Company transitions: what happens when my company merges or moves?

Forming a union is all about leveling the playing field between coworkers and management. It provides a place where staff can advocate for quality of life increases on the job and negotiate with bosses to achieve those ends. But when ownership changes hands or companies decide to move, the status of a Collective Bargaining Agreement and recognition of your union can be thrown into limbo.

According to the Institute for Mergers, Acquisitions, and Alliances, since 2000, more than 790,000 of these kinds of company-to-company transitions have occurred around the world. In the U.S. where the viability of your union stands during these shifts can greatly vary. First, you have to understand how the company was purchased.

What happens if my company merges with another?

If your organization is bought as a stock transfer, meaning the new owners secured ownership of a majority of corporate equity, then your new bosses must recognize an existing union and Collective Bargaining Agreement.

If your organization was acquired through an asset transfer, then this is where things get a little murky. In these cases, a union can only be recognized by new management if the purchasing company is deemed a labor successor. There are two criteria used when The National Labor Relations Board (NLRB) determines a labor successor:

• If over 50 percent of the new owner’s staff were previously employed by the last owner.
• If there is continuity between the two organizations' business operations.

The determination of what “continuity” means for a potential successor is left entirely up to the NLRB whose members and hostility toward unions ebb and flow as Presidential administrations come and go. Be sure to consult with a labor advisor when and if such a situation happens in your workplace.

Here’s a couple of interpretations found in NLRB rulings on labor successors:

• Successors are required to consult with a union about the terms of employment for new employees.
• Old and new management can get into trouble with the NLRB for misleading unionized workers from the previous company about the terms of their new positions or for failing to let them know that aspects of work conditions will be changing.

What happens if my company moves my workplace?

Under current federal law, unless a move is justified as economically beneficial to management, it’s illegal to relocate a unionized workforce.

Case precedent under the NLRB says that if a company or a part of it relocates and the new space is considered a continuation of the old one, then management must recognize and bargain with the union that was in existence prior to the move.

Just as is the case when NLRB make decisions about labor successors, deciding what a continuation of a workplace looks like has been case by case, but there is some precedent you should know about:

• A continuation has been loosely defined to apply when a company maintains the same operational methods, managerial hierarchy, customers, and services or products from one workplace to the other. Changes in size, makeup, or responsibilities of workers also matter.
• Also, if workers who transfer from a closed office to a new one make up 40% of the new workforce, the NLRB will determine it a continuation.

There’s a lot to unpack when it comes to company transitions. Definitely speak with a labor organizer if any of these situations present themselves at your job.