# DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD

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- **Document type:** Agency decision

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DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD

MV Transportation and Gerald King, Petitioner and
Amalgamated Transit Union, Local 416, Case
33–RD–788
July 17, 2002
DECISION ON REVIEW AND ORDER
BY CHAIRMAN HURTGEN, AND M EMBERS LIEBMAN,
COWEN, AND BART LETT
Cases arising under the National Labor Relations Act
often require the Board to engage in sometimes delicate
but almost always difficult balancing of competing statu­
tory policies. This case presents another such example.
The case involves an employee petition to decertify an
incumbent union following the acquisition of the com­
pany by a successor employer. The issue is whether the
employees of the acquired company should be allowed
the option to exercise their statutory rights and vote out
the incumbent union, or whether they should be barred
from doing so for some period of time until the incum­
bent union has had an opportunity to negotiate a collec­
tive-bargaining agreement with the new employer. The
competing statutory policies involved in addressing this
issue are protecting employee freedom of choice on the
one hand, and promoting stability of bargaining relationships on the other.
The issue is not a new one. For decades, with one
brief and unsuccessful deviation, the Board, with court
approval, balanced the competing interests involved in
favor of protecting employee freedom of choice and held
that employees retained their statutory right to vote fol­
lowing a change of employers. In 1999, however, in St.
Elizabeth Manor,1 a divided Board abruptly—without
prompting by any amendment to the statute or adverse
court decision, and without inviting the views of the la­
bor-management community—reversed course and upset
this balance in favor of maintaining stability of bargain­
ing relationships at the expense of employee freedom of
choice. The Board majority justified this reversal on the
ground that the Board’s existing policy had not been ap­
plied in certain other circumstances, which the majority
viewed as analogous.
As fully explained in our opinion today, based on our
consideration of the record, including the briefs of the
Union and amici curiae, we find that the majority’s rea­
soning in St. Elizabeth Manor was faulty and, in any
event, plainly insufficient to warrant such an abrupt de­
parture from longstanding Board and court precedent.
Accordingly, we overrule St. Elizabeth Manor and return
to the previously well-established doctrine that an in ­
cumbent union in a successorship situation is entitled to
1

329 NLRB 341.

337 NLRB No. 129

770

—and only to—a rebuttable presumption of continuing
majority status, which will not serve as a bar to an oth­
erwise valid decertification, rival union, or employer
petition, or other valid challenge to the union’s majority
status.
I . FACTS
The Employer assumed the operations of Door to
Door, Inc. on July 1, 2001.2 Prior to that date, however,
the Employer3 recognized the Union, which was the bargaining representative of the Door to Door employees, as
the representative of its employees.
Accordingly,
following the Employer’s assumption of operations, the
parties met for bargaining on August 29 and 30. On Oc­
tober 10, before the parties had held any additional nego­
tiation sessions, the Petitioner filed the decertification
petition.
On October 26, 2001, the Regional Director for Re­
gion 14 administratively dismissed the decertification
petition pursuant to the successor bar doctrine enunciated
in St. Elizabeth Manor, Inc., 329 NLRB 341 (1999). The
Petitioner subsequently filed a timely request for review
of the Regional Director’s action. On February 8, 2002,
the Board granted the request for review to consider the
propriety of the application of the successor bar rule, and
the principles underlying its creation. Thereafter, the
Union filed a timely brief on review. In addition, amicus
curiae briefs were submitted by the AFL–CIO and Outrigger Hotels and Resorts.
II . ANALYSIS
A discussion of the evolution of Board precedent in the
successor employer context necessarily begins with the
Supreme Court’s decision in NLRB v. Burns Interna­
tional Security Services, Inc., 406 U.S. 272 (1972). In
that case, the Supreme Court approved the Board’s determination that a “successor employer”—an employer
that 1) assumes the operations of another employer,
maintaining substantial continuity with the predecessor’s
operations, and 2) hires a majority of its employee com­
plement from among the predecessor’s employees—has
an obligation to recognize and bargain with the union
that was recently certified as the bargaining representa­
tive of the predecessor’s employees.4 At the same time,
however, the Court rejected the Board’s conclusion that
2

All dates are in 2001, unless otherwise indicated.
No party challenged the Regional Director’s implicit finding that
the Employer is a successor employer within the meaning of NLRB v.
Burns Security Services, 406 U.S. 272 (1972).
4
In Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27
(1987), the Supreme Court reaffirmed its holding in Burns and specifi­
cally indicated that its principles were not limited to situations in which
the incumbent union was recently certified as the employees’ bargain­
ing representative.
3

771

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD

the successor employer is obligated to adopt the terms of
the collective-bargaining agreement between the prede­
cessor and the Union. Id. at 291.
The Board subsequently delineated the effects of the
Burns decision on the rights and obligations of the suc­
cessor employer, its employees, and the union represent­
ing the predecessor’s/successor’s employees. In Southern Moldings, 219 NLRB 119 (1975), the Board consid­
ered the effect of a successorship on the processing of a
decertification petition. Noting that a successor em­
ployer “in effect stands in the shoes of the predecessor
vis -à-vis the [u]nion,” the Board found that the Union in
a successorship situation is not entitled to greater rights
with the successor than it had with the predecessor. Ac­
cordingly, the Board reasoned that since a union in a
bargaining relationship with a predecessor employer—
assuming the expiration of any certification year and the
absence of a collective-bargaining agreement—is entitled
only to a rebuttable presumption of majority status, a
union in a successor employer situation similarly will be
entitled only to a rebuttable presumption of majority
support. Id. at 119–120. Applying that principle to the
facts of the case, the Board concluded that the union’s
rebuttable presumption of majority status would not op­
erate as a bar to a timely filed petition raising a question
concerning representation.5
The Board in Southern Moldings additionally rejected
the union’s contention that the successor employer’s vol­
untary recognition of the union gave rise to a recognition
bar6 that precluded the processing of the decertification
petition. In that regard, the Board held that the recogni­
tion bar rule is applicable only in an initial organizing
situation, and does not extend to the successor employer
context. Id. at 120.
The Board thereafter adhered to and expounded upon
the principles set forth in Southern Moldings for nearly a
quarter of a century, with a single exception. In Landmark International Trucks, Inc., 257 NLRB 1375 (1981),
5
The Board’s decision in Southern Moldings was by no means the
first time t he Board had held that there is only a rebuttable presumption
of continued majority status in a successorship situation. The Board
had so held in several cases preceding the Supreme Court’s decision in
Burns. See, e.g., Downtown Bakery Corp., 139 NLRB 1352, 1355
(1962), enfd. in part 330 F.2d 921 (6th Cir. 1964).
6
In Keller Plastics Eastern, Inc., 157 NLRB 583 (1966), an unfair
labor practice case, the Board held that an employer’s lawful voluntary
recognition of a union based on a showing of majority support entitles
the union to a reasonable period of time for bargaining without chal­
lenge to its continued majority status. Thereafter, in Sound Contrac­
tors, 162 NLRB 364 (1966), the Board extended its holding in Keller to
representation cases, such that an employer’s lawful voluntary recogni­
tion of a majority union will serve as a bar to petitions challenging the
union’s representational status for a reasonable period of time follow­
ing the recognition.

an unfair labor practice case, the Board inexplicably retreated from its holding in Southern Moldings. There,
the Board determined that, following the successor em­
ployer’s voluntary recognition of the incumbent union,
the employer could not lawfully withdraw recognition
without first affording the Union a reasonable period of
time for bargaining. As support for its application of
voluntary recognition principles in the successor context,
the Board simply remarked that it could “discern no
principle that would support distinguishing a successor
employer’s bargaining obligation based on voluntary
recognition of a majority union from any other em­
ployer’s duty to bargain for a reasonable period.” Id. at
1375 fn. 4.
On review, the Sixth Circuit vacated the decision of
the Board, stating that “there is no reason to treat a
change in ownership of the employer as the equivalent of
a certification or voluntary recognition of a union follow­
ing an organization drive.” Landmark International
Trucks, v. NLRB, 699 F.2d 815, 818 (6th Cir. 1983).7
The court reasoned that whereas the employees in a
situation involving voluntary recognition or certification
need an opportunity to assess the union’s effectiveness in
an environment free from any attempts to replace, decer­
tify, or otherwise alter the employer-union relationship,
the employees in a successor situation have already had
the opportunity to gauge the union’s effectiveness as a
result of their long-standing relationship. Id.
Responding to the criticisms of the Sixth Circuit, the
Board in a subsequent unfair labor practice case overruled its earlier decision in Landmark , and reiterated and
specifically adopted the reasoning of the Sixth Circuit in
that case. See Harley-Davidson Transportation Co., 273
NLRB 1531 (1985). Accordingly, reaffirming the prem­
ise that a union that has been certified for a year or more
enjoys only a rebuttable presumption of majority status,
the Board in Harley-Davidson found that a successor
employer lawfully withdrew recognition from the recog­
nized incumbent union based upon evidence that the em­
ployees no longer supported the union. Id. at 1531–
1532.
The Supreme Court has endorsed the Board’s position
in Harley-Davidson. In Fall River Dyeing & Finishing
Corp. v. NLRB, 482 U.S. 27 (1987), the Court was called
upon to clarify and define the successorship principles
under the Act. In discussing the union’s presumption of
majority status and the employer’s countervailing right to
7
The court referenced the absence of precedent supporting the
Board’s decision, deeming inapposite the cases on which the Board
relied. The court found that such cases involved instances of “truly
voluntary recognition during an organizing campaign,” as contrasted
with recognition required by law in successor employer situations.

MV TRANSPORTATION

arrange its business, the Court, citing Harley-Davidson,
said that a successor employer could challenge the un­
ion’s majority status “at any time.” 482 U.S. at 41 fn. 8.
Following Harley-Davidson, the principle that the in­
cumbent union in a successor employer situation is enti­
tled to no greater rights than it otherwise would have
with respect to the predecessor, i.e., that the union
merely is entitled to a rebuttable presumption of continu­
ing majority status following the expiration of its certifi­
cation year, remained undisturbed for more than 14 addi­
tional years. In St. Elizabeth Manor, Inc., 329 NLRB
341 (1999), however, the Board reversed course and
changed decades of precedent.
In St. Elizabeth Manor, the Board majority overruled
Southern Moldings and announced the creation of a
“successor bar,” pursuant to which a successor employer,
by operation of law, incurs an obligation to bargain with
the incumbent union for a reasonable period of time, dur­
ing which the union’s majority status is immune to chal­
lenge through a decertification effort, an employer peti­
tion, or a rival union petition.8 The Board majority, os­
tensibly drawing from recognition bar principles, as­
serted that there were similarities between successor and
initial recognition situations: In both situations, the em­
ployer and union are “embarking on a new relationship,”
which generally poses greater challenges than bargaining
between parties to an established relationship;9 the parties in both situations additionally are undergoing a
“stressful transitional period,” during which the employ­
ees may fear that their support for (and employer opposi­
tion to) the union could jeopardize their job security or
result in less favorable working conditions, leading ulti­
mately to employee disaffection for the union. Id. at
343. The Board majority thus concluded that the union
in a successor situation should be afforded the same irre­
buttable presumption of majority status for a reasonable
period of time as that provided to a union following vol­
untary recognition by an employer.
Then-Member Hurtgen and former Memb er Brame
dissented. Emphasizing the freedom of choice granted
employees by Section 7 of the Act, they rejected the
8

The Board in St. Elizabeth Manor indicated that the successor em­
ployer’s obligation to recognize the union, and the concomitant bar to
any challenge to the union’s majority status, commences upon the
“occurrence of two events: (1) a demand for recognition or bargaining
by the union; and (2) the employment by the successor employer of a
‘substantial and representative complement’ of employees, a majority
of whom were employed by the predecessor.” Id. at 344 fn. 8.
9
The Board majo rity acknowledged that the relationship between
the union and the employees was a continuing one—such that the em­
ployees would have had the opportunity to assess the union’s effective­
ness in representing them—but stressed that the employees would not
have had the opportunity to assess the union’s effectiveness with regard
to the new employer.

772

adoption of a successor bar as an improper incursion on
the employees’ freedom to select or reject a bargaining
representative. Contending that the majority opinion
served to “protect the incumbent [union] from the desires
of those individuals who have firsthand knowledge of,
and experience with, the union’s ability, attentiveness,
and performance,” the dissenters maintained that
“[c]ollective bargaining. . . should flow from employee
choice and not drive it.” St. Elizabeth Manor, 329
NLRB at 349 (dissenting opinion). The dissenters addi­
tionally drew upon the prior decisions of the Board in
Southern Moldings and Harley-Davidson and the opinion
of the Sixth Circuit in Landmark , noting that the courts
had not challenged the soundness of the principles articu­
lated in those cases. Instead, the dissenters observed, the
Supreme Court and various courts of appeal had cited
with approval the Board’s decision in HarleyDavidson.10 See id. at 348.
After careful consideration, we now conclude, in ac­
cord with the dissenting opinion in St. Elizabeth Manor,
that St. Elizabeth Manor represented an unwarranted
departure from well-established Board precedent. Ac­
cordingly, we overrule St. Elizabeth Manor and return to
the sound principles articulated in Southern Moldings,
which, we conclude, more appropriately and effectively
serve the purposes of the Act.
It is well established that two of the fundamental pur­
poses of the Act are (1) the protection and promotion of
employee freedom of choice—choice with respect to the
initial decision to engage in or refrain from collective
bargaining, and choice regarding the selection of a bargaining representative; and (2) the preservation of the
stability of bargaining relationships. See Stanley Spencer
v. NLRB, 712 F.2d 539, 566 (D.C. Cir. 1983). The first
of these is explicitly set forth in Section 7 of the Act.
The second is a matter of policy and operates with re­
spect to those situations where employees have chosen a
bargaining relationship. When these two objectives con­
flict, it is the Board’s obligation to strike an appropriate
balance between them. NLRB v. Circle A & W Products
Co., 647 F.2d 924 (9th Cir. 1981). See, e.g., General
Cable Corp., 139 NLRB 1123 (1962)(determining that a
3-year contract bar rule represented the appropriate bal­
ance between the competing concerns); Deluxe Metal
Furniture Co., 121 NLRB 995 (1958)(modifying contract-bar policies to “achiev[e] a finer balance between”
the objectives of fostering stability of labor relations and
ensuring employee freedom of choice).
10
See, e.g., Fall River Dyeing Corp. v. NLRB, 482 U.S 27, 41 fn. 8
(1987); NLRB v. Williams Enterprises, 50 F.3d 1280, 1288 (4th Cir.
1995); Briggs Plumbin gware, Inc. v. NLRB, 877 F.2d 1282, 1288 (6th
Cir. 1989); Textron, Inc. v. NLRB, 965 F.2d 141, 148 (7th Cir. 1992).

773

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD

We conclude that in a successor employer context, the
position articulated by the Board in Southern Moldings
represents the appropriate balance between employee
freedom of choice and the maintenance of stability in
bargaining relationships. Although the Board majority in
St. Elizabeth Manor purported to strike a balance between these two objectives, we find that the successor
bar rule, by providing the union with an irrebuttable pre­
sumption of majority status and denying the employees
the opportunity to change or reject their bargaining rep­
resentative for a “reasonable period of time,” promotes
the stability of bargaining relationships to the exclusion
of the employees’ Section 7 rights to choose their bargaining representative. Hill Park Health Care Center,
334 NLRB 328, 331 at fn. 7 (dissenting opinion of
Chairman Hurtgen). At a minimum, the successor bar
prohibits the employees’ exercise of their right to select a
bargaining representative for a “reasonable period of
time” as defined by the Board in a particular case. It is
possible , however, that the successor bar could preclude
the employees’ exercise of their Section 7 rights for as
long as several years. For example, a successor employer
could engage in bargaining with the incumbent union
and, prior to the expiration of a “reasonable period of
time,” reach agreement with the union on a new collec­
tive-bargaining agreement, which then would serve as a
bar to a representation petition for the duration of the
contract, up to a period of 3 years. Moreover, the incur­
sion on the employees’ freedom of choice could be even
more severe (up to 6 years) if the Union and the prede­
cessor employer were parties to a collective-bargaining
agreement that served to bar any employee efforts to
remove or replace the Union prior to the successor’s as­
sumption of operations.11
In contrast, the rule developed in Southern Moldings
gives proper effect to employee freedom of choice guar­
anteed by Section 7 of the Act. Pursuant to Southern
Moldings, an incumbent union in a successor employer
situation is entitled only to a rebuttable presumption of
continuing majority status, which will not operate to bar
an otherwise valid decertification, rival union, or em­
ployer petition. Accordingly, the employees, “who have
firsthand knowledge of, and experience with, the union’s
ability, attentiveness and performance,” properly can
determine whether the incumbent union is adequately
representing their interests during the period of transi­
tion, or whether another representative or the employees
themselves might be more effective in dealing with their
11
Thus, we reject as a significant understatement our dissenting col­
league’s assertion that the successor bar merely places a temporary
restraint on the employees’ exercise of their Sec. 7 rights.

prospective employer.12 See St. Elizabeth Manor, 329
NLRB at 349 (dissenting opinion). If the employees
determine that the union is not serving their needs, they
can file a decertification petition or attempt to secure
representation by another union. Alternatively, if the
employees feel that they have had an insufficient period
of time to assess the effectiveness of the Union with re­
spect to the new successor employer, they can simply
refrain from filing a decertification petition or supporting
a rival union. In either case, it is significant that, in con­
trast to a situation in which the successor bar rule is ap­
plied, the decision is left to the employees.
At the same time that the Southern Moldings rule preserves employee freedom to select a bargaining represen­
tative, it additionally promotes the objective of maintain­
ing stability in bargaining relationships, contrary to our
dissenting colleague’s assertions. Although our return to
the principles set forth in Southern Moldings has the ef­
fect of removing the irrebuttable presumption of majority
status provided to the union under the successor bar rule,
it does not eliminate the bargaining obligation of the suc­
cessor employer. As articulated by the Supreme Court in
Burns, supra, a successor employer becomes obligated to
bargain with the bargaining representative of its prede­
cessor’s employees if (1) there is substantial continuity
12

Rather than relying on the employees’ own judgments, the Board
majority in St. Elizabeth Manor appeared to rely on a paternalistic
assumption that the employees in a successor employer situation need
the protection of an insulated period—free from the potential ill effects
associated with the alleged “stressful transition” to a new employer—to
make an informed decision regarding the effectiveness of their bargain­
ing representative. See St. Elizabeth Manor, 329 NLRB at 343 (sug­
gesting that, in the absence of an insulated period, employee anxiety
over job security and work conditions as a result of a change of em­
ployers could alter the employees’ otherwise favorable attitudes toward
their bargaining representative). We believe such protectionism is
unwarranted. Employees are presumably mature individuals who are
capable of making rational decisions. See Midland National Life In­
surance Co., 263 NLRB 127, 132 (1982) (stating, in the context of an
election campaign, that employees are “mature individuals who are
capable of recognizing campaign propaganda for what it is,” such that
the Board need not regulate the veracity of the parties’ campaign state­
ments).
Additionally, apart from its questionable factual validity, that as­
sumption fails to account for the possibility that the employees could
have made a decision to replace or remove their bargaining representa­
tive prior to the change in employers. For example, it is entirely possi­
ble that the employees could reach a decision to remove the union
while still employed by the predecessor employer, yet be prevented
from effectuating that decision as a result of an existing collectivebargaining agreement between the predecessor employer and the union.
Further, even after the change in employers, there may be other reasons
why employees would no longer want union representation, none of
which has to do with “stress,” “anxiety,” “uncertainty,” “dislocation,”
or “turmoil”. For example, employees may simply feel that they no
longer need a union in light of the change in the identity of their em­
ployer, a change that employees may perceive as improving their overall employment circumstances.

MV TRANSPORTATION

between the predecessor employer’s and the successor
employer’s operations; and (2) the successor employer
hires a majority of its employees from among the prede­
cessor’s employee complement. Furthermore, pursuant
to Southern Moldings, the successor employer’s obliga­
tion to bargain with the incumbent union continues indefinitely, unless and until the employees exercise their
right to remove or replace the union by filing a decertifi­
cation petition or supporting a rival union petition or,
alternatively, the employer rebuts the presumption of the
union’s continuing majority status.13 Accordingly, the
existing bargaining relationship is permitted to continue,
absent some evidence that the employees no longer support that relationship.14
Although the Southern Moldings policy to which we
return today does not completely immunize or protect the
bargaining relationship from disruption or uncertainty,
we conclude that it nevertheless serves to promote labor
stability, and that it does so without abrogating the Sec­
tion 7 rights of the employees. Moreover, we believe
that the Southern Moldings standard properly recognizes
and accounts for an important distinction between the
successor employer situation and other situations in
which the employer embarks on a new bargaining rela­
tionship with a union. Contrary to the St. Elizabeth
Manor majority’s suggestion that the successor employer
situation is analogous to the voluntary recognition situa­
tion, we find, in accordance with the well-reasoned deci­
sion of the Sixth Circuit in Landmark , supra, that the two
situations are not equivalent.
In [the case of a voluntary recognition following an or­
ganizing drive] the employees must be given an oppor­
tunity to determine the effectiveness of the union’s rep­
resentation free of any attempts to decertify or otherwise change the relationship. However, where the un­
ion has represented the employees for a year or more a
change in ownership of the employer does not disturb
the relationship between employees and the union.
While the relationship between employees and em13

A successor employer can rebut the presumption if it can demon­
strate that (1) the union has in fact lost its majority status or (2) that the
employer possesses a good faith uncertainty as to the union’s continued
majority support. The employer may unilaterally withdraw recognition
from the union in the former situation, and may file an RM petition in
the latter situation. See Levitz, 333 NLRB 717 (2001). Members
Cowen and Bartlett were not on Levitz, and find it unnecessary in this
case to express an opinion regarding the analysis set forth in the
Board’s Levitz decision.
14
If a successor employer were to refuse to bargain with the union in
the absence of evidence that the union had lost its majority status, or
bargain in bad faith, the union could seek recourse with the Board
through the filing of an unfair labor practice charge.

774

ployer is a new one, the relationship between employ­
ees and union is one of long standing.
Landmark , 699 F.2d at 818. Therefore, although the in­
cumbent union “may not necessarily be familiar with the
new employer, its overall knowledge of the operations and
the specific facility may exceed that of the new owners.
Thus, it can build rapidly on its past experience in handling
workplace issues that particularly concern these unit em­
ployees.” St. Elizabeth Manor, 329 NLRB at 349 (dissent­
ing opinion). In light of these distinctions, it is reasonable to
maintain different standards that appropriately harmonize
the purposes and policies of the Act.
Our dissenting colleague agrees that protecting em­
ployee free choice is a fundamental statutory policy and
therefore properly a Board concern. She also agrees that
a merger or acquisition may cause changes in employee
attitudes about continued representation by the incum­
bent union. Finally, our dissenting colleague also agrees
that whether employees should be allowed the opportu­
nity to rid themselves of an unwanted union following a
merger or acquisition requires balancing the policy of
protecting employee free choice against the competing
policy of maintaining stability of bargaining relationships. Unlike us, however, our colleague strikes the bal­
ance against employee free choice in favor of stability of
bargaining relationships.
Our dissenting colleague premises her conclusion on
two essential propositions. First, she notes correctly that
the transition to a successor employer is potentially destabilizing.15 Second, and incorrectly, she posits that
permitting a challenge to the union’s continued majority
status adds to the instability. In reality, if a large per­
centage (or majority) of the employees support a petition
to decertify or change the bargaining representative, the
situation has reached maximum instability, and to fail to
resolve the issue with a Board-conducted election simply
aggravates the instability further. Instability is, in fact,
preserved and increased rather than relieved. The dissent
seems to recognize this reality by the statement in footnote 16 that “[a]s a practical matter, however, it seems
unlikely that a successor employer would reach an
agreement with a union that lacked majority support:
there would rarely be an incentive to do so.” To what
purpose, then, do we require bargaining during the insu­
lated period?16
15
While it is frequently disconcerting to employees, successorships
also save failing businesses and jobs and are then a cause for celebra­
tion, not despair.
16
Contrary to our dissenting colleague, we are not suggesting that
collective bargaining “guarantees” that a contract will be reached. We
recognize that collective bargaining may, or may not, result in a contract. We simply observe that it is unlikely that a successor employer

775

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD

Our dissenting colleague also correctly observes that
the incidence of successorship in our economy has sig­
nificantly increased since Southern Moldings. We fail to
see how this macroeconomic phenomenon should re quire, in any given successorship, that a particular unit of
employees lose their right to choose to be represented or
not. The same economic forces that precipitate succes­
sorship require employers to be more efficient, adaptable,
and expedient. Employees should not lose their right to
representation by reason of these dynamics; neither,
however, should they lose their right to change or elimi­
nate a bargaining representative.
Contrary to the suggestion of the dissent, we do not
link “efficiency, adaptability and experience” with the
elimination of the union as representative. We simply
say that employees should not lose their freedom of
choice by reason of these qualities.
We acknowledge the possibility that a change in cor­
porate ownership or other restructuring might engender
anxiety or stress among those affected by the change.
Our difficulty lies not with the recognition of that possi­
bility but, rather, with the unsupported leap to the as­
sumption that such anxiety would render the employees
incapable of making an informed decision regarding un­
ion representation, or that it would cause them to “shun”
the union. Indeed, it is equally possible, if not more
plausible, that the employees—faced with an environ­
ment of uncertainty and anxiety—would turn to, and
place a greater value on representation by, their bargain­
ing representative.
As noted above, we recognize that a change of em­
ployers can cause instability, and this in turn may cause
stress for the employees. However, the impact of such
instability on employees is uncertain. The impact may
be that the employees become stronger adherents of the
union; they may become weaker adherents or nonadherents of the union; or there may be no effect at all on
their union views. What is certain, however, is that, un­
der the Act, these matters are to be decided by the em­
ployees. Our colleague would take away that choice for
an undefined period of time. By contrast, in other contexts where economic changes cause stress (e.g., reces­
sions or layoffs), no one suggests that the economic
changes and stress are reasons to postpone the exercise
of employee free choice. Contrary to the suggestion of
our colleague, we are not saying that “broader economic
developments should have no bearing” on Board rules.
We simply observe that the fundamental statutory policy
would reach agreement with a non-majority union, and there would be
no incentive to do so.

of employee free choice has paramount value, even in
times of economic change.
By creating a bar to employees’ exercise of their free­
dom of choice and awarding the union an irrebuttable
presumption of majority status, our dissenting col­
league’s position additionally results in an unwarranted
extension of the Supreme Court’s holdings in Burns and
Fall River, supra.17 The Burns principle, affirmed in Fall
River, affords stability in the context of a change of em­
ployers. It does so by continuing the union’s representa­
tive status and by the presumption that the union retains
majority support. However, the price of stability becomes too high if we say that the presumption cannot be
rebutted, i.e., that the employees cannot reject the union
if they so choose. Indeed, although the Supreme Court in
Burns and Fall River discussed the propriety of a con­
tinuing presumption of majority status in light of the po­
tential negative effects of a change in corporate ownership, the Court also specifically emphasized “the rightful
prerogative of owners independently to rearrange their
businesses,” as well as the successor’s right to withdraw
recognition from the Union at any time if it loses its ma­
jority status. Fall River, supra at 40–41 (citations omit­
ted).
Our dissenting colleague’s attempt to justify the exis­
tence of an insulated period in a successorship situation
through reliance on other contexts in which the Board
has deemed appropriate the creation of an insulated pe­
riod (during which the union’s majority status cannot be
challenged) is unavailing. None of those contexts is ap­
plicable here. In an initial certification case, the employ­
ees have recently exe rcised their Section 7 right to
choose a union. As the newly-elected representative, the
union needs time to learn the ropes and prove its worthi­
ness. The same is true of a voluntary extension of lawful
recognition. In a case involving an unlawful withdrawal
of recognition, the insulated period is necessary to rem­
edy unlawful employer conduct and to allow the union
time to get back on its feet. In a Section 8(a)(5) settle­
ment case, the employer has promised to bargain in order
to remedy an alleged violation. It would be contrary to
the remedial aspect of the settlement to allow a hasty
withdrawal of recognition. By contrast, the union in the
instant situation has been the representative of employees
for a long time. The employer has committed no unfair
labor practices, and has not agreed to any remedial set­
tlements.
Finally, we have emphasized throughout the principles
of industrial democracy and emp loyee free choice. Our
17

By contrast, the Southern Moldings policy to which we return
properly adheres to and reflects the Supreme Court’s mandate in those
cases.

776

MV TRANSPORTATION

colleague speaks of the “destabilizing effects of an elec­
tion.” In response, we believe that a democracy, by its
nature, undergoes the turmoil of frequent elections. But
that is a price that we gratefully pay for a free society.
Incumbent public officials are subject to elections at pe­
riodic intervals. Incumbent unions are not. Thus, to al­
low for free choice, we subject unions to challenge at
certain times when employees objectively indicate that
they no longer desire representation by the union.18 Our
colleague would take away that choice for an undefined
period of time.
For all the foregoing reasons, we reject our dissenting
colleague’s criticisms of the well-reasoned principles of
Southern Moldings.
Application of Southern Moldings principles
Having determined that the principles set forth in
Southern Moldings best effectuate the purposes and poli­
cies of the Act, we turn now to the application of those
principles to the facts of the instant case. Several months
after the Employer’s assumption of the predecessor’s
operations, the Petitioner filed a decertification petition.
Relying on the successor bar doctrine established in St.
Elizabeth Manor, the Regional Director administratively
dismissed the petition, finding that the Employer and the
Union had not had a reasonable period of time to bargain
before the petition was filed. Since the Regional Direc­
tor’s dismissal of the petition was based on the Board’s
decision in St. Elizabeth Manor, which we have overruled today, we will reverse the Regional Director’s ac­
tion and remand the proceeding to him for processing of
the petition. In so doing, we note that the facts of this
case clearly illustrate the wisdom of the Southern Mold­
ings principles. As the Petitioner contends in his request
for review, the employees felt that the incumbent union
was not effectively representing their interests with re­
spect to their employment with the Employer.19 Whereas
the successor-bar rule would have negated the employ­
ees’ ability to reject their bargaining representative, the
Southern Moldings policy permits the employees to ex­
ercise their freedom of choice.
ORDER
The Regional Director’s administrative dismissal of
the decertification petition is reversed, and the case is
remanded to the Regional Director for further appropriate
action consistent with this decision.
18
Contrary to the dissent, this objective indication is more than a
drop in poll numbers.
19
Indeed, the Petitioner’s request for review recites a multitude of
complaints concerning the Union’s representation, including allegations
of preferential treatment of certain employees, inadequate communica­
tion, and retaliation against employees who were opposed to the Union.

M EMBER LIEBMAN, dissenting.
Corporate mergers and acquisitions have proliferated
during the past quarter century. These transactions have
consequences for employees in the workplace. Under
current labor law successorship principles, employers
enjoy substantial flexibility to restructure their businesses
and transfer capital, unhampered by the rights and bene­
fits union members may have won through collective
bargaining. Unions, in turn, must struggle to safeguard
employees’ gains, including their jobs, all of which may
be jeopardized. This case poses the question whether
during the throes of the corporate transition—with its
attendant uncertainties and dislocations—the union’s
representational status should be subject to challenge.
Resolving this question requires the Board to decide an
important question of labor policy: how best to balance
the National Labor Relations Act’s goals of workplace
stability and employee free choice, in the context of suc­
cessor bargaining relationships. My colleagues today
resurrect the old doctrine of Southern Moldings, Inc., 219
NLRB 119 (1975), and overrule St. Elizabeth Manor,
Inc., 329 NLRB 341 (1999), a case in which the Board,
only 3 years ago, took an initial step in striking a balance
that fits today’s economy. By providing a limited period
of repose during which a question of representation may
not be raised, St. Elizabeth Manor preserves stability and
promotes collective bargaining, without sacrificing em­
ployee free choice. I dissent from the Board’s abandon­
ment of a framework that best accommodates the eco­
nomic realities of the 21st Century.
I . THE CURRENT ECONOMIC CONTEXT OF
SUCCESSORSHIP LAW

“Regulatory agencies do not establish rules of conduct
to last forever; they are supposed, within the limits of the
law and of fair and prudent administration, to adapt their
rules and practices to the Nation’s needs in a volatile
changing economy. They are neither required nor supposed to regulate the present and the future within the
inflexible limits of yesterday.” American Trucking Assns.
v. Atchison T. & S.F. Ry. Co., 387 U.S. 397, 416 (1967).
The economy, and the workplace with it, have changed
radically in the past 25 years . Under Southern Moldings,
decided in 1975, a challenge to the incumbent union’s
majority status may be raised at any time, even immedi­
ately upon the start of the successor business. But in
1975, mergers and acquisitions—business events that
typically create successorships—were, in a relative
sense, blips on the radar screen of economic activity.
Since then, our economy has experienced a many-fold
increase in merger and acquisition activity. The numbers

777

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD

are illuminating.1 In 1975, merger and acquisition an­
nouncements numbered 2,297. In the year 2000, there
were 9,566. The dollar value of this activity is even
more pronounced. In 1975, the total dollar value paid in
these transactions was $11.8 billion. In 2000, it was $1.3
trillion. In terms of dollar value as a percentage of gross
domestic product (GDP), mergers and acquisition activ­
ity has gone from about 1% of GDP to a striking, nearly
14% level in 2000.
With the efficiencies that most consolidations are ex­
pected to achieve, layoffs are a routine fact of merger
activity.2 Even for employees who survive the transac­
tion, fear, anger, and insecurity will almost inevitably
arise. Whether employees are uncertain about their con­
tinued prospects for employment or disturbed by the
clash of corporate cultures, their loyalties certainly are
strained. One pair of commentators has described the
effect of mergers on employees this way:
Mergers affect cultural patterns. . . . First, there is the
look-over-your-shoulder effect. Personnel try to figure
out where cuts will be made. Second, there is the win­
ners-and-losers effect. One party to the deal almost al­
ways wins, and the other, usually the acquired, almost
always loses as jobs in the new entity are allocated.
Third, and most important, there is the cultural isolation
effect. It occurs when survivors discover that the com­
pany that they now work for is significantly different
from the one they worked for before.
Terrence E. Deal & Allan A. Kennedy, The New Cor­
porate Cultures 121–122 (1999).
All of these effects are likely to destabilize relations
not only between both labor and management, but between a union and the workers it represents . The union,
after all, will have failed in sparing workers from
dislocation. Successorship law, as I will explain, directly
contributes to the union’s precarious position, a fact the
Supreme Court implicitly recognized in Fall River Dye­
ing & Finishing v. NLRB, 482 U.S. 27 (1987).
Meanwhile, the merger craze shows little or no sign of
abating.3 Thus, “[a]t the end of the 1980s, corporations
were selling off divisions and companies and buying new
ones at a rapid rate” and “[w]hile the pace of mergers and
acquis itions slowed somewhat during the early 1990s, it
1

See Paul A. Pautler, Evidence on Mergers and Acquisitions, Fed­
eral Trade Commission Bureau of Economics Working Paper 243, at
58, 60 (Table 1 & Figure 2) (Sept. 25, 2001) (available at
www.ftc.gov/be/econwork.htm). See Appendix A and Appendix B.
2
See, e.g., Peter Cappelli, The New Deal at Work 79–80 (1999).
3
See, e.g., Deal & Kennedy, supra, at 111; William C. Symonds &
Peter Coy, Corporate America Braces for the Shakeout, Business Week
(Oct. 15, 2001).

has accelerated since then.”4 These transactions may
benefit corporate executives handsomely, but for the rank
and file, they seriously upset settled expectations and
surely complicate, even frustrate, collective bargaining.5
One implication of these dramatic economic changes is
that old regulatory doctrines may no longer be appropri­
ate. In contrast to the old Southern Moldings rule, the
contemporary St. Elizabeth Manor framework fits the
demands of changed circumstances. In an economy in
which rapid corporate transformation regularly brings
uncertainty, even turmoil, to the workplace, the rule of
St. Elizabeth Manor affords some measure of stability.
St. Elizabeth Manor strikes the right balance in newlycreated successor relationships, by creating an insulated
period during which a union’s majority support may not
be challenged. The decis ion calls for the parties to bargain for a reasonable period of time, free of the kind of
challenges that would undermine the bargaining relationship before it had any real chance to flourish. The major­
ity’s approach, in contrast, unnecessarily ni trudes on
collective bargaining and destabilizes an already uncer­
tain situation for employees, labor unions, and employ­
ers. The timing is unfortunate. In a volatile economy
marked by mergers, acquisitions, and takeovers, the in­
terest of stability should be given greater—not less—
weight in shaping national labor policy. I take issue,
then, with my colleagues’ apparent suggestion that
broader economic developments should have no bearing
on the rules the Board necessarily applies in individual
workplaces.
II . THE LEGAL CONTEXT OF THE ST. ELIZABETH MANOR
INSULATED PERIOD

St. Elizabeth Manor was a sound, logical outgrowth of
current successorship law, which seeks to reconcile the
sometimes competing interests of employers and em­
ployees in the context of changes in corporate ownership.
As the Supreme Court observed in its first labor-law suc­
cessorship decision, the “objectives of national labor
policy . . . require that the rightful prerogative of own­
ers independently to rearrange their businesses . . . be
balanced by some protection to the employees from a
sudden change in the employment relationship.” John
Wiley & Sons v. Livingston, 376 U.S. 543, 549 (1964).
4

Cappelli, supra, at 79–80.
Compare Andrew Ross Sorkin, Those Sweet Trips to the Merger
Mall, New York Times (April 7, 2002), with N. R. Kleinfeld, The
Downsizing of America: In the Workplace, Musical Chairs; The Com­
pany as Family, No More, New York Times (March 4, 1996). Al­
though the question is debatable, some economists have argued that “an
important source of … gains [from corporate acquisitions] comes sim­
ply from breaking long-term employment relationships, particularly
those which implicitly deferred compensation.” Cappelli, supra, at 79.
See Pautler, supra, at 7–8 (surveying economic literature).
5

MV TRANSPORTATION

See also Howard Johnson Co., v. Detroit Local Joint
Executive Board , 417 U.S. 249, 264 (1974) (discussing
balancing of interests in John Wiley). The Supreme
Court has recognized that a successorship case “requires
analysis of the interests of the new employer and the em­
ployees and of the policies of the labor laws in light of
the facts of each case and the particular legal obligation
which is at issue. . . .” Howard Johnson Co., Inc., supra,
417 U.S. at 262 fn. 9. Within the broader framework
established by the Court, the Board must in turn develop
subsidiary rules that further the goals of the Act—and
that necessarily seek to reconcile competing interests.
NLRB v. Burns Services, 406 U.S. 272 (1972), sets out
the basic rules of successorship.6 Under Burns, the in­
cumbent union that represented the predecessor’s em­
ployees is the presumptive bargaining representative of
the successor’s employees, when the latter’s work force
comprises a majority of the predecessor’s former em­
ployees and when there is substantial continuity between
the enterprises in the employing industry. If these crite­
ria are satisfied, the incumbent union follows the em­
ployees, as their bargaining representative, in the succes­
sor workplace.
As a practical matter, however, Burns sharply limits
the authority and status of the employees’ bargaining
representative in crucial respects. The Burns Court
stressed that employers enjoy substantial flexibility to
restructure their businesses and that successor employers
are free to make substantial changes in their operation of
the enterprise. It decided that holding a new employer
bound to the substantive terms of the preexisting labor
contract might inhibit the free transfer of capital. Thus,
if there was formerly a governing bargaining agreement
with the predecessor, that contract no longer governs the
workplace in the future. It is abrogated, unless the suc­
cessor chooses to assume its oblig ations.
Further, the incumbent union typically has no bargain­
ing authority with respect to the initial terms and condi­
tions of employment preferred by the successor employer
for its new workforce. Those working conditions may be
unilaterally implemented by the successor.7 Perhaps
most significantly, the incumbent union’s authority to
represent employees, as a threshold matter, is essentially
determined by the successor employer. Thus, the union’s
representative status depends virtually entirely on the
6
Rules for changes in ownership resulting from the mere transfer of
stock shares do not raise successorship issues. See TKB International
Corp ., 240 NLRB 1082, 1083, fn. 4 (1979).
7
Under Burns, the successor must consult with the incumbent union
about initial terms of employment only when it is “perfectly clear” that
it intends to retain the predecessor’s work force. E.g., Spruce Up
Corp., 209 NLRB 194 (1974).

778

vagaries of the successor’s hiring process and decisionmaking. It is no wonder, then, that employees may ask
whether union representation is worthwhile.8
In Fall River Dyeing & Finishing, supra, its most recent successorship decision, the Court focused on the
impact that corporate transactions have on employees
and their unions. While Fall River reaffirmed the propo­
sition that employers are free to restructure their busi­
nesses and hire a workforce unhampered by the prede­
cessor’s collective bargaining agreement, the Court also
held that a successor’s obligation to bargain is not lim­
ited to situations where the union has been recently certi­
fied. In observations that bear directly on the issue posed
today, the Court underscored the difficult circumstances
facing the employees’ incumbent union:
During a transition between employers, a union is in a
peculiarly vulnerable position. It has no formal and es­
tablished bargaining relationship with the new em­
ployer, is uncertain about the new employer’s plans,
and cannot be sure if or when the new employer must
bargain with it. While being concerned with the future
of its members with the new employer, the union also
must protect whatever rights still exist for its members
under the collective-bargaining agreement with the
predecessor employer.
482 U.S. at 39 (footnote omitted).
At the same time, the Fall River Court observed, suc­
cessorship also affects the way in which employees per­
ceive their union and their rights under Section 7 of the
Act:
If the employees find themselves in a new enterprise
that substantially resembles the old, but without their
chosen bargaining representative, they may well feel
that their choice of a union is subject to the vagaries of
an enterprise’s transformation. This feeling is not con­
ducive to industrial peace. In addition, after being
hired by a new company following a layoff from the
old, employees initially will be concerned primarily
with maintaining their new jobs. In fact, they might be
inclined to shun support for their former union, espe­
cially if they believe that such support will jeopardize
their jobs with the successor or if they are inclined to
blame the union for their layoff and problems associ­
ated with it.
482 U.S. at 39–40 (emphasis added; footnote omitted).
With these considerations in mind, the Court in Fall
River emphasized, as it had in Burns, the “interest of the
8
For an argument that successorship law itself makes unions less attractive to workers, see Wilson McLeod, Rekindling Labor Law Suc­
cessorship in an Era of Decline, 11 Hofstra Labor L. J. 271, 276–286
(1994).

779

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD

employees in continued representation by the union” and
reiterated that the “new employer has an obligation to
bargain with that union so long as the new employer is in
fact a successor of the old employer and the majority of
its employees were employed by its predecessor.” 482
U.S. at 41.9
III . THE RATIONALE OF ST. ELIZABETH MANOR
St. Elizabeth Manor created a framework for succes­
sorship bargaining that gives substance to the notion of
continuity underlying both Burns and Fall River. When
an employer, exercising its freedom to select employees
of its lawful choosing, hires its workforce and becomes a
Burns successor, it must honor an incumbent union’s
request to bargain, and it must bargain in good faith for a
reasonable period of time.
This rule avoids the scenario posed, for exa mple, in
Hampton Lumber Mills-Washington, 334 NLRB 195
(2001), enfd. No. 01-1276 (D.C. Cir. May 17, 2002) (un­
published judgment order), where a successor employer
began operations on November 4, received a petition
from employees repudiating the incumbent union on De­
cember 8, declined to recognize the union that same day,
and filed a petition with the Board on December 9. The
number of bargaining sessions before the challenge to the
union’s incumbency was exactly zero. In a case like that,
the presumption of majority status flowing from Burns is
rendered entirely illusory, as is the notion, endorsed by
Fall River, that the presumption should facilitate the in­
cumbent union’s development of a relationship with the
successor. Yet that is what the majority’s approach al­
lows.
In contrast, St. Elizabeth Manor puts first things first.
The issue of successorship has been settled and meaning­
ful bargaining should proceed. It leaves for another day
a re-testing of the incumbent union’s majority status,
while delaying that inquiry for only a “reasonable” time.
This frees the union from what the Supreme Court has
called “exigent pressure to produce hot-house results or
be turned out.” Brooks v. NLRB, 348 U.S. 96, 100
(1954) (approving bar to election for one year after certi­
fication of union). At the same time, the employer -–who
must bargain in good faith for a reasonable time—is
freed of the temptation to avoid good faith bargaining in
the hope that, by delay, it can undermine the union’s
9
The majority contends that the Fall River Court “endorsed” the re­
buttable nature of the Burns presumption by its citation to HarleyDavidson Co ., 273 NLRB 1531 (1985), in which the Board found that a
successor employer lawfully withdrew from bargaining based on a
good faith doubt of the union’s majority status. But, as the St. Eliza­
beth Board explained (329 NLRB at 344, fn. 7), the Court’s reference
to the Harley-Davidson rebuttable presumption was simply a reflection
of Board law at the time of the Court’s decision.

support among employees. Id . See, e.g., Chelsea Indus­
tries v. NLRB, 285 F.3d 1073, 1076 (D.C. Cir. 2002)
(citing Brooks in upholding Board’s certification-year
bar). Finally, as do other insulated periods adopted, the
rule of St. Elizabeth Manor allows the employer and the
incumbent union to bargain without the uncertainty and
disruption that might be caused by organizing cam­
paigns, including the effort of a rival union, a potential
destabilizing factor. See, e.g., Deluxe Metal Furniture,
121 NLRB 995, 998–1001 (1958) (discussing contractbar rule). As the St. Elizabeth Manor Board explained,
the rationale for a successor bar—that employees should
have a reasonable opportunity to determine the effective­
ness of the union’s representation—parallels the rationale
for the well-established insulated period following an
employer’s voluntary recognition of a union. 329 NLRB
at 342–343. See also Keller Plastics Eastern, Inc., 157
NLRB 583 (1966) (establishing recognition bar doctrine).
Of course, preserving industrial stability and promo t­
ing collective bargaining are not the Board’s only con­
cerns; so is protecting employee free choice. But St.
Elizabeth Manor does this, too. As to employees who do
not desire union representation—notwithstanding the
Burns presumption that the bargaining unit as a whole
supports the Union—they must wait temporarily before
they can invoke the Board’s election processes. Their
right of free choice is not denied, but merely delayed
pending a reasonable period for bargaining.10 This delay
may occur in every situation where the Board has, for
decades, created insulated periods. As the Fall River
Court observed, those rules are not based on judgments
about employees’ likely sentiments or their fitness to act
on them, but rather on a compelling policy interest, the
need to promote industrial peace, that comes into play.
482 U.S. at 38–39.
Fall River explains why, during a corporate transition,
unions are particularly vulnerable to employee dissatis10
That employees who oppose union representation may be required
to wait to express their views, as a means of furthering the Act’s other
policies, is neither unreasonable, nor unfair. See NLRB v. Gissel Pack­
ing Co., 395 U.S. 575, 613 (1969) (upholding bargaining order based
on employer’s unfair labor practices). In the words of the Gissel Court:
There is . . . nothing permanent in a bargaining order. . . . [A]s we
pointed out long ago, in finding that a bargaining order involved no
“injustice to employees who may wish to substitute for the particular
union some other . . . arrangement,” a bargaining relationship “once
rightfully established must be permitted to exist and function for a rea­
sonable period in which it can be given a fair chance to succeed,” after
which the “Board may . . . upon a proper showing, take steps in rec­
ognition of changed situations which might make appropriate changed
bargaining relationships.”
395 U.S. at 613, quoting Frank Bros. Co. v. NLRB, 321 U.S. 702,
705–706 (1944).

780

MV TRANSPORTATION

faction and why employees simultaneously may feel par­
ticular pressure to shun the Union. These effects, as we
have seen, are in significant part a result of successorship
law itself, which gives employers great flexibility and
which gives employees and unions comparatively little
security. The volatile nature of this transitional period
makes it appropriate, as a matter of policy, to establish a
period of repose with respect to changes in union repre­
sentation. To say that employees must have free choice
in the selection of their representatives (or in their deci­
sion to forgo representation) is not to say that an incum­
bent union must be prepared to survive a confidence-vote
at all times—even when employees, for no fault of the
union’s, “might be inclined to shun support” in the words
of the Fall River Court.
An insulated period ensures that employees will be
free to decide on representation after the union has a fair
chance to prove itself in its dealings with a new em­
ployer. It ensures, as well, that the union will not be re­
quired to expend resources to defend its representational
status, as opposed to protecting the interests of employ­
ees during the transition to a new employer. Obviously,
important employee interests are at stake, and the union’s
role—following, not before, successorship—may be cru­
cial. As the John Wiley Court observed:
Employees, and the union which represents them, ordi­
narily do not take part in negotiations leading to a
change in corporate ownership. The negotiations will
ordinarily not concern the wellbeing of the employees,
whose advantage or disadvantage, potentially great,
will inevitably be incidental to the main considerations.
376 U.S. at 549.
In turn, no one familiar with union-representation
campaigns—which employers often contest vigorously
(and sometimes unlawfully)— can doubt that they con­
sume the resources of unions and employers, while dis­
rupting ordinary workplace activities.11 As vital as elec­
tions are to the Act, permitting challenges to a union’s
status even during the transition from one employer to
another, elevates employee free choice to the exclusion
of other statutory goals.
Finally, while this case involves a petition seeking a
decertification election, under the majority’s approach—
which extols the virtues of employee free choice—
successor employers would be permitted to unilaterally
withdraw recognition from unions even without an elec11
See, e.g., Commission on the Future of Labor-Management Rela­
tions (Dunlop Commission), Final Report 40 (1994) (www.ilr.cornell.
edu/library/e_archive/gov_reports/dunlop). My colleagues do not give
sufficient weight to the destabilizing effects of an election, in which
employers may use entirely lawful means t o undermine a union’s sup­
port —and thus generate instability in the workplace.

tion.12 Even if defended in terms of employee free
choice, the majority’s approach certainly coincides with
the interests of those employers who wish to rid themselves of unions unilaterally. Indeed, the majority’s per­
spective is telling in linking the asserted need of succes­
sor employers to be “more efficient, adaptable, and ex­
pedient”—goals that are not, in fact, incompatible with
union representation—to the elimination of bargaining
representatives. While the rule of St. Elizabeth Manor
forecloses an election, it also prevents employers from
withdrawing recognition unilaterally, a not uncommon
event that often leads to litigation before the Board.
IV. THE MAJORITY’S APPROACH IN AN ERA OF RAPID
CORPORATE TRANSFORMATION

In short, St. Elizabeth Manor was sound policy, consis­
tent with the Act, and fairly adapted to “needs in a vola­
tile, changing economy.” American Trucking Assns.,
supra, at 416. It reflected an attempt by the Board to
carry out its responsibility “to adapt the Act to changing
patterns of industrial life.” NLRB v. J. Weingarten, Inc.,
420 U.S. 251, 266 (1975). The Board may, of course,
change its policies, but it must justify the change with a
“reasoned explanation.” Micro Pacific Dev., Inc. v.
NLRB, 178 F.3d 1325, 1336 (D.C. Cir. 1999). Here, in
one of its first undertakings (review was granted on Feb­
ruary 8, 2002), the Board’s newly-constituted majority
reverses course needlessly and without institutional ex­
perience under the previous rule.13 In less than 3 years—
12
Of course, the withdrawal of recognition would have to be consis­
tent with the Board’s recent decision in Levitz, 333 NLRB 717 (2001),
requiring proof that the union has in fact lost majority status. I note,
however, that Chairman Hurtgen dissented in Levitz and that Members
Cowen and Bartlett expressly state no view on the merits of that deci­
sion.
13
The majority asserts that the Southern Moldings principles actu­
ally precede t he issuance of that case in 1975. But in D & F Super
Market, 208 NLRB 891, 892 (1974), which issued a year prior to
Southern Moldings, the Board stated that, under then-prevailing Board
law, a successor must bargain for a reasonable period of time free from
challenges to its majo rity under the doctrine of Keller Plastics Eastern,
Inc., 157 NLRB 583 (1966), citing Fed-Mart, 165 NLRB 202 (1967).
As the majority points out, however, other cases preceding Southern
Moldings permitted successors to show a good-faith doubt of the un­
ion’s majority status, and seem to treat the presumption as rebuttable, at
least in an unfair labor practice context. See Southerland’s Tennessee
Co., 102 NLRB 1178 (1953). The uncertain status of the Board’s law
is illustrated by the classic treatise on the National Labor Relations Act,
The Developing Labor Law. It notes that until the issuance of HarleyDavidson, 273 NLRB 1531 (1985), which returned to the rule of Southern Moldings, the Board had “applied the contract -bar principle of
Keller Plastics Eastern , that following lawful recognition the parties
may be given a ‘reasonable’ time in which to conclude an agreement
undisturbed by challenges to the incumbent’s bargaining status,” citing
D & F Super Market and Fed-Mart, supra, cases from the 1960s and
early 1970s. American Bar Association, Section of Labor & Employ­
ment Law, The Developing Labor Law 1144 (Patrick Hardin & John E.

781

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD

and with no empirical evidence whatsoever that the deci­
sion failed to further statutory policy interests—the ma­
jority casts St. Elizabeth Manor aside for an older and, to
my eyes, far less appealing alternative. After all, admin­
istrative agencies are not “supposed to regulate the present and the future within the inflexible limits of yester­
day.” American Trucking Assns., supra, at 416.
One might ask in what respect St. Elizabeth Manor has
failed in practice. My colleagues supply no answer.
Rather, they assert simply that the decision is “paternalis­
tic.” They focus on whether employees are “capable” of
making in formed decisions about union representation.
Obviously, employees are. But that is not the issue here.
The question, rather, is whether it is sound policy to reinstate a rule that permits representation questions to be
raised during corporate transitions, and so places further
strains on unsettled workplaces.
That rule had its origin in a very different time, before
the phenomenal growth of corporate takeovers beginning
in the 1980s.14 In today’s era of accelerating corporate
transformation, encouraging continuity in the workplace
serves important policy objectives. By providing a pe­
riod of repose, St. Elizabeth shielded unions from prema­
ture and perhaps unreliable confidence votes, prevented
unwarranted intrusions on collective bargaining, afforded
some protection for retained employees from sudden
changes in their employment relationship, and thereby
eased the transition from one corporate organization to
another. The majority, however, consistently ignores
business realities and the dislocations that they cause.
The majority also mistakenly subordinates the need for
stability to the goal of employee free choice, a step that
has no statutory justification, despite the majority’s im­
plication to the contrary .15 While the majority purports
to take into account the need for stability, it is difficult to
Higgins eds., 4th ed. 2001). Cf. Paramount Paper Products Co ., 154
NLRB 1064 (1965).
14
As one student of merger and acquisition activity has written re­
cently:
[M]arkets for corporate assets were remarkably active over the
last twenty years, with major merger waves occurring in the
1980s and 1990s . . . . This new 1990s wave took asset transfer
activity to levels not seen before.
Pautler, supra, at 55 (footnote omitted).
15
The majority acknowledges, but then seems to ignore, the admoni­
tion of the Supreme Court in Auciello Iron Works, Inc. v. NLRB, 517
U.S. 781, 784 (1996), that the “object of the National Labor Relations
Act is industrial peace and stability, fostered by collective-bargaining
agreements providing for the orderly resolution of labor disputes between workers and employers.” Our task is to strike an appropriate
balance between stable labor management relations, the encouragement
of the practice of collective bargaining (Sec. 1 of our Act), and employ­
ees’ freedom of choice in deciding whether they want to engage in
collective-bargaining and whom they wish to represent them. See
Stanley Spencer v. NLRB, 712 F.2d 539, 566 (D.C. Cir. 1984).

see how stability is furthered by permitting a challenge to
the union’s majority status shortly after the creation of
the new relationship—indeed, before bargaining has
even begun.
The majority contends that the rapid rise in mergers
and acquisitions, and the uncertainties created by such
activity, may cause changes in employee attitudes about
existing unionization sufficient to warrant quick elections
upon successorship. As I have pointed out, however,
changes in employee sentiment are very likely bound up
with the legal rules that make it difficult for unions to
protect employee interests in the context of successorship. Moreover, the Board’s law on representation ques­
tions, which incorporates several insulated periods, is not
based on the premise that an election is warranted whenever it might reasonably be expected to produce a change
in representation. Indeed, in the successorship context, it
is precisely the vulnerability of employees and unions
that makes a period of repose appropriate.
The majority claims that an insulated period actually
contributes to workplace instability, at least where em­
ployees wish to end union representation, but are prevented from achieving that goal. In principle, that criti­
cism would apply to any of the long-established insulated
periods, but it lacks force especially in the successorship
context. As explained, there is good reason to suspect
that in such situations, the decline in support for the un­
ion may be a function of the successorship itself.
Instability, then, is likely to diminish over time, as the
union continues to represent employees and to make pro­
gress in good-faith collective bargaining, and as employ­
ees continue to shape their representative’s policies in
light of new realities in the changed workplace. The
majority asks what purpose an insulated period serves, if
there is no guarantee that a collective-bargaining agree­
ment will be reached. The answer is that, in the interest
of employees, unions should be given an opportunity to
demonstrate their effectiveness before being put to the
test. An insulated period thus is akin to a term of office
for a public official, who is not required to run for reelection whenever his poll numbers drop. In or out of the
workplace, democracy does not demand a perpetual
campaign.
In any case, the majority’s approach turns Burns on its
head. If Burns stood for the proposition that protecting
employee free choice was of overriding concern during
corporate transitions, then the Supreme Court would not
have conferred on incumbent unions a presumption of
majority status of any kind. On the contrary, Burns is
predicated on the notion that, once continuity is estab­
lished, it is presumed that employees still desire union
representation—and not that a question concerning rep-

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resentation, for election purposes, is created by the inevi­
table uncertainties and anxieties endemic to most succes­
sorship situations.
Underlying my colleagues’ position is the idea that the
insulated period established by St. Elizabeth Manor is
unnecessary, because Burns recognizes the concept of
successorship and provides for continuity of representa­
tion across changes in corporate ownership, at least in
some circumstances and at least so long as the union can
survive a challenge to its status. They suggest that in the
successorship context, the insulated period of St. Eliza­
beth Manor somehow gives the incumbent union
“greater rights than it otherwise would have with respect
to the predecessor.” But this is clearly not the case. As
explained, a union that survives a corporate transaction
often will lose important rights that it had with respect to
the predecessor: the ability to require the employer to
honor any preexisting collective-bargaining agreement,
as well as an irrebuttable presumption of majority support for the duration of that contract, up to 3 years.
In today’s economy, corporate transitions are an in­
creasingly common feature of the workplace. Burns cer­
tainly did not foreclose the Board from developing rules,
consistent with the Act and with the Supreme Court’s
decisions, which address the destabilizing effects of suc­
cessorship. St. Elizabeth Manor addresses those effects
while representing a genuine balancing of statutory inter­
ests, unlike the majority’s approach. The majority here
sees no need to adopt a rule that furthers stability when it
is clearly jeopardized.
In contrast, the St. Elizabeth Manor Board recognized
the need to protect employee free choice and gave it
proper weight. Thus, the insulated period that the deci­
sion created was necessarily temporary. As the Board
emphasized:
The rule extends for a “reasonable period,” not in per­
petuity. It is intended neither to give the incumbent un­
ion an unfair advantage nor to fix a permanent bargain­
ing relationship requiring the employer to bargain with
a designated union forever, without regard to new
situations that may develop. After a reasonable period
has elapsed, the Board may, in a proper proceeding and
upon a proper showing, take steps in recognition of
changed situations that might make appropriate
changed bargaining relationships.
329 NLRB at 346.
For employees, their statutory right to choose a bargaining representative, or not, is fulfilled. The bar to an
election is temporary. If no bargaining agreement is
reached after a reasonable period of time for bargaining
has elapsed, employees may petition for an election.

782

In some instances, certainly, the parties will reach a
bargaining agreement. My colleagues worry that in such
a case, an opportunity for the expression of free choice
could effectively be blocked for a long period, based on
the adding together of different insulated periods, imme­
diately before and after the successorship.16 The Board
never had occasion to consider that case. And had my
colleagues in the majority truly been interested in strik­
ing an appropriate balance of policy interests, they could
have proposed a refinement to St. Elizabeth Manor to
address that scenario. For example, we could have con­
sidered whether the application of the customary 3-year
contract bar rule would have been appropriate in that
case, or whether some other framework for achieving
reasonable and periodic access to the election process
would better serve statutory interests.17
Instead, my colleagues jettison St. Elizabeth Manor before it has had a chance to succeed. The decision was a
first step toward addressing a recurring workplace issue.
Rather than move forward and refine our law to better
confront the changing demands that our economy makes
on employers, employees, and unions in this era of un­
precedented merger, acquisition, and takeover activity,
the majority moves backwards.
Conclusion
The issue that we consider today requires a sensitive
balance of competing policy interests. Instead, the ma­
jority’s approach champions one interest at the complete
expense of the other. Our responsibility is to make deci­
sions that promote longstanding statutory aims in the
context of current economic realities. Abandoning the
rule of St. Elizabeth Manor, which endorses a reasonable
period for bargaining, does not advance this mandate. I
fail to see how that rule is contrary to the statute, incon­
sistent with federal labor policy, or unreasonable in any
respect. Accordingly, I dissent.
16

For example, a contract bar might have been in place for nearly 3
years before the successorship, the successorship would then lead to an
insulated period under St. Elizabeth Manor, and finally, the successor
employer and the union might reach an agreement, resulting in a second
contract bar. As a practical matter, however, it seems unlikely that a
successor employer would reach an agreement with a union that lacked
majority support: there rarely would be an incentive to do so.
17
Had the majority not decided to abandon St. Elizabeth Manor in
its entirety, a number of issues ult imately might have been decided
under its rubric, such as: (1) whether a 3-year contract bar, or something less, is appropriate if a bargaining agreement is reached during a
“reasonable period of bargaining;” (2) whether recent “open periods”
during the predecessor employer’s reign are sufficient to satisfy the
need for periodic access by represented employees to the Board’s elec­
tio n processes; and (3) whether the duration of the predecessor’s viti­
ated contract should be a factor in determining the timing of future
access to the Board’s election processes.

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Appendix A

783

784
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD

Appendix B

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Anlrb%3A6cbdcc836e0f0464. Public record. Not legal advice.