Narrowing Successorship: The Alter Ego Doctrine and the Role of Intent

When one company is acquired by another in a bona fide transaction, the successor employer generally is not bound by the substantive provisions of a collective bargaining contract negotiated by its predecessor. When, however, a company merely changes its name or corporate form, courts will use the a...

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Bibliographic Details
Published in:DePaul business & commercial law journal 2010-01, Vol.8 (2), p.151
Main Authors: Willis, Drew, Bales, Richard A
Format: Article
Language:English
Subjects:
Acquisitions & mergers
Collective bargaining
Federal court decisions
Successors
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Summary:When one company is acquired by another in a bona fide transaction, the successor employer generally is not bound by the substantive provisions of a collective bargaining contract negotiated by its predecessor. When, however, a company merely changes its name or corporate form, courts will use the alter ego doctrine to hold the company to its labor obligations. Courts are split regarding the role intent should play in distinguishing successor companies from alter ego companies. Our Article argues that courts should be able to infer invidious intent from anti-union animus, from the employer's receiving a foreseeable benefit by eliminating its collective bargaining obligations, or from the employer's desire to avoid its collective bargaining obligations, even if the employer was motivated by other factors, as well. [PUBLICATION ABSTRACT]
ISSN:1542-2763