing parts for Toyota. Lily hired many of Pumpernickel's former employees, including drivers, and began operations in November 2013. The Union promptly demanded that Lily recognize it as the drivers' bargaining representative, but Lily refused. Lily later produced signed statements it allegedly had received from a majority of the drivers saying that they no longer wished to be represented by the Union.

         The Union filed an unfair labor practice charge with the National Labor Relations Board, claiming that Lily's refusal to bargain violated Sections 8(a)(1) and 8(a)(5) of the National Labor Relations Act.[1] After a hearing, the Administrative Law Judge found that in distributing for Toyota, Lily was a "successor employer" to Pumpernickel, that is, an employer who "makes a conscious decision to maintain generally the same business and to hire a majority of its employees from the predecessor, " Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 41 (1987); accord Asseo v. Centro Médico Del Turabo, Inc., 900 F.2d 445, 450-51 (1st Cir. 1990). The Judge held that Lily, as a successor, was required under Fall River to recognize and bargain with the Union, and rejected Lily's position that its refusal to bargain about terms of employment in the affected unit was justified by the signed employee statements of repudiation. Rather, the Judge explained, under the "successor bar doctrine, " as adopted by the Board in UGL-UNICCO Service Co., 357 N.L.R.B. 801 (2011), an incumbent union is entitled to represent a successor employer's employees for a reasonable period of time for bargaining before its majority status may be questioned.

         The Board affirmed, agreeing with the Administrative Law Judge that insofar as Lily was a successor employer, it was obligated to bargain with the Union, and that UGL barred Lily from challenging the Union's majority status until a reasonable period of time for bargaining had elapsed. The Board accordingly ordered Lily to recognize and bargain with the Union.

         The Board now asks this Court to enforce its order over Lily's objection. Lily submits that the Board erred in relying on UGL's successor bar doctrine and that we should instead substitute only a rebuttable presumption of majority union support under the rule of MV Transportation, 337 N.L.R.B. 770 (2002), of the kind the Board adopted and enforced prior to its rejection in UGL. Lily also says that it has rebutted that presumption with its documentary evidence that a majority of the affected drivers no longer support the Union.

         II.

         Lily's objection to the successor bar implicates some doctrinal history. The National Labor Relations Act provides neither bar nor presumption to address the unstable labor climate that can develop in successor employment, a silence the Board has seen as leaving a statutory gap needing to be filled. In 1999, it adopted a successor bar partially resembling its present iteration, in St. Elizabeth Manor, Inc., 329 N.L.R.B. 341 (1999). There, the Board held that "once a successor employer's obligation to recognize an incumbent union attaches [under Fall River], the union is entitled to a reasonable period of time for bargaining without challenge to its majority status." Id. at 341. The Board recognized that it was overruling its previous decision of some twenty-four years earlier in Southern Moldings, Inc., 219 N.L.R.B. 119 ...


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