Employee in both union plan and employer plan?

I have a client with a safe harbor match only plan, which excludes union employees. The union plan is DB. Employer now wants to include only one of their 14 union employees in the 401k plan. All union employees are NHCEs. Assuming the CBA allows it, and aside from creating dissention in the ranks, is this ok?

1 minute ago, digger said:

 ...aside from creating dissention in the ranks ...

No problem there.  ?

But seriously, what is the origin/backstory of this proposal?  

Perhaps overly conservative on my part, but since I have never had this come up if I were in your shoes I would check the 410(b) rules to make sure that the exclusion for union employees isn't ALL OR NOTHING, i.e, whether you lose the ability to ignore the union employees in your headcount if you in fact cover one of them.  Of course I am not in your shoes and perhaps you already know that this is not a problem. 

52 minutes ago, jpod said:

Perhaps overly conservative on my part, but since I have never had this come up if I were in your shoes I would check the 410(b) rules to make sure that the exclusion for union employees isn't ALL OR NOTHING, i.e, whether you lose the ability to ignore the union employees in your headcount if you in fact cover one of them.  Of course I am not in your shoes and perhaps you already know that this is not a problem. 

Not a problem; see my other response which will be written and posted AFTER this one.

1 hour ago, digger said:

I have a client with a safe harbor match only plan, which excludes union employees. The union plan is DB. Employer now wants to include only one of their 14 union employees in the 401k plan. All union employees are NHCEs. Assuming the CBA allows it, and aside from creating dissention in the ranks, is this ok?

Perfectly ok; plan language would have to be modified to basically say you have a union exclusion EXCEPT for Employee X.

More importantly, you need a written agreement from the union, and many unions will not give it to you. You cannot unilaterally change the terms of work for any union employee; only the union is their representative and they cannot negotiate for themselves. The union represents ALL the employees, and unions think differently.  If you (as the employer) are willing to give this benefit to one union member, maybe they should be negotiating it for ALL the union members. 

Dealing with unions can be extremely complex and difficult (I once almost had armed guards put in my house because I was helping a company with teamster drivers redesign their DB plan to get the union DB plan off their backs and because they were threatened with a strike, strike breakers were going to be brought in and their "consultants" suggested everyone involved needed to have significant "protection".  My wife was not happy!  It was settled the day before this would have happened).

Great advice. Thanks, everyone.