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U.S. Supreme Court

Howard Johnson Co., Inc. v. Hotel Employees, 417 U.S. 249 (1974)

Howard Johnson Co., Inc. v. Detroit Local Joint Executive Board,

Hotel & Restaurant Employees & Bartenders

International Union, AFL-CIO

No. 73-631

Argued March 19-20, 1974

Decided June 3, 1974

417 U.S. 249


Petitioner purchased the assets of a restaurant and motor lodge under an agreement whereby the sellers, who had been operating the enterprises under franchises from petitioner, retained the real property and leased it to petitioner, and petitioner expressly did not assume any of the sellers' obligations, including those under any collective bargaining agreement. Deciding to hire its own workforce to operate the enterprises, petitioner hired 45 employees, but only nine of the sellers' 53 former employees and none of the former supervisors. Respondent Union, which had collective bargaining agreements with the sellers containing arbitration provisions, filed an action under § 301 of the Labor Management Relations Act, claiming that petitioner's failure to hire all the sellers' employees constituted a "lockout" in violation of the agreements and seeking injunctive relief and an order compelling petitioner and the sellers to arbitrate the extent of their obligations to the sellers' employees under the agreements. The District Court held that petitioner was required to arbitrate, but denied the union's motion for a preliminary injunction requiring petitioner to hire all of the sellers' employees. The Court of Appeals affirmed the order compelling petitioner to arbitrate.

Held: Petitioner was not required to arbitrate with the union in the circumstances of this case, since there was plainly no substantial continuity of identity in the workforce hired by petitioner with that of the sellers, and no express or implied assumption of the agreement to arbitrate. John Wiley & Sons v. Livingston, 376 U. S. 543, distinguished. Petitioner had the right not to hire any of the sellers' employees, if it so desired, NLRB v. Burns Security Services, 406 U. S. 272, and this right cannot be circumvented by the union's asserting its claims in a § 301 suit to compel arbitration, rather than in an unfair labor practice context. Pp. 417 U. S. 253-265.

482 F.2d 489, reversed. chanroblesvirtualawlibrary

Page 417 U. S. 250

MARSHALL, J., delivered the opinion of the Court, in which BURGER, C.J.,and BRENNAN, STEWART, WHITE, BLACKMUN, POWELL, and REHNQUIST, JJ., joined. DOUGLAS, J., filed a dissenting opinion, post, p. 417 U. S. 265.

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