DUAL-SHOP UPDATE (09/07/2011)


Dual-Shop Update: On June 30, the Federal District Court for the District of New Jersey issued a decision which serves as an important reminder for construction industry employers who wish to use a dual-shop arrangement with one union company and one non-union company.  In the New Jersey case, one company had signed a collective bargaining agreement with Operating Engineers Local 825 which required contributions into several multi-employer benefit funds.  The second company, which was established in 1965, never entered into a collective bargaining agreement (CBA) with any union.  Over the years, the union company used some of the employees of the non-union company to perform work on projects.  Trustees of the multi-employer benefit funds agreed to this arrangement.  The benefit funds later sued in federal court for unpaid contributions on the non-union company employees.  The federal court found that the money was due to the funds because the two construction companies were a single employer because they shared offices, operated on an interdependent basis on projects, were managed by the same officers, shared supervisors and staff and were owned by the same people.  The court also noted that even if trustees agreed to the use of non-union employees on union projects, the CBA did not allow the fund trustees the authority to enter into such an agreement.  This case serves as a reminder to all construction industry employers using a dual-shop approach or thinking about doing so that the CBA signed by the union company needs to be very clear and explicit in excluding any application to employees of the non-union company.  Failure to do so could result in some very expensive federal court litigation.       By Bill Harding, Chapter Attorney

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