649 F.3d 873
8th Cir.2011Background
- Leiferman unilaterally implemented changes to terms and conditions in Aug 2006 after two months of negotiations with the Union.
- HAIP held a perfected security interest and obtained a receiver for Leiferman due to defaults on loans and forbearance agreement.
- The Receiver operated Leiferman and solicited bids while warning of NLRA liability risks.
- WRS purchased Leiferman in Jan 2007 subject to indemnity by HAIP for NLRA liabilities; sale was approved as fair and free and clear of liens.
- The Board issued an unfair-labor-practices complaint in Nov 2006 and ultimately held Leiferman liable and imposed successor liability on WRS under Golden State Bottling Co. v. NLRB.
- WRS challenged successor liability on several grounds, including “free and clear” sale language and equity concerns; the Board’s order was enforced on review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether WRS is Golden State successor to Leiferman. | WRS argues no substantial continuity; sale was free and clear; HAIP indemnity negates liability. | Board found substantial continuity and knowledge of pending charges; continued operation with limited changes. | Yes; WRS is a Golden State successor. |
| Whether the sale’s “free and clear” language precludes successor liability. | Language shows no privity by purchaser to predecessor’s liability. | Indemnity and continuity override the sale language; equity supports liability. | No; sale language does not defeat successor liability given indemnity and continuity. |
| Whether the Board’s enforcement against WRS should be upheld given factual record and standard of review. | Alignment with reasonable inferences and deference to Board findings. | Board misapplied law or erred in finding substantial continuity. | Enforcement affirmed; Board properly applied law and substantial-evidence standard. |
Key Cases Cited
- Golden State Bottling Co. v. NLRB, 414 U.S. 168 (U.S. Supreme Court, 1973) (holds successor liability for pre-purchase unfair labor practices)
- Winco Petroleum Co., 668 F.2d 973 (8th Cir. 1982) (fact-intensive, focuses on continuity factors for successor liability)
- Smegal v. Gateway Foods of Minneapolis, Inc., 819 F.2d 191 (8th Cir. 1987) (majority of successor's employees criterion for bargaining duty)
- Wal-Mart Stores, Inc. v. NLRB, 400 F.3d 1093 (8th Cir. 2005) (standard of review for Board factual findings is substantial evidence)
- Howard Johnson Co. v. Detroit Local Joint Exec. Bd., 417 U.S. 249 (U.S. Supreme Court, 1974) (no single definition of successor; context-dependent)