Double-Breasted Operation Withstands Scrutiny

Two Keller Thoma clients were sued by a Union alleging that the two companies were operating an illegal “double- breasted” operation. While the two companies ran similar businesses, one utilized a union workforce, while the other was union-free. The federal lawsuit sought contributions by the non-union company into various union funds, such as pension funds, vacation funds and training funds, on the basis that two companies were alter egos. Although the two companies were related in many ways, Keller Thoma attorneys successfully argued that the two companies were not “alter egos” under federal law, and the case was dismissed before going to trial.