Adams Insulation Co.

National Labor Relations Board - Board Decisions

Jul 17, 1975

219 N.L.R.B. 211 (N.L.R.B. 1975)

ADAMS INSULATION COMPANY
Rodney and Judith Adams , d/b/a Adams Insulation
Company and Orange County District Council of
Carpenters , AFL-CIO. Case 21-CA-13176
July 17, 1975
DECISION AND ORDER
BY MEMBERS FANNING, KENNEDY, AND PENELLO
Upon a charge filed by Orange County District
Council of Carpenters, AFL-CIO, hereinafter called
Carpenters or the Charging Party, the General Coun-
sel of the National Labor Relations Board, by the
Regional Director for Region 21, issued a complaint
dated January 3, 1975, against Rodney and Judith
Adams, d/b/a Adams Insulation Company, herein-
after called the Respondent, alleging that the Re-
spondent, a sole proprietorship conducted by a hus-
band and wife, violated Section 8(a)(5) and (1) of the
Act by refusing to furnish the Union with payroll
and job location records for carpenters, including in-
sulation installers and weather-stripping installers,
employed by the Respondent in that portion of its
operations conducted pursuant to Contractor's Li-
cense No. 290613. Copies of the charge, complaint,
and notice of hearing were served on the Respondent
and the Charging Party. On January 23, 1975, the
Respondent filed its answer to the complaint, deny-
ing the commission of any unfair labor practices. The
Respondent filed a motion for a bill of particulars on
January 15, 1975. On January 17, 1975, the General
Counsel furnished the Respondent with a bill of par-
ticulars.
On February 21, 1975, the Respondent, General
Counsel, and the Charging Party entered into a stipu-
lation of the testimony of all witnesses pertinent to
the dispute. These parties also waived a hearing be-
fore an Administrative Law Judge and agreed that
the charge, complaint, and stipulation shall consti-
tute the entire record in the case . They further agreed
to submit the stipulated record directly to the Board
for findings of fact, conclusions of law, and a Deci-
sion and Order. By an order dated March 10, 1975,
the Board approved the stipulation and transferred
the case to itself . Thereafter, the General Counsel,
the Respondent, and the Charging Party filed briefs.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
Upon the basis of the stipulation, the briefs, and
the entire record in this case , the Board makes the
following:
FINDINGS OF FACT
1. JURISDICTION
211
Rodney Adams d/b/a Adams Insulation Compa-
ny, hereinafter called Rodney Adams, and Judith
Adams d/b/a Adams Insulation Company, hereinaf-
ter called Judith Adams, are engaged in business as
insulation and weather-stripping subcontractors in
the building and construction industry.
Rodney Adams rents trucks and equipment and
purchases supplies and materials from Judith Ad-
ams. During the past 12-month period, Judith Ad-
ams purchased and received supplies and materials
valued in excess of $50,000 directly from suppliers
located outside the State of California.
We find that Rodney Adams and Judith Adams
are, and at all material times have been, employers
engaged in commerce and in operations affecting
commerce within the meaning of Section 2(6) and (7)
of the Act.
11. THE LABOR ORGANIZATION INVOLVED
Orange County District Council of Carpenters,
AFL-CIO, is a labor organization within the mean-
ing of Section 2(5) of the Act.
III. THE UNFAIR LABOR PRACTICES
A. Facts
Rodney Adams, an individual, began an insulation
and weather-stripping subcontracting business, as
sole proprietor, in December-1972. He applied for
and received from the State of California
Contractor's License No. 280595, under the name
Adams Insulation Company.' From December 1972
to January 28, 1974, Adams Insulation Company op-
erated as a subcontractor engaged in installing insu-
lation and weather stripping in residential and com-
mercial buildings. During this time, Judith Adams,
the wife of Rodney Adams, performed secretarial
and bookkeeping duties for the Adams Insulation
Company business, but received no salary.
Also in December 1972, Rodney formed a corpo-
ration called Rod Adams Co., Inc., of which he was
president, his wife was vice president and secretary,
his attorney was treasurer, and all of the stock was
owned by Rodney and Judith.
On January 23, 1974, Adams Insulation Company
was awarded a contract for the installation of insula-
tion and weather stripping on a project on which the
1 Hereinafter called Adams Insulation Company
219 NLRB No. 59
212 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
general contractor told Rodney that he would have
to have a collective-bargaining agreement with the
Carpenters in order to perform such contract. As
most of Rodney's customers desired that he perform
contracts for them with "nonunion" labor, Rodney
and Judith jointly decided to establish two busi-
nesses, one for the performance of contracts with
contractors who required a collective-bargaining
agreement with the Carpenters, and another for the
performance of work for contractors who did not.
Thereafter, on January 28, 1974, Rodney sold Ad-
ams Insulation Company to his wife, Judith Adams,
for approximately $10,000. Judith gave Rodney two
promissory notes totaling $32,000, payable without
interest 5 years from the date of sale. Also, Rodney
sold to Rod Adams Co., Inc., all the trucks and
equipment owned by Adams Insulation Company, in
exchange for stock in Rod Adams Co., Inc. At this
same time, Rod Adams Co., Inc., assumed the ex-
isting lease on the building in which Adams Insula-
tion Company had its office and warehouse and be-
came responsible for the payment of the utility bills
in the building.
Judith Adams commenced operations on January
28, 1974, under the name Adams Insulation Compa-
ny with employees formerly employed by Adams In-
sulation Company. Also, Judith applied for and re-
ceived from the State of California Contractor's
License No. 290613. Since Judith had not taken the
state contractor test, she qualified to do business in
California by listing Rodney on her license as the
"responsible managing employee."
During this same period, Rodney formed a new
company, Adams Insulation Company (Rodney Ad-
ams), under his existing Contractor's License No.
280595 on January 29, 1974. On the same date, Rod-
ney Adams, on behalf of that company executed a
collective-bargaining agreement with the Carpen-
ters.2
Both Rodney Adams and Judith Adams occupy
the same building which was previously occupied by
the original company, and they share the same tele-
phone listing under Adams Insulation Company.
The 1974 edition of the Yellow Pages lists only Ad-
ams Insulation Company, Contractor's License No.
280595. However, the Rod Adams Co., Inc., pays the
telephone bills.
Judith Adams leases all trucks and equipment
from Rod Adams Co., Inc., on a monthly basis.
When Rodney Adams requires trucks or equipment,
it rents such items from Judith Adams at a daily rate
of $10, including gasoline . All payments for repairs
2 Both Rodney and Judith published fictitious business name statements
in accordance with California law.
and gasoline for all equipment leased from Rod Ad-
ams Co., Inc., are assumed by Judith Adams, but the
former makes the insurance premium payments for
the trucks and equipment, and the rental fee on the
building. Rodney Adams pays $70 per month to Rod
Adams Co.. Inc., as rental fee on the building. Rod-
ney Adams purchases supplies and materials from
Judith Adams at cost, plus 5 percent.
Judith Adams and Rodney Adams have separate
accounting records, bank accounts, and banks, but
each hires the same accounting firm. The two compa-
nies also have different state workmen's compensa-
tion fund accounts and separate state unemployment
insurance accounts. Judith Adams and Rodney Ad-
ams do not compete with one another in bidding for
jobs. Rodney Adams bids only on jobs which require
performance of work pursuant to a collective-bar-
gaining agreement with the Union. The two compa-
nies do not employ the same employees and do not
regularly interchange employees, although on several
occasions one company has hired an employee who
had been laid off by the other company.
As the responsible managing employee, required
by the contractor's license , and consultant to Judith
Adams, Rodney visits the work locations of that
company. However, although he was employed in
this capacity in January 1974, Rodney did not start
receiving his consultant salary of $100 per month un-
til December 1974. When Rodney is dissatisfied with
the work at Judith Adams' work locations, he notifies
Judith or Barry Hoyt, her job supervisor.
Rodney Adams has employed Judith as a secretary
since its beginning on January 29, 1974, at a salary of
$50 per month. Neither Judith nor Rodney has au-
thority to sign the payroll checks of the other's com-
pany. Each company separately hires, fires, and dis-
ciplines its employees and each separately
formulates , determines, and effectuates all decisions
with respect to labor relations matters.
While the employees of Rodney Adams receive the
wages and fringe benefits contained in its collective-
bargaining agreement with the Union, the employees
of Judith Adams do not and their wages are on a
piece rate rather than hourly basis. Judith Adams
employs, on the average, four or five employees,
whereas Rodney Adams employs two employees.
John Hutton was employed by Adams Insulation
Company as a weather-stripping installer from Sep-
tember 1973 to January 28, 1974, at which time he
commenced working for Judith Adams, continuing
to do so until the end of March 1974. Hutton was
unaware of the formation of Judith Adams. Howev-
er, two other employees, who are presently employed
by Judith Adams and have been so employed since
September or October 1974, were aware at all times
ADAMS INSULATION COMPANY
that two separate companies were engaged in busi-
ness. Hutton was not aware that two separate com-
panies had been formed or that Rodney Adams had
signed a contract with the Union . Prior to January
28, 1974 , either Judith or Rodney signed Hutton's
paychecks . After January 28, 1974, Judith was the
only person who signed Hutton 's paychecks.
Following Hutton 's termination of employment
with Judith Adams at the end of March 1974 , Hutton
began employment with another employer who sub-
sequently informed Hutton that , to that employer's
knowledge, "Adams Insulation Company" had a col-
lective-bargaining agreement with the Union . There-
after , Hutton asked Union Business Representative
Robert Guthrie if Adams Insulation Company had
made any contributions on behalf of Hutton into the
trust funds pursuant to the collective -bargaining
agreement with the Union . Guthrie presented the
question to Robert Miller, an administrative assistant
for the Union , and Miller contacted the Trust Funds
Office. Miller was informed by the Trust Funds Of-
fice that it had searched its records and that Adams
Insulation Company had not paid any contributions
to the trust funds on behalf of Hutton.
After checking the listings in the "California State
License Supplement," Miller found that two separate
licenses had been issued , one to Rodney Adams, Li-
cense No . 280595 , and one to Judith Adams, License
No. 290613, which listed Rodney as the responsible
managing employee . When Miller discovered the two
separate companies , he suspected that Adams Insula-
tion Company, License No. 280595 , had not been
making contributions to the trust funds on behalf of
employees covered by the collective-bargaining
agreement between the Union and Rodney Adams.
For this reason , Miller requested that the Trust
Funds conduct an audit of the books and records of
both Judith Adams and Rodney Adams.
On approximately June 10, 1974, Freddie Diaz,
one of the auditors of the Trust Funds , visited the
offices of Rodney Adams and Judith Adams located
at 1639 Monrovia , Costa Mesa, California , to con-
duct the audit requested by Miller . Diaz requested
and received all the books and records of Rodney
Adams . After auditing the records , Diaz did not find
Hutton listed as an employee of Rodney Adams, and
he then requested orally of both Rodney and Judith
that he be given all the books and records of Judith
Adams. At no time did Diaz tell Rodney or Judith
why he requested the books of Judith Adams. Both
Rodney and Judith refused to comply with Diaz' re-
quest and stated that Judith Adams was a separate
company owned by Judith and that such company
had not executed a collective-bargaining agreement
with the Union.
213
At Miller's request, on June 13, 1974, Rodney met
with Miller and Dick Harkey, a field representative
of the Trust Funds, at the Union's office . At this
meeting, Miller and Harkey once again asked Rod-
ney to present all the books and records of Judith
Adams to the Trust Funds for purposes of conduct-
ing an audit . Rodney refused to do so on the grounds
that Judith Adams was a separate company and that
it did not have a collective -bargaining agreement
with the Union. However , Rodney told Miller and
Harkey that he would discuss the matter with his at-
torney and let them know.
Thereafter, on approximately October 7, 1974,
Miller telephoned Rodney and again requested that
Rodney permit the Trust Funds to conduct an audit
of all the books and records of Judith Adams, but
Rodney refused . On October 8, 1974 , Miller tele-
phoned Rodney and told him that if he didn't bring
all the books and records of Judith Adams to Miller's
office Miller would consider Rodney in violation of
his collective-bargaining agreement with the Union
and take economic action against Rodney. Rodney
once again refused to comply with Miller's request.
B. Contentions of the Parties
The General Counsel contends that under the test
for "single employer" developed by the Board it is
clear that the formation of two businesses by Rodney
and Judith was accomplished in order to enable them
to bid on jobs which required a collective-bargaining
agreement and at the same time remain competitive
on nonunion jobs. Also, the General Counsel con-
tends that, while the mere existence of such parallel
businesses may not lead to a conclusion that they
constitute a single employer, the manner in which the
two businessess were formed and their relationship
does lead to such a conclusion . The Respondent con-
tends that , notwithstanding that the two companies
are located in the same building , that they have a
common telephone number , that Judith and Rodney
perform routine office or managerial tasks for each
other's business , and that Rodney Adams rents sup-
plies and equipment from Judith Adams, the two
companies are not a single employer for the purposes
of the Act.
Finally, the Respondent contends that, even as-
suming, arguendo, that a request properly was made
to a single employer for information concerning non-
unit employees , the Union failed to communicate to
the Respondent at the time of its request how its
blanket request for "all books and records" related to
its role as the collective-bargaining representative of
the unit employees of Rodney Adams.
214 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Conclusion
We find merit in the Respondent's contention that
the Union failed to adequately inform the Respon-
dent as to the basis of its request for information or
of the Respondent's obligation to honor such re-
quest. Thus, we find it unnecessary to resolve the
issue pertaining to the alleged single-employer status
of the two companies.
It is well settled that an employer is obligated to
furnish, upon request, the employees' bargaining
agent with information relevant and necessary to the
intelligent discharge of its function as the employees'
exclusive bargaining representative. Nor can an em-
ployer refuse to furnish requested information on the
basis that the bargaining representative seeks infor-
mation concerning employees outside of the unit
who are also in the employer's employ.' Where a
union, in good faith, believes that an employer is e-
roding the bargaining unit to the detriment of the
employees the union represents, the standard of rele-
vancy applied by the Board and the courts is that it is
sufficient that the union's claim be supported by a
showing of probable or potential relevance.4
However, the issue in this case is limited to wheth-
er the Respondent had an obligation to honor the
Union's request for information, when such request
was lacking in both specificity and clarity, and the
Respondent could not have been aware of the intent
and purpose of the Union's request as a result of
negotiations.
The stipulated facts show that, upon the comple-
tion of the audit of the books of Rodney Adams,
Diaz, the Union's Trust Funds auditor, did not find
the name of Hutton listed as an employee of that
company. At that time, Diaz requested orally of both
Rodney and Judith that he be given all the books
and records of Judith Adams. At no time did Diaz
tell Rodney or Judith why he requested the books of
Judith Adams. Both Rodney and Judith refused to
comply with Diaz' request and told Diaz that Judith
Adams, Contractor's State License No. 290613, was a
separate company owned by Judith which had not
executed a collective-bargaining agreement with the
Union. Although at a later date Rodney met with the
3 Curtiss-Wright Corporation, Wright Aeronautical Division v . N.L.R.B,
347 F.2d 61 (C.A. 3, 1965).
4 N L.R.B. v. Acme Industrial Co, 385 U.S. 432 (1967). In General Electric
Company, 199 NLRB 286 (1972), the Board rejected the respondent's con-
tention that the union's request for information concerning employees in
classifications excluded from the unit was neither necessary nor relevant,
absent proof that there was a dispute over bargaining unit work , pending
grievances , need for information for future contract negotiations, or a re-
duction of unit work through the hiring of outside contractors.
union representatives at the Union's office and they
renewed their request for the books of Judith Adams
for purposes of conducting an audit, Rodney refused
the request on the grounds that Judith Adams was a
separate company and did not have a collective-bar-
gaining agreement with the Union.'
On a later occasion, October 7, 1974, the Union
telephoned Rodney and again requested that Rodney
permit the Trust Funds to conduct an audit of all of
the books and records of Judith Adams, and Rodney
refused such request once more. On October 8, 1974,
the Union telephoned Rodney and told him that if he
did not bring all the books and records of Judith
Adams to the Union's office the Union would con-
sider Rodney Adams in violation of its collective-
bargaining agreement with the Union and take eco-
nomic action against Rodney Adams. Rodney re-
fused to comply with the Union's request.
As set forth above, the Union did have a collec-
tive-bargaining agreement with Rodney Adams and
it was entitled to an audit of the books of that com-
pany, a request which was duly complied with by
Rodney Adams in view of its bargaining obligation
under the bargaining agreement with the Union.
However, no obligation attached to Rodney Adams
or to Judith Adams to furnish the books and records
of Judith Adams, absent a collective-bargaining
agreement , or a specific request accompanied by the
reasons and basis upon which such request was
founded. Clearly, the Respondent's obligation to sa-
tisfy the Union's request could not attach until and
unless the Union had made some showing of proba-
ble or potential relevance of the information to its
performance of its representative functions re-
specting the employees of Rodney Adams. At no
time , however, did the Union set forth the reasons or
basis for its request. Accordingly, without finding
that the Union has no right to such information un-
der any circumstances, we find, upon the special
facts of this record, that the Respondent's refusal to
grant the Union's request for the payroll and job lo-
cation records of Judith Adams d/b/a Adams Insu-
lation Company was not a violation of Section
8(a)(5) and (1). For the above reasons, we conclude
that the complaint should be dismissed in its entirety.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Re-
lations Board hereby orders that the complaint here-
in be, and it hereby is, dismissed in its entirety.
S At this time, Rodney also told the union representative that he would
discuss the matter with his attorney and let him know