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Successor Bus Company Violated National Labor Relations Act (Thursday, May 18, 2017)

Allways East Transportation, Inc., 365 NLRB No. 71 (2017) is a recent case which provides a good discussion of labor law successorship issues.

A bargaining unit of school bus drivers and monitors employed by Durham School Services provided transportation services for general and special education students in Dutchess County New York. In early 2014, the Dutchess County Department of Health (the “DCDOH”) rescinded the portion of the contract pertaining to the transportation of special education students from Durham and awarded it to Allways East Transportation, Inc. It further requested that Allways assume operations as soon as possible, due to Durham’s poor performance.

In order to satisfy the DCDOH’s request for expedited action, Allways leased a facility in Wappingers Falls, New York, 54 miles from its headquarters in Yonkers, New York, and 8 miles from Durham’s facility in Poughkeepsie. Unlike the Yonkers facility and Durham’s Poughkeepsie facility, the facility in Wappingers Falls did not have a maintenance yard; Allways’ yard in Yonkers was tasked with maintaining the buses at both locations. To service the new routes in Dutchess County, Allways also purchased a fleet of new buses, which were generally of the same type and size as those used by Durham.

Allways’ president, Judith Koller, and her daughter, Vice President Marlaina Koller, held a job fair to recruit new drivers and monitors. The DCDOH encouraged Allways to hire drivers who were familiar with the special education students and routes in Dutchess County, and provided it with a list of drivers and monitors who had worked for Durham and their corresponding bus routes. Selected applicants were then interviewed by Vice President Koller, at which time the prospective employees’ wages were discussed. Ultimately, Allways hired 82 school bus drivers and monitors, of whom 62 had previously worked for Durham. Upon hire, Allways gave employees its employee handbook. The drivers were assigned bus routes similar to those they had driven with Durham, and some retained the same monitor.

On April 16, Teamsters Local 445, the Union, asserted that Allways was a successor to Durham, and requested in writing that Allways recognize and bargain collectively with it for the drivers and monitors based in Wappingers Falls. Allways did not respond to that demand and has not recognized or bargained with the Union at any time since.

Allways began operations in Dutchess County on April 22, after the students’ spring break. There was no hiatus in operations after the transfer of work from Durham. From April 22 until the end of the school year in June, additional drivers and monitors were needed in Wappingers Falls, so Allways shuttled 8 to 10 drivers and monitors daily from its headquarters in Yonkers to Wappingers Falls.

Beginning April 22, President Koller worked at the Wappingers Falls facility 4 to 5 days per week to oversee operations and train the dispatchers based there. Toni-Ann Francisco, the office manager in Yonkers, also worked at the Wappingers Falls facility every day for the first 2 weeks of Allways’ operation there, during which time she fine-tuned the drivers’ routes. In addition, Allways promoted two drivers from Yonkers to dispatcher positions and permanently assigned them to Wappingers Falls. Dispatchers relay information between drivers, parents, teachers, and management and also ensure that all routes are covered daily, assigning drivers to cover routes due to unexpected absences, and receive requests for leave, which are then transmitted to other individuals for a final decision. Several employees testified that they considered the dispatchers to be their immediate supervisors.

After Allways determined that close supervision was no longer needed at the Wappingers Falls facility, President Koller and Office Manager Francisco returned to their offices in Yonkers. where Allways’ management personnel are permanently based. All firing, hiring, and discipline is done by either the president or vice president. All payroll and human resources functions are conducted in Yonkers. Monthly attendance sheets and daily Department of Transportation reports from both locations are retained there too.

The Union filed unfair labor practice charges, which were rejected by an Administrative Law Judge after a hearing. The case proceeded to the National Labor Relations Board. A majority of a three member Board panel reversed the ALJ, over the dissent of the remaining panel member.

An employer is a successor employer, obligated to recognize and bargain with a union representing the predecessor’s employees, when (1) there is a substantial continuity of operations, and (2) a majority of the new employer’s work force, in an appropriate unit, consists of the predecessor’s employees See NLRB v. Burns Security Services, 406 U.S. 272 (1972); Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27 (1987). The essence of successorship, however, is not premised on an identical re-creation of the predecessor’s customers and business, but rather, on the new employer’s conscious decision to maintain generally the same business and to hire a majority of its employees from the predecessor in order to take advantage of the trained work force of its predecessor. A. J. Myers & Sons, Inc., 362 NLRB No. 51 (2015).

Here, the parties stipulated that the operative date to determine successorship was April 22, 2014,when Allways began providing transportation services for Dutchess County. The parties also stipulated that, on that date, a majority of the drivers and monitors employed at Allways’ Wappingers Falls facility were previously employed by Durham. Therefore, there were only two remaining issues to be resolved: (1) whether there was substantial continuity of operations, and (2) whether Wappingers Falls facility employees constituted an appropriate unit for collective bargaining.

The ALJ found that the differences between Durham and Allways precluded a finding of substantial continuity of operations. She further found that Allways successfully rebutted the presumption that Wappingers Falls was an appropriate single-facility bargaining unit.

With respect to the issue of substantial continuity between predecessor and successor operations, the Supreme Court has identified the following factors as relevant to the analysis: (1) whether the business of both employers is essentially the same; (2) whether the employees of the new company are doing the same jobs in the same working conditions under the same supervisors; and (3) whether the new entity has the same production process, produces the same products, and basically has the same body of customers. Fall River Dyeing. Most importantly, these factors are to be analyzed from the perspective of the employees, i.e., whether they “understandably view their job situations as essentially unaltered.”

Applying the relevant factors, the majority found that there was substantial continuity of operations. First, Durham and Allways, performed the same general business service: providing school bus transportation for the special education students in Dutchess County. The drivers and monitors were doing the same general job transporting special education students by school bus on a predetermined route. In many cases, pursuant to Dutchess County’s request, the drivers were paired with the same monitors, drove similar routes, and transported many of the same students. Accordingly, the drivers and monitors were doing the same job as before and without any hiatus in operations, only now their employer is Allways, not Durham. See A. J. Myers & Sons, Inc., 362 NLRB No. 51 (2015); Van Lear Equipment, Inc., 336 NLRB 1059 (2001); Montauk Bus Co., 324 NLRB 1128 (1997).

The panel majority acknowledged that there were some minor differences in Allways’ operations and in the employees’ terms and conditions of employment. For instance, Allways had a new facility, different supervisors, wages, fueling procedures, and employee handbook policies. Nevertheless, from the perspective of the drivers and monitors who had been handling special education transportation for Durham, their job remained essentially unchanged. See A. J. Myers & Sons, Inc. (differences in buses, location, and supervision did not defeat finding of continuity of operations); Montauk Bus Co. (finding substantial continuity despite “some differences in the way Montauk operates and also differences in the wages and terms and conditions of employment”). When viewed from the employees’ perspective, these minor operational changes made by Allways would not so change employees’ job situation “that they would change their attitudes about being represented.” Van Lear Equipment, Inc. Accordingly, the majority found that there was substantial continuity of operations.

As to the appropriate-unit issue, the Board has long recognized the presumption that a single plant or store unit is appropriate for purposes of collective bargaining unless it has been so effectively merged into a comprehensive unit, or is so functionally integrated, that it has lost its separate identity, Dean Transportation, Inc., 350 NLRB (2007), enfd. 551 F.3d 1055 (D.C. Cir. 2009). The party opposing a single-facility unit has the heavy burden of rebutting its presumptive appropriateness. Trane, 339 NLRB 866 (2003) To determine whether the presumption has been rebutted, the Board examines a number of community-of-interest factors: (1) central control over daily operations and labor relations, including the extent of local autonomy, (2) similarity of skills, functions, and working conditions, (3) degree of employee interchange, (4) distance between locations, and (5) bargaining history, if any. J&L Plate, 310 NLRB 429 (1993).

The majority found that the ALJ improperly analyzed the community of interest between the employees at Allways’ two facilities without first giving sufficient weight to the presumption that the single facility of former Durham employees at Wappingers Falls was appropriate, before determining whether Allways met its rebuttal burden. The determination of appropriateness of a unit is different in the context of successorship than when determining initially, in a representation case, whether an unrepresented group of employees should be included in a single or multiplant unit. Dean Transportation, Inc. In addition, the single-facility presumption is particularly strong where employees had historically been represented in a single-location unit, as was the case here. Id.

The majority concluded that Allways was a successor employer, and therefore that it violated Sections 8(a)(5) and (1) of the NLRA by failing to recognize and bargain with the Union as the exclusive collective bargaining representative of the drivers and monitors employed by Allways in Wappingers Falls.

A successor employer is ordinarily free to establish initial terms of employment without first bargaining with the incumbent union, unless it is a “perfectly clear” successor. Burns. Because there was no allegation that Allways was a perfectly clear successor employer under Spruce Up Corp., 209 NLRB 194 (1974), enfd. mem. 529 F.2d 516 (4th Cir 1975), it was free to set the initial wage rates of drivers and monitors.

Allways admitted that it terminated Wappingers Falls driver Sherry Siebert without affording the Union notice and an opportunity to bargain over the decision. Relying on the rationale articulated in Alan Ritchey, Inc., 359 NLRB 236 (2012), the General Counsel argued that Allways should have provided the Union with notice and an opportunity to bargain prior to terminating Seibert. Although Alan Ritchey was invalidated by the Supreme Court, in Total Security Management, 364 NLRB No. 106 (2016), the Board held that employers must provide unions with notice and the opportunity to bargain prior to the implementation of all discharges, demotions and suspensions. The Board held, however, that this decision was not to be applied retroactively. As a result, under the circumstances presented in this case, Allways had no duty to bargain with the Union prior to discharging Siebert. The majority adopted the ALJ’s dismissal of this allegation.

After discovering that Siebert had been terminated, the Union requested via email a list of all employees who had been terminated since April 22. Allways did not reply to the email or provide the requested information. An employer is obligated to provide a union with requested information that is relevant to the union’s proper performance of its collective-bargaining obligations. See Boeing Co., 363 NLRB No. 63 (2015). Allways repeated its argument that it had no duty to respond to the information request because it was not a successor employer. The General Counsel contended that without such information, the Union would not know which employees remained in the bargaining unit, thus preventing it from carrying out its representative duties. The majority agreed, and found that the requested information was clearly relevant and that Allways violated Sections 8(a)(5) and (1) by failing and refusing to furnish it to the Union.


· Michael R. Lied
· Howard & Howard Attorneys PLLC
· One Technology Plaza, 211 Fulton Street, Suite 600, Peoria, IL 61602
· (309) 999-6311
· MLied@howardandhoward.com 

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