Diversified Technical Services, Inc. v. Indiana Department of Workforce Development, 84 N.E.3d 723

Pokey, Inc. owned Diverse Technical Services (a staffing agency) and had an Indiana unemployment insurance (SUTA) account; Diverse ceased operations in 2014 and most employees moved to Manpower.
Harpenau formed Diversified Technical Services, Inc. (DTS) in 2015 and purchased Certain intangible assets from Diverse (name, goodwill, limited accounts receivable) via an Asset Purchase Agreement for $15,000; the Agreement disclaimed assumption of liabilities.
DTS acquired no equipment, leases, or Diverse employees; DTS provided different services and had only three employees.
DTS’s accountant completed a SUTA form reporting DTS had acquired 100% of a disposer corporation (identified by Pokey/Diverse account number), prompting the Department to issue a Notice of Complete Disposition and a delinquency demand for predecessor liabilities.
DTS protested; an ALJ found DTS was a successor employer under I.C. § 22-4-10-6(a) and affirmed the Department’s determination.
The Court of Appeals reviewed the ALJ’s legal conclusion de novo and reversed, holding the record was insufficient to show that DTS acquired "substantially all" assets or continued Diverse’s business.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether DTS was a "successor employer" that assumed predecessor unemployment liabilities by acquiring "substantially all" assets under I.C. § 22-4-10-6(a)	DTS: Acquired only intangible/name/accounts receivable, did not acquire employees, equipment, or continue Diverse's staffing business, so it is not a successor.	Department: DTS reported acquisition of 100% of the disposer on the SUTA form; absent contrary proof, Department may treat DTS as successor and impose predecessor liabilities.	Court: Reversed ALJ — evidence insufficient to show DTS acquired substantially all assets or continued Diverse’s business; intangibles alone (without employees/continuity) do not establish successorship as a matter of law.

Franklin Elec. v. Unemployment Ins. Appeals, 953 N.E.2d 1066 (Ind. 2011) (standard of review for ALJ factual findings v. legal conclusions)
Ashlin Transp. Servs. v. Ind. Unemployment Ins. Bd., 637 N.E.2d 162 (Ind. Ct. App. 1994) (successorship requires acquisition of entity or substantially all of its assets)
Indianapolis Concrete v. Unemployment Ins., 900 N.E.2d 48 (Ind. Ct. App. 2009) (factors for determining whether substantially all assets were acquired; acquiring assets to build a new business is not successorship)
Astral Indus., Inc. v. Ind. Emp. Sec. Bd., 419 N.E.2d 192 (Ind. Ct. App. 1981) (interpretation of “substantially” and treatment of accounts receivable in successorship analysis)
D & D NAPA, Inc. v. Unemployment Appeals of Ind., 44 N.E.3d 67 (Ind. Ct. App. 2015) (partial successorship where acquirer continued same business, location, employees, and goodwill)
UTLX Mfg., Inc. v. Unemployment Ins. Appeals, 906 N.E.2d 889 (Ind. Ct. App. 2009) (discussion of experience accounts and employer contribution rates)
Ind. Dep’t of Envtl. Mgmt. v. West, 838 N.E.2d 408 (Ind. 2005) (agency legal conclusions receive no special deference)