Alter-Ego Doctrine

Alter-Ego Doctrine

Definition

A theory under which a plaintiff may pierce the corporate veil and hold individual or corporate shareholders or a corporate affiliate personally liable for corporate debts. A claim under the alter-ego theory alleges that a shareholder or affiliated entity used the corporation as a mere tool, business conduit, or façade to cover the shareholder's personal dealings. In the context of labor law, the doctrine is invoked when a unionized employer seeks to evade collective-bargaining responsibilities through the formation of an open shop that is substantially the same company.

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