Some of my clients want to get rid of the union that represents their employees. They believe that if they close their company and reopen under another name, perhaps in a different location, that the union will no longer represent their employees. I have to tell them that they are wrong. According to a public press release from the National Labor Relations Board, former employees of a window washing company were awarded back pay after the company unlawfully closed Republic Windows and opened Echo Windows and Doors.
According to the press release, in December 2008, the employer abruptly shuttered operations at its Goose Island facility and filed voluntary Chapter 7 bankruptcy resulting in the termination of 270 employees. Simultaneously, the employer established Echo Windows and Doors with substantially identical ownership, management, and purpose. Upon closing operations in the Chicago area, the employer transferred all bargaining unit work to its alter ego operation in order to avoid obligations to the Union as the employees’ collective-bargaining representative. Bankruptcy proceedings often prevent compliance with Board-ordered remedies as employer’s assets are liquidated through Chapter 7 processes. The employees here did not receive full back pay, but the Board is considering this case a victory, nonetheless.