What is a double-breasted employer? In simple terms, it means that you have two separate and distinct entities, for example, in the construction or entertainment industry, etc., in which one or more of the entities is bound to a union collective bargaining agreement, while the other distinct entity operates with the “non-union” employees. The NLRB does not prohibit double-breasted operations. However, these operations are challenged in several ways. One, through grievance and arbitration under the union contracts, two, through pension and welfare audits, or three, through unfair labor practice charges at the labor board.
It is imperative that the separate operations do not fall within the “single employment test”. If they do, then the collective bargaining agreements could apply to both operations. In its simplest form, the single employee test applied by the NLRB is as follows:
1. interrelations of operations
2. central control of labor relations
3. common financial interest
4. common management
No one criteria puts a double breasted employer in peril. The NLRB relies heavily in looking at whether there is common control or centralized labor relations, common financial control, and common management. Even however if these criteria are present there is one remainder key factor that the NLRB looks to conclude that in fact the double-breasted employer is a “single employer”. That factor is if the employees of both entities share common skills, duties, and working conditions. Additionally, there is a alter ego test. To what extent do what entities share management, business, operations, customers, and supervision. The alter ego test, if met, shows the employee common interest is not a factor in both entities can be deemed a single employer.
The takeaway is to be careful to keep day-to-day management, labor relations, financial controls, distinct and separate.
As the founder of Koppekin Consulting Inc., I worked with a client who employed a double breasted management style and sought a “check-up” to make sure his operations were running properly. While the double-breasted approach is perfectly legal, employers must follow the correct procedures to keep management and operations between the two groups separate.
I was able to work with the client to make sure they didn’t cross the line in adding new business to their new non-union side. We successfully came up with a plan that was implemented and the company continued to go along operating both businesses without a problem.
Double-breasted situations can become extremely tricky especially when it comes to which level of management that both companies report to. If you have or thinking of setting up a double breasted operation, I’m glad to discuss these with you further.
As an expert in the field, I’ve spent years gaining a comprehensive knowledge on the proper procedures involved with the double-breasted employee. Legality and practicality remains at the heart of my consulting work. Remember, it is important to review the factors set forth below. The NLRB or an arbitrator may look at the following:
1. if they are separately incorporated or chartered;
2. details regarding formation of companies;
3. stock ownership, officers and directors of each;
4. the names of supervisors of each;
5. who has controlling interest;
6. the nature of business of each as well as products and services involved;
7. common or separate office staff and where they are located;
8. how bookkeeping, auditing and accounting are handled;
9. the details of common labor relations policy;
10. who formulates labor relations policy for each;
11. services, relationships and the flow of goods of each company and between companies;
12. the nature and frequency of interchange of employees;
13. the nature and frequency of interchange of supervisors;
14. if seniority or other benefits are transferable;
15. comparisons of hiring, discharge and disciplinary action policies and control;
16. comparisons of benefits, vacations, hours, wages, holidays, bonus insurance and bargaining history;
17. the locations of each in relation to the other;
18. who owns the premises, pays the rent and if there is a lease agreement;
19. the nature and frequency of equipment interchange;
20. if maintenance and janitorial services are performed jointly or separately;
21. comparisons among banking, loans, financing and disbursements services;
22. the determination of production schedules and by whom;
23. the handling , separately or jointly, of group insurance, fire insurance, tax statements, Social Security, withholding tax, workmen’s compensation and pension funds;
24. purchases or sales between each company and if they are paper transactions or actual exchanges of funds;
25. any common equipment or facilities;
26. commonalities between the sales and research facilities of each;
27. common advertising, sales force and shipping and receiving;
28. and employer exemptions from NLRB jurisdiction.