• Target Not a Successor to Zellers
  • November 30, 2012 | Author: Earl Phillips
  • Law Firm: McCarthy Tétrault LLP - Vancouver Office
  • The BC Labour Relations Board has refused to declare Target a successor to Zellers for a location in Burnaby.

    The United Food and Commercial Workers Union, Local 1518 was seeking to extend its bargaining rights for the Zellers employees at Brentwood Mall.  That location was one of 220 leasehold interests across the country that Target could acquire from Zellers.

    The Board rejected the union application, essentially because the union had not shown a sufficient continuity between the former Zellers business and the projected Target business.  The Board noted:

    • Target is different from Zellers in its brand, its market and its methods;

    • the Brentwood Mall leasehold interest was important to Target, not because it had been a Zellers, but because of the characteristics of the location itself;

    • there will be gap of six months to three years between the Zellers closure on March 14, 2013 and the Target opening;

    • Target did not need Zellers for anything but the location; in fact, it was in Target’s best interests to distance itself from Zellers as much as possible.

    The decision gives appropriate significance to the concept of the transfer of a business or part of it.  It would have been easy to point to the location, the carrying on of the same “type” of business, the transfer of some pharmacy assets and the acquisition of rights to one brand carried by Zellers, and find that Target was a successor.  But by properly focusing on the need for a discernible continuity in the business the Board reached the right decision:  Target is not Zellers.  (And if  Target’s market research is correct, it appears the Canadian consumer agrees and can’t wait for Target to open.)