Unpublished Disposition, 931 F.2d 896 (9th Cir. 1991)

MEMORANDUM^* 

The National Labor Relations Board (Board) found that American Golf Corporation (AGC) was a successor employer and concluded that AGC violated sections 8(a) (1), (3) and (5) of the National Labor Relations Act (Act), 29 U.S.C. §§ 158(a) (1), (3) and (5) (1988), by refusing to hire its predecessor's employees and by unilaterally lowering wages and benefits. The Board ordered AGC to offer to reinstate the former employees with back pay and benefits. AGC petitions for review of that order and the Board cross-petitions for enforcement. We enforce the order in part, deny it in part, and remand.

AGC first argues, under NLRB v. Burns Int'l Sec. Serv., Inc., 406 U.S. 272 (1972), it is not liable for any back pay because it was free to implement terms of employment without notifying the union. We agree that AGC was under no duty to adopt the predecessor's collective bargaining agreement. See NLRB v. Edjo, Inc., 631 F.2d 604, 606 (9th Cir. 1980). Nevertheless, " [w]hen employees have a collective bargaining agreement and a change in ownership occurs, the new owner must recognize and bargain with the employees' union if the new owner is found to be a 'successor employer.' " Kallmann v. NLRB, 640 F.2d 1094, 1100 (9th Cir. 1981) (citing Edjo, 631 F.2d at 606-07). Because AGC is a successor employer, it acted unlawfully when it implemented new terms of employment without notifying the union.

AGC nevertheless argues that its back pay liability was tolled by its reinstatement offer. AGC relies on Canova v. NLRB, 708 F.2d 1498, 1505 (9th Cir. 1983), where we held that back pay liability may be tolled by making a full and unconditional offer of reinstatement. Here, the terms of AGC's reinstatement offer were less than the terms offered by AGC's predecessor; therefore, the offer did not toll AGC's back pay liability.

AGC next contends the Board's back pay order is unlawful in light of Kallmann, 640 F.2d 1094. In Kallmann we refused to enforce an order requiring back pay at the predecessor's rates from the time of the takeover until the parties bargained to agreement or to impasse. Id. at 1103. We determined that the Board's order was unlawful because it was evident that, in all probability, any bargaining would have led to impasse, at which time the successor employer could have lawfully implemented its own terms of employment. Id. We thus concluded that an appropriate back pay award could not extend beyond a reasonable period allowing for bargaining. Id. We remanded the matter to the Board to make that determination. Id.

Here, the record is insufficient for us to determine whether bargaining would have led to impasse. That determination should be made by the Board on remand. Should the Board find that the parties would have reached impasse had they bargained, it should then apply the limitation set forth in Kallmann in fashioning a new back pay order. We note here, as we did in Kallmann, that the Board may leave resolution of the back pay issue to bargaining between the parties. With the exception of the back pay order, we enforce the Board's order in all other respects.

ENFORCED IN PART, DENIED IN PART, and REMANDED.