Advance Electric

National Labor Relations Board - Board Decisions

Feb 21, 1984

268 N.L.R.B. 1001 (N.L.R.B. 1984)

ADVANCE ELECTRIC
Advance Electric, Inc. and its Alter Ego Beacon
Electric, Inc. and IBEW Local No. 124 affili-
ated with International Brotherhood of Electri-
cal Workers, AFL-CIO. Case 17-CA-11380
21 February 1984
DECISION AND ORDER
BY CHAIRMAN DOTSON AND MEMBERS
ZIMMERMAN AND HUNTER
On 15 August 1983 Administrative Law Judge
Lowell Goerlich issued the attached decision. The
Respondent, the Charging Party, and the General
Counsel filed exceptions and supporting briefs.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
The Board has considered the decision and the
record in light of the exceptions and briefs and has
decided to affirm the judge's rulings, findings, and
conclusions only to the extent consistent with this
Decision and Order.
The complaint in this proceeding alleges, inter
alia, that Advance Electric, Inc. (Advance) and its
alter ego Beacon Electric, Inc. (Beacon) violated
Section 8(a)(1), (3), and (5) of the Act by with-
drawing recognition from the Union, repudiating
its collective-bargaining agreement with the Union,
and discharging employees because of their union
membership, activities, or support. The judge
found that Beacon was not an alter ego of Ad-
vance and therefore dismissed all of the 8(a)(5) alle-
gations.' For the reasons stated below, we find
merit to the General Counsel's and the Charging
Party's exceptions to each of those findings.
From about 1968 until 17 December 1982, Ad-
vance engaged in residential and commercial elec-
trical contracting work in the construction indus-
try. At all material times, Bob H. Shoots (Bob) was
president and treasurer of Advance, Ruby J.
Shoots (Ruby), Bob's wife, was its secretary, and
Thomas B. Shoots, Bob's brother, was its vice
president. Bob and Ruby as joint tenants owned 52
percent of the stock in Advance. Bill Shoots (Bill),
another of Bob's brothers, owned the remaining 48
percent of the stock. In 1968 Advance executed a
letter of assent authorizing the National Electrical
Contractors Association, Inc. (NECA), to be Ad-
vance's collective-bargaining representative and
agreeing to be bound by the collective-bargaining
agreement between the Union and the local NECA
chapter. On or about 6 August 1980 Advance exe-
' The judge did find that Beacon violated Sec. 8(aX3) and (1) by its
refusal to hire three employees because they refused to forgo their union
affiliation. While we agree that a violation of Sec. 8(aX3) occurred here,
we do so solely for the reasons expressed infra.
268 NLRB No. 151
cuted a "Letter of Assent-A" authorizing NECA
to bargain on its behalf concerning all matters con-
tained in or pertaining to the residential labor
agreement between the Union and NECA. Pursu-
ant to these letters of assent, at all material times
through 17 December 1982, Advance abided by
the various collective-bargaining agreements in
effect between NECA and the Union.
Beacon was incorporated in 1980 for "tax pur-
poses." Originally Ruby held 52 percent and Bill
48 percent of the stock in Beacon. Later, about
March 1982 Bill returned his stock to the corpora-
tion and Ruby became sole owner of Beacon, as
well as its president and treasurer. Between its in-
corporation and December 19822 Beacon basically
was a dormant corporation that transacted very
little business.s
Around early December Bill told Bob that he
had decided to leave Advance and to go into busi-
ness for himself. About the same time Bob decided
that it was no longer economically feasible to oper-
ate Advance. After discussions with Ruby, howev-
er, they decided to remain in the electrical con-
tracting business by activating Beacon. During
their discussions concerning "starting Beacon up
again" Bob and Ruby decided that in order to
make a profit they would have to reduce the over-
head expense. They further decided that the pri-
mary cost of business which could be cut was em-
ployee wages.
On 2 December Bob interviewed Bonnie Selby
for the position of Advance's receptionist-office
manager. Selby, who was hired for the job, was
told by Bob that he (Bob) had not made any
money from Advance in the past year and that he
"was in the process of becoming a non-union
shop." On 5 December Bob placed a newspaper
advertisement for a "house wireman." The next
day, Selby was instructed by Bob to advise all job
applicants that the job was "non-union" and paid
S7 per hour. On 8 December Bob interviewed sev-
eral applicants who had responded to the newspa-
per advertisement. On 9 December Bill told Ad-
vance's three electricians that he was leaving Ad-
vance to go into business for himself and that Bob
was "going to close the doors" and would be
"going non-union, opening another shop." Bill's
statement was confirmed the following day when
Bob met with Advance's three electricians. Bob
stated that Advance was not making any money
and that "the only way he could curb the situation
was either to go out of business entirely or close
J Unless otherwise noted, all dates hereafter re in 1982.
' Bob estimated that Beacon transacted about $10,bo0 worth of busi-
ness in 1981 and 1982, mostly small jobs that Advance refused to accept
because the client owed Advance considerable sums of money.
1001
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
down and open up non-union." Bob explained that
he already had placed an advertisement for electri-
cians and had "contacted individuals to come on
board," and that the new employees would work
for $8 per hour with no benefits. Bob offered to
hire each of Advance's three electricians if they
would work "non-union" for those same wages.
All three declined asserting that they wanted to
remain with the Union. On the same day, Bob noti-
fied the Union that due to economic reasons Ad-
vance would be closing permanently on 24 Decem-
ber. However, on Friday, 17 December, Bob an-
nounced to the electricians that they were termi-
nated as of that date because Advance had run out
of money.
On the following Monday, 20 December, Bob
told Selby to answer the telephone "Beacon Elec-
tric, Inc." and to advise confused callers that
Beacon was "formerly Advance." Bob explained to
Selby that the signs on the building and the trucks
would be changed to Beacon Electric. On the same
date three newly hired electricians began work.
Two received wages of $8 per hour and one was
paid $6 per hour; none received fringe benefits.
The newly hired employees were assigned to finish
the work in progress started by Advance, utilizing
the same vehicles, tools, equipment, and materials
previously used by Advance.
To settle his 48 percent interest in Advance, Bill
received one of Advance's four trucks, "some"
tools and materials, and an unspecified amount of
cash. All remaining assets of Advance were turned
over to or utilized by Beacon. Insofar as the record
reflects, no inventory was prepared showing what
tools, materials, and other assets of Advance were
assumed by Beacon, and no formal sale or other
transaction accompanied the transfer. Bill has no
interest in or connection with Beacon and has start-
ed his own electrical contracting business, Bill
Shoots Electric.
In analyzing the foregoing facts, the judge set
forth the proper standard utilized by the Board and
the courts to determine whether two facially inde-
pendent employers constitute alter egos for pur-
poses of the Act, to wit:
The legal principles to be applied in deter-
mining whether two factually separate em-
ployees are in fact alter egos are well settled.
Although each case must turn on its own facts,
we generally have found alter ego status where
the two enterprises have "substantially identi-
cal" management, business purpose, operation,
equipment, customers, and supervision, as well
as ownership.
Denzil S. Alkire, 259 NLRB 1323, 1324 (1982). 4
Accord: NLRB v. Campbell-Harris Electric, 719
F.2d 292 (8th Cir. 1983). Other factors which must
be considered in determining whether an alter ego
status is present in a given case include "whether
the purpose behind the creation of the alleged alter
ego was legitimate or whether, instead, its purpose
was to evade responsibilities under the Act."
Fugazy Continental Corp., 265 NLRB 1301 (1982).
Here, the judge concluded that Beacon was not
the alter ego of Advance. The judge reasoned that,
upon the cessation of business by Advance, its op-
erations were "bifurcated" by Bill's decision to go
into business on his own and that Bill's departure
"rendered it impossible for Advance to continue as
Beacon with the same identity, management, super-
vision, and ownership." We do not agree. Rather
we find that the facts of the instant case illustrate
"a mere technical change in the structure or identi-
ty" of the predecessor employer. Howard Johnson
Co. v. Detroit Local Joint Executive Board, 417 U.S.
249, 259 fn. 5 (1974); NLRB v. Campbell-Harris
Electric, supra.
Initially, we note that there can be no dispute
but that Beacon shared Advance's business purpose
and mode of operation. Both companies engaged in
electrical contracting work in the construction in-
dustry, both conducted business in the same geo-
graphical area, both purchased materials from the
same supplier and both maintained accounts at the
same bank. Additionally, Beacon utilized the same
physical facility and telephone numbers and equip-
ment that had been used by Advance. Although
Advance performed both residential 'and commer-
cial electrical contracting while Beacon worked ex-
clusively in the residential field, it is uncontradicted
that less than 10 percent of Advance's business was
commercial in nature. Hence, we find that the two
enterprises had at least a "substantially identical"
business purpose and mode of operations.5
It is also clear that Beacon and Advance shared
a "substantially identical" customer base. Despite
the judge's finding, based on Bob's uncorroborated
testimony, that Bill took 80 percent of Advance's
customers and left Beacon with only about 20 per-
cent of Advance's extant customers, we find that
the business records maintained by Advance and
Beacon clearly indicate the existence of the requi-
site degree of customer identity required by our de-
4 The court denied enforcement of the Board's order on the basis that
the Board had not considered whether the employer "obtained, or rea-
sonably expected" an economic benefit as a result of the transfer of its
operations to the alleged alter ego. Denzil S Alkire v. NLRB, 716 F.2d
1014 (4th Cir. 1983). Such an economic benefit is present in this case as is
explained below.
I Our finding in this regard is buttressed by the fact, noted above, that
Beacon undertook to complete all of Advance's work in progress.
1002
ADVANCE ELECTRIC
cisions. Those business records show that about 75
percent of Beacon's customers previously were
customers of Advance. When viewed in dollars
and cents, the extent to which Beacon relied on
customers of Advance is even more striking; over
93 percent of Beacon's dollar volume of business
was attributable to ex-Advance customers.8 More-
over, Beacon's sales for the first 4 months of 1983
totaled $59,187.27, while Advance's sales for the
first 4 months of 1982 totaled $64,707.96. In addi-
tion, Advance's four largest customers, accounting
for 68 percent of Advance's sales, all became cus-
tomers of Beacon and accounted for 53 percent of
Beacon's sales. Carried further, five of Advance's
six largest customers were customers of Beacon,
accounting for 77 percent and 79 percent of Ad-
vance's and Beacon's sales, respectively. 7 Based on
these total sales figures and the statistics set forth
above, it is apparent, and we find, that Beacon
served customers formerly associated with Ad-
vance to a more than sufficient extent to satisfy this
element of our alter ego standard.
With respect to common equipment, it is uncon-
tradicted that all of Beacon's equipment formerly
was utilized by Advance including the motor vehi-
cles which were merely repainted with Beacon's
name. Additionally, all of the materials used by
Beacon, at least until replenishment was necessary,
formerly was inventory of Advance. Furthermore,
Beacon used the same premises as had been used
by Advance-the only change being that Beacon's
name was painted on the office door in lieu of Ad-
vance's. Under these circumstances, and particular-
ly as there was not even an attempt to observe any
business formalities such as contracts or bills of sale
in connection with these transactions, we find that
this portion of the test for alter ego status also is
satisfied notwithstanding the fact that one of Ad-
vance's four trucks and "some" of its tools and
equipment were transferred to Bill.
Concerning the element of common manage-
ment, we expressly reject the judge's finding that
Bill was the "main force" in the management of
Advance. Indeed, the overwhelming weight of evi-
dence in the record clearly shows that it was Bob
who was responsible for and exercised the manage-
ment of both Advance and Beacon. Thus it was
Bob who signed the letters of assent with NECA,
handled all labor relations matters both with the
Union and with Advance's three electricians, hired
and fired office clerical employees, signed all
s These statistics are based on Beacon's sales journal for the first 4
months of 1983, the only period in evidence, as compared to a list of Ad-
vance's 1982 customers compiled from its sales journal.
I These percentages are based on a comparison of Advance's sales
journal for the last 4 months of 1982 with Beacon's sales journal for the
first 4 months of 1983.
checks, and executed all business documents re-
quired by the State of Missouri and by the collec-
tive-bargaining agreement with the Union. More-
over, it was Bob, in consultation with his wife,
who decided to close Advance and activate
Beacon. On the other hand, Bill was not an officer
or director of Advance and spent most of his time
performing "hands-on" work. Accordingly, we
find that Beacon and Advance shared "substantial-
ly identical" management and that this factor too
supports a finding of alter ego in this case.8
Turning to the factor of supervision, it is clear
that Bill, who was responsible for the immediate
supervision of Advance's employees, was not an
employee of Beacon. However, the record reveals
that Bill basically functioned as a working foreman
while employed by Advance and that the ultimate
supervisory authority at all times rested with Bob.
As mentioned above, Bill spent most of his time
performing hands-on work. Bill's supervisory role
mostly consisted of assigning each electrician to a
certain worksite. All of Advance's electricians
were journeymen and once assigned a worksite re-
quired no supervision. Rather upon being assigned
to a particular job, each electrician would deter-
mine independently what materials and equipment
were required, obtain that material and equipment
from the warehouse, proceed to the job and do the
work, and then return to the shop in the evening.
In the event that a problem arose on the jobsite the
electrician would call Advance's office and speak
to either Bill or Bob-"whoever was there and an-
swered." Under these circumstances we accord
little weight to the fact that Bill functioned as the
immediate supervisor of Advance's employees
while Bob filled that role for Beacon. Another in-
dication that Bill did not perform the crucial role
in the operations of Advance is the fact that on 16
December David Cary, one of Advance's electri-
cians, was asked by Bob to take over Bill's job for
Beacon.9 In any event there is no indication that
Beacon's method of supervision differed from Ad-
vance's in any significant way.' ° We therefore find
a In finding that Bill was the main force in the management of Ad-
vance, the judge emphasized Bob's testimony that he had retired in 1981
and worked only limited hours. We note the judge did not resolve the
conflict between Bob's description of his working hours a ending about
noon and Selby's testimony that Bob normally left the office about 3 p.m.
We find it unnecessary to resolve this conflict since Selby's uncontradict-
ed testimony reveals that Bob's working hours did not change following
the transformation of Advance into Beacon. As Bob admittedly was the
"management" of Beacon, his limited hours of work, whether ending at
noon or 3 p.m., provide no basis for a finding that another individual
must have been the "management" of Advance.
Cary declined Bob's offer on the ground that he (Cary) "would
rather stick with the union ...
"O See NLRB v. Campbell-Harris Electric, supra.
1003
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
that Beacon's supervision did not substantially
differ from Advance's.
The judge further based his finding of a lack of
alter ego status on what in his view was an absence
of common ownership. As noted above, Bob and
Ruby held a 52 percent, and Bill a 48 percent, in-
terest in Advance. Since March 1982 Ruby has
owned all of Beacon's stock. At all times all stock
in both corporations was owned by members of the
Shoots family and all corporate officers and direc-
tors also were members of that family. In such cir-
cumstances the Board and the courts find owner-
ship and control of those companies to be "substan-
tially identical" for purposes of determining alter
ego status. Crawford Door Sales Co., 226 NLRB
1144 (1976). See also All Kind Quilting, 266 NLRB
1187 1983); Campbell-Harris Electric, 263 NLRB
1143 (1983), enfd. 719 F.2d 292 (8th Cir. 1983). Ac-
cordingly, we find that Advance and Beacon share
"substantially identical" ownership for purposes of
determining alter ego status.
Having found that all factors which must be ex-
amined support a finding that Beacon is the alter
ego of Advance, there remains for consideration an
examination of the purpose behind the activation of
Beacon, i.e., whether its purpose was to evade re-
sponsibilities under the Act. It is substantially un-
disputed that Beacon was activated for the purpose
of eliminating the high costs associated with oper-
ating Advance as a union contractor. In this
regard, Bob's own testimony shows that, when he
and Ruby discussed whether to remain in the elec-
trical contracting business, their main concern was
how to reduce their overhead or costs of doing
business, and that they decided the only way to
achieve the desired savings would be to reduce the
expense of employee wages and benefits. Bob fur-
ther testified that he "would still be a union con-
tractor" if "economic conditions" permitted him to
do so. Also, both during his 2 December conversa-
tion with Selby and his 10 December meeting with
Advance's electricians, Bob attributed his decision
to close unionized Advance and open nonunion
Beacon to the higher expenses associated with op-
erating a unionized shop. Finally, Bob's 10 Decem-
ber notification to the Union attributed his decision
to close Advance to "economic reasons," and made
no reference to either Bill's departure or Bob's in-
tention to open a similar business. Given these cir-
cumstances, we find that, while Bill's decision to
leave Advance may have prodded Bob into exam-
ining the status of Advance, the true purpose for
which Beacon was formed was to evade Advance's
responsibility under the Act to honor its collective-
bargaining agreement with the Union. Such a moti-
vation supports an alter ego finding. J. M. Tanaka
Construction v. NLRB, 675 F.2d 1029 (9th Cir.
1982).
Based on our consideration of all the factors out-
lined above, we find and conclude that Beacon is
and was at all times since 20 December the alter
ego of Advance and, as such, is and was obligated
to bargain with the Union as the representative of
its employees and is and was bound by the collec-
tive-bargaining agreement" entered into between
NECA and the Union at a time when Advance had
assented to NECA as its collective-bargaining rep-
resentative. By not doing so but instead withdraw-
ing recognition from the Union and repudiating the
above-mentioned collective-bargaining agreement,
Beacon violated Section 8(a)(5) and (1) of the Act.
We further find that Beacon violated Section
8(a)(3) and (1) of the Act by conditioning the em-
ployment of its electricians on their working with-
out union representation and for wages below
those specified in the collective-bargaining agree-
ment applicable to them, and that those electri-
cians, having chosen to forgo their employment
rather than accept those unlawful conditions, were
thereby constructively and unlawfully discharged.
Redlands Construction Co., 265 NLRB 586 (1982);
Campbell-Harris Electric, supra; Electric Machinery
Co., 243 NLRB 239 (1979), and cases cited therein.
CONCLUSIONS OF LAW
1. Respondent Advance Electric, Inc. and Re-
spondent Beacon Electric, Inc. are employers en-
gaged in commerce within the meaning of Section
2(2), (6), and (7) of the Act.
2. IBEW Local No. 124 affiliated with Interna-
tional Brotherhood of Electrical Workers, AFL-
CIO, is a labor organization within the meaning of
Section 2(5) of the Act.
3. Respondent Beacon Electric, Inc. is, for the
purpose of this proceeding, the alter ego of Re-
spondent Advance Electric, Inc.
4. All full-time and regular part-time employees
employed by Advance Electric, Inc. and by its
alter ego Beacon Electric, Inc., but excluding cleri-
cal employees, guards and supervisors as defined in
the Act, constitute a unit appropriate for collective
bargaining within the meaning of Section 9(b) of
the Act.
5. At all times material herein, the Union has
been the exclusive collective-bargaining representa-
tive of the employees in the appropriate unit within
the meaning of Section 9(a) of the Act.
6. By failing and refusing to recognize and bar-
gain with the Union as the exclusive representative
" The most recent collective-bargaining agreement by its terms was
effective from I September 1982 to 31 August 1983.
1004
ADVANCE ELECTRIC
of its employees in the appropriate unit, by failing
to honor the collective-bargaining agreement with
respect to such employees, and by failing to apply
to such employees the terms and conditions of the
agreement, the Respondent has violated Sections
8(a)(5) and (1) and 2(6) and (7) of the Act.
7. By constructively discharging employees Joe
Abbate, Sam G. Younger, and David Cary by con-
ditioning their employment on working without
union representation and for wages below those
called for in the collective-bargaining agreement,
the Respondent has violated Section 8(a)(3) and (1)
of the Act.
8. The aforesaid unfair labor practices are unfair
labor practices affecting commerce within the
meaning of Section 2(6) and (7) of the Act.
THE REMEDY
Having found that the Respondent has violated
Section 8(a)(1), (3), and (5) of the Act, we shall
order that they cease and desist therefrom and take
certain affirmative action designed to effectuate the
policies of the Act.
It has been found that Respondent constructively
discharged its employees Joe Abbate, Sam G.
Younger, and David Cary on 17 December 1982.
We will therefore order the Respondent to restore
the status quo ante by offering said individuals
their former jobs or, if those jobs no longer exist,
substantially equivalent jobs, without prejudice to
their seniority and other rights and privileges, dis-
missing, if necessary, any employees hired on or
since 17 December 1982 to fill any of said posi-
tions, and make them whole for any loss of earn-
ings suffered by reason of the discrimination
against them by payment to them of sums of
money equal to that which they normally would
have earned absent the discrimination, less net in-
terim earnings during such period, computed on a
quarterly basis in the manner established by the
Board in F. W Woolworth Co., 90 NLRB 289
(1950), with interest computed as described in Flor-
ida Steel Corp., 231 NLRB 651 (1977).12
Having also found that Respondent Beacon is
the alter ego of Respondent Advance and has con-
tinued to operate its business, but has failed and re-
fused to recognize the Union as the collective-bar-
gaining representative of its employees or to apply
the terms of the collective-bargaining agreement
between the Union and Respondent Advance, we
shall order Respondent Beacon to recognize the
Union as the representative of its employees and to
honor and apply the terms of that agreement, and
Ls See generally Isis Plumbing Ca, 138 NLRB 716 (1962).
any subsequent agreement,1 3 to its employees. In
addition, we shall order the Respondent to make
whole its employees by making the contractually
established payments to the various trust funds es-
tablished by the collective-bargaining agreement,1 4
and by reimbursing employees for any expenses en-
suing from the Respondent's unlawful failure to
make such required payments, as provided in Kraft
Plumbing & Heating, 252 NLRB 891 fn. 1 (1980),
enfd. 661 F.2d 940 (9th Cir. 1981).15
ORDER
The National Labor Relations Board orders that
the Respondent, Advance Electric, Inc., and its
alter ego Beacon Electric, Inc., Grandview, Mis-
souri, its officers, agents, successors, and assigns,
shall
1. Cease and desist from
(a) Refusing to recognize and bargain with the
Union as the exclusive representative of its employ-
ees in the appropriate unit with respect to wages,
hours, working conditions, or other terms and con-
ditions of employment of said employees, and re-
fusing to honor the collective-bargaining agreement
applicable to those employees.
(b) Discouraging membership in the Union, or
any other labor organization, by constructively dis-
charging its employees through the imposition of
illegal conditions of employment, or by otherwise
discriminating against any of its employees in
regard to hire, tenure of employment, or other
terms and conditions of their employment.
(c) In any like or related manner interfering
with, restraining, or coercing employees in the ex-
ercise of the rights guaranteed them by Section 7
of the Act.
is Bob testified, and it is undisputed, that Advance never terminated or
attempted to terminate the "Letter of Assent-A" it executed in 1980, and
that said letter remains in full force and effect. Accordingly, the Re-
spondent is bound to the terms of any subsequent collective-bargaining
agreement between NECA and the Union until such time as the Re-
spondent shall give proper and timely written notice to terminate their
authorization to NECA, and then to the expiration of that agreement.
Rayel Electric Ca, 260 NLRB 1327 (1982); Pac0u Intercom Ca, 255
NLRB 184 (1981); Nelson Electric, 241 NLRB 545 (1979).
" Because the provisions of employee benefit fund agreements are
variable and complex, the Board does not provide for interest at a fixed
rate on fund payments due as part of a "make-whole" remedy. We there-
fore leave to further proceedings the question of how much interest the
Respondent must pay into the benefit fund in order to satisfy our "make-
whole" remedy. These additional amounts may be determined, depending
upon the circumstances of each case, by reference to provisions in the
documents governing the fund at issue and, where there are no governing
provisions, to evidence of any loss directly attributable to the unlawful
action, which might include the loss of return on investment of the por-
tion of funds, withheld additional administrative costs, etc., but not col-
lateral losses. See Merryweather Optical Co. 240 NLRB 1213, 1216 fn. 7
(1979).
Is See also F Landon Cartage Co., 265 NLRB No. 177 (Dec. 16, 1982)
(Not reported in volumes of Board decisions.)
1005
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
2. Take the following affirmative action neces-
sary to effectuate the policies of the Act.
(a) Offer Joe Abbate, Sam G. Younger, and
David Cary immediate and full reinstatement to
their former jobs or, if those jobs no longer exist,
to substantially equivalent positions, without pred-
judice to their seniority or loss of earnings and
other benefits suffered as a result of the discrimina-
tion against them, in the manner set forth in the
remedy section of the decision.
(b) Remove from its files any reference to the
unlawful discharges and notify the employees in
writing that this has been done and that the dis-
charges will not be used against them in any way.
(c) Comply with the terms and conditions of the
collective-bargaining agreements between NECA
and the Union to which the Respondent is bound,
retroactively to 17 December 1982 and prospec-
tively until such time as proper and timely notice
of cancellation is given pursuant to the Letter of
Assent-A executed by Respondent Advance in
1980, including making the appropriate trust funds,
the employees, and the Union whole in the manner
described in the remedy section of this decision.
(d) Upon request, recognize and bargain with the
Union as the exclusive representative of the em-
ployees in the following appropriate unit concern-
ing terms and conditions of employment:
All full-time and regular part-time employees
employed by Advance Electric, Inc. and its
alter ego Beacon Electric, Inc., but excluding
clerical employees, guards and supervisors as
defined in the Act.
(e) Preserve and, on request, make available to
the Board or its agents for examination and copy-
ing, all payroll records, social security payment
records, timecards, personnel records and reports,
and all other records necessary to analyze the
amount of backpay due under the terms of this
Order.
(f) Post at its facility, in Grandview, Missouri,
copies of the attached notice marked "Appen-
dix." 1 6 Copies of the notice, on forms provided by
the Regional Director for Region 17, after being
signed by the Respondent's authorized representa-
tive, shall be posted by the Respondent immediate-
ly upon receipt and maintained for 60 consecutive
days in conspicuous places including all places
where notices to employees are customarily posted.
Reasonable steps shall be taken by the Respondent
'6 If this Order is enforced by a Judgment of a United States Court of
Appeals, the words in the notice reading "Posted by Order of the Na-
tional Labor Relations Board" shall read "Posted Pursuant to a Judgment
of the United States Court of Appeals Enforcing an Order of the Nation-
al Labor Relations Board."
to ensure that the notices are not altered, defaced,
or covered by any other material.
(g) Notify the Regional Director in writing
within 20 days from the date of this Order what
steps the Respondent has taken to comply.
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found
that we violated the National Labor Relations Act
and has ordered us to post and abide by this notice.
Section 7 of the Act gives employees these
rights.
To organize
To form, join, or assist any union
To bargain collectively through representa-
tives of their own choice
To act together for other mutual aid or pro-
tection
To choose not to engage in any of these
protected concerted activities.
WE WILL NOT constructively discharge our em-
ployees by forcing them to quit rather than accept
wages less than those required by the contract with
IBEW Local No. 124 affiliated with International
Brotherhood of Electrical Workers, AFL-CIO, or
by forcing them to quit rather than accept contin-
ued employment without representation by the
Union.
WE WILL NOT refuse to recognize and bargain
with the above-named Union as the exclusive rep-
resentative of our employees in the following ap-
propriate unit:
All full-time and regular part-time employees
employed by Advance Electric, Inc. and its
alter ego Beacon Electric, Inc., but excluding
clerical employees, guards and supervisors as
defined in the Act.
WE WILL NOT repudiate the collective-bargain-
ing process by withdrawing recognition from the
above-named Union as the exclusive collective-bar-
gaining representative of our unit employees, and
WE WILL NOT refuse to follow the collective-bar-
gaining agreements applicable to our unit employ-
ees.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce you in the exer-
cise of the rights guaranteed you by Section 7 of
the Act.
1006
ADVANCE ELECTRIC
WE WILL, upon request, bargain with the above-
named Union as the exclusive representative of all
the employees in the appropriate unit concerning
rates of pay, wages, hours of work, and other
terms and conditions of employment.
WE WILL offer Joe Abbate, Sam G. Younger,
and David Cary immediate and full reinstatement
to their. former jobs or, if those jobs no longer
exist, to substantially equivalent positions, without
prejudice to their seniority or any other rights or
privileges previously enjoyed and WE WILL make
them whole for any loss of earnings and other ben-
efits resulting from their discharge, less any net in-
terim earnings, plus interest.
WE WILL notify each of them that we have re-
moved from our files any reference to his dis-
charge and that the discharge will not be used
against him any way.
WE WILL make whole our unit employees by
transmitting the contributions owed to the Union's
health and welfare, pension, vacation and holiday,
and apprenticeship and training funds pursuant to
the terms of our collective-bargaining agreement
with the Union, and by reimbursing unit employees
for any medical, dental, or any other expenses en-
suing from our unlawful failure to make such re-
quired contributions. This shall include reimbursing
employees for any contributions they themselves
may have made for the maintenance of the Union's
health and welfare, pension, industry, and appren-
ticeship funds after we unlawfully discontinued
contributions to those funds; for any premiums
they may have paid to third-party insurance com-
panies to continue medical and dental coverage in
the absence of our required contributions to such
funds; and for any medical or dental bills they have
paid directly to health care providers that the con-
tractual policies would have covered.
ADVANCE ELECTRIC, INC. AND ITS
ALTER EGO BEACON ELECTRIC, INC.
DECISION
STATEMENT OF THE CASE
LOWELL GOERLICH, Administrative Law Judge: The
charge filed by IBEW Local No. 124 affiliated with
International Brotherhood of Electrical Workers, AFL-
CIO (the Union), on December 22, 1982, was personally
served on Advance Electric, Inc. (Advance), and its alter
ego Beacon Electric, Inc. (Beacon), Respondents, on
January 5, 1983. A complaint and notice of hearing was
issued on January 27, 1983. In the complaint it was al-
leged that Respondents violated Section 8(aXl), (3), and
(5) of the National Labor Relations Act, as amended (the
Act), among other things, by withdrawing recognition of
the Union, discharging union members, and repudiating
its alleged contract with the Union.
Advance and Beacon filed separate timely answers de-
nying that they had engaged in or were engaging in the
unfair labor practices alleged.
The case came on for hearing in Kansas City, Kansas,
on May 23 and 24, 1983. Each party was afforded full
opportunity to be heard, to call, to examine and cross-
examine witnesses, to argue orally on the record, to
submit proposed findings of fact and conclusions, and to
file briefs. All briefs have been carefully considered.
I. THE BUSINESS OF ADVANCE
Respondent Advance is a Missouri corporation which
engaged in electrical contract work in the construction
industry and maintained an office at 308 Blue Ridge,
Grandview, Missouri.
Beacon Electric, Inc. is a Kansas corporation having
its principal place of business at 308A Blue Ridge Boule-
vard, Grandview, Jackson County, Missouri.
Respondent Advance and Respondent Beacon, in the
course and conduct of their business operations within
the State of Missouri, annually collectively sell goods
and services valued in excess of $50,000 directly to cus-
tomers located outside the State of Missouri.'
11. THE LABOR ORGANIZATION INVOLVED
The Union is, and at all times material herein has been,
a labor organization within the meaning of Section 2(5)
of the Act.
III. THE UNFAIR LABOR PRACTICES
The main thrust of the General Counsel's complaint is
that Beacon is the alter ego of Advance.
The Facts
First: On December 17, 1982, Advance ceased doing
business. At the time of its closure Bob H. Shoots (Bob)
and his wife Ruby J. Shoots (Ruby) jointly owned 52
percent of the stock in advance. Bill Shoots (Bill), a
brother of Bob H. Shoots and an employee of Advance,
owned the remaining 48 percent of the stock. Bob was
Advance's president and treasurer; Thomas B. Shoots,
vice president; and Ruby J. Shoots, secretary. All offi-
cers were family members.
Advance operated out of a building which was owned
by Ruby. About a year before Advance's closure, Ruby,
to whom Advance owed money from a loan made
before she was married to Bob, foreclosed on the build-
ing and thereafter leased it to Advance as well as to
other tenants.
On October 30, 1980, Beacon was incorporated as a
Kansas corporation. According to Bob it was incorporat-
ed "for tax purposes." He thought "it might be a tax
break .... It didn't turn out that way." Ruby and Bill
were the owners. Bill owned 48 percent of the stock in
Beacon. All officers of Beacon were relatives. According
to Bob, Bill bought "six or seven thousand dollars worth
of stock" at the time Beacon was organized. Bill sold the
I Admitted by Respondent. Beacon's Sales Journal (O.C. Exh. 11) of-
fered in evidence discloses that Beacon's operation meets the jurisdiction-
al requirements for coverage by the Act.
1007
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
stock to the Company "a year and a half ago." Ruby
became the sole stockholder of Beacon.2
Bob "guessed" that Beacon transacted about $10,000
worth of business in 1981 and 1982. Bob testified that
one employee, Scott Conley, "would get 20 hours a
week in, something like that" in 1982.3
Bob retired in 19814 and thereafter did not fully par-
ticipate in the operations of Advance; however, he ap-
peared at Advance's offices sometimes in the morning.
Bob thus described his functions:
Well, when I come to town I would come to the
office about 8:30 or so and wait around there, take
the mail and wait till the girl got there and when
the girl got there I'd go out and have coffee and
come back about 10 or 10:30 or something, and take
a call if a call would come in and I'd leave about
noon and normally wouldn't come back the rest of
the day and that's about the way it was till Decem-
ber of 1982.
Bob was out of town "two or three months" of the year.
To Bill was left the ordering of inventory, the supervi-
sion of the employees, and the general management of
the business. Bill's wife, Martha, was Advance's secre-
tary, bookkeeper, and receptionist.
Apparently Bill became disenchanted with the running
of Advance, for in October 1982 he advised his brother,
Bob, that he was considering going into business for him-
self. As related by Bob:
From October to December when he finally told
me he was for sure going to go into business for
himself that I had nobody that could take his place
that could operate the business and I'd retired in
1962, I mean, 61, and I figured he would run the
business, but instead of that he decided to go into
business for himself. Any of the employees I had,
they weren't capable of doing his work and I wasn't
going to work it, so that's it, and the economic rea-
sons I decided to close Advance Electric.
I took a look at the checkbook and it had about
$500 in it. I said that's it.
Apparently Bob's wife, who was familiar with the
construction industry, had different ideas. She questioned
why Bob did not "operate Beacon Electric and acquire
some help to see if we couldn't make a few bucks out of
it."
Bonnie J. Selby testified that at a job interview on De-
cember 2, 1982, with Bob, Bob said that because of
losses he had made no money in the past year; "he was
in the process of becoming a nonunion shop."5
A domestic corporation report (State of Kansas) dated April 28,
1982, discloses that Ruby owned 7,800 shares of stock and Bill 7,200
shares of stock. Ruby was listed as president and treasurer, and Lela B.
Amel as secretary. Ruby was listed as sole member of the board of direc-
tors.
s Beacon's records indicate Conley worked 233 hours during 1982.
4 Bob was 63 years of age.
6 Selby was hired as a secretary-receptionist-bookkeeper for Advance,
the job which Bell's wife had previously filled.
On December 5, 1982, Bob placed an ad in the Kansas
City Star for a "house wireman."
On December 6, he directed Selby to advise job appli-
cants that the job was "nonunion" and paid $7 an hour.
On December 8, 1982, Bob interviewed some job appli-
cants.
On December 9, 1982, a conversation occurred be-
tween Bill and Advance's three electricians, Joe Abbate,
Sam G. Younger, and David Cary. Bill told the employ-
ees that he was contemplating going into business for
himself and that Bob was "going to close the doors, that
the shop wasn't making any money . . . going non-
union, opening another shop." Bill said that he would no
longer work for Advance.
On December 10, 1982, Bob addressed Advance's
three electricians. Bob told the employees that Advance
was not making any money. He said that "the only way
he could curb the situation was either to go out of busi-
ness entirely or close down and open up non-union. He
explained that Bill had decided that he wasn't going to
stay with the shop and said he already put an ad in the
paper and had contacted individuals to come on board."
Bob indicated that the applicants would work for $8 an
hour with no benefits and asked whether the three elec-
tricians would work for that amount. The three declined,
asserting that they wanted to remain with the Union.
Also on December 10, 1982, Bob informed the Union
by letter that Advance could no longer remain in busi-
ness.
On December 17, 1982, the three electricians and Bill
were terminated from employment.
According to Selby by Monday, December 20, Ad-
vance "had become Beacon." Bob instructed Selby to
answer the phone Beacon Electric, Inc. He also informed
her the lettering would be changed on the door and that
he was taking one of the vans to have it painted with the
name Beacon. He also said he had sent Russell Christo-
pher and Darryl Brinks to finish a job that the three
electricians had commenced. For the pay week of De-
cember 20, 1982, Phil Shippley, Darryl Brinks, Russ
Christopher, and Selby were on the payroll. Brinks was
paid $6 an hour and Christopher and Shippley were paid
$8 an hour. Work performed by these employees was
billed through Beacon.
During the year 1982 Bob and Bill, in order to cut
costs on the Acuff and Rhoades jobs, worked out an ar-
rangement with the three electricians to work 8 hours
for 6 hours' pay. Pension and welfare payments were
continued and paid to the Union. Otherwise Advance
conformed with the labor agreement between the Union
and Kansas City Division, Greater Kansas City Chapter,
NECA, Inc.
Bob was of the opinion that he coud not operate Ad-
vance without Bill. According to Bob, Bill left Advance
because "he was tired of having . . . to put up with
[Bob] or sponge off of [him] as he put it ... ."
Bob personally had invested no money in Beacon.
Ruby, Bob's wife, furnished the money. "She had always
been involved in the construction business with her
former husband." According to Bob, Ruby "put eighty
1008
ADVANCE ELECTRIC
some hundred in the day Beacon was formed and then
she loaned it $5,000 sometime in December or January."
Apparently after Advance closed Bill formed Bill
Shoots, Inc., through which work of the same nature as
that of Advance was performed. Abbate, a former Ad-
vance employee, commenced employment with Bill
Shoots, Inc. on February 4, 1983. Although Bill is a
union member, Bill Shoots, Inc., operates as a nonunion
shop.
When Advance closed, Bob and Bill "took part of the
equipment . . . to settle [their] holdings." Bob took two
trucks and Bill took one truck on which he placed his
name. Material and tools were also divided. In addition
Bill was given cash. Ruby and Bob bought the two
trucks. Around May 14, 1983, the remaining assets of
Advance were offered at a liquidation auction.
Bill had never worked for Beacon. He had withdrawn
his investment of $4,700 on March 12, 1982.
After Advance ceased business operations Bill's com-
pany ended up with 80 percent of Advance's customers.
Beacon finished some of Advance's work in progress and
did perform some new work." At the time of the hearing
Beacon employed one employee.
Ninety percent of Advance's electrical work had been
residential. Its commercial work went with Bill. Bill was
the only person connected with Advance who held a
commercial license.
Second: Both the General Counsel and the Charging
Party insist that Beacon is the alter ego of Advance. The
Board has lately said in the case of Denzil S. Alkire, 259
NLRB 1323, 1324 (1982):
The legal principles to be applied in determining
whether two factually separate employers are in
fact alter egos are well settled. Although each case
must turn on its own facts, we generally have found
alter ego status where two enterprises have "sub-
stantially identical" management, business purpose,
operation, equipment, customers, and supervision, as
well as ownership.
While the General Counsel and the Charging Party have
cited a number of cases in their briefs touching on the
alter ego rationale, they have quoted no facts from these
cases which, as here, involve a predecessor employer
whose operations were bifurcated upon its cessation of
business. Alter ego contemplates that there be a substan-
tial identity between the predecessor and the successor
to the extent that it may be concluded the second em-
ployer is actually the first employer. Here the "second"
is two employers, neither of which is identical with Ad-
vance. The extant management, supervision,7 80 percent
of the customers, all the commercial business (10 per-
cent), a substantial part of the assets, a truck, and one
employee of Advance ended up with Bill Shoots, a 48-
percent stockholder, and his company, Bill Shoots, Inc.
6 Bob described this work as follows:
Beacon wired one new house for, roughed in, one new house for
Stratford. They roughed in one new house for Bopp, and they
roughed in three new houses for Masters. That's all the new rough
ins work that Beacon has done.
Bill was the main force in the management and supervision of Ad-
vance.
Additionally, Advance's decease was perpetrated by
Bill's withdrawal as the operational manager of Ad-
vance. Under these circumstances, his departure ren-
dered it impossible for Advance to continue as Beacon
with the same identity, management, supervision, and
ownership. Thus, Beacon was not and could not be Ad-
vance's "other self." Accordingly, Beacon is not the alter
ego of Advance. Those allegations of the complaint
based on the claim that Beacon is the alter ego of Ad-
vance are dismissed.
Third: The General Counsel further contends that
"Respondent Beacon unlawfully failed to hire employees
Abbate, Cary, and Younger solely because they refused
to accept non-union terms and conditions of employ-
ment." The Supreme Court in the case of Phelps Dodge
Corp. v. NLRB, 313 U.S. 177, 187 (1941), settled the
proposition that an employer's refusal to hire a person
solely because of his affiliation with a union was an
unfair labor practice under Section 8(aX3) of the Act. 8
Beacon's refusal to hire the three employees, for which it
had work, was solely because they chose to remain affili-
ated with the Union and did not want to become non-
union workers. That they forgo their union affiliation
and accept nonunion status were unlawful conditions
which Beacon could not demand without running afoul
of Section 8(a)(3) of the Act. Accordingly, Respondent
Beacon's conduct in this regard was in violation of Sec-
tion 8(a)(1) and (3) of the Act. See F.M.L Supply, Inc.,
258 NLRB 604, 616, 617 (1981); Florida Steel Corp., 214
NLRB 264 (1974); Redlands Construction Co., 265 NLRB
586 (1982); Owen Lee Floor Service, 250 NLRB 651
(1980); Campbell-Harris Electric, 263 NLRB 1143 (1982).
CONCLUSIONS OF LAW
1. Respondent Beacon is an employer engaged in com-
merce within the meaning of Section 2(2), (6), and (7) of
the Act, and it will effectuate the purposes of the Act for
jurisdiction to be exercised herein.
2. The Union is a labor organization within the mean-
ing of Section 2(5) of the Act.
3. By unlawfully rejecting for hire Joe Abbate, Sam
G. Younger, and David Cary on December 20, 1982, Re-
spondent Beacon engaged in unfair labor practices within
the meaning of Section 8(a)(1) and (3) of the Act.
4. All full-time and regular part-time employees em-
ployed by Respondent Beacon but excluding clerical em-
ployees, guards and supervisors as defined in the Act,
constitute a unit appropriate for the purposes of collec-
tive bargaining within the meaning of Section 9(b) of the
Act.
5. The aforesaid unfair labor practices are unfair labor
practices affecting commerce within the meaning of Sec-
tion 2(6) and (7) of the Act.
The Court said, 313 U.S. at 185:
Discrimination against union labor in the hiring of men is a dam to
self-organization at the source of the supply.... In a word, it un-
dermines the principle which, as we have seen, is recognized as a
basis to the attainment of industrial peace.
1009
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
THE REMEDY
It having been found that Respondent has engaged in
certain unfair labor practices, it is recommended that it
cease and desist therefrom and take certain affirmative
action designed to effectuate the policies of the Act. It
having been found that Respondent Beacon unlawfully
refused to hire Joe Abbate, Sam G. Younger, and David
Cary on December 20, 1982, in violation of Section
8(a)(3) of the Act, it is recommended that it offer the
foregoing persons immediate employment to the posi-
tions to which they would have been entitled had they
been offered employment on December 20, 1982, or, if
such positions no longer exist, to substantially equivalent
employment, without prejudice to their seniority or
other rights and privileges dismissing, if necessary, any
employees, hired on or since December 20, 1982, to fill
any of said positions. Each of said persons shall be made
whole for any loss of earnings he may have suffered by
reason of Respondent Beacon's acts herein detailed, by
payment to each of a sum of money equal to the amount
he would have earned from the date of the unlawful re-
fusals to hire, to the date of an offer of employment as
aforesaid, less net earnings during such period, with in-
terest thereon, to be computed on a quarterly basis, in
the amount and manner established by the Board in F.
W. Woolworth Co., 90 NLRB 289 (1950), and Florida
Steel Corp., 231 NLRB 651 (1977).9
Had not Respondent Beacon discriminated against the
above-named persons, it would have become the employ-
er of employees in an appropriate unit where a majority
of the employees would have been members of the
Union and Respondent Beacon would have been obligat-
ed to bargain with the Union on request. Respondent
Beacon thus avoided its bargaining obligation by engag-
ing in unlawful discrimination. Accordingly, it is recom-
mended that, in order to remedy Respondent Beacon's
8(a)(3) violations effectively, Respondent Beacon also be
ordered to bargain with the Union upon request as soon
as it employs any discriminatee. See Piasecki Aircraft
Corp., 123 NLRB 348, 350 (1959).
[Recommended Order omitted from publication.]
0 See generally Isis Plumbing Co, 138 NLRB 716 (1962).
!010