§11.6 Connected Employers

• Library: Labor and Employment Law: Private Sector (OSBar) (2011 Ed.)

§11.6 CONNECTED EMPLOYERS

§11.6-1 In General

The employer with whom the union establishes a collective bargaining relationship (through certification or voluntary employer recognition) is often a single, discrete company that is not under common control or ownership with any other business. Therefore, no dispute normally arises regarding which employer is bound by the duty to bargain in good faith. However, in many disputed cases, unions have attempted to impose or establish a collective bargaining relationship and labor contract obligations on a nominally separate and independent employer, on the legal theory that the employer in question constituted a joint, dual, or "double-breasted" employer with, or alter ego of, the unionized company. These theories are discussed in §§11.6-2 to 11.6-4.

Although the legal underpinnings of each of these theories are technically different, the factual circumstances in which unions seek to apply these theories are very similar. In practice, the National Labor Relations Board and the courts tend to apply these legal theories interchangeably and without great precision. The fundamental inquiry in each case is essentially whether the degree and nature of the interconnection between the nominally separate employers legally justify the imposition of a bargaining duty or labor contract on a business affiliated with the unionized company.

§11.6-2 Dual Employers—Doublebreasting

The term double breasting describes the simultaneous maintenance of two businesses—one union and one nonunion—under some degree of common ownership or control. The National Labor Relations Board (NLRB) often treats separate companies as one employer when it finds that the companies, "despite their nominal separation, are highly integrated with respect to ownership and operation." Sakrete of Northern California, Inc., 137 NLRB 1220, 1222 (1962). In determining the extent of integration, the NLRB considers the following principal factors: "(1) interrelation of operations, (2) centralized control of labor relations, (3) common management, and (4) common ownership or financial control." Sakrete of Northern California, Inc., 137 NLRB at 1222.

The United States Supreme Court has confirmed this four-factor test. Radio & Television Broadcast Technicians Local Union v. Broadcast Service of Mobile, Inc., 380 US 255, 256, 85 S Ct 876, 13 L Ed2d 789 (1965).

Not all of the principal factors need be present, and no factor is controlling. Single-employer status ultimately "depends upon all the circumstances of the case." International Union of Operating Engineers v. NLRB, 518 F2d 1040, 1046 (DC Cir 1975), aff'd in part per curiam sub nom. South Prairie Constr. Co. v. International Union of Operating Engineers, 425 US 800 (1976), on remand, 231 NLRB 76 (1977), aff'd, 595 F2d 844 (DC Cir 1979).

Singe-employer status has been "characterized as an absence of an 'arm's length relationship found among unintegrated companies.'" NLRB v. Don Burgess Constr. Corp., 596 F2d 378, 384 (1979) (quoting International Union of Operating Engineers, 518 F2d at 1046).

In practice, common control of labor relations and policies is often the dominant and deciding factor in disputed double-breasting cases. J.M. Tanaka Constr., Inc. v. NLRB, 675 F2d 1029, 1033-1034 (9th Cir 1982); Chesapeake Foods, Inc., 287 NLRB 405 (1987).

Even when a double-breasted operation is deemed to constitute a single employer because of the high degree of common control of labor relations and operational connections, a collective bargaining obligation is not imposed on the nonunion business entity when the employees of the two companies constitute separate bargaining units. See International Union of Operating Engineers, 518 F2d at 1047-1049; Carpenters Local Union No. 1846 etc. v. Pratt-Farnsworth, Inc., 690 F2d 489 (5th Cir 1982). Separate bargaining...