South Prairie Construction Co. v. Local No. 627, International Union of Operating Engineers

Background

In 1972 a labor union filed a complaint with the National Labor Relations Board saying two construction companies, South Prairie and Kiewit, had refused to apply Kiewit’s union contract to South Prairie’s workers. The union argued the two firms were really one employer because they were subsidiaries of the same parent and worked on highway jobs in Oklahoma. The Board found the firms were separate employers and dismissed the complaint. The Court of Appeals reviewed the record, concluded the firms were a single employer, and went further by deciding that the combined employees formed the appropriate bargaining unit and ordering enforcement.

Reasoning

The central questions were whether the two companies should be treated as a single employer and whether the appeals court could decide which group of employees should bargain together. Relying on the record, the Supreme Court agreed with the appeals court that the firms are a single employer. But the Court said the appeals court should not have decided the bargaining-unit issue because the statute assigns that initial choice to the labor board. So the Court vacated the appeals court’s ruling about the bargaining unit and sent that question back for the board to decide.

Real world impact

The ruling leaves unresolved which employees will be covered by the union contract because the labor board must now make that determination. It affects the union, the construction workers, and the companies by shifting the bargaining-unit decision back to the agency rather than leaving it settled by the courts. The outcome could change depending on the board’s later findings.