Employers Relocating a Unionized Facility Have a Duty To Bargain in New Location



Employers relocating a unionized facility have a duty to collectively bargain with the union at the new location.  See National Labor Relations Board v. Gaylord Chemical Co., No. 15-10006, 2016 WL 3127087 (11th Cir. Jun. 3, 2016).   “Generally, if an employer relocates and the new plant is considered merely a continuation of the old one, the employer must continue to recognize and bargain with the union which represented the employees at the old plant.”  Gaylord Chemical, 2016 WL 3127087 at *4.  In determining if a new plant is a “continuation” of a closed facility, the NLRB and Courts look “to whether the employer has maintained the same ‘operational methods, managerial hierarchy, customers, and services or products,’ as well as ‘changes in either the size, makeup, or the identity of the employee complement.'”  Id. at *5.  Generally, if employees transferring from the closed plant constitute 40% of the new facility’s workforce, the NLRB and courts will find a continuity of workforce.  Id.

In Gaylord Chemical, the employer closed a plant in Bogalusa, Louisiana and relocated it to a new plant inTuscaloosa, Alabama.  Ninety percent of the employees at the Tuscaloosa plant were former Bogalusa employees.  The United Steel Workers were the collective bargaining unit for the Bogalusa plant, but Gaylord Chemical refused to bargain with the USW in Tuscaloosa.  In an extensive analysis, the Eleventh Circuit found that the Tuscaloosa plant was a continuation of the Bogalusa facility and that Gaylord Chemical had an obligation to bargain with the USW.

Certain parts of Alabama are perceived to be less “union friendly” than others.  Thus, there might be a temptation for some employers to close unionized plants and move to those parts of Alabama.  Nevertheless, Gaylord Chemical demonstrates that merely relocating a facility cannot achieve elimination of a union.