Should Contractors Operate Separate Entities?

Posted August 24, 2022

  • Should Contractors Operate Separate Entities?

Nicholas Sullivan was published in the August 2022 edition of Utility & Transportation Contractor – the official publication of the Utility and Transportation Contractors Association of New Jersey. The title of Nick’s article is A Tale of Two Entities: Maintaining Separate and Distinct Entities.

The article discusses the common occurrence of a single contractor owning and operating two separate businesses. One business is usually operated under a collective bargaining agreement and the other operates as an “open shop” which means it runs free of a collective bargaining agreement.

While it is legal for a contractor to operate in this fashion, there are potential legal issues to consider. The article looks at the advantages and disadvantages of operating two separate entities, the necessary steps to keep the entities separate, and how courts or the National Labor Relations Board (NLRB) determine if the entities are sufficiently separate and distinct.

Please contact Nick if you have any questions. In the meantime, click here to read the entire article.

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