Executive Summary: Key Legal and Evidentiary Issues

• Reasonableness of the Labour and Employment Board’s dismissal of three applications alleging a sale of business and common employer status under the Industrial Relations Act.
• Adequacy of evidence proving a “functional economic vehicle” was transferred from East Coast Interiors to 697800 NB Corp. (Millennium Estates) to support successor rights.
• Whether hiring a small drywall crew and its former principal (Greene) by Millennium could establish a sale of business or only ordinary hiring in a larger workforce.
• Sufficiency of evidence to show East Coast and Millennium, and separately Amped and Millennium, operated as a common employer under s. 51.01 of the Act.
• Proper application of the Vavilov reasonableness framework, including deference to the Board’s expertise and prohibition on re-arguing the merits on judicial review.
• Impact of evidentiary gaps where the Board repeatedly found “no evidence” of key factors such as asset transfer, upper-management role, or coordinated anti-union business design.

Background and facts of the dispute
The case arises from a labour relations dispute in the New Brunswick construction industry involving the United Brotherhood of Carpenters and Joiners of America, Local 1386 (the union) and several construction-related employers: 697800 NB Corp. (Millennium Estates), East Coast Interiors Inc., and Amped Construction Inc. The underlying proceedings were heard together by the New Brunswick Labour and Employment Board because they shared a common factual matrix. The union filed three applications before the Board: one seeking a declaration of successor rights, and two seeking declarations of common employer status under the Industrial Relations Act, RSNB 1973, c. I-4. The union’s core theory was that bargaining rights and unionized work were being shifted or fragmented between related or successor entities so as to avoid or undermine unionization, particularly in relation to drywall and carpentry work. The Board heard the applications together and, on June 11, 2025, dismissed all three, prompting the union to seek judicial review in the Court of King’s Bench of New Brunswick. Justice E. Thomas Christie heard the judicial review on February 18, 2026 and issued the ruling on February 24, 2026 (2026 NBKB 28).

The applications before the Labour and Employment Board
Three separate Board files were involved, all brought by Local 1386: (1) In Board file IR-034-24, the union sought a declaration of successor rights, naming 697800 NB Corp. (Millennium Estates) and East Coast Interiors Inc. as respondents. The allegation was that there had been a “sale of business” within the meaning of s. 60 of the Industrial Relations Act from East Coast to Millennium. (2) In Board file IR-035-24, the union sought a declaration that Millennium and East Coast were a common employer under s. 51.01 of the Act. The Saint John Construction Association Inc. and the Moncton Northeast Construction Association Inc. were also named but were not active participants. (3) In Board file IR-036-24, the union sought a declaration that Millennium and Amped Construction Inc. were a common employer under s. 51.01, again with the construction associations named but not actively participating. Across all three, the union relied heavily on the movement of personnel and work between these entities, particularly the transition of a principal from East Coast, Mr. Greene, and his drywall crew to Millennium, as well as the relationship between the unionized Amped and the non-union Millennium.

Statutory framework and legal issues before the Board
The Board identified three central issues: whether there had been a sale of business under s. 60 of the Industrial Relations Act between East Coast and Millennium; whether Millennium and East Coast should be declared a common employer under s. 51.01; and whether Millennium and Amped should similarly be declared a common employer. In the successor rights application, the legal focus was on whether there had been a transfer of a “functional economic vehicle” from East Coast to Millennium—this is the labour relations concept that underpins a sale of business analysis. The union argued that, in the construction context, the true “assets” of a business are often its skilled crews and their supervisors, and that Greene and his drywall crew, when hired by Millennium, effectively were the real assets that passed from East Coast to Millennium. In the common employer applications, the Board applied the test set out in its own prior decision, Lafford Formwork Ltd. (Re), [2025] N.B.L.E.B.D. No. 1, which requires more than mere similarity of activities or workforce; it requires evidence that the entities are engaged in related activities for the benefit of related principals, with sufficient integration or common control to justify treating them as a single employer for collective bargaining purposes. The Act’s provisions themselves (ss. 60 and 51.01) frame these doctrines but no specific insurance or commercial policy terms were at issue; the case centered on statutory labour law tests rather than contractual policy clauses.

The Board’s factual findings on the alleged sale of business
On the successor rights application, the Board concluded that the evidence did not establish a sale of business or transfer of a functional economic vehicle from East Coast to Millennium. The union emphasized that Greene and his drywall crew, formerly associated with East Coast, moved to work for Millennium, and argued that, in the construction industry, this workforce shift alone could constitute a transfer of the business. The Board, however, required more than the hiring of a crew. It noted the absence of evidence that Greene or any East Coast employee moved into upper management or ownership at Millennium; at most, Greene was described as a “working foreman” within Millennium’s larger workforce hierarchy. The Board also found no evidence of any transfer of real assets or equipment, or of a purchased contract from East Coast. While Millennium continued drywall work at the Millidge Avenue job site after East Coast’s involvement ended, the Board held that continuation of work at a site did not, in itself, prove that Millennium had acquired East Coast’s contract or business. The Board ultimately characterized Greene’s actions as abandoning his contracting business to avoid unionization of his employees, rather than selling that business to Millennium. On this evidentiary record, the Board held that the union had not even made out a prima facie case of a sale of business or transfer of a functional economic vehicle.

The Board’s analysis of the East Coast–Millennium common employer claim
Turning to the common employer application involving East Coast and Millennium, the Board applied the Lafford Formwork test and accepted that there were multiple entities as required by s. 51.01 and that these small construction companies engaged in similar or related activities. The Board recognized that East Coast, Millennium, and similar firms hired skilled tradespeople—particularly in general carpentry—and operated with comparable means of production, without being in different industries or lines of business. However, the Board highlighted that a key element of a common employer finding is whether the activities are carried out for the benefit of related principals. While Millennium did hire Greene, the former principal of East Coast, the evidence only supported that he occupied a foreperson-level role. The Board expressly found no evidence that Greene was related to any of Millennium’s principals or that he formed part of its ownership, directorship, or senior management. Nor was there evidence that Millennium participated in East Coast’s decision-making or exercised control over it. In the Board’s view, the record simply did not demonstrate the degree of relatedness, common control, or shared benefit among principals necessary to declare East Coast and Millennium a common employer. Again, the crux was evidentiary insufficiency, not an error in the test applied.

The Board’s findings on the Millennium–Amped common employer application
In the application involving Millennium and Amped Construction Inc., the Board again accepted that there were at least two separate entities engaged in related activities as contemplated by s. 51.01. The union’s concern was that business was being shifted from Amped, a unionized employer, to Millennium, a non-union employer, thereby undermining bargaining rights. However, the Board found the evidence did not support a finding that Millennium and Amped had designed or coordinated their business plans to divert work deliberately from the unionized entity (Amped) to the non-union entity (Millennium). Without proof of such coordinated design, common control, or a scheme to move union work, the Board concluded that the criteria for a common employer declaration were not met. As with the other applications, the decisive factor was the lack of concrete evidence tying the entities’ operations together at the level of ownership, management, or planning, rather than mere similarity of trade or overlap of projects.

Standard of review and the Vavilov reasonableness framework
On judicial review, all parties accepted that the applicable standard was reasonableness, consistent with the Supreme Court of Canada’s decision in Minister of Citizenship and Immigration v. Vavilov. Justice Christie endorsed that position, noting the presumption of reasonableness review for administrative tribunals, absent a legislated correctness standard or a rule-of-law exception. Within this framework, the court’s role is not to decide the matter afresh, reweigh the evidence, or determine the “correct” result, but to ask whether the Board’s decision and reasons are transparent, intelligible, and justified in light of the applicable law and the evidentiary record. Justice Christie emphasized that labour relations questions about the scope and application of bargaining rights are central to the expertise of the Labour and Employment Board, and that courts must show deference to such specialized tribunals. The union argued that the Board had applied an inconsistent test by sometimes using the term “prima facie case” and at other times referring to a “strong prima facie case,” contending that this amounted to legal error. The judge was not persuaded that this linguistic variation alone rendered the decision unreasonable, characterizing it as a variation on the same theme rather than a material change in the burden. He further observed that, even if the Board’s expression of the test were imperfect, Vavilov contemplates that tribunals can be “wrong” within limits without necessarily crossing the line into unreasonableness. Justice Christie also noted that, if any clarification of the prima facie standard is needed in this specialized labour context, it is better left to the Board in future decisions, rather than imposed on judicial review.

The court’s assessment of the Board’s evidentiary approach
A central plank of the union’s judicial review was the assertion that, on the evidence, there was only one reasonable outcome: the granting of each of the requested declarations and orders. Counsel urged the court to accept that no reasonable decision-maker could have failed to find a sale of business or common employer status on this record. Justice Christie rejected that premise. He repeatedly referenced the Board’s findings that critical elements of each test were unsupported by evidence or, in some cases, that there was effectively “no evidence.” For successor rights, the missing evidence concerned transfer of real assets, managerial continuity, or acquisition of East Coast’s business as a functional economic vehicle. For the common employer claims, the gaps related to shared principals, ownership or upper-management integration, involvement in each other’s business decisions, or proof of a deliberate design to move union work to a non-union employer. The judge underlined that it is not the role of the reviewing court to conduct a paper review of the record to see whether it would reach a different factual conclusion. Instead, the question is whether the Board’s conclusion that the evidentiary threshold had not been met falls within the range of reasonable outcomes, given its reasons and the record before it. In his view, the Board carefully articulated why it saw the evidence as insufficient at each step, and these explanations were defensible both in logic and in law.

Final ruling, successful parties, and monetary outcome
Justice Christie concluded that the Board’s rulings were “unassailable” under the Vavilov reasonableness standard. He found that the Board’s reasons were transparent, intelligible, and adequately justified the dismissal of the union’s applications for successor rights and common employer declarations. Accordingly, the court dismissed the application for judicial review and confirmed the Board’s decision. On costs, the Court of King’s Bench ordered the union, as the unsuccessful Applicant, to pay costs to each of the employer-side Respondents—Millennium Estates (697800 NB Corp.), East Coast Interiors Inc., and Amped Construction Inc.—in the amount of $2,500.00 plus HST per Respondent. There were thus three separate cost awards, for a total of $7,500.00 plus applicable HST in favour of the Respondent employers, who emerged as the successful parties in the litigation.