Ameristeel Corp. v. International Brotherhood of Teamsters

Opinions of the United
2001 Decisions States Court of Appeals
for the Third Circuit

9-26-2001

Ameristeel Corp v. Local Union 430
Precedential or Non-Precedential:

Docket 00-3366

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Recommended Citation
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Filed September 26, 2001

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

No. 00-3366

AMERISTEEL CORPORATION

v.

INTERNATIONAL BROTHERHOOD OF
TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN
AND HELPERS OF AMERICA, AFL-CIO,
ARBITRATION ASSOCIATION

International Brotherhood of Teamsters,
Chauffeurs, Warehousemen and Helpers
of America, AFL-CIO, Teamsters Local 430,
Appellant

On Appeal from the United States District Court
for the Middle District of Pennsylvania
(D.C. Civil No. 99-cv-02131)
District Judge: Honorable William W. Caldwell

Argued November 30, 2000

Before: BECKER, Chief Judge, RENDELL,
and MAGILL,* Circuit Judges

(Opinion Filed September 26, 2001)

_________________________________________________________________
* Honorable Frank J. Magill, Senior Judge of the United States Court of
Appeals for the Eighth Circuit, sitting by designation.
 Ira H. Weinstock, Esq. [ARGUED]
Joseph P. Milcoff, Esq.
Ira H. Weinstock, P.C.
800 North Second Street, Suite 100
Harrisburg, PA 17102
Counsel for Appellant

John G. Creech, Esq. [ARGUED]
D. Rangle Moody, II, Esq.
Haynsworth, Baldwin, Johnson &
Greaves
918 South Pleasantburg Drive
Greenville, SC 29607
-and-
Mark J. Manta, Esq.
Klett, Rooney, Lieber & Schorling
810 Bear Tavern Road
Mountain View Office Park,
Suite 302
West Trenton, NJ 08628
Counsel for Appellee

OPINION OF THE COURT

RENDELL, Circuit Judge.

I. Introduction

This appeal presents the question whether a successor
employer who has expressly refused to be bound by its
predecessor's collective bargaining agreement may
nonetheless be forced to arbitrate grievances pertaining to
the agreement. Because an unconsenting successor cannot
be bound by the substantive provisions of its predecessor's
agreement, we hold that the successor in this case, appellee
AmeriSteel Corporation, cannot be forced to arbitrate the
extent of its obligations under the agreement. AmeriSteel,
quite simply, has no obligations under the agreement--
and thus no arbitration award for the appellant, Teamsters

2
Local 430, could possibly receive judicial sanction. In such
circumstances, the arbitration forum designated in the
collective bargaining agreement is an inappropriate vehicle
by which to settle the parties' dispute. Therefore, we will
affirm the District Court's order which enjoins the Union
and the American Arbitration Association from including
AmeriSteel as a party in pending arbitration proceedings, or
any other arbitration proceedings involving the collective
bargaining agreement.

Our resolution of this case avoids creating the
incongruous situation in which a successor employer may
be forced to arbitrate the extent of its obligations under its
predecessor's agreement, and yet the arbitrator is powerless
to enforce these obligations because they are not binding
on the successor employer. While we recognize the vital
importance of arbitration as a means of settling labor
disputes, we think it clear that arbitration should not
proceed when ultimately it can serve no purpose.
Furthermore, our decision recognizes the sound principle
that arbitration cannot be used as a means to accomplish
illegitimate ends. More specifically, given that AmeriSteel
has no obligations under the collective bargaining
agreement, any arbitration award to the appellant Union
would necessarily reach beyond the agreement itself and
into the realm of the arbitrator's own notion of industrial
justice, a practice expressly forbidden by the United States
Supreme Court.

II. Facts and Procedural Background

Appellee AmeriSteel is a Florida corporation engaged in
the manufacture and sale of steel products. On April 29,
1999, AmeriSteel purchased various assets of Brocker
Rebar, including a manufacturing facility in York,
Pennsylvania, and AmeriSteel commenced operations at the
York facility on May 3, 1999. Appellant Teamsters Local
430 ("Local 430" or "Union") represents certain employees
at the facility, namely truck drivers, warehousemen,
material handlers, and other helpers. A collective
bargaining agreement ("CBA") existed between Local 430
and Brocker Rebar, effective from December 1, 1996 to
November 30, 1999. The purchase agreement between

3
AmeriSteel and Brocker Rebar included various provisions
expressly stating that AmeriSteel was not to be bound by
the terms of the CBA. In its dealings with the Union,
AmeriSteel has consistently and repeatedly maintained that
it is not bound by the terms of the CBA, and therefore that
it is not bound to arbitrate under the agreement.

AmeriSteel hired roughly 50 employees to work in the
York facility, and all but six members of Local 430 who had
worked for Brocker Rebar were hired by AmeriSteel. In
addition, AmeriSteel retained four Brocker Rebar
executives. Because it had hired a majority of the Local 430
members who had worked for Brocker Rebar, AmeriSteel
was obligated to bargain with the Union. Bargaining with
the Union broke down, however, on May 10, 1999, when
AmeriSteel withdrew recognition of the Union based on a
petition purportedly signed by a majority of the Union
employees, in which they supposedly stated that they no
longer wanted to be represented by Local 430. The Union
then initiated an unfair labor practices action against
AmeriSteel before the NLRB, but that action is not before
us on appeal.

Local 430 filed a grievance on behalf of all its members
against Brocker Rebar and AmeriSteel on April 22, 1999,
challenging unilateral changes that would occur in working
conditions at the York facility when the AmeriSteel
purchase agreement was consummated. Closing under the
purchase agreement occurred on April 29, 1999. In May
1999, after the parties were unable to resolve the grievance,
the Union requested arbitration pursuant to the arbitration
clause in the CBA. AmeriSteel filed a Complaint and motion
for injunctive relief in the United States District Court for
the Middle District of Pennsylvania on December 9, 1999,
seeking to enjoin Local 430 and the American Arbitration
Association from proceeding to arbitration with AmeriSteel
as a party. On March 17, 2000, the District Court granted
AmeriSteel a preliminary injunction, reasoning that
AmeriSteel could not be bound to arbitrate under the pre-
existing CBA because AmeriSteel was not the "alter ego" of
Brocker Rebar, nor had AmeriSteel agreed to abide by the
CBA. App. at 256-57.

4
Local 430 complains on appeal that the District Court
should not have granted the preliminary injunction in the
first place, and that the court compounded its error by, in
effect, granting a permanent injunction without analyzing
the applicable standard for granting a permanent
injunction. Unfortunately, the District Court might have
caused some unnecessary confusion by not explicitly
stating that it was, in fact, granting a permanent
injunction, and not merely a preliminary one. We have in
the past admonished district courts to avoid this type of
oversight. E.g., CIBA-GEIGY Corp. v. Bolar Pharm. Co., 747
F.2d 844, 847 (3d Cir. 1985) (observing that although the
Third Circuit could convert the district court's opinion into
a permanent injunction, "we would much prefer that the
district court recast its own opinion in the language of the
standard it is applying. This would eliminate the possibility
of confusion as to what the district court intended and
would, in the long run, promote judicial economy").

Nonetheless, it is apparent that the District Court
implicitly granted a permanent injunction, and we find no
reversible error in the court's procedure. In its opinion, the
District Court announced a legal standard under which
Local 430 could prevail only if it could prove that
AmeriSteel was the "alter ego" of Brocker Rebar, or that
AmeriSteel had agreed to abide by the CBA. It is
undisputed that AmeriSteel is not the "alter ego"1 of
Brocker Rebar and that AmeriSteel has expressly rejected
the CBA. Thus, there were no triable issues of fact and no
need for a trial on the merits. In other words, AmeriSteel
_________________________________________________________________

1. Under the "alter ego" doctrine, a successor employer "is subject to all
the legal and contractual obligations of the predecessor" when the
successor is a mere "alter ego" of the predecessor, or nothing more than
"a disguised continuance of the old employer." NLRB v. Omnitest
Inspection Servs., 937 F.2d 112, 118 (3d Cir. 1991). An "alter ego"
relationship exists "when there is a mere technical change in the
structure or identity of the old employing entity, frequently to avoid the
effect of the labor laws, without any substantial change in its ownership
or management." Id. As the District Court observed, AmeriSteel's
purchase of Brocker Rebar was a transaction involving two unrelated
parties, and there "has been no suggestion that AmeriSteel is a sham or
alter ego of Brocker Rebar." App. at 255.

5
had already prevailed on the merits, and therefore the
District Court's order, in effect, grants AmeriSteel a
permanent injunction. Any further proceedings in the
District Court would have served no purpose.
Consequently, we are squarely presented with the question
of whether AmeriSteel can be bound to arbitrate under the
CBA.

III. Jurisdiction and Standard of Review

The District Court had jurisdiction over this action
pursuant to 28 U.S.C. S 1331 and 29 U.S.C.S 185. Because
the District Court's order, in effect, grants a permanent
injunction, we have appellate jurisdiction pursuant to 28
U.S.C. S 1291, which provides for appeals of all final
decisions of the federal district courts.

We review a district court's decision to grant or deny a
permanent injunction under an abuse of discretion
standard. E.g., ACLU v. Black Horse Pike Reg'l Bd. of Educ.,
84 F.3d 1471, 1476 (3d Cir. 1996). However, because an
abuse of discretion exists where the district court's decision
"rests upon a clearly erroneous finding of fact, an errant
conclusion of law, or an improper application of law to
fact," id., we apply plenary review to the District Court's
legal conclusions.

IV. Discussion

This case requires us to navigate the treacherous waters
of the Supreme Court's labor law successorship doctrine,
which has, at times, imposed extra-contractual duties upon
successor employers. Appellant Local 430 argues that
AmeriSteel, as a successor employer to Brocker Rebar,
must arbitrate grievances brought by the Union under the
collective bargaining agreement between the Union and
Brocker Rebar. AmeriSteel counters that it was never a
party to the CBA, expressly rejected it during its asset
purchase negotiations with Brocker Rebar, and has
consistently maintained in its dealings with the Union that
it is not bound by the terms of the CBA, including its
arbitration clause. Accordingly, AmeriSteel argues that it
cannot be compelled to submit to arbitration.

6
As an initial matter, we note that labeling AmeriSteel a
"successor employer" to Brocker Rebar does little to help
resolve the issue in this case. As the Supreme Court has
explained, a new employer, like AmeriSteel, "may be a
successor for some purposes and not for others," and the
question whether AmeriSteel is a successor to Brocker
Rebar "is simply not meaningful in the abstract." Howard
Johnson Co. v. Hotel and Restaurant Employees, 417 U.S.
249, 262 n.9 (1974). Accordingly, the question we must ask
is: what are the legal obligations of AmeriSteel to the
employees of Brocker Rebar? Id. Or more specifically: does
AmeriSteel have a duty to arbitrate with the Union under
the CBA? As the District Court correctly noted, the
resolution of that latter question depends, in large part, on
the proper interpretation of three decisions of the U.S.
Supreme Court: John Wiley & Sons v. Livingston , 376 U.S.
543 (1964), NLRB v. Burns International Security Services,
Inc., 406 U.S. 272 (1972), and Howard Johnson Co. v. Hotel
and Restaurant Employees, 417 U.S. 249 (1974).

While other courts have tried to make sense of these
three opinions, we find no analysis that charts a perfect
course that we can readily follow. Accordingly, we will make
our own way through the progression of the Supreme
Court's reasoning. As the dissent points out, it is
unfortunate that the law in this area is unsettled, and
ultimately, only the Supreme Court can silence the conflict
that exists in the troubled trilogy of Wiley, Burns, and
Howard Johnson. Given the tension that exists in this
trilogy, no approach to reconciling these cases will be
completely satisfying. Nevertheless, we think it significant
that, as discussed below, our ultimate result (and the logic
that underpins it) is supported by the majority of courts
that have articulated the contours of labor law
successorship.

In Wiley, the Court introduced the idea that a successor
employer could be bound by an arbitration clause in a
collective bargaining agreement between the predecessor
employer and its unionized employees. The predecessor
employer, Interscience, had merged with John Wiley &
Sons, and ceased to do business as a separate entity. The
Union then brought suit against Wiley to compel arbitration

7
under the collective bargaining agreement. Wiley , 376 U.S.
at 544-45. The Court posed the legal issue as follows:
"whether Wiley, which did not itself sign the collective
bargaining agreement on which the Union's claim to
arbitration depends, is bound at all by the agreement's
arbitration provision." Id. at 547. The Court answered this
question in the affirmative. Id. at 550-51.

The Court acknowledged that "the principles of law
governing ordinary contracts would not bind to a contract
an unconsenting successor to a contracting party," but
distinguished the case at hand by explaining that"a
collective bargaining agreement is not an ordinary
contract." Id. at 550. The Court grounded this extra-
contractual duty in federal law -- specifically,"the policy of
our national labor laws," id. at 548, which recognized both
the "central role of arbitration" and the importance of
"protect[ing] . . . employees from a sudden change in the
employment relationship," id. at 549. Thus, the Court
explained, "the impressive policy considerations favoring
arbitration are not wholly overborne by the fact that Wiley
did not sign the contract being construed." Id. at 550.

The Court's holding is actually quite limited:

We hold that the disappearance by merger of a
corporate employer which has entered into a collective
bargaining agreement with a union does not
automatically terminate all rights of the employees
covered by the agreement, and that, in appropriate
circumstances, present here, the successor employer
may be required to arbitrate with the union under the
agreement.

376 U.S. at 548.

The Court then went on to note that "[w]e do not hold
that in every case in which the ownership or corporate
structure of an enterprise is changed the duty to arbitrate
survives." Id. at 551. Rather, factors such as lack of
"substantial continuity of identity in the business
enterprise" before and after the change could alter the
result; so could the parties' conduct, if, for instance, the
union fails to continue to make its claims known. Id.
Without continuity, the duty to arbitrate would be

8
"something imposed from without, not reasonably to be
found in the particular bargaining agreement and the acts
of the parties involved." Id. Thus, the"substantial
continuity" concept -- first alluded to by the Court after it
announced its holding -- should properly be viewed as a
necessary but not a sufficient condition for the imposition
of arbitration on an unconsenting successor.

The Court also observed that "[o]f course, the Union may
not use arbitration to acquire new rights against Wiley" that
were not grounded in the collective bargaining agreement
itself. Id. at 555. Whether the Union's demands had merit
was for the arbitrator to decide in light of the facts, yet
arbitration would be inappropriate if "it can be seen in
advance that no award to the Union could receive judicial
sanction." Id. Such was not the case in Wiley -- because
the Union's demands were not "plainly unreasonable" --
and therefore the Court permitted the demands to proceed
to arbitration. Id.

Although the Wiley holding, strictly speaking, addresses
only the duty to arbitrate, we have in the past noted that
a necessary implication of Wiley's holding is that Wiley, the
successor employer, could possibly be bound by the
substantive terms of the CBA. E.g., Local Union No. 249 v.
Bill's Trucking, Inc., 493 F.2d 956, 960 (3d Cir. 1974). This
conclusion "is manifest from the fact that the very question
upon which the successor must, under Wiley, submit to
arbitration, is the extent to which the other terms of the
predecessor's contract are binding on the successor." Id. at
960 n.20. If Wiley could not possibly be bound by the
substantive terms of the CBA, arbitration would be a wholly
pointless exercise. Moreover, if the terms could not possibly
be enforced against Wiley, then no arbitration award to the
Union "could receive judicial sanction," and thus the Wiley
Court would not have permitted the case to proceed to
arbitration in the first place. Wiley, 376 U.S. at 555.

In Burns, the Supreme Court took a very different
approach to the issue of whether a successor employer
could be bound by the substantive terms of its
predecessor's CBA. The predecessor employer, the
Wackenhut Corporation, had provided plant protection
services at a Lockheed Aircraft Service plant for several

9
years before the successor, Burns International Security
Services, took over this task after outbidding Wackenhut
for the security contract. Burns, 406 U.S. at 274-75. A
majority of the employees hired by Burns had been
employed by Wackenhut, but Burns refused to honor the
existing CBA between Wackenhut and these employees. The
Union then filed an unfair labor practice charge with the
NLRB, and the Board ordered Burns to comply with the
CBA executed by Wackenhut. Id. at 275-77.

In reversing the NLRB, the Supreme Court endorsed the
Board's earlier, consistently-held interpretation that
successor employers could not be bound against their will
by the substantive terms of existing CBAs. Id. at 285-91.
Specifically, the Burns Court noted that:

These considerations, evident from the explicit
language and legislative history of the labor laws,
underlay the Board's prior decisions, which until now
have consistently held that, although successor
employers may be bound to recognize and bargain with
the union, they are not bound by the substantive
provisions of a collective-bargaining contract negotiated
by their predecessors but not agreed to or assumed by
them.

Id. at 284 (emphasis added).

In reaching its decision, the Burns Court stated that the
federal labor policy of preventing industrial strife did not
outweigh "the bargaining freedom of employers and
unions." Id. at 287. Therefore Burns, which had "in no way
agreed" to the existing CBA, could not be compelled to
accept contract provisions against its will. Id. at 282, 287.
Moreover, the Court reasoned, forcing either a union or a
successor employer to be bound by the substantive terms
of an old CBA "may result in serious inequities." Id. at 287.
For example, saddling successor employers with the terms
and conditions contained in old CBAs "may discourage and
inhibit the transfer of capital" because many potential
employers will be willing to rescue moribund businesses
only if they can negotiate their own CBAs. Id. at 287-88.
Additionally, a union may have made concessions to a
small or economically-troubled predecessor employer that it

10
would not be willing to make to a large or economically
powerful successor. Id. at 288. In sum, the balance of
bargaining advantage between employers and labor should
"be set by economic power realities," and the federal labor
policy of avoiding industrial strife would be ill-served by
binding either employers or employees to contract terms
that "do not correspond to the relative economic strength of
the parties." Id.

Wiley and Burns, therefore, appear to be in direct
conflict. On the one hand, the holding in Wiley necessarily
implies that unconsenting successor employers may be
bound by the substantive terms of pre-existing CBAs. But
on the other hand, Burns endorses the idea that unwilling
successors cannot be bound by such terms. As the
principal means of distinguishing these two cases, the
Burns Court offered the somewhat unsatisfying distinction
that Wiley arose in the context of a suit to compel
arbitration, whereas Burns involved an unfair labor practice
proceeding in front of the NLRB.2Id. at 285-86. Not
_________________________________________________________________

2. The Burns Court also suggested that Wiley and Burns could be
distinguished on the basis that Wiley involved a merger, which triggered
the general state law rule "that in merger situations the surviving
corporation is liable for the obligations of the disappearing
corporation."
Burns, 406 U.S. at 286. In Wiley, the Court had noted that the union's
argument -- which may well have influenced its specific holding -- was
based on principles of corporate consolidation. Wiley, 376 U.S. at 547-48
("The Union relies on S 90 of the N.Y. Stock Corporation Law, . . . which
provides, among other things, that no `claim or demand for any cause'
against a constituent corporation shall be extinguished by a
consolidation."). In Howard Johnson, the Court again noted this
distinction with approval, Howard Johnson, 417 U.S. at 257, yet the
Court has since downplayed this distinction as determinative of a
successor's labor law obligations, e.g., Fall River Dyeing & Finishing
Corp.
v. NLRB, 482 U.S. 27, 44 n.10 (1987) (noting that "the way in which a
successor obtains the predecessor's assets is generally not
determinative" of the successor's labor law obligations); see also Golden
State Bottling Co. v. NLRB, 414 U.S. 168, 182 n.5 (1973) (observing that
"[t]he perimeters of the labor-law doctrine of successorship" are not
confined by the boundaries of state corporation law, and that "[t]he
refusal to adopt a mode of analysis requiring the Board to distinguish
among mergers, consolidations, and purchases of assets" is due to the
fact that as long as there is "continuity in the employing industry, the

11
surprisingly, in the aftermath of Burns, courts struggled to
reconcile Burns with Wiley, and could do little more than
repeat the Supreme Court's emphasis on the procedural
distinction between the two cases. E.g., Bill's Trucking, 493
F.2d at 961 (noting that "it was specifically emphasized in
Burns that Wiley arose in the context of a . . . suit to
compel arbitration, not in the context of an unfair labor
practice proceeding," and that "Burns, then, cannot be read
to foreclose absolutely the imposition upon a successor
employer of the contract obligations entered into by its
predecessor").

It is against this backdrop that, just two years after
Burns, the Supreme Court took up the issue of labor law
successorship in Howard Johnson. The Court began by
acknowledging the conflicting reasoning of Wiley and
Burns, but rejected the idea that the cases could be
distinguished on the basis of their procedural context,
because distinguishing the cases in this manner would
inappropriately "permit the rights enjoyed by the new
employer in a successorship context to depend upon the
forum in which the union presses its claims." Howard
Johnson, 417 U.S. at 256. With this distinction repudiated,
the Howard Johnson Court appeared to be squarely faced
with an irreconcilable conflict between Wiley and Burns:
either the substantive terms of an existing CBA could be
imposed against an unconsenting successor, as is implicit
in Wiley, or they could not, as stated by Burns.

The Howard Johnson Court, however, chose not to deal
with this conflict, and instead walked a very narrow path.
Rather than deciding "whether there is any irreconcilable
conflict between Wiley and Burns," the Court decided the
case on the ground that "even on its own terms, Wiley does
not support the decision of the courts below," which had
compelled the successor employer, Howard Johnson, to
_________________________________________________________________

public policies underlying the doctrine will be served by its broad
application"). We have ourselves implicitly indicated that no special
significance should be attached to the fact that Wiley involved a merger.
E.g., Bill's Trucking, 493 F.2d at 957-61 (applying Wiley in the context
of
a sale of capital stock).

12
submit to arbitration pursuant to a CBA between its
unionized employees and the predecessor employer, the
Grissoms. Id. at 256. In other words, even on its own
terms, Wiley did not compel the conclusion that Howard
Johnson must proceed to arbitration against its will, and
likewise could not justify imposing the substantive terms of
the CBA against Howard Johnson.

The Howard Johnson Court contrasted the facts of its
case with Wiley, noting that the most important distinction
is that in Wiley, "the surviving corporation hired all the
employees of the disappearing corporation," whereas in
Howard Johnson the successor "hired only nine of the 53
former Grissom employees and none of the Grissom
supervisors." Id. at 258, 260. The Court emphasized that,
because Howard Johnson had hired so few of the Grissom
employees, there was no "substantial continuity in the
identity of the work force across the change in ownership,"
which placed the case outside the realm of Wiley . Id. at
262-63. Wiley had stated that the lack of "substantial
continuity" would remove the situation from the ambit of its
holding, and the lack of substantial continuity thus
dictated the result.

It is important, for the purposes of this appeal, to
appreciate the limited scope of the Court's decision in
Howard Johnson. As explained above, the Court did not
reconcile the conflict between Wiley and Burns. The
Howard Johnson Court simply pointed out that, consistent
with Wiley, and on Wiley's own terms, the lack of
substantial continuity meant that the Court needed to look
no further. Accordingly, Howard Johnson does not bridge
the gap between Wiley and Burns, nor does it establish
broadly applicable guiding principles that should be
implemented when analyzing labor law successorship
problems.3
_________________________________________________________________

3. Our main point of disagreement with our dissenting colleague is in our
view that Howard Johnson's focus on substantial continuity does not
make it the sole basis for finding a continuing duty to arbitrate or
making agreements binding, but, rather, as one sine qua non. There is
a difference: while the existence of substantial continuity is a necessary
ingredient, its presence does not necessarily render the new entity

13
Still, Howard Johnson does give some indication as to the
Court's thinking on the conflict between Wiley and Burns.
Throughout the opinion, the Court downplays the
significance of Wiley, describing its holding as a "guarded,
almost tentative statement," id. at 256, and focusing on the
limited factual context in which Wiley arose, id. at 256-64.
In contrast, the Court takes an expansive view of Burns,
repeatedly extolling its reasoning. Stating at the outset that
"[c]learly the reasoning of Burns must be taken into
account here," id. at 256, the Howard Johnson Court goes
on to observe that "[w]hat the Union seeks here is
completely at odds with the basic principles this Court
elaborated in Burns," id. at 261, and that the reasoning in
Burns "established that Howard Johnson had the right not
to hire any of the former Grissom employees, if it so
desired," id. at 262. In short, the best reading of Howard
Johnson is that it does not resolve the conflict between
Wiley and Burns, but it does much to strengthen and
reaffirm the reasoning of Burns, and certainly does nothing
to call into question Burns' assertion that successor
employers "are not bound by the substantive provisions of
a collective-bargaining contract negotiated by their
predecessors but not agreed to or assumed by them."
Burns, 406 U.S. at 284.

Nevertheless, one might argue (at least in theory) that
Burns has somehow been modified by Howard Johnson,
based on the reasoning that Howard Johnson's emphasis
on "substantial continuity in the identity of the work force"
_________________________________________________________________

bound. (If one is not 35 years of age, one cannot be President of the
United States; this is a sine qua non. However, if one is 35 years of age,
he or she does not necessarily qualify. Being a native-born citizen is
another sine qua non, in fact.) The difficulty, having explored the three
"guiding" cases, is that we must determine what are all the sine qua
nons. We cannot subscribe to the dissent's view that these cases equate
substantial continuity with successorship or "mandates" such a finding
here. Clearly, as Wiley itself indicates, other factors must also be
considered. See Wiley, 376 U.S. at 551. Burns says that contractual
understandings are important, but the dissent discredits that concept.
While we concede that the scope of the directive of Burns may not be
crystal-clear, we suggest that the directives of Wiley and Howard
Johnson are clearly narrower than the dissent's view would allow.

14
necessarily implies that if such "substantial continuity"
does exist, then arbitration under the existing CBA would
be appropriate. And if such arbitration were to go forward,
it follows that the substantive terms of the CBA could be
enforced, and thus Burns cannot survive intact.4

In our view, however, this reading of Howard Johnson
would stretch its carefully circumscribed holding beyond
recognition. As explained above, the holding in Howard
Johnson does nothing more than simply point out that on
the facts of the case, not even Wiley (and certainly not
Burns) could justify forcing Howard Johnson to submit to
arbitration against its will. In other words, because the
Court was able to base its result on the lack of"substantial
continuity," it simply did not reach the issue of whether,
had there been "substantial continuity," the successor
employer would have been forced to arbitrate and
necessarily could have been bound by the substantive
terms of the CBA. Indeed, nothing in the Howard Johnson
opinion calls into question either the reasoning or the
holding of Burns -- as explained above, there is much in
the opinion that reaffirms Burns -- and thus we cannot
accept any interpretation of Howard Johnson that either
explicitly or implicitly modifies Burns' conclusion that a
successor employer cannot be bound against its will by the
substantive provisions of its predecessor's CBA. Here, the
parties specifically agreed that the CBA would not be
binding, and Burns teaches that we must respect that
agreement.

Our reading of Burns and Howard Johnson is confirmed
by the Supreme Court's observations in Fall River Dyeing &
Finishing Corp. v. NLRB, 482 U.S. 27 (1987). In reviewing
the principles of labor law successorship, the Court
reiterated Burns' assertion that "the successor . . . is not
bound by the substantive provisions of the predecessor's
_________________________________________________________________

4. While the dissent does not frame its argument in precisely these
terms, nonetheless this reasoning is implicit in the dissent's conclusion
that "there is sufficient `substantial continuity of identity in the
business
enterprise,' between Brocker Rebar and AmeriSteel to justify holding that
AmeriSteel is bound to the arbitration provision (and possibly to the
substantive provisions) of Brocker Rebar's CBA with Local 430."
Dissenting Op. at 37.

15
collective-bargaining agreement."5 Fall River, 482 U.S. at 40
(citing Burns, 406 U.S. at 284). Significantly, in the very
next sentence, the Court cited Howard Johnson , so it
cannot be argued that the Fall River Court somehow
overlooked Howard Johnson when reaffirming Burns.
Rather, the only conclusion that can be drawn is that after
Howard Johnson, Burns rests on solid ground.

This conclusion, however, serves to illuminate the
perplexing issue presented by this appeal -- namely, that
while the validity of Burns cannot be doubted, Burns
nonetheless conflicts with the implications of Wiley. The
most we can say with assurance regarding this conflict is
that while the contours of Wiley are narrow, and its status
not entirely clear, Burns' language and logic have been
reinforced in later cases. Accordingly, we believe the clear
mandate of Burns -- that an unconsenting successor
employer cannot be bound by the substantive terms of a
CBA negotiated by its predecessor -- provides more
persuasive guidance than the limited holding in Wiley. That
being the case, AmeriSteel cannot be bound by the
substantive terms of the CBA at issue here, which was
negotiated between Brocker Rebar and the Union and
which AmeriSteel's purchase agreement specifically stated
would not be binding on it. And because AmeriSteel cannot
be bound by the substantive terms of the CBA, no
arbitration award to the Union -- which, of course, would
be based on the substantive terms of the CBA -- could
receive judicial sanction, and therefore AmeriSteel cannot
be compelled to submit to arbitration.6 Wiley, 376 U.S. at
555.
_________________________________________________________________

5. The dissent attempts to downplay the significance of this statement by
characterizing it as a "cryptic piece of dicta." Dissenting Op. at 36 n.2.
While it is arguably dicta, there certainly is nothing "cryptic" about it.
This is a simple, straightforward statement that makes a general
observation about successors, taken almost word-for-word from Burns.
The dissent would re-write the statement as referring to only "Burns-type
successors," but we see no reason to believe that the Fall River Court
meant anything other than what it said.

6. In reaching this conclusion, we are not, as the dissent appears to
indicate, overstepping our authority as a lower federal court by
"emasculat[ing] Wiley." Dissenting Op. at 28. Rather, when faced with a

16
While there is no directly controlling authority in our
Circuit, nonetheless we think the result that we reach here
flows logically from our existing Circuit precedent. For
example, in Stardyne, Inc. v. NLRB, 41 F.3d 141 (3d Cir.
1994), we observed that a successor has an obligation to
recognize and bargain with the union that represented its
predecessor's employees, but that a successor is"not
bound by its predecessor's collective bargaining agreement."
Id. at 145 n.3. Similarly, in Pick-Mt. Laurel Corp. v. NLRB,
625 F.2d 476 (3d Cir. 1980), we noted that when analyzing
labor law successorship, the Supreme Court has held"that
a successor does not stand in the same shoes as its
predecessor because it will not be bound to the previously
bargained for terms, [and] the Court construed the relevant
policies to prevent imposing on the successor an obligation
to be bound by past events and arrangements." Id. at 484.
And, as explained above, if AmeriSteel cannot be bound by
these "past events and arrangements" in the form of
Brocker Rebar's CBA, then it necessarily follows that
arbitration under the CBA is inappropriate because no
award for the Union "could receive judicial sanction."7
Wiley, 376 U.S. at 555.
_________________________________________________________________

body of Supreme Court precedent that is, as the dissent points out,
"discordant in [ ] overall tone and approach," id. at 24, we are simply
choosing what we believe to be the best interpretation. And in so doing,
we are performing our appropriate role as a federal appellate tribunal in
the most basic sense. (The dissenting opinion arguably emasculates
Burns in similar fashion when it urges that the sales agent expressly
repudiating the CBA is "irrelevant to the analysis." Dissenting Op. at
32.)

Moreover, we do not agree that our result in this case necessarily
emasculates Wiley, or relegates it "to the dustbin of history," Dissenting
Op. at 30, although we do decline to give Wiley as broad a reading as
does Chief Judge Becker. We suggest that one who reads Wiley on its
own, start to finish, would be struck by its careful and restrictive
analysis, which leads to its equally narrow holding, which we quoted
above, that collective bargaining agreement provisions do not
automatically go by the wayside when a corporate consolidation occurs.
Wiley, 376 U.S. at 548.

7. Several other cases in our Circuit have addressed the labor law
successorship doctrine, but we find these decisions of limited utility.
For

17
Moreover, we find it significant that our resolution of this
case is supported by the decisions of our sister circuit
courts of appeals. Indeed, in the time since Fall River, every
one of our sister circuits that has addressed the issue has
concluded that an unconsenting successor employer cannot
be bound by the substantive terms of an existing CBA.8
_________________________________________________________________

example, in Local Union No. 249 v. Bill's Trucking, Inc., 493 F.2d 956 (3d
Cir. 1974), we addressed Wiley and Burns , but we distinguished the two
cases based on their procedural distinction. Id. at 961. As explained
above, the Court has since rejected this means of distinguishing the
cases. Supra p. 13. In American Bell Inc. v. Federation of Telephone
Workers, 736 F.2d 879 (3d Cir. 1984), we touched upon the
successorship doctrine, but ultimately did not reach the issue because
we concluded that the doctrine did not apply. Id. at 888. And in
Teamsters Local Union No. 430 v. Cement Express, Inc., 841 F.2d 66 (3d
Cir. 1988), we construed Burns somewhat narrowly, but we think it
unwise to place any particular emphasis on this case. As a case
primarily concerned with the imposition of Rule 11 sanctions, Cement
Express did not give labor law successorship a thorough treatment, as
evidenced by the fact that in our discussion, we did not mention Howard
Johnson or Fall River. Id. at 69. Moreover, in distinguishing Wiley and
Burns, we relied on the procedural distinction between the two cases
that the Court has repudiated. Id.

In concluding that AmeriSteel had no duty to arbitrate, the District
Court appeared principally to rely upon our decision in NLRB v. Phoenix
Pipe & Tube, 955 F.2d 852 (3d Cir. 1991), which the District Court
characterized as standing for the proposition that"by retaining the
workforce of a prior employer, a subsequent employer becomes obligated
to bargain with a union, but not to abide by the collective bargaining
agreement." App. at 257. This is a puzzling statement, however, because
Phoenix Pipe does not support this proposition, and the District Court
included no supporting citation to the case. Given that Phoenix Pipe says
nothing regarding a successor's obligations under its predecessor's CBA,
we conclude that the case is not relevant to the issues presented by this
appeal. Accordingly, while we agree with the District Court's ultimate
conclusion that AmeriSteel cannot be compelled to arbitrate, we disagree
with the reasoning that the District Court employed to arrive at that
result.

8. The dissent states that the case law from other courts of appeals "cuts
in both directions," Dissenting Op. at 38, but, we cannot agree. It
references only two appellate cases that supposedly cut in its favor, id.
at 38 n.4, but neither case is particularly relevant. Boeing Co. v.

18
E.g., Local 7-517 v. Uno-Ven Co., 170 F.3d 779, 781 (7th
Cir. 1999) (stating that when a successor purchases a
predecessor's business, the successor "would not be bound
by the collective bargaining contract"); NLRB v. Hosp. San
Rafael, Inc., 42 F.3d 45, 50 (1st Cir. 1994) (observing that
"[w]here, for example, a unionized business is acquired by
a new owner unaffiliated with the old one, the new
employer may not be bound by a collective bargaining
agreement with the old one"); Southward v. S. Cent. Ready
Mix Supply Corp., 7 F.3d 487, 495 (6th Cir. 1993) (asserting
that the Supreme Court has "repeatedly recognized that a
successor corporation may be bound by the substantive
terms of its predecessor's CBA only if the successor is the
alter ego of the predecessor or the successor has expressly
or impliedly assumed the obligations of its predecessor's
contract"); Sullivan Indus. v. NLRB, 957 F.2d 890, 895 (D.C.
Cir. 1992) (noting that "[w]hile a successor has a duty to
bargain with an incumbent union, it is not bound by the
substantive terms of the previously negotiated collective-
bargaining agreement"); New England Mech., Inc. v. Local
Union 294, 909 F.2d 1339, 1342 (9th Cir. 1990) (explaining
that a successor employer "is not bound by its
predecessor's collective bargaining agreement," and that
"the Supreme Court has continually indicated that a
successor employer is only bound to bargain with a union
which had a CBA with the predecessor"). District courts in
our Circuit have come to the same conclusion. E.g.,
_________________________________________________________________

International Association of Machinists and Aerospace Workers, 504 F.2d
307 (5th Cir. 1974), predates Fall River, and therefore is of limited
utility.
And in Stotter Division of Graduate Plastics Co. v. District 65, 991 F.2d
997 (2d Cir. 1993), the court based its determination that Stotter was a
successor employer not only on continuity, but also on the fact that the
obligations at issue arose before the transfer, and the fact that Stotter
had "entered into an agreement with the Union which adopted (with
immaterial exceptions) the provisions of the [CBA]." Id. at 1002. Thus,
Stotter is not persuasive on this issue. The dissent can cite no post-Fall
River case in our sister circuits that has bound an unconsenting
successor employer to the substantive provisions of an existing CBA. We
submit there are none. Indeed, were the dissent's interpretation to
prevail, it would place us squarely at odds with every court of appeals to
consider this issue, as noted above.

19
Philadelphia Joint Bd. v. After Six, Inc., No. 92-4294, 1992
WL 202166, at *2 (E.D. Pa. Aug. 6, 1992) (maintaining that
"if an employer takes over another business, the employer
is not bound by its predecessor's collective bargaining
agreements. At most, the employer will be required to
bargain with any unions that the predecessor employer had
recognized."); Local Union No. 4 v. Owens-Illinois, Inc., 758
F.Supp. 962, 973 (D.N.J. 1991) (observing that "[u]nder
Wiley and Burns, although [the successor] had an
obligation to recognize and bargain with the Union .. . [the
successor] could not be required to assume [the
predecessor's] labor contract"). Additionally, many
commentators are in accord. E.g., Burton F. Boltuch,
Workplace Closures and Company Reorganizations:
Enforcing NLRB, Contract and Noncontract Claims and
Obligations, 7 Lab. Law. 53, 78 (1991) (explaining that
"[c]ourts and arbitrators since Burns do not hold the
`unconsenting' successor to the CBA"); Claiborne Barksdale,
Successor Liability Under the National Labor Relations Act
and Title VII, 54 Tex. L. Rev. 707, 711 (1976) (arguing that
a "successor will not be bound . . . by the substantive
terms of the predecessor's contract with the employees
unless it either explicitly or impliedly ratifies the
agreement"); Wilson McLeod, Rekindling Labor Law
Successorship in an Era of Decline, 11 Hofstra Lab. L.J.
271, 308-09 (1974) (explaining that "courts are firmly
opposed" to enforcing the substantive terms of a
predecessor's CBA against a successor, and that if the
Burns holding rests on solid footing, then "there is no
principled reason why successors should be forced to
arbitrate at all").

Given the prevailing case law supporting our view, and
given the teachings of Wiley and Burns that expose the
futility and inappropriateness of arbitration when the
substantive terms of the bargaining agreement cannot be
binding on the new entity, we are curious as to what
purpose is to be served by arbitration? How can we hold, as
the dissent would, that such a pointless exercise is
mandated, especially given the fact that the specific
contractual provisions between the parties did in fact not
merely "shed" the prior agreement containing the

20
arbitration provisions, but specifically contracted them
away?

Finally, we think it is important to note that our decision
in this case does not overlook the vital importance of
arbitration as a means of settling labor disputes. We have
in the past observed that federal labor law elevates labor
arbitrators "to an exalted status," Ludwig Honold Mfg. Co.
v. Fletcher, 405 F.2d 1123, 1126 (3d Cir. 1969), and that
"courts play an extremely limited role in resolving labor
disputes," News Am. Publ'n, Inc. v. Newark Typographical
Union, Local 103, 918 F.2d 21, 24 (3d Cir. 1990). Moreover,
an arbitration award must be enforced "[a]s long as the
arbitrator has arguably construed or applied the contract,"
News Am., 918 F.2d at 24 (emphasis in original), which is
in accord with the Supreme Court's instruction that an
arbitration award is legitimate as long as it "draws its
essence from the collective bargaining agreement," United
Paperworkers Int'l Union v. Misco, Inc., 484 U.S. 29, 36
(1987).

What distinguishes this case, however, is that because
AmeriSteel cannot be bound by the substantive terms of
the CBA between Brocker Rebar and the Union, there
simply is no contract for the arbitrator to construe. While
we must respect the vital role that arbitration plays in
settling labor disputes (and the correspondingly broad
authority granted to arbitrators), we think it goes without
saying that courts should not compel parties to submit to
arbitration when there is nothing to arbitrate. To hold
otherwise would create the paradoxical situation in which
AmeriSteel would be forced to arbitrate the extent of its
obligations under the CBA, and yet, because it has no such
obligations, the arbitrator would be powerless to enforce
these obligations.

One might argue that even though AmeriSteel has no
obligations under the CBA, this case should still proceed to
arbitration on the theory that an arbitrator could
conceivably grant an award to the Union based on some
general sense of equity or fairness. Even granting this
possibility, such an award would be illegitimate because it
would "simply reflect the arbitrator's own notions of
industrial justice" and would not "draw its essence from the

21
contract" itself. Misco, 484 U.S. at 38. As Chief Judge
Becker has highlighted, an arbitrator's authority is quite
broad, but it is not unlimited, because courts cannot
"permit[ ] the arbitrator to transform the contractual
arbitration into an equitable dispensation of his own brand
of industrial justice, an endeavor expressly forbidden by the
Supreme Court's decision in United Paperworkers Int'l
Union v. Misco, Inc., 484 U.S. 29 (1987)." News Am. Publ'n,
Inc. v. Newark Typographical Union, Local 103, 921 F.2d 40,
41 (3d Cir. 1990) (Becker, J., dissenting from denial of
rehearing en banc).

Our decision here recognizes the sound principle that
arbitration, while critically important to settling labor
disputes, nonetheless cannot be used as a means to
achieve illegitimate ends. Were we to permit this case to
proceed to arbitration, we would be guilty of "wav[ing] a
wand" over the arbitration proceedings by engaging in the
fiction that an arbitrator could legitimately grant an award
for the Union. Id. at 42. But when arbitration is placed
within its proper limits, there is no escaping the conclusion
that AmeriSteel, which is not bound by the substantive
terms of the CBA, cannot be compelled to submit to
arbitration because no arbitration award to the Union could
receive judicial sanction.

Accordingly, the March 17, 2000 order of the District
Court will be AFFIRMED.

22
BECKER, Chief Judge, dissenting.

It is surprising that thirty-seven years after John Wiley &
Sons v. Livingston, 376 U.S. 543 (1964), in which the
Supreme Court first tackled the issue of successorship
liability in labor cases, the law in this area is still unsettled.
Wiley established that the notion of "substantial continuity
in the identity of the business enterprise" is the principal
criterion for determining successorship liability, and held
that, in appropriate circumstances, successor employers
can be required to arbitrate with their employees' union
under the terms of the collective bargaining agreement
(CBA) that the union had with the predecessor employer.
Id. at 548, 551.

In NLRB v. Burns International Security Services, Inc., 406
U.S. 272 (1972), and Howard Johnson Co. v. Hotel and
Restaurant Employees, 417 U.S. 249 (1974), the Court
considered how the Wiley doctrine applied in different
factual contexts. In American Bell, Inc. v. Federation of
Telephone Workers of Pennsylvania, 736 F.2d 879, 888 (3d
Cir. 1984), this Court used Wiley and Howard Johnson as
the basis for developing a six-factored test for determining
whether substantial continuity in the identity of the
business enterprise is present: (i) continuity of work force,
(ii) continuity of business operations, (iii) continuity of
supervisory personnel, (iv) continuity of physical plant and
location, (v) continuity in the nature of the product or
services, and (vi) continuity in the methods of production,
sales, or inventorying.

As counsel for AmeriSteel had to concede at oral
argument, the record in this case is crystal clear that in the
transition of ownership of the York plant from Brocker
Rebar to AmeriSteel, there has been not only substantial
continuity but utterly no change in any of the American Bell
factors except possibly for the methods of sales, which
AmeriSteel's counsel represented had changed (although he
was unclear as to how and to what degree). In other words,
after closure for a three-day weekend, a new business
appeared at 1700 Seventh Avenue in York that was the
exact same enterprise as the one that had been there four
days before in virtually all respects. Despite these
uncontroverted facts and their close similarity to those in

23
Wiley, the majority holds that the successor corporation,
AmeriSteel, is not bound by the arbitration provision of its
predecessor's CBA.

Judge Rendell's thoughtful opinion makes clear that
resolving this case requires an analysis of Wiley, Burns,
and Howard Johnson, the Supreme Court's cases
addressing when a successor can be bound to the terms of
a predecessor's CBA. Her opinion also demonstrates the
difficulty of reconciling those cases and, implicitly at least,
underscores the problems with choosing one path of
reconciliation over another. I cannot join the majority's
opinion because I believe that the case before us is
controlled by the Supreme Court's decision in Wiley, which
involved a fact pattern that is similar in all relevant aspects
to the facts in the case at bar, just as the other key cases
involved quite different facts. While I do not suggest that
AmeriSteel is duty-bound to accept the CBA that Brocker
Rebar signed with Teamsters Local 430 (the union
representing Brocker's employees), I do believe that Wiley
mandates that we hold that AmeriSteel is bound to
arbitrate with the union as to whether it is bound by any
of the CBA's provisions.

In other circumstances, the foregoing might well suffice
for a dissenting opinion. But Wiley, Burns, and Howard
Johnson are difficult to harmonize if not discordant in their
overall tone and approach, and I disagree with the
majority's attempt to fit these opinions together. I believe
that the Supreme Court would do well to revisit this area
which remains unclear twenty-seven years after Howard
Johnson, the latest of the trilogy. Under these
circumstances, I think it useful to explain my disagreement
with the majority in some detail.

I.

In Wiley, a publishing firm, Interscience, entered into a
CBA with a union that represented its employees.
Interscience then merged with another publishing firm,
John Wiley & Sons, and ceased to do business as a
separate entity. The union and Wiley were unable to agree
what effect the merger had on the CBA, so the union

24
brought an action to compel arbitration under the CBA in
order to determine the effect. Wiley pointed out that it did
not sign the CBA, and argued that it therefore should not
be bound by the CBA's arbitration clause. The Court,
however, ultimately held that "in appropriate
circumstances, present here, the successor employer may
be required to arbitrate with the union under the
agreement." Wiley, 376 U.S. at 548. As the majority rightly
points out, Wiley also states that to send the case to
arbitration (as it did), the union's demands under the
substantive terms of the CBA must not be "so plainly
unreasonable that . . . it can be seen in advance that no
award to the Union could receive judicial sanction." Id. at
555. Wiley nonetheless holds that "in appropriate
circumstances," a successor employer can be held bound to
the arbitration clause of its predecessor's CBA, and
possibly can be held bound to the substantive terms of the
CBA as well--despite the fact that (like AmeriSteel) the
successor never agreed to be so bound and was not the
alter ego of the predecessor.

The key question for our purposes is what are these
"appropriate circumstances" in which a CBA can be
enforced against a successor employer. Wiley is brief in its
description of these circumstances, but it does state that
there must be "relevant similarity and continuity of
operation across the change in ownership" so that there is
"substantial continuity of identity in the business
enterprise before and after [such] a change." Id. at 551. In
Wiley, this continuity of identity and operation of the
business enterprise was "adequately evidenced by the
wholesale transfer of Interscience employees to the Wiley
plant, apparently without difficulty." Id.

The Court did not address the notion of "substantial
continuity of identity in the business enterprise," in the
next case in the trilogy, Burns, because it was clear in that
case that there was absolutely no continuity between the
predecessor and the successor. See Burns, 406 U.S. at 286
("Here there was no merger or sale of assets, and there were
no dealings whatsoever between Wackenhut and Burns.").
In Howard Johnson, however, the Court elaborated on that
concept. In that case, the Grissom family ran a Howard

25
Johnson's restaurant and motor lodge and entered into a
CBA with the union representing their employees. The
Grissoms thereafter sold to the Howard Johnson Company
all of the personal property that they had been using to run
the restaurant and lodge. By the terms of the sale
agreement, Howard Johnson assumed four specific
contracts relating to the operation of the restaurant and
lodge but specifically declined to assume the CBA. Howard
Johnson then hired its own workforce to staff the
restaurant and lodge; it hired forty-five employees, only
nine of whom had previously been working for the
Grissoms at the restaurant (the Grissoms had had fifty-
three employees), but hired none of the Grissoms'
supervisory employees. See Howard Johnson, 417 U.S. at
250-52.

The union filed suit, seeking an order to compel Howard
Johnson to arbitrate the extent of its obligations to the
former Grissom employees under the terms of the CBA. The
Court ruled against the union, holding that the substantial
continuity between the predecessor and successor
corporations that was present in Wiley was missing in the
case before it. See id. at 264-65. In particular, the Court
noted that in Wiley the successor corporation hired all of
the predecessor's employees and did not make substantial
changes in its operation of the enterprise, as Interscience's
former employees "continued to perform the same work on
the same products under the same management at the
same work place as before the change in the corporate
employer." Id. at 258 (quoting Interscience Encyclopedia,
Inc., 55 Lab. Arb. 210, 218 (1970) (the arbitrator's opinion
in Wiley)). In contrast, Howard Johnson selected and hired
its own independent work force to run the restaurant and
lodge.

The case before us involves the same sort of "substantial
continuity of identity in the business enterprise" that was
present in Wiley but missing in Howard Johnson. The
predecessor corporation, Brocker Rebar, negotiated a CBA
with Local 430. Brocker Rebar then sold substantially all of
its assets to AmeriSteel, including "the Business as a going
concern and all of the assets, properties, and rights of the
Sellers constituting the Business or used by the Sellers

26
therein, of every type and description, real and personal,
tangible and intangible, wherever located." Asset Purchase
Agreement between AmeriSteel and Brocker Rebar at 3. The
assets purchased included Brocker Rebar's steel plant and
equipment located at 1700 Seventh Avenue in York, where
Local 430's members worked, along with all of Brocker
Rebar's contracts and leases, except the CBA and
individual employment contracts.

Instead of selecting and training its own work force (as
the successor did in Howard Johnson), AmeriSteel hired all
but six of Brocker Rebar's former employees to work at the
same plant (50 workers are needed to run the plant), doing
the same jobs that they performed before the sale.
AmeriSteel also hired Brocker Rebar's top supervisory
personnel at the plant (again in contrast to Howard
Johnson, where the successor hired none of the
predecessor's supervisors). The York plant is situated in
exactly the same location where it was before and produces
the exact same product using the same inventory, the same
equipment, the same physical set-up, and the same
production methods that it did when it was Brocker Rebar's
plant. In short, insofar as the plant's workers were
concerned, virtually nothing changed at the plant when
AmeriSteel took over except for the name on the door.

In my view, this almost total continuity in Brocker
Rebar's and AmeriSteel's operation of the York plant brings
this case under Wiley's rule binding a successor
corporation to the arbitration clause in its predecessor's
CBA when there is almost total continuity of the business
enterprise. As was the case in Wiley, the employees in the
case at bar " `continue[ ] to perform the same work on the
same products under the same management at the same
work place as before the change in the corporate
employer.' " Howard Johnson, 417 U.S. at 258 (quoting
Interscience Encyclopedia, Inc., 55 Lab. Arb. at 218).
Moreover, as the majority recognizes, the Supreme Court
has held that the one potentially relevant difference
between this case and Wiley--in Wiley the predecessor was
merged into the successor, while here there was no merger
but a purchase of assets--is irrelevant in the context of
successor liability. See Maj. Op. at 11 n.2; see also Fall

27
River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 44
n.10 (1987); Golden State Bottling Co. v. NLRB , 414 U.S.
168, 182 n.5 (1973).

One implication of Wiley is that a successor that is
bound by the arbitration clause of its predecessor's CBA
may end up being bound by (at least some of) the
substantive provisions of the CBA as well. The majority is
concerned that a potential problem with such a regime is
that corporations may be hesitant to purchase the assets of
other corporations if they thought they might be saddled
with the other corporations' labor agreements. I share that
concern. However, Wiley struck a balance between
corporate freedom and the protection of workers,
recognizing that arbitration was an important means of
maintaining labor peace and that "employees who are in
fact retained in `[t]he transition from one corporate
organization to another' " need to be afforded protection
"from sudden changes in the terms and conditions of their
employment." Howard Johnson, 417 U.S. at 264 (quoting
and describing Wiley). The implication of the majority
opinion is that Wiley is virtually a dead letter confined to its
specific facts, essentially overruled. But it is not within our
power to emasculate Wiley--only the Supreme Court can do
that. See State Oil Co. v. Khan, 522 U.S. 3, 20 (1997)
(holding that the Court of Appeals was correct to apply a
Supreme Court precedent despite the precedent's
"infirmities, [and] its increasingly wobbly, moth-eaten
foundations," because "it is this Court's prerogative alone to
overrule one of its precedents") (internal quotation marks
omitted).1
_________________________________________________________________

1. The majority attempts to refine its position with the argument that the
"substantial continuity" concept in Wiley "should properly be viewed as
a necessary but not a sufficient condition for the imposition of
arbitration on an unconsenting successor." Maj. Op. at 9; see also Maj.
Op. at 13-14 n.3. It adds, "Clearly, as Wiley itself indicates, other
factors
must also be considered." Maj. Op. at 14 n.3. With all respect, I believe
that this reading of Wiley conflicts with Howard Johnson's treatment of
Wiley. In Howard Johnson, the Supreme Court applied the analytical
precepts of Wiley, interpreting Wiley as making "substantial continuity
in
the identity of the business enterprise" the centerpiece of the analysis
of
when a successor can be bound to arbitrate under a predecessor's CBA.

28
II.

Turning to a global analysis of the majority's decision, it
is based upon the following two premises: (1) a successor
corporation cannot be bound to the substantive terms of a
predecessor's CBA unless it agrees to be so bound or is an
"alter ego" of the predecessor; and (2) a successor
corporation that is not bound by the substantive terms of
a CBA should not be bound by an arbitration provision in
that CBA either, because any decision by the arbitrator
enforcing the CBA could not "receive judicial sanction" and
thus arbitration could "serve no purpose." Maj. Op. at 3, 9,
16. Because it is undisputed that AmeriSteel did not agree
to be bound by the CBA and there is no evidence that
AmeriSteel is the alter ego of Brocker Rebar, the majority
concludes that AmeriSteel cannot be bound by the
arbitration provision in Brocker Rebar's CBA with Local
430. However, a simple exercise in deductive logic reveals
that premises (1) and (2) lead inexorably to the conclusion
that an arbitration clause of a CBA can never be enforced
against a successor corporation unless the successor
_________________________________________________________________

The Court held in Howard Johnson that the successor corporation was
not bound to arbitrate under the predecessor's CBA because there was
insufficient substantial continuity in the business enterprise, and the
clear implication of the opinion is that, if there had been such
substantial continuity, then the successor would have been so bound. I
see nothing in Howard Johnson that would lead me to the conclusion
that the Court would have held that the successor was not bound to
arbitrate even if there had been such substantial continuity, because the
"other factors" present in Wiley were missing there. See Howard
Johnson, 417 U.S. at 264-65 ("Since there was plainly no substantial
continuity of identity in the work force hired by Howard Johnson with
that of the Grissoms, and no express or implied assumption of the
agreement to arbitrate, the courts below erred in compelling the
Company to arbitrate the extent of its obligations to the former Grissom
emloyees."); see also id. at 258 (" Even more important, in Wiley the
surviving corporation hired all of the employees of the disappearing
corporation.") (emphasis added); id. at 263 (noting that the Court's
holding "is reflected in the emphasis most of the lower courts have
placed on whether the successor employer hires a majority of the
predecessor's employees in determining the legal obligations of the
successor in S 301 suits under Wiley").

29
agreed to be bound by the CBA or is the predecessor's alter
ego. I cannot accept the majority's reasoning because its
logical consequence flatly contradicts the holding of Wiley,
see supra Part I.

Although the majority denies that it has relegated Wiley
to the dustbin of history, it is abundantly clear from its
opinion that it is doing just that. In order to get around the
fact that Wiley's holding is implicated in the case at bar
because of the very close similarity of fact patterns in this
case and Wiley, the majority concludes that (1) Wiley is in
"direct" and "irreconcilable conflict" with Burns because
"Burns endorses the idea that unwilling successors cannot
be bound" by "the substantive terms of pre-existing CBAs";
(2) Howard Johnson "downplays the significance of Wiley"
while "tak[ing] an expansive view of Burns," thus strongly
reaffirming Burns while casting Wiley into doubt; so (3)
Burns's dicta rather than Wiley's holding provides the
relevant rule for this case because Burns's dicta provides
"more persuasive guidance" than Wiley's "limited holding,"
whose "status [is] not entirely clear." Maj. Op. at 11, 12, 14,
16. I disagree with all three steps in this analysis.

A.

First, the majority's finding of an irreconcilable conflict
between Wiley and Burns depends upon its erroneous
characterization of Burns as establishing"the clear
mandate . . . that an unconsenting successor employer
cannot be bound by the substantive terms of a CBA
negotiated by its predecessor." Maj. Op. at 16. The majority
relies on the following language in Burns:

These considerations, evident from the explicit
language and legislative history of the labor laws,
underlay the Board's prior decisions, which until now
have consistently held that, although successor
employers may be bound to recognize and bargain with
the union, they are not bound by the substantive
provisions of a collective-bargaining contract negotiated
by their predecessors but not agreed to or assumed by
them.

Burns, 406 U.S. at 284.

30
When this passage is considered in its entirety, it
becomes clear that this is not Burns's holding and that to
read it as establishing a "clear mandate" is a
misinterpretation of Burns. As I read Burns, its holding is
much more narrow, constrained by the Court's caution that
its "[r]esolution [of the case] turns to a great extent on the
precise facts involved here." Id. at 274. Unlike in Wiley, the
Court in Burns did not recite an explicit holding; rather, the
Court's actual conclusions in Burns are narrowly tailored to
the particular facts of that case and carefully avoid any
broad, sweeping statements of what the law is in this area.
The overarching focus of the Court's reasoning in Burns is
to show that Wiley does not control in Burns's fact situation
because of the differences in the predecessor-successor
relationships and in the legal claims made by the unions.
See id. at 285-87, 291 (setting out the Court's own
conclusions, which center on distinguishing Wiley). In sum,
Burns does not "clear[ly] mandate . . . that an unconsenting
employer cannot be bound by the substantive terms of a
CBA negotiated by its predecessor." Maj. Op. at 16.

The majority further concludes that if a predecessor and
successor explicitly agree that the predecessor's CBA will
not be binding on the successor, "Burns teaches that we
must respect that agreement." Maj. Op. at 15. I do not
understand Burns to support this conclusion, and in fact
this reading of Burns conflicts with the majority's own
characterization of the law in this area. As the majority
itself observes, Wiley recognized that "an unconsenting
successor" can owe an "extra-contractual duty," grounded
in " `the policy of our national labor laws,' " to arbitrate with
a union under the predecessor's CBA. Maj. Op. at 8
(quoting Wiley, 376 U.S. at 548). It is clear that this duty,
if implicated, is owed by the successor to the union, since
the duty requires the successor to arbitrate with the union
and the union can sue the successor to enforce the duty.
However, the majority seems to believe that the successor's
extra-contractual duty to the union can be abrogated by an
express contractual provision in an agreement between the
successor and its predecessor, with which the union was in
no way involved. See Maj. Op. at 17, 20 ("[T]he specific
contractual provisions between [AmeriSteel and Brocker
Rebar] did in fact not merely `shed' the prior agreement

31
containing the arbitration provisions, but contracted them
away[.]"). I find no support in either Supreme Court
precedent or legal reasoning for the position that an extra-
contractual duty owed to an entity can be nullified by a
contract to which that entity is not a party. Therefore, I
believe that the provision in the AmeriSteel-Brocker Rebar
sales agreement expressly repudiating the CBA is irrelevant
to the analysis.

B.

The majority's treatment of Howard Johnson is similarly
flawed because it is based on the view that Howard
Johnson "downplays the significance of Wiley," and "takes
an expansive view of Burns." Maj. Op. at 14. On this basis,
the majority implicitly holds that Burns effectively overruled
Wiley. See Maj Op. at 16 ("[W]hile the validity of Burns
cannot be doubted, Burns nonetheless conflicts with the
implications of Wiley. . . . Accordingly, we believe the clear
mandate of Burns -- that an unconsenting successor
employer cannot be bound by the substantive terms of a
CBA negotiated by its predecessor -- provides more
persuasive guidance than the limited holding in Wiley."). I
cannot agree with this reasoning.

The majority concedes that the centerpiece of Howard
Johnson's analysis involved applying the precepts of Wiley
to the facts before the Court. See Maj. Op. at 13. I note that
this is hardly consistent with the view that Howard
Johnson "downplays the significance of Wiley."
Furthermore, if Burns effectively overruled Wiley, then why
would Howard Johnson (decided after Burns) use Wiley's
analytical structure to reach its decision? If the majority's
analysis is correct, then surely the Howard Johnson Court
would have simply stated that Burns overruled Wiley and
then based its decision on Burns's "holding" that
unconsenting successor employers (who are not an alter
ego of the predecessor) are never bound by the substantive
terms of a predecessor's CBA. The Supreme Court has not
been reluctant to overrule its own decisions when satisfied
that they were wrong or based on outdated or anachronistic
reasoning. See, e.g., State Oil Co. v. Khan, 522 U.S. 3, 20
(1997). Tellingly, however, Howard Johnson did not do this,

32
but instead rested its decision upon Wiley's analytical
structure. The clear implication of this, I believe, is that the
Howard Johnson Court did not understand Burns to have
overruled Wiley. I thus cannot understand how the majority
now purports to hold implicitly that Wiley is overruled.

Moreover, Howard Johnson's description of Wiley's
holding as a "guarded, almost tentative statement," see
Maj. Op. at 14 (quoting Howard Johnson, 417 U.S. at 256)
is not made in the context of downplaying the Wiley's
significance, but instead is actually a laudatory comment
praising Wiley's careful reasoning. This description of
Wiley's holding is made in the course of the Court's
observation that, in every case in this area (including Burns
and Howard Johnson itself), "we must necessarily proceed
cautiously, in the traditional case-by-case approach of the
common law. . . . [E]mphasis on the facts of each case as
it arises is especially appropriate." Howard Johnson, 417
U.S. at 256. Howard Johnson then reaffirms Burns's
statement that Burns's decision " `turn[ed] to a great extent
on the precise facts involved here' " (hardly an "expansive
view" of Burns), and concludes that this sentiment applies
equally well to all cases in this area of the law. Id. (quoting
Burns, 406 U.S. at 274) Howard Johnson interprets Wiley's
"guarded, almost tentative statement of its holding" as
demonstrating that the Wiley Court was properly aware of
the need for the Court to constrain its holding to the
particular facts of the case. Id. In short, Howard Johnson
does not bury Wiley, but praises it.

Finally, Howard Johnson specifically notes that its
interpretation of Wiley (based on the notion of "substantial
continuity of identity in the business enterprise," see supra
Part I) preserved for Wiley a substantial role in the
protection of union members' rights:

This interpretation of Wiley is consistent also with the
Court's concern with affording protection to those
employees who are in fact retained in "[t]he transition
from one corporate organization to another" from
sudden changes in the terms and conditions of their
employment, and with its belief that industrial strife
would be avoided if these employees' claims were

33
 resolved by arbitration rather than by "the relative
strength . . . of the contending forces."

Id. at 264 (quoting Wiley, 376 U.S. at 549). I think the
above passage clearly communicates the Court's intention
in Howard Johnson that Wiley should continue to protect
employees from "sudden changes in the terms and
conditions of their employment" in situations like the one
before us--where there is a change in corporate ownership
but the employees and the running of the business remain
overwhelmingly the same. Again, this is just not consistent
with an interpretation of Howard Johnson as"downplay[ing]
the significance of Wiley." Maj. Op. at 14.

III.

I think that a much better reconciliation of the trilogy can
be developed from a passage in Howard Johnson discussing
the concept of successorship that the majority quotes early
in its opinion but then promptly ignores. See Maj. Op. at 7.
In this passage, Howard Johnson states that the lower
court's division of issues into (1) whether Howard Johnson
was a successor employer, and (2) whether a successor is
required to arbitrate under its predecessor's CBA, was
artificial and unhelpful, because "successor" is not a
monolithic concept.

The question whether Howard Johnson is a "successor"
is simply not meaningful in the abstract. Howard
Johnson is of course a successor employer in the sense
that it succeeded to operation of a restaurant and
motor lodge formerly operated by the Grissoms. But
the real question in each of these "successorship"
cases is, on the particular facts, what are the legal
obligations of the new employer to the employees of the
former owner or their representative? The answer to
this inquiry requires analysis of the interests of the
new employer and the employees and of the policies of
the labor laws in light of the facts of each case and the
particular legal obligation which is at issue, whether it
be the duty to recognize and bargain with the union,
the duty to remedy unfair labor practices, the duty to
arbitrate, etc. There is, and can be, no single definition

34
 of "successor" which is applicable in every legal context.
A new employer, in other words, may be a successor
for some purposes and not for others.

Howard Johnson, 417 U.S. at 262 n.9 (emphasis added). In
my view, this passage, along with Burns's admonition that
its decision "turns to a great extent on the precise facts
involved here," 406 U.S. at 274, serves as a clear warning
to lower courts not to read these opinions as providing
expansive rules about successors in general; instead, the
rules of these cases should always be understood in the
context of the facts of the particular case. The majority
appears to recognize this point when it quotes from the
above passage and states that "labeling AmeriSteel a
`successor employer' to Brocker Rebar does little to help
resolve the issue in this case." Maj. Op. at 7. But the
majority then ignores its own direction when it interprets
Burns as making a general pronouncement that successors
are never bound by the substantive terms of their
predecessors' CBAs, thus treating all successorship
situations as legally identical.

I think the best reconciliation of the Wiley-Burns-Howard
Johnson trilogy is that the cases set out a"sliding scale" for
what types of burdens can be imposed on what types of
successors. That is, the successorship relationships in
these three cases were very different, and the burdens
imposed on the successors varied with the corresponding
strength of the successor relationship, thus providing an
outline for deciding future cases. In Burns, there was a very
weak relationship of succession between the corporations--
as the Court noted, "there was no merger or sale of assets,
and there were no dealings whatsoever between Wackenhut
[the predecessor] and Burns [the successor]," Burns, 406
U.S. at 286; the successor merely took over the security job
that the predecessor had performed and hired a portion of
guards who had been employed by the predecessor. In a
situation with such a weak succession relationship, the
Court held that the successor corporation only had the
duty to bargain with the union representing the employees,
and was not bound by the substantive terms of the
predecessor's CBA.

35
In Wiley, there was a very strong relationship of
succession between the corporations--the predecessor
merged into the successor--so the Court held that the
successor was bound by the arbitration provision of the
predecessor's CBA, and, as the majority recognizes,
implicitly recognized that the successor corporation could
be bound by the substantive terms of the predecessor's
CBA as well (if the arbitrator were to so decide). The
relationship of succession in Howard Johnson was not as
strong as in Wiley--while there was a sale of assets by the
predecessor to the successor, there was not nearly as much
continuity of business operations as there was in Wiley (or
here)--so the Court held that the successor was not bound
to arbitrate under the predecessor's CBA.2
_________________________________________________________________

2. This approach to interpreting the trilogy has the added benefit of
clarifying a cryptic piece of dicta on the successorship issue in Fall
River
Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27 (1987). Fall River
addressed the question whether Burns's holding that a successor
corporation has a duty to bargain with the union that represents the
predecessor's employees extended to a situation in which the union had
been certified by the employees long before the transition in ownership.
In discussing the background of the successorship doctrine, the Court
said the following about Burns:

We observed in Burns that, although the successor has an
obligation to bargain with the union, it "is ordinarily free to set
initial terms on which it will hire the employees of a
predecessor,"
and it is not bound by the substantive provisions of the
predecessor's collective-bargaining agreement.

Id. at 40 (citations omitted).

The first thing to note about this passage is that it clearly plays no
part in Fall River's holding; it is simply a description of Burns
contained
in a general discussion of the development of successorship law, so it
must be understood in that context. Although the majority contends that
the statement it relies on from Fall River is only "arguably" dicta, Maj.
Op. at 16, n.5, the majority fails to explain how this statement from Fall
River was necessary to the decision in that case and therefore fails to
offer any argument that it is not dicta.

Some courts have interpreted this passage as standing for the
proposition that a successor may never be held bound to the substantive
terms of a predecessor's CBAs unless the successor consents or is the
alter ego of the predecessor, see, e.g., Southward v. South Cent. Ready

36
The question before us, then, is which type of successor,
Wiley, Burns, or Howard Johnson , is AmeriSteel most like?
As I argued in Part I, I believe that AmeriSteel is much
more like a Wiley successor than a Howard Johnson
successor. In other words, in my view there is sufficient
"substantial continuity of identity in the business
enterprise," between Brocker Rebar and AmeriSteel to
justify holding that AmeriSteel is bound to the arbitration
provision (and possibly to the substantive provisions) of
Brocker Rebar's CBA with Local 430. Howard Johnson, 417
U.S. at 259 (quoting Wiley, 376 U.S. at 551).

Unfortunately, we derive no assistance from our own
jurisprudence in resolving this dispute. The cases from
within this circuit that interpret the Supreme Court case
law can best be described as "dueling dicta": as I describe
in the margin, no Third Circuit case has issued a square
holding on this issue, although several have espoused one
view or the other in passing.3
_________________________________________________________________

Mix Supply Corp., 7 F.3d 487, 493 (6th Cir. 1993), and in fact the
majority cites to this passage as support for its view. See Maj. Op. at
15-16. I think it preferable to read the passage as making an observation
about Burns-type successors particularly (i.e., these types of successors
are not bound to the substantive terms of their predecessors' CBAs),
rather than a point about all successors generally, because such a
reading more closely fits with the carefully circumscribed reasoning and
overall approach of the Wiley-Burns-Howard Johnson trilogy. Given that
the Court was so careful to limit the holdings of each case in the trilogy
to "the precise facts involved here," Howard Johnson, 417 U.S. at 256
(quoting Burns, 406 U.S. at 274), it would seem incongruous to read Fall
River as effecting, via dicta, an expansion of the holding of one of the
trilogy beyond its "precise facts" into a general rule that covers all
successors in the abstract--despite Howard Johnson's clear admonition
that the concept of "a `successor' is simply not meaningful in the
abstract." Id. at 262 n.9. Interpreting Fall River as effecting such an
expansion would do violence to the principles and approach that
underlie the Wiley-Burns-Howard Johnson trilogy.

3. Compare Shaffer v. Mitchell Transp., Inc. , 635 F.2d 261, 266 (3d Cir.
1980) ("The successorship doctrine simply allows the court to imply
certain contractual duties from the predecessor's collective bargaining
agreement and impose them on the successor."), Local Union No. 249 v.
Bill's Trucking, Inc., 493 F.2d 956, 960 (3d Cir. 1974) ("Analysis of the

37
I thus agree with the majority's conclusion that no
previous Third Circuit case controls our decision in this
case, see Maj. Op. at 17, and that our decision must be
based on an in-depth interpretation of the Supreme Court
trilogy rather on an earlier panel's off-the-cuff musing on
this issue. And because our cases are contradictory on the
issue of a successor's liabilities on a predecessor's CBA, I
cannot agree with the majority that its decision"flows
logically from our existing Circuit precedent." Maj. Op. at
17. The case law cuts both ways, so a decision on this
issue must stand solely on the substance of the analysis of
the Wiley-Burns-Howard Johnson trilogy.

The case law from other courts of appeals also cuts in
both directions, likewise noted in the margin.4 None of the
_________________________________________________________________

Burns opinion convinces us, however, that its significance is largely
limited to the particular facts of that case. . . . That there is no
absolute
bar to the enforcement of labor agreements against`successor' employers
in section 301 actions, such as this, is amply illustrated by the decision
in John Wiley and Sons, Inc. v. Livingston."), and Teamsters Local Union
No. 430 v. Cement Express, Inc., 841 F.2d 66, 69 (3d Cir. 1988) ("Burns
did not deal with the question of when successorship doctrine may bind
a transferee of assets to the procedural duty to submit to arbitration the
question of whether the successor has somehow assumed any of the
obligations of the old bargaining agreement."), with Stardyne, Inc. v.
NLRB, 41 F.3d 141, 145 n.3 (3d Cir. 1994) (stating that a "successor [is]
not bound by its predecessor's collective bargaining agreement"), NLRB v.
Rockwood Energy and Mineral Corp., 942 F.2d 169, 174 (3d Cir. 1991)
("[A] successor is not bound by the substantive terms of its predecessor's
labor agreement."), and United Steelworkers of Am. v. New Jersey Zinc
Co., 828 F.2d 1001, 1010 (3d Cir. 1987) ("[A] successor employer is not
automatically required to adopt its predecessor's collectively bargained
agreements, see NLRB v. Burns.").

4. Compare Stotter Div. of Graduate Plastics Co. v. District 65, 991 F.2d
997, 1001 (2nd Cir. 1993) (holding that a successor corporation had a
duty to arbitrate the extent of its obligations under its predecessor's
CBA
because there was substantial continuity in the business enterprise),
and Boeing Co. v. Int'l Ass'n of Machinists and Aerospace Workers, 504
F.2d 307, 314-16 (5th Cir. 1974) (stating that "[w]e are confident,
however, that even at the most Burns has not overruled the principles of
Wiley," which give broad protection to employees "against sudden
changes in the employment relationship" by enforcing against successors

38
cases from other circuits that the majority cites in support
of its decision engages in the detailed, in-depth analysis of
the troubled trilogy that this case calls for. Additionally,
none of the cases from other Circuits recognizes, as the
majority does, that Wiley's holding necessarily means that,
_________________________________________________________________

the duty to arbitrate under a predecessor's CBA), with Southward v.
South Cent. Ready Mix Supply Corp., 7 F.3d 487, 493 (6th Cir. 1993)
(stating that Burns and Fall River support the view that a successor is
not bound to the substantive terms of its predecessor's CBA).

Although the majority seeks to distinguish Stotter by the fact that the
successor employer "entered into an agreement with the Union which
adopted (with immaterial exceptions) the provisions of the [CBA]," Maj.
Op. at 19 n.8, it is the prior CBA (coupled with successorship status),
not the new CBA, that informs the ratio decidendi:

[The successor employer] asserts that it could not be made a party
to the arbitration because it was not a party to the contract with
the
Union until May 29, 1990. . . . This argument essentially merges
with the broader question whether the arbitrator correctly
determined that GPC was a "successor" to Stotter.

In Wiley, the Supreme Court held that the surviving corporation
of a merger was obliged to arbitrate disputed issues under a
collective bargaining agreement between the merged (and no longer
existing) corporation and the union that represented the merged
corporation's employees, even though the surviving corporation had
not signed the contract and the contract did not contain an express
provision binding successors.

Stotter, 991 F.2d at 1001. Stotter then undertook an extensive
"substantial continuity of identity in the business enterprise" analysis,
and based its decision on its finding that "such continuity clearly
exists"
between the predecessor and the successor. See id.; see also Chartier v.
3205 Grand Concourse Corp., 100 F. Supp. 2d 210, 213 (S.D.N.Y. 2000)
("[T]he Supreme Court has made it clear that one who succeeds to the
business of an employer that was a party to a CBA, in appropriate
circumstances, may be held to have succeeded also to its obligation to
arbitrate under a CBA irrespective of any intention to do so.").

The majority also argues that Boeing is"of limited utility" because it
predates Fall River. Maj. Op. at 19, n.8. As I argue supra note 2, the
language from Fall River that the majority relies on is not only dicta,
but
ambiguous dicta. Therefore, in this case I believe that it is Fall River
that
is of limited utility.
39
in the right circumstances, some substantive terms of a
predecessor's CBA may be imposed on an unconsenting,
non-alter-ego successor corporation. I add only that,
whatever the viability of the preceding proposition, this case
involves only arbitrating the applicability of the CBA, and in
the thirty-seven years since Wiley, one area of doctrine that
has grown stronger in that period is the Supreme Court's
recognition of the importance of arbitration in a number of
fields, including labor.

IV.

It is manifest from my dispute with the majority that, in
its current state, the federal common law on this issue--in
particular the Wiley-Burns-Howard Johnson trilogy--does
not provide a clear answer in certain cases. If Wiley has
been implicitly overturned by later Supreme Court cases,
the Court should say so; but if, as I believe, it still plays a
viable role in protecting the rights of "those employees who
are in fact retained in `[t]he transition from one corporate
organization to another' from sudden changes in the terms
and conditions of their employment," Howard Johnson, 417
U.S. at 264 (quoting Wiley, 376 U.S. at 549), the Court
should reaffirm that fact. I hope that the Supreme Court
will clarify the law in this area. In the meantime, I believe
that the better interpretation of Supreme Court precedent is
that the rule of Wiley is still in force and that rule should
be applied to the case at bar to enforce the arbitration
provision of the CBA against AmeriSteel. Indeed, if Wiley
has continuing viability, its rule would apply here if it
applied anywhere. I would reverse the judgment of the
District Court and remand with directions to order this
matter to proceed to arbitration. For the foregoing reasons,
I respectfully dissent.

A True Copy:
Teste:

Clerk of the United States Court of Appeals
for the Third Circuit

40