Oregon Law Firm
Employer Can Be Liable for Prior Business’s Unpaid Wage Claims As a “Successor to the Business
The Oregon Supreme Court recently sided with BOLI in finding that a business which operated a bar in the same location as a prior bar was liable for the prior bar’s unpaid wages as a “successor to the business.” The case is Blachana LLC v. BOLI.
CP Underhill, LLC (CPU) owned a building in North Portland. Five businesses had operated a bar in that location, all referred to as the “Portsmouth Club.” CPU leased the building and sold the Portsmouth Club’s assets and goodwill to NW Sportsbar Inc. in early 2005. NW Sportsbar operated under the name “Portsmouth Club” and “Anchor Grill.” NW Sportsbar stopped paying its employees wages in 2006 (as well as other bills and obligations), and ultimately entered into a Surrender and Release Agreement with CPU, the owners of the building, wherein the business name, goodwill, and assets were surrendered to CPU. The members of CPU created a new company, Blachana, LLC, and opened a business in the same location called “Penner’s Portsmouth Club.” Blachana obtained a new liquor license and other permits, hired new workers (and did not employ any of NW Sportsbar’s former employees), and used a different food vendor. Blachana did, however, use the same bar equipment and beer vendor as NW Sportsbar.
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