What are the Defenses of an Employer to Overcome a Union's claim it is an Alter Ego or Successor Employer
August 11, 2025
1.The following case is a current case at the NLRB at the office of H. Sanford Rudnick & Associates which is as follows:
2. To win, a alter ego case against an employer, the union must prove either alter ego status or successor employer status.
The defense goal is to show that neither applies.
3. Defense Against Alter Ego Claim by Employer
The NLRB alter ego test generally looks for:
- Substantially identical ownership
- Same management
- Same business purpose
- Same operations
- Same equipment/customers
- Same supervision and employees
- Plus — whether there was an anti-union motive in the restructuring.
4. Key Defense Points for Employer:
a. Different Ownership - No shared ownership or stockholders. This difference is significant under Southport Petroleum Co., 72 NLRB 1146 (1947) and its progeny.
b. Different Business Purpose & Market – That’s a different market segment, different customers, and often different bidding processes.
c. Different Operations – New company has separate offices, no use of the old company’s tools/equipment (if true), no transfer of contracts or jobs from the old company.
d. No Continuity of Workforce – Employees from the union company were not automatically hired into the new company. If any were hired, it was incidental and not wholesale.
e. No Anti-Union Motive – Closure was due to legitimate business/economic reasons, not to avoid union obligations. Scott Cook’s company was formed as a separate venture in a different market, not as a continuation.
5.Defense Against Successor/Refusal-to-Bargain Claim
The NLRB’s successor employer doctrine (from NLRB v. Burns Security Services, 406 U.S. 272 (1972)) says a new employer may have to recognize and bargain with a union if:
- It continues essentially the same business operations,
- Employs a majority of the predecessor’s employees, and
- The bargaining unit remains appropriate.
7. If your firm need any assistance relating to the above claim that an Employer is not an alter ego or a successor Employer and that it will not negotiate with the union or any other labor relations issues please contact, Sanford Rudnick JD at 1-800-326-3046 or www.theunionexpert.com
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