relations to avoid liability for unfair
labor practices? Would careful practices
have resulted in a different outcome?
It perhaps would have been helpful not o have identical officers for Oaktree and TBR, and the NLRB found some transaction documentation that, in hindsight, could have been drafted more precisely. The reliance by the NLRB and the court on correspondence between the investment advisor and the funds also would suggest that all communications should be handled
with sensitivity to single employer issues.
John W. Simmons is a member of the law firm of
Kiesewetter Wise Kaplan Prather PLC in Memphis,
Tennessee, and represents management clients in
all aspects of employment law and labor relations,
including cases before the National Labor Relations
Board. He is a member of the Board of Directors
and president-elect (for 2013) of TMA’s Tennessee
Chapter. Simmons holds a law degree from the
University of Mississippi and a bachelor’s degree from
Mississippi State University. Simmons can be reached
at (901) 795-6695 or email@example.com.
But beyond that, the Oaktree case
should serve as a lesson on how NLRB
litigation and the deferential review
given decisions by an administrative
law judge initially and then by the NLRB
in affirming that judge’s decision can
lead to results that may be surprising.
question, other entities involved in
the Oaktree case could have provided
a remedy), and to provide a deterrent
to future labor relations problems.
A union’s motivation in bringing
unfair labor practices charges against
investment advisors or investors is,
of course, to put greater pressure
on those on the opposite side of the
bargaining table to bring about a more
favorable agreement from the union’s
perspective. The NLRB’s general counsel,
the prosecutor within the world of the
NLRA, similarly would seek to extend
liability to those entities to exert pressure
to produce a voluntary resolution of
a case, to expand the likelihood of an
effective remedy (although, without
Based on the application of the single
employer doctrine in Oaktree, it is
difficult to see how any investment
advisor can have a reasonable degree
of certainty that it will not be pulled
into unfair labor practice litigation
arising out of operating companies.
As an additional word of caution, a
somewhat similar test is also applied in
employment discrimination litigation.
Accounting for Risk
An investment advisor, as well as
any other entity involved up the
corporate chain from an investment,
risks being dragged into unfair labor
practice litigation as a single employer.
Investment advisors like Oaktree may
mitigate that risk somewhat by being
very careful to adhere to corporate
formalities and by avoiding the use of
vague representations of the kind cited
by the NLRB in finding against Oaktree.
But even then, the factors of financial
control, common management, control
over labor relations, and interrelation
of operations—as applied by the NLRB
and the 5th Circuit—leave advisors
and others vulnerable to findings of
liability as a single employer. The risk of
liability cannot be completely eliminated
based on the supervision and control
inherent in making an investment.
Therefore, this risk must be factored
into future investment decisions. J
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