FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
CHRISTINA SULLIVAN, a single
person,
Plaintiff-Appellant, No. 08-35413
v.
D.C. No.
2:07-CV-05020-EFS
DOLLAR TREE STORES, INC., a
Virginia corporation, doing OPINION
business in Washington,
Defendant-Appellee.
Appeal from the United States District Court
for the Eastern District of Washington
Edward F. Shea, District Judge, Presiding
Argued and Submitted
July 14, 2010—Seattle, Washington
Filed September 27, 2010
Before: Stephen Reinhardt, Susan P. Graber, and
Richard A. Paez, Circuit Judges.
Opinion by Judge Graber
16443
SULLIVAN v. DOLLAR TREE STORES 16447
COUNSEL
Janet E. Taylor, Taylor Galloway, PLLC, Richland, Washing-
ton, for the plaintiff-appellant.
Leslie R. Weatherhead, Witherspoon, Kelley, Davenport &
Toole, PS, Spokane, Washington, for the defendant-appellee.
OPINION
GRABER, Circuit Judge:
When is a new employer a “successor in interest” to a for-
mer employer under the Family and Medical Leave Act of
16448 SULLIVAN v. DOLLAR TREE STORES
1993 (“FMLA”), 29 U.S.C. §§ 2601-2654? The answer mat-
ters because an employee is not eligible for the protections of
the FMLA until he or she has worked for a particular
employer for at least 12 months, and the term “employer” “in-
cludes . . . any successor in interest of an employer.” 29
U.S.C. § 2611(4)(A)(ii). Today we adopt the persuasive rea-
soning of Grace v. USCAR, 521 F.3d 655 (6th Cir. 2008), and
apply the regulations promulgated by the United States
Department of Labor (“DOL”) at 29 C.F.R. § 825.107. After
doing so, we conclude that Plaintiff Christina Sullivan is not
entitled to FMLA benefits because her new employer, Defen-
dant Dollar Tree Stores, Inc. (“Dollar Tree”), for whom she
worked for less than 12 months, is not a successor in interest
of her former employer, Factory 2-U. Accordingly, we affirm
the summary judgment in Dollar Tree’s favor.
FACTUAL AND PROCEDURAL HISTORY
Factory 2-U was a retail store that sold discount clothing.
At its height, Factory 2-U operated more than 200 stores in
the western United States and employed more than 4,000 peo-
ple. Seven stores were located in the Tri-Cities area of south-
eastern Washington (Kennewick, Richland, and Pasco), and
each of those stores had about 30 employees. Plaintiff Chris-
tina Sullivan was the full-time Store Manager of the Pasco
Factory 2-U store.
By 2004, however, Factory 2-U had filed for Chapter 11
bankruptcy. In September 2004, the bankruptcy court
approved the sale of Factory 2-U’s existing leasehold on the
Pasco store (and 39 other store leaseholds) to Dollar Tree.
Dollar Tree is a chain retail store that sells a variety of items,
including clothing, for one dollar. Apart from the leaseholds,
Dollar Tree purchased no other assets of Factory 2-U. Others
purchased the remainder of Factory 2-U’s assets. At the end
of September 2004, the Factory 2-U store in Pasco closed its
doors.
SULLIVAN v. DOLLAR TREE STORES 16449
Dollar Tree opened for business at the Pasco location four
weeks later. During those four weeks, Dollar Tree reconfig-
ured the store. First, a construction crew remodeled the inte-
rior to support a Dollar Tree store, in accordance with Dollar
Tree’s specifications. Second, a set-up team prepared the
inventory, stocked the shelves with Dollar Tree’s merchan-
dise, and performed other preparatory work. Finally, on Octo-
ber 30, 2004, Dollar Tree opened for business in the former
location of Factory 2-U, with 15 to 25 Dollar Tree employees.
In September 2004, Plaintiff filled out an application for
employment with Dollar Tree. Dollar Tree hired her as an
assistant manager of the soon-to-be-opened Dollar Tree store
at the same Pasco location. Even though the store was closed
for four weeks, Plaintiff’s employment was continuous. Dur-
ing the first two weeks of the renovations in Pasco, Plaintiff
trained at a pre-existing Dollar Tree store in nearby Richland.
After her two-week training, Plaintiff then assisted with the
preparatory work at the Pasco store. When the Pasco store
opened, Plaintiff began full-time work at that store as an
assistant manager. Only one other former Factory 2-U
employee worked at the new Dollar Tree store in Pasco after
its opening.1
From September 2004 until May 2005, Plaintiff worked as
assistant manager at the Pasco Dollar Tree without incident.
In May 2005, Plaintiff’s mother experienced serious health
problems, and Plaintiff provided assistance and care for her.
Dollar Tree granted Plaintiff some amount of unpaid leave but
1
Plaintiff originally submitted an affidavit attesting that “most” employ-
ees continued to work at Dollar Tree. Dollar Tree countered with a
detailed affidavit describing who worked at the Pasco store, when, and for
what purpose. Plaintiff declined to reply to Dollar Tree’s specific factual
assertions, resting on her original assertion of “most” employees. As we
discuss in Part A-2, below, we agree with the district court that, in this
context, Plaintiff’s assertion does not meet the requirement in Federal
Rule of Civil Procedure 56(e)(2) that a party set out “specific facts.”
16450 SULLIVAN v. DOLLAR TREE STORES
less than Plaintiff requested. Plaintiff either quit or was fired
in late May or June 2005.
Plaintiff eventually contacted the DOL, which initiated an
investigation of whether Dollar Tree had violated the FMLA.
The DOL concluded that Dollar Tree’s actions had violated
the FMLA and informed the parties of its conclusion. During
the negotiations that followed, Dollar Tree offered Plaintiff
reinstatement to her former position at the Pasco store, a par-
tial payment of $5,000 toward lost wages, and certain other
benefits such as accrued sick leave. Although Plaintiff had
sought more than $20,000 in lost wages, she accepted the offer2
and began work again on April 14, 2006.
After her reinstatement, Plaintiff continued working at the
Pasco Dollar Tree store until she quit voluntarily in December
2006. Soon thereafter, Plaintiff filed this action in federal
court seeking the full amount of her lost wages. The district
court held that Dollar Tree was not a successor in interest
under the FMLA and granted summary judgment to Dollar
Tree. Plaintiff timely appeals.
STANDARDS OF REVIEW
We review de novo both a grant of summary judgment in
general, Sharer v. Oregon, 581 F.3d 1176, 1177 (9th Cir.
2009), and pure questions of law decided on summary judg-
ment, Bjustrom v. Trust One Mortg. Corp., 322 F.3d 1201,
1205 (9th Cir. 2003). “Whether the district court correctly
construed the hearsay rule is a question of law reviewed de
novo. We review the admission of evidence under an excep-
tion to the hearsay rule for abuse of discretion.” United States
v. Hernandez-Herrera, 273 F.3d 1213, 1217 (9th Cir. 2001)
(citation and internal quotation marks omitted).
2
Dollar Tree does not argue here that the settlement bars Plaintiff’s
claims.
SULLIVAN v. DOLLAR TREE STORES 16451
DISCUSSION
A. Preliminary Questions
Plaintiff submitted many documents in support of her case,
two of which are relevant here. First, Plaintiff submitted a
report prepared by the DOL during or after its investigation
of Plaintiff’s complaints (“DOL Report”). Second, she sub-
mitted her own affidavit. Plaintiff argues that the district court
erred by disregarding certain statements in the two documents.3
1. DOL Report
[1] Plaintiff argues that the district court erred when it held
that the DOL Report was inadmissible hearsay not exempted
by Federal Rule of Evidence 803(8)(C), which provides:
The following are not excluded by the hearsay
rule, even though the declarant is available as a wit-
ness:
....
(8) Public records and reports. Records, reports,
statements, or data compilations, in any form, of
public offices or agencies, setting forth . . . (C) in
civil actions and proceedings . . . factual findings
resulting from an investigation made pursuant to
authority granted by law, unless the sources of infor-
3
Plaintiff also asserts summarily that the district court erred by disre-
garding “several admissions” made by Dollar Tree, as revealed by the
DOL Report and other documents. Plaintiff does not specify what facts
she believes Dollar Tree “admitted.” We deem this argument waived. See
Greenwood v. FAA, 28 F.3d 971, 977 (9th Cir. 1994) (“We review only
issues which are argued specifically and distinctly in a party’s opening
brief. We will not manufacture arguments for an appellant, and a bare
assertion does not preserve a claim . . . .” (citation omitted)).
16452 SULLIVAN v. DOLLAR TREE STORES
mation or other circumstances indicate lack of trust-
worthiness.
The disputed portion of the DOL Report states:
Dollar Tree Stores, Inc., a covered employer, is
considered a “successor in interest” to the covered
employer Factory 2-U Stores, Inc. The circum-
stances of the transition that occurred between the
two companies coincide with six out of eight factors
that determine a “successor in interest.” These fac-
tors are: 1) the same retail business operation contin-
ued; 2) the same rental space was used; 3) most of
the same personnel continued to work; 4) the store
continued to employ retail salespeople who worked
during regular hours; 5) the same supervisory per-
sonnel continued with the opening of the Dollar Tree
store; and 6) the products continued to include cloth-
ing along with other personal, gift and household
items (Exhibit E-6).
a. Legal Conclusions as “Factual Findings”
[2] Some portions of the DOL Report, including the first
sentence in particular, state legal conclusions. The district
court ruled that, because Rule 803(8)(C) applies to “factual
findings,” legal conclusions are inadmissible. This seemingly
straightforward holding uncovers an open question of law in
this circuit: Does Rule 803(8)(C) cover an investigative
report’s legal conclusions as well as its factual findings?
In Beech Aircraft Corp. v. Rainey, 488 U.S. 153 (1988), the
Supreme Court rejected the argument that the term “factual
findings” in Rule 803(8)(C) encompassed only “facts” and not
“opinions” and “conclusions.” The Court held that “factually
based conclusions or opinions are not on that account
excluded from the scope of Rule 803(8)(C).” Id. at 162. Par-
ticularly relevant here, the Court cabined its decision:
SULLIVAN v. DOLLAR TREE STORES 16453
We emphasize that the issue in this litigation is
whether Rule 803(8)(C) recognizes any difference
between statements of “fact” and “opinion.” There is
no question here of any distinction between “fact”
and “law.” We thus express no opinion on whether
legal conclusions contained in an official report are
admissible as “findings of fact” under Rule
803(8)(C).
Id. at 170 n.13.
[3] Only one circuit court has addressed that open question
at any length. In Hines v. Brandon Steel Decks, Inc., 886 F.2d
299, 302 (11th Cir. 1989), the Eleventh Circuit held that
“Rule 803(8)(C) does not provide for the admissibility of the
legal conclusions contained within an otherwise admissible
public report.” “Legal conclusions are inadmissible because
the jury would have no way of knowing whether the preparer
of the report was cognizant of the requirements underlying the
legal conclusion and, if not, whether the preparer might have
a higher or lower standard than the law requires.” Id. at 303.
That court “caution[ed], however, that the amorphous line
between ‘factual’ and ‘legal’ conclusions may obscure a prac-
tical analysis under this rubric.” Id. The Fourth Circuit has
agreed, albeit without analysis. See Zeus Enters., Inc. v.
Alphin Aircraft, Inc., 190 F.3d 238, 243 (4th Cir. 1999) (“The
NTSB order involved no factual determinations and was
strictly a legal ruling. As such, the NTSB order was not
admissible under Rule 803(8)(C).”).
[4] We agree with the Eleventh and Fourth Circuits. Pure
legal conclusions are not admissible as factual findings. In the
context of a summary judgment motion, a conclusion of law
by a third-party investigator does not, by itself, create a genu-
ine issue of material fact for the obvious reason that a legal
conclusion is not a factual statement and for the reasons
explained by the Eleventh Circuit. Accordingly, the district
court properly held that the DOL Report’s legal conclusion
16454 SULLIVAN v. DOLLAR TREE STORES
that Dollar Tree is a successor in interest under the FMLA
does not create a genuine issue of material fact.
b. “Trustworthy” Requirement
[5] The district court held that the remainder of the DOL
Report, to the extent that it contains factual findings, is inad-
missible as not “trustworthy.”4 In Beech Aircraft, 488 U.S. at
167-68, the Supreme Court emphasized that, although a broad
range of factual findings are potentially admissible under Rule
803(8)(C), the district court retains the discretion to exclude
findings that are not trustworthy. See id. at 167 (“Thus, a trial
judge has the discretion, and indeed the obligation, to exclude
an entire report or portions thereof . . . that she determines to
be untrustworthy.”). Relevant factors include “(1) the timeli-
ness of the investigation; (2) the investigator’s skill or experi-
ence; (3) whether a hearing was held; and (4) possible bias
when reports are prepared with a view to possible litigation.”
Id. at 167 n.11 (citation omitted). “A party opposing the intro-
duction of a public record bears the burden of coming forward
with enough negative factors to persuade a court that a report
should not be admitted.” Johnson v. City of Pleasanton, 982
F.2d 350, 352 (9th Cir. 1992).
[6] The district court acted within its discretion when it
held that the DOL Report is not trustworthy. The report is
incomplete because its exhibits are not attached. Its author is
unidentified and unknown, making it impossible to assess the
author’s skill or experience. No hearing was held. The docu-
ment does not appear even to be a final report, as distinct
from an internal draft: “It is recommended that this case be
administratively closed as a partial agreement to pay.” DOL
4
Many of the “factual findings” are more easily characterized as conclu-
sions of law, which are inadmissible for the reasons previously explained
in text. Nevertheless, because we reach the same conclusion either way,
we—like the district court—treat all statements other than the “successor
in interest” statement as factual findings.
SULLIVAN v. DOLLAR TREE STORES 16455
Report at 8 (emphases added). The DOL did not issue the
report or send it to either party at any time before this litiga-
tion; rather, it became available only because Plaintiff filed a
request pursuant to the Freedom of Information Act, 5 U.S.C.
§ 552. Accordingly, we—like the district court—do not con-
sider the disputed portion of the DOL Report as evidence in
our analysis of the successorship issue.
2. Plaintiff’s Affidavit
Next, Plaintiff contends that the district court improperly
rejected some of the factual assertions in her affidavit as being
too vague and non-specific. We review de novo and note the
following relevant statements in the affidavit:
Dollar Tree Stores continued in the same retail
business operation as Factory 2-U. Dollar Tree
Stores used the same rental space as the Factory 2-U
store they took over, so I kept working in the same
store I had been in for over four years. Most of the
same personnel continued to work when Dollar Tree
took Factory 2-U over at my store. We continued to
employ retail sales people who worked during regu-
lar store hours. The same supervisory personnel con-
tinued with the opening of Dollar Tree Store, such as
[three named individuals]. The products continued to
include clothing along with other personal, gift and
household items.
We find it unnecessary to quibble with most of Plaintiff’s
statements. Although her statements are indeed vague, we
find little reason to reject her characterization, for instance,
that Dollar Tree “took over” the rental space, as distinct from
merely purchasing the leasehold from Factory 2-U. Similarly,
whether one characterizes the merchandise, as Plaintiff does,
as “clothing along with other personal, gift and household
items” or, as Dollar Tree does, as “items including some
clothing” matters little to the ultimate analysis of successor in
16456 SULLIVAN v. DOLLAR TREE STORES
interest. Although the district court is probably correct that
Plaintiff’s characterizations are self-serving exaggerations, we
nevertheless will adopt Plaintiff’s characterizations for pur-
poses of our analysis.
Plaintiff’s assertion concerning the number of employees is
a different issue. Dollar Tree provided detailed factual asser-
tions about which employees it hired and for what purposes.
According to Dollar Tree, it hired a small number of employ-
ees to help with the four-week remodeling and transition
period, and it hired only two employees—Plaintiff and one
other—to continue working after the Pasco Dollar Tree
opened its doors for regular business.
[7] By contrast, Plaintiff supplied only the vaguest conclu-
sion: “most of the same personnel continued to work when
Dollar Tree took Factory 2-U over.” Is Plaintiff counting all
persons who worked on the transition team? Does she intend
to dispute the otherwise undisputed evidence that only two
persons worked at the store when it opened at the end of Octo-
ber?5 Those questions matter, because continuity of the work-
force is a relevant factor.
[8] Federal Rule of Civil Procedure 56(e)(2) requires a
party to “set out specific facts showing a genuine issue for
trial.” (Emphasis added.) In Lujan v. National Wildlife Feder-
ation, 497 U.S. 871, 888-89 (1990), the Supreme Court
explained that, unlike when ruling on a motion to dismiss,
when the court “presumes that general allegations embrace
those specific facts that are necessary to support the claim,”
Rule 56(e) requires that the party opposing a motion for sum-
mary judgment set out specific facts—that is, the court will
not presume that general allegations embrace more specific
5
The statement is vague enough that it could even be read to include
persons who continued to work elsewhere, at stores unrelated to Dollar
Tree: “most of the same personnel continued to work [somewhere] when
Dollar Tree took Factory 2-U over.”
SULLIVAN v. DOLLAR TREE STORES 16457
facts to support the claim. Id. at 889. The Court acknowl-
edged that “[a]t the margins there is some room for debate as
to how ‘specific’ must be the ‘specific facts’ that Rule 56(e)
requires in a particular case.” Id. But it found the general alle-
gations in that case to be too vague. Id. at 888-89.
There, the plaintiffs were required to present facts support-
ing their allegation that they had been “adversely affected or
aggrieved.” Id. at 889. Their general assertions were insuffi-
cient: “Rule 56(e) is assuredly not satisfied by averments
which state only that one of respondent’s members uses
unspecified portions of an immense tract of territory, on some
portions of which mining activity has occurred or probably
will occur by virtue of the governmental action.” Id. The
Court explained:
It will not do to “presume” the missing facts because
without them the affidavits would not establish the
injury that they generally allege. That converts the
operation of Rule 56 to a circular promenade: plain-
tiff’s complaint makes general allegation of injury;
defendant contests through Rule 56 existence of spe-
cific facts to support injury; plaintiff responds with
affidavit containing general allegation of injury,
which must be deemed to constitute averment of req-
uisite specific facts since otherwise allegation of
injury would be unsupported (which is precisely
what defendant claims it is).
Id.
[9] Here, we hold that, in light of the specific facts pres-
ented by Dollar Tree regarding the number of employees
retained, Plaintiff’s assertion that “most” employees were
rehired by Dollar Tree is too vague to satisfy Rule 56(e)’s
requirement of specificity. In support of its motion for sum-
mary judgment, Dollar Tree carefully explained exactly which
employees, by name, had been rehired and for what purposes.
16458 SULLIVAN v. DOLLAR TREE STORES
At that point, “[i]t became [Plaintiff’s] burden, in order to
defeat the motion, to ‘set out specific facts showing a genuine
issue for trial.’ ” Gerlinger v. Amazon.com Inc., 526 F.3d
1253, 1256 (9th Cir. 2008) (quoting Fed. R. Civ. P. 56(e)).
Plaintiff’s assertion of “most” employees appears to conflict
with Dollar Tree’s evidence but, as described above, her
vague assertion leaves entirely unclear the nature of that con-
flict, if any.6 We therefore hold that the district court properly
disregarded Plaintiff’s unsupported and unexplained assertion.
Likewise, in our analysis of the successor in interest issue, we
will disregard Plaintiff’s assertion.
B. Successor in Interest
[10] The FMLA entitles “an eligible employee” to take
family or medical leave for several enumerated reasons,
including to care for a close relative. 29 U.S.C. § 2612(a)(1).
“The term ‘eligible employee’ means an employee who has
been employed (i) for at least 12 months by the employer with
respect to whom leave is requested . . . .” Id. § 2611(2)(A).
That is, an employee is not eligible for family or medical
leave until he or she has worked for an employer for 12
months. The term “employer” generally means a person or
entity engaged in commerce with a minimum number of
employees. Id. § 2611(4)(A)(i). Additionally, however, the
term “employer” “includes . . . any successor in interest of an
employer.” Id. § 2611(4)(A)(ii)(II).
Here, Plaintiff challenges a denial of leave that occurred
several months shy of her one-year anniversary of employ-
ment with Dollar Tree. The FMLA covers the purpose of that
leave, to care for a seriously ill parent. But, without the “suc-
cessor in interest” provision, Plaintiff was not an “eligible
employee.” The dispositive question, then, is whether Dollar
Tree is a “successor in interest” to Factory 2-U.
6
We need not address whether “most” would be specific enough in the
absence of detailed evidence to the contrary.
SULLIVAN v. DOLLAR TREE STORES 16459
[11] The FMLA does not define the term “successor in
interest.” The Department of Labor has issued the following
regulation:
(a) For purposes of FMLA, in determining
whether an employer is covered because it is a “suc-
cessor in interest” to a covered employer, the factors
used under Title VII of the Civil Rights Act and the
Vietnam Era Veterans’ Adjustment Act will be con-
sidered. However, unlike Title VII, whether the suc-
cessor has notice of the employee’s claim is not a
consideration. Notice may be relevant, however, in
determining successor liability for violations of the
predecessor. The factors to be considered include:
(1) Substantial continuity of the same busi-
ness operations;
(2) Use of the same plant;
(3) Continuity of the work force;
(4) Similarity of jobs and working condi-
tions;
(5) Similarity of supervisory personnel;
(6) Similarity in machinery, equipment, and
production methods;
(7) Similarity of products or services; and
(8) The ability of the predecessor to provide
relief.
(b) A determination of whether or not a “successor
in interest” exists is not determined by the applica-
16460 SULLIVAN v. DOLLAR TREE STORES
tion of any single criterion, but rather the entire cir-
cumstances are to be viewed in their totality.
29 C.F.R. § 825.107.
As the regulation itself acknowledges and incorporates, the
“successor in interest” inquiry has arisen in many contexts
and has a long history in case law. See Cobb v. Contract
Transp., Inc., 452 F.3d 543, 550-56 (6th Cir. 2006) (recount-
ing the history in some detail). Briefly, the “successor in inter-
est” doctrine arose initially in traditional labor-law cases
involving disputes between a new employer and the union
recognized by the former employer. See, e.g., John Wiley &
Sons, Inc. v. Livingston, 376 U.S. 543 (1964) (holding that the
new employer must arbitrate under the old collective bargain-
ing agreement); NLRB v. Burns Int’l Sec. Servs., Inc., 406
U.S. 272 (1972) (holding that the new employer must negoti-
ate with the former union, but the new employer is not bound
by the old collective bargaining agreement); Howard Johnson
Co. v. Detroit Local Joint Exec. Bd., 417 U.S. 249 (1974)
(holding that the new employer is not required to arbitrate
under the old collective bargaining agreement and distin-
guishing Wiley); Fall River Dyeing & Finishing Corp. v.
NLRB, 482 U.S. 27 (1987) (holding that the new employer
must bargain with the old union, if the new employer is a true
successor, and discussing factors). Courts later adopted and
applied the same considerations in Title VII cases. See, e.g.,
Bates v. Pac. Mar. Ass’n, 744 F.2d 705, 708 (9th Cir. 1984)
(“Different policy considerations and enforcement mecha-
nisms are incorporated in Title VII [than in the labor-law con-
text]; nonetheless, we have held the successorship doctrine to
apply to Title VII obligations.” (citing cases)); EEOC v. Mac-
Millan Bloedel Containers, Inc., 503 F.2d 1086, 1090 (6th
Cir. 1974) (“We are of the view that the considerations set
forth by the Supreme Court in these [labor-law] cases as justi-
fying a successor doctrine to remedy unfair labor practices are
applicable equally to remedy unfair employment practices in
violation of Title VII.”); see also Steinbach v. Hubbard, 51
SULLIVAN v. DOLLAR TREE STORES 16461
F.3d 843, 845 (9th Cir. 1995) (holding that the doctrine also
applies to the Fair Labor and Standards Act).
The factors that appear in the FMLA regulation, quoted
above, are nearly verbatim the factors developed by this and
other circuits in the labor-law and Title VII contexts. See, e.g.,
NLRB v. Jeffries Lithograph Co., 752 F.2d 459, 463 (9th Cir.
1985) (listing the factors); MacMillan, 503 F.2d at 1094
(same). Those factors elaborated on an earlier formulation
querying whether “the new employer conducts essentially the
same business that the old employer conducted.” Jeffries, 752
F.2d at 463. In other words, the general thrust of the inquiry
is whether the new business is “essentially the same” as the
old business.
The inquiry is not merely whether the new employer is a
“successor” in the strict corporate-law sense of the term. The
successorship inquiry in the labor-law context is much
broader. Golden State Bottling Co. v. NLRB, 414 U.S. 168,
182 n.5 (1973). “The refusal to [adhere to the strict corporate-
law definition] is attributable to the fact that, so long as there
is a continuity in the employing industry, the public policies
underlying the doctrine will be served by its broad applica-
tion.” Id. (internal quotation marks omitted).
“Because the origins of successor liability are equitable,
fairness is a prime consideration in its application.” Criswell
v. Delta Air Lines, Inc., 868 F.2d 1093, 1094 (9th Cir. 1989);
see also Bates, 744 F.2d at 710 (holding that “fairness and
necessity are inherent considerations in successorship analy-
sis”). Courts have stressed the intensely fact-specific nature of
the inquiry. See, e.g., Fall River, 482 U.S. at 43 (holding that
the successor inquiry “is primarily factual in nature and is
based upon the totality of the circumstances of a given situa-
tion”); Howard Johnson, 417 U.S. at 256 (“Particularly in
light of the difficulty of the successorship question, the myr-
iad factual circumstances and legal contexts in which it can
arise, and the absence of congressional guidance as to its reso-
16462 SULLIVAN v. DOLLAR TREE STORES
lution, emphasis on the facts of each case as it arises is espe-
cially appropriate.”); Burns, 406 U.S. at 274 (“Resolution
turns to a great extent on the precise facts involved here.”);
see also Haw. Carpenters Trust Funds v. Waiola Carpenter
Shop, Inc., 823 F.2d 289, 293 (9th Cir. 1987) (“The inquiry
we undertake is more functional than formal.”).
The inquiry depends not only on the facts related to the
new and old employers, but also on the nature of the legal
obligation at issue. As the Supreme Court has stated:
[T]he 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 sin-
gle definition 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. Adhering to that expla-
nation, we have stated that “[d]ecisions on successorship must
balance, inter alia, the national policies underlying the statute
at issue and the interests of the affected parties.” Steinbach,
51 F.3d at 846; see also Cobb, 452 F.3d at 554 (“The ultimate
inquiry always remains whether the imposition of the particu-
lar legal obligation at issue would be equitable and in keeping
with federal policy.”). Finally, the Supreme Court has held
that courts must examine the successorship question from the
viewpoint of the employee: “In conducting the analysis, [the
court] keeps in mind the question whether ‘those employees
SULLIVAN v. DOLLAR TREE STORES 16463
who have been retained will understandably view their job sit-
uations as essentially unaltered.’ ” Fall River, 482 U.S. at 43
(quoting Golden State Bottling Co., 414 U.S. at 184; Jeffries,
752 F.2d at 464)).
[12] Only the Sixth Circuit and a handful of district courts
have analyzed the successorship inquiry under the FMLA.
Grace, 521 F.3d 655; Cobb, 452 F.3d 543; Finnerty v. Wire-
less Retail, Inc., 624 F. Supp. 2d 642 (E.D. Mich. 2009), aff’d
on other grounds, No. 09-2192, 2010 WL 3069608 (6th Cir.
Aug. 5, 2010) (unpublished); Cobain v. Destination Hotels &
Resorts, No. 05-2248, 2007 WL 1589533 (E.D. Cal. June 1,
2007) (unpublished); Lombardo v. Air Prods. & Chems., Inc.,
No. 05-1120, 2006 WL 1892677 (E.D. Pa. July 7, 2006)
(unpublished); Miller v. Level 3 Commc’ns, LLC, No. 03-
4451, 2005 WL 1529419 (D.N.J. June 29, 2005) (unpub-
lished); Carlson v. Rent-A-Center, Inc., 237 F. Supp. 2d 114
(D. Me. 2003); Slaughter v. Am. Bldg. Maint. Co. of N.Y., 64
F. Supp. 2d 319 (S.D.N.Y. 1999); Barrilleaux v. Thayer
Lodging Group, Inc., No. 97-3252, 1999 WL 144110 (E.D.
La. Mar. 12,1999) (unpublished); Vanderhoof v. Life Exten-
sion Inst., 988 F. Supp. 507 (D.N.J. 1997); Jolliffe v. Mitchell,
971 F. Supp. 1039 (W.D. Va. 1997); Rhoads v. FDIC, 956 F.
Supp. 1239 (D. Md. 1997), rev’d in other part, 257 F.3d 373
(4th Cir. 2001). Those courts generally have adopted the same
considerations applied in other contexts: The inquiry is fact-
specific, fairness is a primary consideration, and courts must
balance the interests of the parties with the federal policy
underlying the FMLA.
[13] With respect to balancing the equities, the Sixth Cir-
cuit has taken a broad approach toward finding successorship.
Grace, 521 F.3d at 672-75; Cobb, 452 F.3d at 556-57. “A
stated purpose of the FMLA is ‘to entitle employees to take
reasonable leave for medical reasons.’ ” Cobb, 452 F.3d at
556 (quoting 29 U.S.C. § 2601(b)(2)). When the eight factors
listed in the DOL regulation support a finding of successor-
ship, that important purpose is fulfilled. Id. at 556-57. Simi-
16464 SULLIVAN v. DOLLAR TREE STORES
larly, a new employer who hires its employees from the old
employer “benefit[s] from the stability and continuity created
by the retention of long-term employees of its predecessor.”
Grace, 521 F.3d at 674-75. The Sixth Circuit explained that
congressional intent with respect to the 12-month waiting
period was to exclude seasonal and temporary workers, not
long-term employees whose former employer merely shifted
form. Id. at 675. The federal policy of granting leave to long-
term employees is fulfilled by a finding of successorship. Id.
[14] The Sixth Circuit held that the balancing of the equi-
ties is the true test, while the regulation’s eight factors simply
assist in the inquiry:
[T]he eight factors are “not in themselves the test for
successor liability.” Rather they are factors in an
overarching, three-part test considering the equities
of imposing a particular legal obligation on a succes-
sor: (1) the interests of the plaintiff-employee, (2)
the interests of the defendant-employer, and (3) the
federal policy goals of the statute.
Grace, 521 F.3d at 672 (quoting Cobb, 452 F.3d at 555); see
also Criswell, 868 F.2d at 1094 (noting that successor liability
began an equitable doctrine to assure fairness). Our discussion
will turn first to the eight factors,7 then to the overarching
considerations.
7
The eight factors are not entirely independent, as certain facts are rele-
vant to more than one factor. We remain cognizant of this overlap as we
assess the various factors and the overarching considerations. The analysis
is holistic and does not depend on a rigid tally of factors in support and
factors in opposition. See Finnerty, 624 F. Supp. 2d at 658 (recognizing
both the redundancy in the factors and the redundancy’s irrelevance
because of the holistic nature of the inquiry); see also 29 C.F.R.
§ 825.107(b) (“A determination of whether or not a ‘successor in interest’
exists is not determined by the application of any single criterion, but
rather the entire circumstances are to be viewed in their totality.”).
SULLIVAN v. DOLLAR TREE STORES 16465
1. “Substantial continuity of the same business
operations”
Where a Factory 2-U store once stood, a Dollar Tree now
operates after a substantial renovation. Dollar Tree purchased
the lease on the building, but absolutely nothing else.
Although both stores sell some clothing, it is undisputed that
Dollar Tree did not acquire any of Factory 2-U’s merchan-
dise; that Dollar Tree sells a wide variety of merchandise
whereas Factory 2-U sold clothing only; and that Dollar Tree
sells items for $1 only whereas Factory 2-U sold clothing at
many different prices. Both stores operated a retail business
selling discounted merchandise, but the similarities end there.
This factor strongly supports a conclusion that Dollar Tree is
not a successor to Factory 2-U.
In most cases in which courts have found substantial conti-
nuity, the new employer simply assumed a contract over a
particular business function with few, if any, changes to the
operation of the business. For instance, in Cobb, 452 F.3d at
546, the United States Postal Service (“USPS”) contracted
with a trucking company to deliver mail on specified routes.
At the end of a contract term, a new employer won the con-
tract and hired the old employer’s truck drivers, including the
plaintiff. Id. at 546-47. The plaintiff continued to deliver mail
along the same routes, using the same trucks. Id. at 547. The
court held that substantial continuity existed because, “[i]n
reality, it [is] as if Plaintiff works for the USPS and not for
one particular trucking company. Only the management, not
the job, has changed.” Id. at 557.
Similarly, in Grace, 521 F.3d at 660, the court found sub-
stantial continuity where the plaintiff worked for a govern-
ment agency through “various contracting houses.” When a
new contracting house won the contract bid, it hired the plain-
tiff and many others to continue performing the same ser-
vices. Id. “The plaintiff was employed continuously since
1996 and her duties stayed the same throughout her move
16466 SULLIVAN v. DOLLAR TREE STORES
from one placement agency to another.” Id.; see also Barril-
leaux, 1999 WL 144110, at *2 (finding substantial continuity
where employee was “re-hired” the same day on which the
old hotel employer was purchased by the new employer and
the employee continued performing the same duties);
Vanderhoof, 988 F. Supp. at 513 (finding substantial continu-
ity where the employees had the same job and duties and the
only difference was that they “merely had to fill out new
paperwork”); Jolliffe, 971 F. Supp. at 1042 (finding substan-
tial continuity where job duties of sheriff’s secretary were
identical, even though a new sheriff was elected).
The facts here are vastly different despite Plaintiff’s state-
ment that Dollar Tree “continued in the same retail business
operation.” That both stores were “retail business operations”
is too general to demonstrate substantial continuity giving rise
to successorship liability. Were it otherwise, the replacement
of a Safeway by a Saks Fifth Avenue, after a month of reno-
vations, would create successorship liability.
Additionally, in most cases in which continuity is found,
there is no break in operations: The employees continue
working on day one of new employment just as they had on
the last day of their former employment. Here, the transition
period of almost a month—when the store was closed to the
public, and when Plaintiff underwent two weeks of training
and two weeks of helping prepare the new store for regular
business—further distinguishes the present situation from
those other cases.
2. “Use of the same plant”
The regulation’s use of the word “plant” is potentially mis-
leading. The term originated in the manufacturing context of
the original labor-law cases involving successorship. Because
the terminology is manufacturing-specific, it is arguable that
this factor does not apply to non-manufacturing contexts, but
that view would be too narrow. The appropriate inquiry is
SULLIVAN v. DOLLAR TREE STORES 16467
whether the new employer uses the same facilities. The term
“plant” is simply a carry-over from the manufacturing con-
text, and there is nothing in the statute, the regulation, or in
their history or purposes to suggest that this factor applies
only to some places of employment. Accordingly, the courts
properly have understood this factor to concern the use of the
same physical facilities. See Cobain, 2007 WL 1589533, at
*16 (considering whether the new employer used “the same
buildings and facilities”); Rhoads, 956 F. Supp. at 1253 (con-
sidering whether the new employer used “the same facili-
ties”).
Considering whether the new employer continued to use
the same facility, we conclude that this factor is neutral. Dol-
lar Tree used the same location and building shell as Factory
2-U’s former store, which points in favor of successorship.
On the other hand, Dollar Tree spent weeks renovating the
interior to meet its own design specifications. So, although the
new store was in the same physical location, the interior had
been substantially renovated, nullifying the effect of this fac-
tor.
3. “Continuity of the work force”
Dollar Tree hired only a small number of employees to help
during the four-week transition period between the closing of
the Pasco Factory 2-U and the opening of the Dollar Tree,
which suggests less than a robust continuity of the work force.
Because the focus of our inquiry is on the continuity of busi-
ness operations overall, though, the more important period of
time to consider is after the store re-opened. The transitional
period may have provided a few additional weeks of employ-
ment for some employees. But, when one considers whether
the new employer continued to employ the old work force, the
more relevant comparison is between the regularly function-
ing old business and the regularly functioning new business.
As discussed above, in Part A-2, only Plaintiff and one
other employee continued to work at the Pasco Dollar Tree
16468 SULLIVAN v. DOLLAR TREE STORES
store after it opened for regular business. Accordingly, this
factor strongly supports a conclusion that Dollar Tree is not
a successor to Factory 2-U. There is almost no continuity of
work force when only two former employees are hired from
a much larger pool of former employees.
4. “Similarity of jobs and working conditions”
This factor is difficult to assess because there is no evi-
dence in the record concerning the specific nature of the jobs
or the working conditions. Plaintiff avers in her affidavit that
“the store continued to employ retail sales people who worked
during regular store hours,” but there is nothing further from
either party.
Viewing the evidence in the light most favorable to Plain-
tiff, with the benefit of generous inferences in her favor, this
factor very slightly supports a finding of successorship. The
jobs likely were of the same kind: cashiers and shelf-stockers,
along with a few managers. The working conditions likely
were similar as well, as both the old and new employers oper-
ated retail business chains during “regular” hours.
5. “Similarity of supervisory personnel”
This factor suggests no successorship. Plaintiff was the
Factory 2-U store manager in Pasco. Dollar Tree employed a
new store manager when it opened the Pasco store, even
though Plaintiff remained as an assistant manager, and the
record discloses no overlap in upper management between
Factory 2-U and Dollar Tree.
6. “Similarity in machinery, equipment, and production
methods”
Neither party presented evidence on this factor beyond a
general description of the different types of retail businesses
operated by Factory 2-U and Dollar Tree. Nonetheless, view-
SULLIVAN v. DOLLAR TREE STORES 16469
ing the record in Plaintiff’s favor, and giving her the benefit
of generous inferences, this factor appears to support a finding
of successorship. Both stores likely used cash registers, hand
trucks, and other equipment usually associated with a retail
business chain. This support is slight, however, because such
equipment is common to most retail businesses.
As with the factor related to the same “plant,” this factor
too is potentially misleading because it uses manufacturing-
specific words (“machinery” and “production methods”).
Indeed, some courts have concluded that, for that reason, this
factor does not apply in a non-manufacturing context. Cobain,
2007 WL 1589533, at *18; Vanderhoof, 988 F. Supp. at 514;
Rhoads, 956 F. Supp. at 1253-54. We disagree, for the rea-
sons discussed above in Part B-2.
7. “Similarity of products or services”
Both stores sold the same general type of products: dis-
counted retail items. Again, though, that level of generality
does not advance the analysis.
Factory 2-U sold clothing only. Dollar Tree sold a wider
variety of products (including—in the words of Plaintiff’s
affidavit—“personal, gift and household items”). Dollar Tree
sold at a particular price point, whereas Factory 2-U sold its
clothing at a range of prices. Dollar Tree did not purchase any
of Factory 2-U’s merchandise but, instead, brought in entirely
new inventory. Because of those differences, this factor sup-
ports a finding against successorship.
8. “The ability of the predecessor to provide relief”
Some courts have held that this factor is inapplicable to
FMLA claims arising after the transition from old employer
to new employer. Cobain, 2007 WL 1589533, at *18;
Vanderhoof, 988 F. Supp. at 514; Rhoads, 956 F. Supp. at
16470 SULLIVAN v. DOLLAR TREE STORES
1253. We agree. A former employer cannot grant leave to a
person no longer employed by it.
9. Conclusion and Balancing of Equities
Some equitable considerations favor successorship. Finding
successorship always promotes the congressional purpose of
granting employees leave, because it expands the number of
employees covered. Additionally, as in Grace, Plaintiff here
was not a seasonal or temporary worker whom Congress
clearly intended to exclude; she was a permanent employee,
meant to be employed for an indefinite period. If Congress
intended to exclude only seasonal or temporary workers, then
the policies of the FMLA would best be met by a finding of
successorship here.
But that intent is far from clear. Although some legislative
history suggests that Congress aimed the 12-month require-
ment at least in part to exclude seasonal and temporary work-
ers, see Cobb, 452 F.3d at 557 (noting that legislative history),
the text of the provision is decidedly broader. Had Congress
intended to exclude only seasonal and temporary workers, it
easily could have written the statute to say so, but it did not.
As it is, all employees, even those whom the employer
intends to employ indefinitely, must wait 12 months before
becoming “eligible” under FMLA. 29 U.S.C. § 2611(2)(A)(i).
Perhaps the 12-month requirement was a legislative compro-
mise to lessen the impact on employers, much as the mini-
mum number of employees serves as a compromise between
full coverage and no coverage. Whatever its genesis, though,
the provision as written plainly requires 12 months of
employment by an employer (either in its present form or as
a successor in interest) to establish eligibility for FMLA bene-
fits. A finding of no successorship advances Congress’ pur-
pose of having all employees wait 12 months to obtain FMLA
coverage.
[15] Turning to the factors discussed above, we conclude
that, although some factors slightly suggest successorship, on
SULLIVAN v. DOLLAR TREE STORES 16471
balance the factors lead strongly to the conclusion that, as a
matter of law, Dollar Tree was not a successor in interest to
Factory 2-U. When Factory 2-U declared bankruptcy, Dollar
Tree purchased only its lease on the Pasco store (and some
other leases irrelevant here). Dollar Tree did rehire a few of
Factory 2-U’s employees, and its generically described busi-
ness operation (consumer retail store offering discounted
products) is similar to Factory 2-U’s. But the similarities end
there. Dollar Tree purchased no inventory of Factory 2-U; it
required Factory 2-U’s employees to apply for jobs with Dol-
lar Tree if they wanted to work for Dollar Tree; it brought in
many of its own employees or newly hired employees; it
closed the store for a month to perform renovations, train
employees in its own methods, and set up; it changed Plain-
tiff’s job title and responsibilities; it assigned a new store
manager; it brought in all new inventory, including different
clothing and many kinds of products never sold by Factory 2-
U; and it used an entirely different pricing structure for its
products.
[16] In summary, considering all the regulatory factors as
a whole, the interests of Plaintiff and Dollar Tree, the policy
goals of the FMLA, and the equities disclosed in the record,
we hold that Dollar Tree is not a “successor in interest” to
Factory 2-U within the meaning of the FMLA. Therefore, the
district court properly granted summary judgment to Dollar
Tree.
AFFIRMED.