The Reasoning Behind a “Good Reason” Standard: The Seventh Circuit’s Analysis of Successor Liability in Teed v. Thomas & Betts Power Solutions, L.L.C.

On January 9, 2013, the U.S. Court of Appeals for the Seventh Circuit held in Teed v. Thomas & Betts Power Solutions, L.L.C. that a federal common law standard for successor liability applies to claims arising under the Fair Labor Standards Act. In doing so, the court established a new, broader standard for successor liability that applies to any claim arising from an employer’s violation of a federal labor or employment statute. This Comment argues that, although the court properly recognized congressional policies favoring employee protection, the new standard goes too far in liberalizing the successor liability exception. With little to guide the newly articulated standard, the Seventh Circuit cannot anticipate problems that might arise in deciding future cases.