Company Became Successor Employer on Date It Assumed Predecessor’s Operations

In Ride Right, LLC, the National Labor Relations Board deemed the company to be a successor employer for purposes of the National Labor Relations Act on the date that it assumed the predecessor employer’s operations, and the successor was therefore obligated to recognize and bargain with the union representing the predecessor’s employees at that point.

Under the Supreme Court’s decision, Fall River Dyeing & Finishing Corp. v. NLRB, a company is a successor employer when (1) there is a substantial continuity of operations, (2) the union makes a timely demand to bargain for an appropriate unit, and (3) the employer has hired a “substantial and representative complement” of employees, the majority of whom were represented by the union under the predecessor. As the Board stated, a “substantial and representative complement” is achieved when “an employer’s job classifications are substantially filled, its operations are in substantially normal production, and it does not reasonably expect to increase the number of unit employees.”

The employer argued that it had not reached a substantial and representative complement until five months after it assumed operations, when it finally achieved its “ultimate work force totals.” However, as the Board noted, under Fall River, the employer does not need to finish hiring to reach a “substantial and representative complement.” Although the employer eventually did expand its workforce, there was no plan to do so at the time that it assumed business operations and hired the majority of the predecessor’s employees, providing normal paratransit services. Thus, the bargaining obligation was triggered on the date that the employer assumed business operations.