If you remember, we discussed double breasting in October, and I ended that blog post with making sure you seek competent legal advice if you want to set up a double breasted operation. This case proves my point.
Two brothers owned a floor installation business that employed union installers. Because of competition from non-union competitors, they established a non-union company that would only use non-union installers and compete for that market. A corporate entity was also established to provide management services to both companies.
The shared management services was a large factor in losing the case. Double breasting arrangements are receiving unprecedented scrutiny by the NLRB and courts now. It is essential that in planning the arrangement, companies carefully consider making the two entities as independent as possible and review the four key factors in determining a single employer: interrelation of operations; common management; centralized control of labor relations; and common ownership. The 7th Circuit’s decision can be found here.
Again, I caution companies interested in establishing double breasted operations to seek competent legal counsel to help ensure that the new entities withstand scrutiny.
Matt Austin is a Columbus, Ohio lawyer who owns Austin Legal, LLC, a boutique law firm with offices in central and northeast Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. Austin Legal’s Concierge Legal Services program is relied upon by companies to remain compliant and competitive. If you have employees, you need Concierge Legal Services. You can call Matt at (614) 285-5342 or email him at Austin@LaborEmploymentOSHA.com.