This type of structure is called “dual shop” or “two-row”. The challenges of such transactions are often in one in three forms: (1) denunciations of unfair labor practices under the National Labor Relations Act (NLRA); (2) complaints and arbitrations under the collective agreement signed by the union; or (3) audits of the trade union trust fund. The final factor is whether the new entity has separate equipment, tools, inventory, or other resources related to its operation. A court will verify whether the two companies jointly used important and expensive equipment in determining alter ego liability. It is important that companies have separate devices with their respective names on them. If it is not financially profitable for each company to have separate equipment, the new entity could lease the equipment from the existing company as long as there is a formal agreement between the companies and the company renting the equipment obtains the fair market value for the leased equipment. To be able to legally manage a two-row farm, businesses must remain separate. If the companies are not sufficiently separated, a court may find that the open store company is the alter ego of the trade union society. When a court makes this finding, it is possible to find that the open-shop company is linked to the CBA and that the open-shop company must provide ancillary services.
An employer is required to disclose information about possible two-tier operations if: (1) the union has a reasonable basis for suspecting that the employer is diverting work from the collective unit and (2) there is a reasonable basis to believe that such information is useful for collective bargaining. But in my experience, every union knows which companies are in two ranks, so these disclosure obligations are a bit superfluous. Non-unionized workers generally receive lower wages and fewer benefits than unionized workers for the same services. As a result, contractors may have a financial incentive to employ, to the extent possible, non-unionized workers. In addition, developers may have a preference, whether or not they mix union and non-union trades on the job site to promote efficiency – some developers believe that mixing union and non-union businesses in an open shopping atmosphere can cause quarrels and a lack of coordination between unions, which can have a negative impact on efficiency and timelines. As a result, some employers subject to THEAs conduct “two-row” operations, where the unionized employer creates a second separate business with non-unionized staff. We find that the defendants told Navillus that non-union assistance was significantly less effective than union assistance (seventeen per cent) and that, therefore, the gap between wages and benefits was somewhat justified. However, the General Court rejected the defendant`s argument in its claim for injury reduction. Awareness – there is a huge opportunity for construction companies that want to open a business that is not bound to the labor rates contained in a collective agreement. But this chance is not without risks if the right measures are not taken. The goal of a two-row business is to have a company that works under union agreements, also known as a “CBA,” and another company that works as an open store. An open store is a business that does not require its employees to join or support a union financially.
Even without a specific anti-double shop clause, the non-union unit may be required to respect the collective agreement if it turns out that the two companies are really one company, as discussed above. A common challenge is that of subcontracting the non-unionized unit in a way that would be contrary to the contract if it were carried out by the union organization. Subcontracting clauses often limit the employer`s ability to entrust subcontractors with work under the unions` jurisdiction on the site, unless the subcontractor meets the conditions of collective agreements. . . .