In short, no.  However, that short answer is not so simple and does not mean you can run and opening a non-union company.  Almost all construction industry collective bargaining agreement contain clauses that attempt to prevent a signatory firm from operating a non-union firm.  These clauses are commonly known as anti-dual shop or double-breasting clauses.  However, whether such clauses are valid and enforceable depends on a two part test.

First, the clause in question must seek to preserve work performed by the employees represented by the union.  In other words, the clause seeks to prevent an employer from circumventing its bargaining obligations.  Second, the contracting employer must have control over the non-union entity.  This second prong is called the “right of control” test.

Determining whether an anti-dual shop clause is facially valid – that means whether it can even be applied – often depends on the nuanced language of the clause and whether the clause is being interpreted by a court or the NLRB.  For example, in N.L.R.B. v. Central Regional Counsel of Carpenters, the Third Circuit Court of Appeals (which governs NJ, PA, DE, and the Virgin Islands) invalided the following anti-dual shop clause:

“The employers stipulated that any of their subsidiaries or joint venture to which they may be parties when such subsidiaries or joint venture engage in multiple dwelling, commercial, industrial, or institutional building construction work shall be covered by the terms of this agreement.”

In that case, the Court held that the clause failed the first prong of the test because it broadly applied to all “construction work” in various types of dwellings.  The Court held that it violated the second prong because it applied to all subsidiaries or joint ventures not just those the employer controlled.

Conversely, the NLRB in Rd. Sprinkler Fitters, Local 669 (Cosco Fire Protection), the NLRB held that an anti-dual shop clause that applied to separate entities that the signatory employer “established and maintained” was facially valid because it passed the second prong right of control test.

Yet, whether an anti-dual shop clause is facial valid does not end the inquiry because a union seeking to enforce the clause would still bear the burden of proving that employer “controlled” the non-union affiliated entity.  Thus, even in the face of an anti-dual shop clause, a non-union entity can still be established if it is truly independent from the union firm.  The factors the Courts and the NLRB use to determine whether the two operations are intertwined include (a) whether the primary purpose of the establishing of the non-union firm was to circumvent the CBA, (b) common ownership, (c) common management, (d) common employees, and (e) common location.

Print Email Tweet Like LinkedIn