Dive Brief:

• There is no clear answer to whether it is OK legally for a union company's owners to set up an open-shop company in the same trade to make lower-cost bids.
• In two federal cases, one from the upper Midwest and one from the New York-New Jersey area, courts went in different directions, ruling for the union in one instance and the company in the other.
• The twin-company practice, known as "double breasting," is tempting to union shops that cannot compete on price with open shops, as in the Midwest case in which a union tile company found itself 25% to 45% above its competitors' bids.

Dive Insight:

The Supreme Court has set four standards for courts to consider in this kind of case: how interrelated the two companies' operations are, how much management they have in common, how much ownership, and how much labor relations are centralized. In one of the cases cited, however, a federal appeals court added other standards it had used about common offices and equipment and family connections, and that tipped things the other way.