WALTERS, J.
In this wage claim case, the issue is whether the Bureau of Labor and Industries (BOLI) correctly determined that a business entity, Blachana, LLC, is a "successor" employer and must, therefore, reimburse BOLI for wages paid from the Wage Security Fund on behalf of four wage claimants. The employees had worked for NW Sportsbar Inc. (NW Sportsbar) before that corporation went out of business and surrendered its property and the business to Blachana. On judicial review of BOLI's final order assigning liability to Blachana, the Court of Appeals reversed, holding that Blachana was not a "successor to the business" of NW Sportsbar, as that phrase is used in the wage claim statute, ORS 652.310(1).
The following facts are undisputed. Janet and Chris Penner, mother and son, owned and managed a limited liability corporation called CP Underhill LLC (CPU). CPU owned a building in Portland and, in that building, operated a bar called the Portsmouth Club and a restaurant called Mama's BBQ. Since 1940, five different businesses had operated a bar and restaurant in that location, and customers had referred to each business as the "Portsmouth Club." In February 2005, CPU executed an agreement to lease the building to NW Sportsbar for five years. The same day, CPU also executed a sales agreement under which NW Sportsbar bought the inventory of the Portsmouth Club for $50,000 and the good will of the Portsmouth Club for $285,000. The president of
For the rest of 2005 and until May 2006, NW Sportsbar operated its business in the leased building under the names "Portsmouth Club" and "Anchor Grill." The business offered food and drinks and live music as entertainment. Drago managed the business and hired the four wage claimants, two in 2005 and two in 2006. Drago paid some wages in 2005, but stopped paying any of the wage claimants' wages in 2006. The two wage claimants hired in 2006 never received any wages for their work.
By May 2006, Drago also was three months behind in his payments under the lease and sales agreements and began to discuss with Janet Penner the closing, and CPU's repossession, of the business. In early May 2006, "Portsmouth Club" closed its doors, and, on May 9, 2006, Drago and CPU entered into a Surrender and Release Agreement, under which NW Sportsbar surrendered all its businesses assets, including the business name and goodwill, and relinquished possession of the personal property left in the building to CPU. In exchange, CPU released NW Sportsbar from its obligations under the lease and sales agreements. Drago then left town without paying the four employees.
About a week later, Janet Penner registered Blachana, LLC, with the Oregon Corporation Division, listing herself as a manager and member
Meanwhile, on May 18, 2006, one of NW Sportsbar's employees filed a wage claim with BOLI. The investigator assigned to the employee's case twice called the telephone number on file for NW Sportsbar and, each time, Chris Penner answered the phone by identifying the business as "Portsmouth Club." Three other former NW Sportsbar employees eventually also filed wage claims; the four wage claims totaled just over $7,000. The investigator attempted unsuccessfully to locate Drago and ultimately determined that the wage claims were valid, that NW Sportsbar had ceased doing business, and that NW Sportsbar's former employees' wage claims could not be fully and promptly paid except through the Wage Security Fund, a fund established to pay wage claimants if the employer no longer is in business or is without sufficient assets to pay the claims. See ORS 652.409 (establishing Wage Security Fund for that purpose); ORS 652.414(1) (authorizing payment of wage claims in those circumstances). BOLI paid the claims through the Wage Security Fund and then notified Blachana that it was responsible for the unpaid wages under ORS 652.414(3) (authorizing commissioner to take appropriate action to recover from "employer, or other persons or property liable for the unpaid wages" amounts paid from Wage Security Fund) and ORS 652.310(1) (defining "employer" for purposes of ORS 652.414 to include "any successor to the business of any employer, or any lessee or purchaser of any employer's business property for the continuance of the same business").
After a contested case hearing before an administrative law judge, BOLI's commissioner concluded that Blachana was a "successor to the business of" NW Sportsbar. In his Final Order, the commissioner explained
Blachana sought review of that determination in the Court of Appeals. In that court, Blachana argued that BOLI's interpretation of the statutory phrase "successor to the business" was not within the legislature's intended meaning of that phrase and that Blachana was not a successor to NW Sportsbar, because it was a separate corporate entity with no connection to NW Sportsbar. The Court of Appeals agreed. After considering dictionary definitions of the operative words of the statute, the court concluded that those definitions did not resolve the issue. The court observed that the legislature could have intended a successor to be a "legal" substitute, which the court described as "a party that succeeds, by some operation of law, to the legal rights and obligations of the predecessor," meaning that only parties that "could be held liable for the predecessor's liabilities as a function of law outside ORS chapter 652, such as contract, agency, common-law successor liability, or other statutory law" would be liable for a predecessor's wage claims as a successor "employer" under ORS 652.310(1) and ORS 652.414(3). Blachana, 250 Or.App. at 87, 279 P.3d 248. Or, the court continued, the legislature could have intended a broader meaning, imposing liability on any "functional" successor, which the court described as any business that "replaces the predecessor business in a functional sense but does not necessarily assume the predecessor's rights and liabilities as a matter of any law other than ORS 652.310(1)." Id.
To resolve the question, the court turned to the context of the phrase "successor to the business" as used in ORS 652.310(1). According to the court, that context includes the second clause of the definition of employer — "or any lessee or purchaser of any employer's business property for the continuance of the same business" — as well as the common law in 1931, when ORS 652.310(1) was enacted. In the court's view, because the common law in 1931 provided that "the transfer of assets between corporate entities does not automatically make the transferee liable for the transferor's debts and liabilities," any "lessee or purchaser of any employer's business property for the continuation of the business" would not be liable for the debts and liabilities of the predecessor. Blachana, 250 Or.App. at 88, 279 P.3d 248.
Id. It followed, the Court of Appeals concluded, that the legislature intended the definition of "successor to the business" to be "limited to a party that has succeeded by law to the legal rights and obligations of the predecessor in that business." Id. at 88-89, 279 P.3d 248.
After applying that interpretation to the facts of the case, the Court of Appeals held that the record did not establish that Blachana was the "legal successor" to NW Sportsbar. The court stated:
Id. at 89, 279 P.3d 248.
As we explain below, we disagree with the Court of Appeals' conclusion that an entity is liable as a "successor to the business" under ORS 652.310(1) only when the entity would be liable for a predecessor employer's unpaid wages under some law other than that statute. We begin our analysis by describing in greater detail the statutory scheme governing this dispute.
In 1931, the legislature enacted a statute providing for the payment and collection of wages, including the enforcement of employees' rights to make wage claims against employers that had not paid employees' wages in full. Or. Laws 1931, ch. 287. Under the original statutory scheme, and until 1985, the statute required the commissioner of the bureau of labor
Under that scheme, if the commissioner could not collect unpaid wages from an "employer" for employees who had worked without compensation, then those employees would have no recourse. In 1985, the legislature addressed that problem by creating the Wage Security Fund, funded by employer taxes, to pay wage claims in those cases in which the commissioner determined that the employer against whom the claim was filed had ceased doing business and was without sufficient assets to pay the wage claim. Or.
Today, under ORS 652.414, when an employee has filed a claim for unpaid wages and BOLI has determined that the employer is incapable of paying the wage claim, the commissioner will pay the claim — up to $4,000 — out of the Wage Security Fund. ORS 652.414 provides, in part:
Subsection (3) of that statute permits the commissioner to take legal action to recover amounts paid from the Wage Security Fund from the employer:
For purposes of ORS 652.414, "employer" is defined as
ORS 652.310(1).
It is that definition of "employer" that is at issue in this case. The wage claimants in this case worked for NW Sportsbar. Blachana did not employ them directly or through an agent; Blachana obtained NW Sportsbar's business assets, including its business name, goodwill, and the property left in the building, through repossession. BOLI relies on the first clause of the definition of "employer" in ORS 652.310 — "any successor to the business of any employer" — in arguing that Blachana is liable for NW Sportsbar's unpaid wages under the wage hour statute.
The phrase "successor to the business" is not defined in the statutes, and BOLI's regulations define the word "successor" in essentially the same terms as are used in the statute.
Id. Since 1987, when it decided Anita's Flowers, BOLI consistently has applied that test and considered those factors to determine whether a business is a successor under the wage claim law. See, e.g., In re Bukovina Express, Inc., 27 BOLI 184, 201 (2006); In re Fjord, 21 BOLI 260, 286 (2001); In re Tire Liquidators, 10 BOLI 84, 93 (1991). And, as explained above, BOLI used that test and applied that nonexclusive list of factors in this case.
In this court, as it did in the Court of Appeals, Blachana argues that BOLI's interpretation of the phrase "successor to the business" in ORS 652.310(1) is outside the legislature's intended meaning of that phrase. When a disputed statutory term is part of a regulatory scheme to be administered by an administrative agency, this court first determines whether that term is an "exact" term, an "inexact" term, or a "delegative" term — that is, how much interpretive authority the legislature delegated to the agency when using that term. Springfield Education Assn., 290 Or. at 223, 621 P.2d 547. "Exact" terms are terms of precise meaning. Id. "Inexact" terms communicate a complete policy statement, but the words used may be imprecise, requiring further interpretation. Id. at 224-25, 621 P.2d 547; Schleiss v. SAIF, Corp., 354 Or. 637, 642, 317 P.3d 244 (2013) (explaining that inexact term is "neither a term so precise that no interpretation is necessary nor a term (such as `good cause') indicating that the legislature intended to delegate the determination of its meaning to an agency charged with implementing the statute"). Finally, "delegative" terms require the agency to make policy determinations in the first instance. Springfield Education Assn., 290 Or. at 223, 621 P.2d 547.
The Court of Appeals held, and the parties agree, that, as used in ORS 652.310(1), the phrase "successor to the business" is an inexact term. We also agree. It embodies a complete legislative policy, but it is not so precise as to be an "exact" term. The words are capable of more than one meaning, and, therefore, BOLI was required to interpret them in order to effectuate the legislative policy. Accordingly, this court must review BOLI's interpretation to ensure that it is consistent with the legislature's intent. Coffey v. Board of Geologist Examiners, 348 Or. 494, 502-06, 235 P.3d 678 (2010) (so analyzing agency action). In that regard, the agency's interpretation of the statute is not entitled to deference on review. Schleiss, 354 Or. at 642, 317 P.3d 244. The court interprets the relevant statute using the usual methods for statutory interpretation. Coast Security Mortgage Corp. v. Real Estate Agency, 331 Or. 348, 354-55, 15 P.3d 29 (2000) (applying usual interpretive paradigm to determine meaning of inexact term). We examine the text and context of the statute and, if helpful, legislative history.
As noted, the phrase "successor to the business," ORS 652.310(1), is not defined in the statutes. In construing that phrase, we seek to discern the intent of the legislature that enacted the statute. State v. Perry, 336 Or. 49, 52, 77 P.3d 313 (2003). As we have explained, the legislature enacted the original version of ORS 652.310(1) in 1931. Or. Laws 1931, ch. 287. That statute has not been amended in any way pertinent to this case since then, and this court has not before construed the phrase at issue here. As the court stated in Perry, in construing statutes that were enacted many years ago, we consult dictionaries that were in use at the time. 336 Or. at 53. 77 P.3d 313. Moreover, if a word has a well-defined legal meaning, we give the word that meaning in construing the statute. Id.
At the time that the legislature enacted ORS 652.310(1), law dictionaries generally defined "successor" as one who follows another. See, e.g., John Bouvier, 3 Bouvier's Law Dictionary and Concise Encyclopedia 3176 (3d ed. 1914) (defining "successor" as "[o]ne who follows or comes into the place of another"); Stewart Rapalje, II Dictionary of American and English Law 1233 (1883) (defining "successor" as "[o]ne that follows in the place of another"); Henry Campbell Black, A Dictionary of Law 1134 (1891) (defining "successor" as "[o]ne who succeeds to the rights or the place of another; particularly the person or persons who constitute a corporation after the death or removal of those who preceded them as corporations"). The contemporaneous general dictionary definition of successor was:
Webster's New Int'l Dictionary 2073 (1910).
Blachana emphasizes the part of those definitions that requires that the entity that follows another must "sustain[] the like part or character." It argues that it should not be enough for an entity simply to follow another in time; to be a successor, the entity must, in some way, step into the shoes of its predecessor. BOLI agrees, as do we. To be a "successor," as that term is used in ORS 652.310(1), an entity must do more than merely follow its predecessor chronologically; it must conduct a business that "sustains the like part or character" of the previously conducted business.
We reach that conclusion not only from the dictionary definition of the word "successor," but also from the context in which the legislature used it. As the Court of Appeals correctly explained, that context includes the second part of the definition of employer in ORS 652.310(1) — "any lessee or purchaser of any employer's business property for the continuance of the same business." Under that clause, a lessee or purchaser of an employer's business property is liable for wages owed by a predecessor only when the lessee or purchaser uses that property "for the continuance of the same business." That is, under that clause, more than merely following in another's place is required. We think it likely that the legislature likewise intended to use the word "successor" in the first clause to mean more than one that merely follows another.
Blachana further argues, however, that, to be a "successor" for the purposes of ORS 652.310(1), an entity that succeeds another must do so in circumstances in which the succeeding entity would be liable for the promises or obligations of its predecessor under law other than the wage statute. Yet the dictionary definitions of the term "successor" do not import that requirement. And, notably, ORS 652.310(1) does not define the word "employer" to include those who succeed to the obligations of a prior employer; rather, the definition includes those who succeed to the "business" of the prior employer.
At the time that the legislature enacted ORS 652.310(1), "business" was defined as "a commercial or industrial establishment or enterprise; he sold his business." Webster's at 296-97 (emphasis in original). By defining an "employer" to mean a successor to the "business" of a predecessor, the legislature indicated an intent to include a
(Footnotes omitted.) Thus, under the common law, where one company transferred all its assets to another company, the successor to the business generally was not responsible for the liabilities of the predecessor.
The Court of Appeals found the intent to impose that limitation not in that phrase, but by looking to the second clause in the definition of employer in ORS 652.310(1) — "or any lessee or purchaser of any employer's business property for the continuance of the same business." The court examined that clause in the context of the first clause of that definition — "successor to the business" of any employer. Blachana, 250 Or.App. at 87-88, 279 P.3d 248. As noted, the court stated that a plausible interpretation giving meaning to both clauses is that
Id. at 88, 279 P.3d 248. According to the court, if it were to interpret the first clause to mean a business that merely followed a predecessor (in the court's words, a "functional" successor), then the two clauses would be duplicative insofar as, in that case, both clauses would refer to businesses that, in the court's view, would not otherwise be liable to pay wages owed by a prior employer. Id.
We interpret the statute differently. As we have explained, to be a "successor to the business" under ORS 652.310(1), an entity must do more than merely follow a predecessor chronologically; it must conduct a business that is of like part or character to the predecessor's business. Thus, the first clause of the definition of "employer" requires a successor to conduct a business of like part or character to the predecessor's. The second clause requires a lease or purchase "for the continuance of the same business." It follows that neither the first nor the second clause refers to or imposes liability on an entity merely because it follows a predecessor. Rather, both clauses require the successor entity to conduct a business similar to that of the predecessor, or, as BOLI has interpreted the statute, to "conduct essentially the same business as conducted by the predecessor." Anita's Flowers, 6 BOLI at 267-68.
We recognize that interpreting the first clause — "successor to the business" — to mean an entity that "conducts essentially the same business as conducted by the predecessor" could be seen to render the second clause — "or any lessee or purchaser of an employer's business property for the continuance of the same business" — redundant. That is, a lessee or purchaser that acquired a predecessor's business property for the continuance of the same business necessarily would "conduct essentially the same business" as the predecessor and would, therefore, fall within that definition of "successor to the business." That redundancy, of course, is a consequence that this court must avoid if possible. See ORS 174.010 (where statute contains several provisions, courts should, if possible, construe statute so as to give effect to all).
There is, however, at least one interpretation of the two clauses that would give meaning to both. The legislature may have intended to include within the scope of the phrase "successor to the business" entities that operate essentially the same business as a predecessor, but do so without entering into a formal agreement, such as a lease or purchase, to acquire the business property of the predecessor. For example, such an entity might, as Blanchana did, obtain the business property of the predecessor by repossession, or it might obtain the predecessor's stock or legal interest in the business rather than the business property per se. Although a broad interpretation of the first clause necessarily would encompass the circumstance expressed in the second, the legislature could have considered it appropriate to identify that circumstance specifically. The legislature could have reasoned that a lessee or purchaser of business assets might not be considered a successor to the preceding entity, and it may have intended to ensure that such a lessee or purchaser be liable for wages that the preceding entity failed to pay, as long as the entity acquiring the assets did so for the continuation of the prior business.
Given that the proper interpretation of the second clause is not at issue in this case, however, we need not definitively discern the legislature's intent in wording the second clause in the way that it did. Rather, it is sufficient for us to conclude that the legislature intended, in the first clause, to include within the definition of those "employers" liable for wage claims those "successors to the business" that conduct essentially the same business as conducted by the predecessor.
In so reasoning, we think it significant that, before the legislature enacted the statutory predecessor to ORS 652.310(1) in 1931, employees who had not been paid by their
As we have explained, BOLI has interpreted ORS 652.310(1) to include successors that conduct "essentially the same business as conducted by the predecessor." For the reasons stated, we conclude that BOLI's interpretation is consistent with the legislature's intent.
We turn, now, to consider whether BOLI correctly applied its interpretation of ORS 652.310(1) to the facts of this case. As this court stated in Springfield Education Assn.,
290 Or. at 224, 621 P.2d 547. As we have discussed, BOLI considers the following factors in determining whether a corporation conducts essentially the same business as a predecessor: the name and identity of the business, its location, the lapse of time between the previous operation and the new operation, whether the businesses employed substantially the same workforce, whether the same product was manufactured or the same services offered, and whether the same machinery, equipment, or methods of production were used.
Blachana has not articulated any specific criticism of those factors and all are logically relevant to a determination of whether a successor operates "essentially the same business" as a predecessor. Other factors also may be logically relevant to that determination; as BOLI has stated, the listed factors are not exclusive. Nothing in the record suggests that BOLI did not give due consideration to any other factor that Blachana considered applicable. BOLI has been interpreting the statutory phrase "successor to the business," ORS 652.310(1), and using the same factors to determine whether an entity is a successor since 1987; we conclude that its consideration of those factors was appropriate in this case.
We conclude that BOLI did not err in reaching that conclusion. Although the employment of a different work force may indicate that a successor is not conducting essentially the same business as a predecessor, other facts may militate in favor of the opposite conclusion, as they did in this case. The legislature intended to make a successor that conducts essentially the same business as its predecessor liable for wages owed to employees of the predecessor, and BOLI did not err in concluding that Blachana was such a successor. Therefore, Blachana must reimburse BOLI for wages paid from the Wage Security Fund on behalf of NW Sportsbar's four wage claimants under ORS 652.414(3) and ORS 652.310(1).
The decision of the Court of Appeals is reversed. The final order of the Bureau of Labor and Industries is affirmed.