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Using Grievance Procedure to Extend Labor Agreement to Commonly Owned Nonunion Company May Be Unlawful

A unionized employer bought a nonunion company in the same type of business. Then the union company terminated part of its business and transferred the work to the commonly owned nonunion company. The union filed a grievance claiming that the union and nonunion companies were really a single employer and, therefore, the employer violated its labor agreement by partially terminating its covered operations and assigning the work to the nonunion company's employees. The union sought to have the terminated union operations restored.

The employer filed secondary boycott charges against the union claiming the union was trying to use the grievance procedure to impose the labor agreement on the nonunion company’s employees who were outside the bargaining unit covered by the labor agreement.

The NLRB’s General Counsel decided not to issue a complaint at this time, but, rather, to wait and see what the arbitrator decided and how the union reacted to the arbitration decision. If the union was only making a good faith argument that it could prove that the two companies were really a single employer and that the terminated operations should be restored, then its actions did not violate the secondary boycott law. By implication, if the union changes its position or loses the arbitration and still claims that the labor agreement should apply to the nonunion company's employees, then the union’s conduct would be unlawful if the nonunion company wasn't a single employer and the nonunion employer's employees were not an appropriate part of the bargaining unit covered by the labor agreement. It is unlawful to attempt to force a nonunion employer to recognize a union and apply a contract to its employees. General Counsel's Report on Case Developments, January through March, 2006, Memorandum GC 06-06.

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