two divisions, only one PPT eligible in one division

I have a company that has 2 divisons, but they are operated as seperate companies. it is 100% a controlled group, Each of the companies has a 401(k) set up, but one company is an all-union shop, so no participants can be in the plan. recently, a new, non-union member joined the company, so he would be the only participant. is the best course of action to set up a division at the custodian to keep them seperate? does the new employee need to be kept separate from the original 401(k) plan?

JHalligan, there is no controlled group if it's only one company (e.g., corporation or LLC). Controlled group applies where there are commonly controlled separate legal entities.

Why the heck would you have a 401(k) that no one can participate in?

Anyway, in theory it should be possible to amend the plan that does have participants to cover the one nonunion employee of the unionized division. But you really need to review your facts and the documents to make sure.

and seriously explore/discuss merging the plans