All notes for Subtopic 201.03000 – Successorship Doctrine

DecisionDescriptionPERC Vol.PERC IndexDate
2868M * * * JUDICIAL APPEAL PENDING * * * El Camino Healthcare District, El Camino Hospital, and Silicon Valley Medical Development, LLC
201.03000: PARTIES; DEFINITIONS; WHO IS AN EMPLOYER?; Successorship Doctrine
The circumstances in which a successor employer takes over determines whether the employer has the right to set initial terms and conditions of employment that differ from those that previously applied (in which case the updated terms become the status quo pending negotiations). Specifically, a successor employer has the right to set new initial terms unless it is already “perfectly clear” that the employer plans to hire enough of the predecessor’s employees to make it evident that the union’s majority status will continue. (See First Student, Inc. v. National Labor Relations Bd. (D.C. Cir. 2019) 935 F.3d 604, 608-610 [discussing the “perfectly clear” rule as applied in the private sector].) The Board clarified that for employers under PERB jurisdiction: While an entity taking over a predecessor’s operation can lawfully announce new initial terms if it is not in the “perfectly clear” category, by the same token if the overall circumstances thereafter shift sufficiently that the employer becomes a “perfectly clear” successor, at that point it has a duty to bargain in good faith to impasse or agreement before making any further changes. (pp. 49-50.) more or view all topics or full text.
483608/15/23
2868M * * * JUDICIAL APPEAL PENDING * * * El Camino Healthcare District, El Camino Hospital, and Silicon Valley Medical Development, LLC
201.03000: PARTIES; DEFINITIONS; WHO IS AN EMPLOYER?; Successorship Doctrine
PERB applies a modified version of the successorship doctrine developed by federal courts and the NLRB under the NLRA. (County of Santa Clara (2019) PERB Decision No. 2670-M, p. 20.) An employer is a legal successor to a predecessor entity, and must therefore recognize and bargain with a union that exclusively represented employees of the predecessor entity, if: (1) more than half of the putative successor’s employees in a relevant bargaining unit previously worked for the predecessor; (2) there is substantial continuity of operations between the putative successor and the predecessor; and (3) the unit at issue is or can be an appropriate unit within the successor employer’s unit structure. (Id. at pp. 20-32.) While this test is akin to that which the NLRB applies, PERB does not necessarily apply each element in the same manner as the NLRB. (See, e.g., id. at pp. 27-32 [deviating from NLRB precedent as to the third successorship element where successor proved that the predecessor’s bargaining unit should properly be merged into successor’s existing, larger, exclusively represented unit, and the union representing the successor’s larger unit was willing to augment it with the newly merged employees].) (p. 48.) more or view all topics or full text.
483608/15/23
2670M County of Santa Clara
201.03000: PARTIES; DEFINITIONS; WHO IS AN EMPLOYER?; Successorship Doctrine
PERB’s three-part test to determine successorship examines: (1) whether the alleged successor employer hired a “substantial and representative complement” of the predecessor’s employees, (2) whether a substantial continuity of operations exists between the predecessor and successor employers, and (3) whether accretion of the predecessor’s employees into the successor employer’s existing units is appropriate. (pp. 20, 22, 25-28.) more or view all topics or full text.
446709/20/19
2670M County of Santa Clara
201.03000: PARTIES; DEFINITIONS; WHO IS AN EMPLOYER?; Successorship Doctrine
Whether a successor employer has hired a substantial and representative complement of the predecessor’s employees turns on whether the majority of employees in the successor bargaining unit worked for the predecessor employer. (p. 20.) Majority status is determined by comparing the number of predecessor employees the successor hired with the total number of employees in the bargaining unit the union claims to still represent. (p. 21.) more or view all topics or full text.
446709/20/19
2670M County of Santa Clara
201.03000: PARTIES; DEFINITIONS; WHO IS AN EMPLOYER?; Successorship Doctrine
To determine whether a substantial continuity of operations exists, the Board examines whether the business of both employers is essentially the same; whether the successor’s employees are doing the same jobs in the same working conditions under the same supervisors; and whether the new entity has the same production process, produces the same products, and maintains the same body of customers. (p. 23.) These factors are based upon the totality of the circumstances and assessed primarily from the perspective of the retained employees. (Ibid.) An employer cannot rely on prospective operational changes that may or may not be implemented in the future to create doubt as to the substantial continuity of operations. (p. 25.) more or view all topics or full text.
446709/20/19
2670M County of Santa Clara
201.03000: PARTIES; DEFINITIONS; WHO IS AN EMPLOYER?; Successorship Doctrine
The federal presumption in favor of single facility bargaining units in the healthcare industry is incompatible with PERB’s preference for broad bargaining units in the public sector. (p. 27, fn. 24.) PERB seeks to avoid both unit fragmentation and proliferation to protect employee representation rights and to balance those rights with public employers’ interest in maintaining operational efficiency. (p. 27.) The final question in successorship analysis is therefore whether accreting the new employees to the successor’s existing units is appropriate. (Ibid.) more or view all topics or full text.
446709/20/19
2670M County of Santa Clara
201.03000: PARTIES; DEFINITIONS; WHO IS AN EMPLOYER?; Successorship Doctrine
In accretion cases, the inquiry is whether the classifications to be added to the existing unit share a “community of interest” with employees in the existing unit. In its analysis, PERB examines: job function and duties; wages; method of compensation; hours; employment benefits; supervision; qualifications, training, and skills; contact and interchange with other employees; integration of work functions; and common goals. (p. 28.) This determination is based on the totality of the circumstances. (p. 29.) more or view all topics or full text.
446709/20/19
2670M County of Santa Clara
201.03000: PARTIES; DEFINITIONS; WHO IS AN EMPLOYER?; Successorship Doctrine
Under the MMBA, local public agencies may adopt reasonable rules and regulations governing unit determinations and representation elections. (p. 32.) Where a successor employer hires its predecessor’s employees to existing classifications and appropriately accretes them to an existing bargaining unit, it has not modified the unit or otherwise run afoul of its unit modification rules. (pp. 32-33.) more or view all topics or full text.
446709/20/19
2670M County of Santa Clara
201.03000: PARTIES; DEFINITIONS; WHO IS AN EMPLOYER?; Successorship Doctrine
The Legislature’s failure to address successorship in the MMBA does not mean it intended to prohibit application of the successorship doctrine to local public agencies. Legislative silence is not the equivalent of positive legislation. (p. 18.) Because the NLRA and MMBA similarly protect employees’ rights to bargain collectively through an employee representative of their own choosing and bar employers from refusing to negotiate with their employees’ chosen representative, there is no statutory reason to preclude application of the successorship doctrine in California’s public sector. (pp. 18-19.) However, differences between private and public sector employment require a more flexible accretion policy in the public sector to ensure that bargaining units are appropriately and rationally structured. (p. 19.) more or view all topics or full text.
446709/20/19
2670M County of Santa Clara
201.03000: PARTIES; DEFINITIONS; WHO IS AN EMPLOYER?; Successorship Doctrine
PERB applies the three-part federal test when determining successorship but follows PERB precedent to determine whether employees hired from a private sector predecessor employer are appropriately accreted to existing public sector bargaining units after a transfer of ownership. (p. 20.) more or view all topics or full text.
446709/20/19
2670M County of Santa Clara
201.03000: PARTIES; DEFINITIONS; WHO IS AN EMPLOYER?; Successorship Doctrine
Under the successorship doctrine, a successor determination creates a presumption that the union which represented its predecessor’s employees continues to enjoy majority status with the successor’s employees, thus requiring the successor employer to recognize and bargain with that union. (p. 14-15.) more or view all topics or full text.
446709/20/19
2670M County of Santa Clara
201.03000: PARTIES; DEFINITIONS; WHO IS AN EMPLOYER?; Successorship Doctrine
Under the successorship doctrine, an employer generally succeeds to the collective-bargaining obligation of a predecessor if a majority of its employees, consisting of a “substantial and representative complement,” in an appropriate bargaining unit are former employees of the predecessor and if the similarities between the two operations manifest a “‘substantial continuity’ between the enterprises. (p. 15.) more or view all topics or full text.
446709/20/19
1839H Trustees of the California State University * * * OVERRULED IN PART by County of Kern and Kern County Hospital Authority (2019) PERB Decision No. 2659-M
201.03000: PARTIES; DEFINITIONS; WHO IS AN EMPLOYER?; Successorship Doctrine
* * * OVERRULED IN PART ON OTHER GROUNDS by County of Kern & Kern County Hospital Authority (2019) PERB Decision No. 2659-M. * * *While the corporation may have some overlap in management, as CSU officers serve on the Corporation’s Board of Directors and its executive director is appointed by the CSU president and they have shared purposes, i.e., providing student housing, there was no common ownership between the two entities. As such, the Corporation was not either an alter ego or a single employer with CSU. more or view all topics or full text.
3011805/12/06

201.03000: PARTIES; DEFINITIONS; WHO IS AN EMPLOYER?; Successorship Doctrine
* * * REVERSED IN PART ON OTHER GROUNDS by San Diego Adult Educators v. PERB (1990) 223 Cal.App.3d 1124. * * *Alter ego status requires demonstration of common ownership, management, purpose, supervision and operation. more or view all topics or full text.