Limbach Company v. Sheet Metal Workers International Association, Afl-Cio and Sheet Metal Workers International Association, Local Union No. 108

BECKER, Circuit Judge,

dissenting.

I agree with the overarching point made by Chief Judge Sloviter in Part II of her dissent and with much of the analysis contained therein. 1 As the Chief Judge persuasively demonstrates, application of the traditional single employer doctrine proves inapposite in the secondary boycott context.

What troubles me about the Chief Judge’s analysis, however, is that it completely supplants the single employer test in the secondary boycott setting with a general rule, and one that unsuccessfully attempts to cover all situations. I believe that we need not completely abandon all aspects of that well-established test when deciding the single employer issue. I write separately to outline the contours of a revised test that would, consistent with the Chief Judge’s position, retain most elements of the single employer doctrine. Such a test would be useful to judges when applying the doctrine and charging jurors if the Supreme Court grants certiorari in this case, as it might well do considering the importance of the issue, and reverses the judgment of this court (and the district court).

The single employer test sets out four criteria for determining whether two corporate entities are a single employer: 1) interrelationship of operations; 2) common management; 3) centralized control of labor relations; and 4) common ownership. See NLRB v. Al Bryant, Inc., 711 F.2d 543, 553 (3d Cir.1983). The test’s critical flaw in this context arises primarily from its emphasis on the centralization of labor relations. The majority makes much of the fact that each subsidiary was responsible for its own labor relations. The jury undoubtedly reasoned from the instruction, which was given consistently with this standard, that labor relations were decentralized and that, under the law, Harper *1273 and Limbach were therefore separate employers.

Given that decentralization of labor relations does not necessarily evidence separate employer status, Chief Judge Sloviter concludes that the entire single employer test should be abandoned in the secondary boycott context. Hence, she advocates a “common sense determination based on the totality of the circumstances” as to whether a firm is a “neutral” in a dispute. See Dissent of Chief Judge Sloviter at 1237. I believe that we should not abandon the test so completely. Instead, I believe that the appropriate standard for determining single employer status in this context should depend on a modification of the single employer test. Two prongs of the test should remain unchanged from the traditional test. Both common ownership and common management are relevant factors to consider in the secondary boycott context. They evidence a commonality of interests between the two entities that is critical to the determination of single employer status. They also serve to bolster the overall purpose of the single employer test, which is to determine whether there genuinely is an “arm’s length relationship found among unintegrated companies.” Local No. 627, Int’l Union of Operating Engineers v. NLRB, 518 F.2d 1040 , 1045-46 (D.C.Cir.1975), aff’d as South Prairie Construction Co. v. Local No. 627, Int’l Union of Operating Engineers, 425 U.S. 800 , 96 S.Ct. 1842 , 48 L.Ed.2d 382 (1976) (per curiam).

The third prong of the single employer test, interrelation of operations, requires modification when applied to the secondary boycott context. Traditionally, courts have focussed on whether the entities have operated in a manner befitting one corporate entity. Thus, day-to-day operations of the entities may be an important part of the inquiry. In the double-breasted situation, however, corporations might not mesh their operations as closely as they do in other contexts in order to serve the larger corporate function of maintaining both a union and a non-union operation. Nonetheless, the double-breasting structure may in fact, in and of itself, demonstrate how closely the corporation is interrelated. The very act of keeping some operations separate often evidences a deeper intent to serve the corporate purpose of bifurcating to preserve partially union and partially non-union workforces. Hence, in the secondary boycott context, the interrelationship of operations prong should emphasize whether there is substantial overlap between the kind of work performed by the primary and secondary employer and whether the structure of operations appears designed to serve a single corporate interest.

The fourth and final prong of the single employer test, the centralization prong, should be completely altered when applied to the secondary boycott context. The purpose of the single employer test is to determine identity of interest between two entities, and centralization generally evidences such identity. Nothing dictates that decentralization always demonstrates the absence of identical interests, however. Indeed, where decentralization makes it possible for an employer to avoid labor responsibilities under other portions of the Act, such decentralization may well suggest identity of purpose and, hence, single employer status. When the issue is whether a union has engaged in a secondary boycott and the union defends by saying that the two entities are a single employer, this prong of the test should focus on the overall structure of labor relations. The consideration must be whether the structure of labor relations is designed so that one single employer may have both non-union and union workers to benefit the employer or whether there are genuinely two employers whose labor relations have been designed absent consideration of how to benefit each other.

I believe that this modification of the single employer test would more adequately serve the purposes of the test in the secondary boycott context and would give judges a standard by which to determine whether two entities are in fact a single employer.

Moreover, there may be situations where two corporate entities are not part of a single employer but the secondary employer is nonetheless not “neutral” within the *1274 meaning of section 8(b)(4) of the National Labor Relations Act. In other words, although the employers prove separate status under the single employer test, that may not, as the majority suggests, end the inquiry. Certainly, all union activity directed at secondary employers does not constitute a secondary boycott. Courts may still be obligated to go beyond the single employer test to determine neutrality. In some situations, courts do not consider activity aimed at a “secondary” employer to be aimed at a “neutral” employer. The ally doctrine, as the Chief Judge explains, provides one example. See, for example, NLRB v. Business Mach. Local 459, IUE, 228 F.2d 553 (2d Cir.1955). Hence, in addition to modifying the single employer test as I have suggested, courts should consider that there is the possibility of non-neutrality if there is a finding of a sufficiently strong relationship between the entities to destroy neutrality. See Teamsters Local 560 (Curtin Matheson Scientific, Inc.), 248 NLRB 1212 (1980).

For the reasons set forth in the opinion of Chief Judge Sloviter, as supplemented herein, I respectfully dissent.

. Because I believe that Limbach may not have been a neutral employer within the meaning of the secondary boycott provisions of the NLRA and that the union’s actions against Limbach constituted action against a primary employer, I find it unnecessary to determine whether the union’s disclaimer of its pre-hire agreement with Limbach was an unfair labor practice. Hence, I join neither the majority opinion nor Part III of Chief Judge Sloviter’s opinion with respect to that issue. I do, however, join in Part IV of Chief Judge Sloviter’s opinion.