Bloomberg Law: Marick Masters on union status at new battery plants

The shift to electric vehicles is threatening labor unions’ ironclad grip on the U.S. auto industry, thanks in part to an obscure portion of federal labor law that gives car manufacturers authority to swap union workers for non-union workers. Typically, if an employer buys a company that’s already unionized, they’re legally required to recognize and bargain with that union. The obligation depends on whether the employer substantially retains the identity of the original business—the more it does, the more it’s required to recognize the union, the Supreme Court said in its 1972 decision NLRB v. Burns International Security Services. The National Labor Relations Board has addressed narrower questions surrounding successorship in the years since.

Successorship doesn’t apply in cases where the employer reorganizes as an entirely new entity—precisely what Ford Motor Co. and General Motors Co. are doing to make electric vehicle batteries through partnerships with other companies. So far, neither company has said they’ll recognize the UAW in the new battery plants, which will be operated through joint agreements with different Korean companies. “That’s why it’s really uncertain at this time—that it’s not a given that they’ll be automatically union jobs,” said Marick Masters, a business professor at Wayne State University who studies collective bargaining in the auto industry. “The union is going to have to fight for those jobs and make certain they can work out the best deal possible with the company, that at least the company will remain neutral during an organizing campaign.”

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