Thursday, June 20, 2024

Long live Anchor Brewing! We'll have to wait and see about its labor union. ⚓ 🍻

News broke earlier this month that Hamdi Ulukaya, the billionaire founder of Chobani yogurt, purchased the assets of Anchor Brewing after its former owner, international beer conglomerate Sapporo, had unexpectedly shuttered the brewery nearly a year ago. Anchor was one of the country's few unionized craft breweries. Ulukaya has said that he would hire back as many former employees as possible but didn't know whether the union would be part of his new operations. If he hires enough of the former employees, however, he may not have a choice on the union. That issue will depend on whether Ulukaya's Anchor Brewing is a "successor" of Sapporo's Anchor Brewing.

NewCo will be deemed a successor and must recognize and bargain with the union representing those employees if: (1) it continues running the business in substantially the same form; and (2) it hires a majority of OldCo's unionized employees. On the hiring issue, NewCo cannot refuse to hire a former employee for the express reason of avoiding the union. That's called discrimination and it's illegal under the National Labor Relations Act.

Even if both prongs are satisfied, there is a twist — NewCo doesn't have to stick to the old union contract if it makes it clear to employees (either before or when offering jobs) that they don't plan to follow the existing agreement. In that case, NewCo can set its own initial terms and conditions of employment and then negotiate a new union contract agreement.

For employers, this saga offers a legit teachable moment. Know what you're buying when you buy a company, including the possibility and probability of buying a labor union and collective bargaining obligations. Due diligence matters, and no one likes these kinds of surprises.