Apex Decorating Co.

National Labor Relations Board - Board Decisions

Aug 21, 1985

275 N.L.R.B. 1459 (N.L.R.B. 1985)

APEX DECORATING CO.
Apex Decorating Co., Inc ., Madison Decorating
Company, and Madison Coating Systems, Inc.,
Alter Egos and Painters and Allied Trades Dis-
trict Council No.- 51, International Brotherhood
of Painters and Allied Trades , AFL-CIO. Case
5-CA-15045-1, -2, -3 -
21 August 1985
DECISION AND ORDER
By CHAIRMAN DOTSON AND MEMBERS
HUNTER AND DENNIS
On 21 December 1984 Administrative Law
Judge Marvin Roth issued the attached decision.
The Respondent filed exceptions and a supporting
brief, and the General Counsel and the Charging
Party filed answering 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
record in light of the exceptions and briefs' and
has decided to affirm the judge's rulings, findings,2
and conclusions-' and to adopt the recommended
Order.
ORDER
The National Labor Relations Board adopts the
recommended Order of • the administrative law
' The Respondents have requested oral argument The request is
denied as the record, exceptions, and briefs adequately present the issues
and the positions of the parties
2 The Respondents have excepted to some of the judge's credibility
findings The Board's established policy is not to overrule an administra-
tive law judge's credibility resolutions unless the clear preponderance of
all the relevant evidence convinces us that they are incorrect Standard
Dry Wall Products, 91 NLRB 544"(1950). enfd 188 F 2d 362 (3d Cir
1951) We have carefully examined the record and find no basis for re-
versing the findings
The Respondents also except to the judge's erroneous finding that
Kevin Trumpower testified that he had contributed $1000 of the initial
investment to start up Respondent Coating As the Respondent correctly
notes. K Trumpower testified that he had contributed 57000 of the initial
$10,000 investment in Coating The judge's inadvertent error, however,
does not affect our conclusion that Coating is an alter ego 'of Respondent
Apex and Respondent Decorating
a In adopting the judge's findings, we have relied on all the factors set
forth in his decision, including employer motivation , to determine that
Respondent Coating is an alter ego of Respondents Apex and Decorat-
ing Our colleague declines to join us in this paragraph because in her
view antiunion motivation is not a sine qua non for a finding of alter ego
status However, we have made no such assertion in stating our reasons
for finding Respondent Coating to be an alter ego of Respondents Apex
and Decorating As the facts clearly establish Respondent Coating's alter
ego status, we find it unnecessary to pass upon the judge' s determination
that Respondents Coating, Apex, and Decorating constitute a single em-
ployer In addition, since the complaint does not allege any unlawful con-
duct prior to 16 July 1982, we also find it unnecessary to pass upon the
judge's conclusion that Respondents Apex and Decorating are alter egos
of each other or constitute a single employer -
Member Dennis does not join in the foregoing paragraph In her view,
although antiunion motivation (like that demonstrated here) supports the
finding of an alter ego relationship, it is not a sine qua non for such a
finding' See Goodman Piping Products v • NLRB, 741 F 2d 10 (2d Cir
1984)
1459
judge and orders that the Respondents, Apex
Decorating Co., Inc., Madison Decorating Compa-
ny, and Madison Coating Systems, Inc., Alter
Egos, Davidsonville, Maryland, their officers.
agents, successors, and assigns, shall take the action
set forth in the Order.,
DECISION
MARVIN ROTH, Administrative Law Judge.'This case
was heard at Baltimore , Maryland, on August 27
through 31, 1984. The charges were filed on January 17
and 24, 1983, by Painters and Allied Trades District
Council No. 51, International Brotherhood of Painters
and Allied Trades, AFL-CIO (the Union). The com-
plaint ,-which issued on July 20, 1984, alleges that Apex
Decorating Co., -Inc., Madison Decorating Company,
and Madison Coating Systems, Inc. (respectively Apex,
Decorating, and Coating and collectively Respondents)
violated Section 8(a)(1) and (5) of the National Labor
Relations Act. The gravamen of the complaint' is that
Respondents are alter egos and a single employer under
the Act, that Coating (the only presently functioning
entity among the three Respondents)' was established by
Apex and Decorating as a subordinate instrument to and
disguised continuation of Apex and Decorating, and that
Respondents have failed and refused to abide by collect
tive-bargaining agreements executed by Apex and Deco-
rating , which agreements allegedly-cover the employees
of all three Respondents. Only Coating filed an answer
and entered an appearance in this proceeding Coating,
by its answer, denied the alleged alter ego relationships
and denied commission of the alleged unfair labor prac-
tices. i
All parties were afforded full opportunity to partici-
pate, to present relevant evidence, to examine and cross-
examine witnesses , to argue orally, and to file briefs. On
the entire record in this case2 and from my observation
of the demeanor of the witnesses, and having considered
the briefs submitted by the General Counsel, the Union,
and Coating, I make the following -
FINDINGS OF FACT
I. THE BUSINESS OF RESPONDENTS
The answer admits that Apex was a Maryland corpo-
ration from approximately 1964 to August 1982, that its
principal. place of business was located in Upper Marl-
boro, Maryland, and that it was engaged in the' business
of providing painting and wallpapering services in the
building and construction industry both nationally and in
the Washington, D.C. metropolitan area. In response to a
commerce questionnaire dated February 11, 1983, Apex
stated that during the past fiscal year it received more
than $50,000 from sale or performance of services to cus-
tomers outside Maryland.. The answer also admits that
At the outset of the hearing I denied the General Counsel' s Motion
for Summary Judgment against Apex and Decorating, finding that Coat-
ing's answer raised issues involving all three Respondents which preclud-
ed the granting of such motion -
2 The official transcript of proceedings is corrected
275 NLRB No. 205
1460 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Decorating was a Maryland corporation from approxi-
mately 1969 to approximately August 1982, that it had
principal offices in Landover and Upper Marlboro,
Maryland, that it was engaged in the business of provid-
ing painting and wallpapering services in the building
and construction industry, nationally and in the Washing-
ton, D.C. area, and that during the fiscal year ending
about February 1983, a representative period, Decorating
performed services and sold goods valued in excess of
$50,000 directly, to customers located outside Maryland.
The answer further admits that since April 1982 Coating
has been a Maryland corporation, that its principal office
is located in Davidsonville, Maryland, that it is engaged
in the business of providing painting, wallcovering, plas-
tering, flooring, and vinyling services in the building and
construction industry in the Washington, D.C. area, and
that Coating annually performs- services and sells goods
valued in excess of $50,000 directly to customers located
outside Maryland. In light of these admissions, and with-
out reaching the questions of alter ego status, I find that
at times material Respondents were employers engaged
in commerce within the meaning of Section 2(6) and (7)
of the Act, that Coating has been at all times material
and, is an employer engaged in commerce within the
meaning of Section 2(6) and (7) of the Act, and that it
would effectuate the purposes of.the Act for the Board
to assert its jurisdiction in this case -
II. THE LABOR ORGANIZATION AND BARGAINING
UNIT. INVOLVED
The parties stipulated that, at - all . times material, the
Union has been and is a labor organization within the
meaning of Section 2(5) of the Act The Union has nego-
tiated a series of collective-bargaining contracts with
Painting , Decorating and, Drywall- Finishing Contractors
of Washington, D.C. and Vicinity (Association), a multi-
employer bargaining association, covering all journey-
men and apprentices, including temporary employees
employed by the signatory employers in connection with'
commercial painting and drywall finishing contracts' in
the Washington, D C. area In early 1981 the Union and
the Association negotiated and on April 29 reached
agreement on a contract which was effective by its terms
through May 15, 1984. Apex was a union contractor and
consequently ''a signatory contractor from the time it
commenced operations Homer Trumpower, president of
Apex, specifically 'authorized the Association to - negoti-
ate the 1981 contract on its behalf, and -together with
other'employer representatives he participated in the ne-
gotiations . As will' tie' discussed, Apex acid ' De`coraimg
each signed the contract `m May 1981. Tn their respective
commerce , questionnaires,' Apex and Decorating 'each in`
dicated that they -participated .ii coll'ective''bar'gaining
with the Union through the.'A'ssociaiiori. The'fcontracf
provided among `other thing's, in sum ; 'that, a `signatory -
employer engages in a material `breach of 'coritra'ct "by
"operating 'on a'dual 'shop or d_duble`b'r'easted'basis, " (art.
I); attempting to'evade or circumvent contractual obliga-
tions by operating in the Washington, D C. area under
the name of or' in conjunction with nonsignatory firms
(art. II), and contracting out or subcontracting work'fo a `
nonsignatory firm'(arf IV). The contract further provid-
ed for a union shop except where prohibited by state
law,- checkoff of dues, use of the Union as the exclusive
source of job applicants, and wage rates and fringe bene-
fits including pension; health and welfare, industry and
apprentice fund contributions The contract further re-
quired each signatory employer to promptly notify the
Union of every job undertaken or contracted I find that
the Association was-at all times material and is an orga-
nization which exists for the purpose of representing its
employer-members, including Apex and Decorating, in
negotiating and administering collective-bargaining con-
tracts with the Union, and that such members together
constitute . employers engaged in commerce within the
meaning of the Act. I further find that all journeymen
and apprentices, including temporary employees em-
ployed by the employer-members of the-Association, in-
cluding Apex and. Decorating, in connection with com-
mercial painting and drywall finishing contracts in the
Washington, D C metropolitan area as defined in the
contract, excluding all other employees, professional 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, that -at all times material the Union has been and is
the exclusive collective-bargaining representative of the
employees in such unit, and that the employees were
covered by the 1981-1984 contract See Hi-Way Bill-
boards, 206 NLRB 22 (1973), enf. denied 500 F 2d 181
(5th Cir. 1974), cited with approval in Bonanno Linen
Service v. NLRB, 454- U.S 404, 411-412 (1982). Whether
the employees of Coating are included in the unit and
were covered by the contract is dependent on resolution
of the alter ego question.
III THE ALLEGED UNFAIR LABOR PRACTICES
A Developments Through May 1981: Background,
Operations of Apex and Decorating, Alleged Alter Ego
Status of Decorating,' and Negotiations and
Agreements with the Union in May 1981
Apex commenced business in 1964 as a painting and
wallcovering contractor - . Shortly thereafter Homer
Trumpower,=who had been an employee, became a part-
ner in the corporation with one Sidney Efross. Each
owned a one-half interest. From its inception Apex oper-
ated as a union -firm However, Trumpower and Efross
would form other corporations for the purpose of obtain-
ing. other work. These corporations might work togeth- .
er, e.g., one corporation would bid a job and another,
would perform the work. In 1969, after prior efforts by
Apex ' to 'operate -nonunion, Trumpower and Efross
formed , Decorating, . adding a third partner. Homer
Trumpower candidly testified that they formed Decorat-
ing, in order to bid, on nonunion jobs which Apex was
unable to-obtain: Apex, by Efross, expressly informed its
customers that because the "painters union has elected to
discontinue a preferential rate for work performed for
open-shop contractors," Decorating would assume
Apex's contracts with -such contractors. Apex would
work only for union general contractors, and usually ob-
served union wage scales and other terms and conditions
APEX DECORATING CO 1461
of employment, while Decorating would perform what-
ever work it could get, and paid its employees at a lower
rate of pay. Therefore it is not surprising that Decorat-
ing's operations led to constant friction between the part-
ners and the Union In 1974 Efross sold his interest in
both' firms and Homer Trumpower formed a partnership
with two-other individuals In 1980, as a consequence of
settlement of litigation among the partners, Trumpower
became and remained the sole owner of Apex and Deco-
rating. Trumpower testified that he operated both as one
company. He became and remained president of Apex
However, in May 1981 he designated, his son Kevin as
president of Decorating, and George O'Connell, a long-
time associate, as vice president.3 Kevin began working
for Decorating while going to school, and gradually as-
sumed greater responsibilities, principally in connection
with nonunion work O'Connell began working with
Homer and his corporations in 1961, and rose through
the ranks from journeyman to foreman to job superin-.
tendent He and Homer were personal friends. .By 1981
O'Connell was principally responsible for supervising
maintenance and other work for the_ Hecht Company.
Homer testified that he made Kevin president of Deco-
rating because he needed him,to run the office and sign
papers However, in his investigatory affidavit Homer
stated that Kevin "took over" Decorating about May
1981 If Homer needed Kevin only as a glorified office
manager and to sign papers, then by the same reasoning
he should have also made him president of Apex. How-
ever he did not For these and other reasons which will
be discussed, I find that Homer had a more significant
motivation for designating Kevin and O'Connell as the
principal officers of Decorating.
During the 1981 contract negotiations, dual shop or
double-breasted operations were a major union concern.
The Union proposed and the , Association agreed to
clauses which permitted the Union to refuse to sign or to
cancel its contract .wi'th any employer-member engaging
in such practices On April 29 the_Union and the Asso-
ciation reached agreement on a contract, the union mem-
bership ratified the contract on May 1, and on May 3 the
employers, including Homer Trumpower on behalf of
Apex, came to the Union's office to, sign the contract
The Union refused to. permit Trumpower to sign the
contract on the grounds that Apez was conducting a
dual operation, and the Union commenced picketing the
office of Apex and Decorating, which was then located
at 8411 Old Marlboro -Pike; Upper Marlboro, Maryland.
However, the Union did riot then picket any jobs Both.
sides then met at Homer's office in an effort to resolve
their differences. International Representative Michael
Monroe, accompanied by a• business agent, -acted- as
union spokesman Homer, accompanied by Kevin, spoke
on behalf of. Apex and Decorating. Monroe testified in
sum as follows concerning their meetings- Monroe said
that the Union would temporarily stop picketing, but re-
jected Homer's request for a permanent cessation. of
picketing. He asserted that the Union was picketing be-
' Homer , his wife Violet, and his son Kevin all figure significantly in
this case In order to avoid confusion I will sometimes refer to them by
their first names
cause the Trumpowers were running a double-breasted
operation in order to circumvent the Union's contract.
Homer began by saying that he would soon retire, and
that Kevin would be taking over all the operations. He
complained, as he had before, that the Union was perse-
cuting and picking on them. Monroe said that there were
other employers engaged in double-breasted operations,
and that he would make the, same proposal as he had
with the other employers. He proposed an agreement
which the Union subsequently presented in written form
as follows:
May 6, 1981
AGREEMENT BETWEEN
MADISON DECORATING
DISTRICT COUNCIL #51
(1) You will have sixty (60) days as a transition
period. Within that sixty (60) days, if your men
come to join the Union as a group, all Initiation
Fees and Fines will be waived. The new members
will only be required to pay the 1st Quarters
Dues.
(2) Upon submitting a list of all jobs for which
Madison Decorating is already committed to per-
form work, you will be allowed to finish said
work in any fashion you see fit.
(3) Upon signing the agreement with District Coun-
cil #51, any new work bid by Madison Decorat-
ing will conform to the established Union rules,
wages and practices.
Kevin said that some of his employees were not suffi-
ciently qualified to be paid at union scale Monroe said,
that it was up to the employer as to which employees
would be retained, and that the less qualified painters'
could be terminated immediately or on completion of
nonunion jobs. Monroe said that Decorating would have
to submit a list of ;lobs which were bid on a nonunion-
basis before or at the time it signed the agreement with
the Union, that only those jobs could be completed on a
nonunion 'basis, and that all jobs bid thereafter would
have to be performed under the union contract. Homer
and Kevin complained that the proposals were unfair
and illegal, and Homer said that he did not even want
Kevin to be involved with the Union. However, they
agreed to meet again with the Union. They also talked-
about maintenance work which Apex or Decorating per-
formed for the Hecht Company chain of department
stores. Monroe said. he thought they were. assured of the
work,. but Homer said,they were "getting pushed'out the
door " The parties next met at Homer's office on May 6
or 7. Monroe read. and explained the proposed written,
agreement . Homer asked 'why the Union needed a list of.'
jobs. ,Monroe said that they needed the names in writing,
that the. Trumpowers ' could not ,claim any job as non-
union if it was, not on the list, and that both Apex and
Decorating would be union contractors. With regard to
the Hecht Company work, Monroe explained, as he had,
during the Association's contract negotiations, that the',
1462 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Union could negotiate a lower wage rate for year-round
maintenance arrangements . However, he did not say that
employees working on Hecht jobs were not required to
join the Union Kevin expressed interest in such negotia-
tions. Homer and Kevin complained about and ques-
tioned the proposed written agreement. However, short-
ly thereafter Kevin, on behalf of Decorating, and Secre-
tary-Treasurer Daniel Ager, on behalf of the Union,
signed the agreement. Homer on behalf of Apex and
Kevin on behalf of Decorating also signed the Associa-
-tion 's contract. On May 13, 1981, Homer and Kevin on
behalf of Apex and Decorating executed an agreement
with the Union whereby each side agreed not to file
charges or institute lawsuits against each other with re-
spect to any business operation or activities prior to that
date. About a week later, Kevin on behalf of Decorating
sent a letter to the Union, dated • May 20, the text of
which read as follows: -
Please find below a list of jobs which will fall
under our agreement to "finish in any manner we
see fit." Please realize that we have submitted many
bid proposals prior to the signing of our agreement
which will also fall under this list also, however,
due to the large number of these jobs they do not
appear on this list As these jobs develop, we will
notify your office with names and addresses
Medical College of Virginia
Hebrew Home for the Aged
DND III - Office Building
Solid Waste Transfer Station
George Mason University
Tycon Courthouse -
Transpotomac Plaza
Harbor Tower Apartments-Portsmouth, Va
If you have any further questions concerning this
please feel free to call.
It is undisputed that thereafter Decorating never notified
the„ Union of any other specific jobs _ which allegedly
could be completed on a nonunion basis.
Homer and Kevin, in their testimony, presented ram-
bling, disjointed, and incomplete versions of their meet-
ings with Monroe in which, it was difficult to separate
their alleged understandings (or misunderstandings) from
what was actually said . Homer testified that it was his
understanding, and the Union agreed, that.on_all pending
jobs, the employees did not have to join the Union How-
ever, this alleged understanding would be, contrary. to
the plain, language of paragraph I ,of the agreement,.
which provided a 60-day transition period within which
the employees would join the Union as a , group, al-
though Decorating could pay them at. less than union
scale on pending exempt jobs. According to Kevin, the
Union was not concerned about 'the accuracy or com-
pleteness of the list, of such jobs. Kevin testified that
Business Agent Bobby Myers; who accompanied Monroe
at the May 1981 meetings, told him to just "give me
something." However, Kevin admitted that on and after
May 6 Myers repeatedly asked him for a list of ongoing
jobs, although he subsequently attempted to' back away
from this admission , asserting that Myers already knew
the identity of ongoing jobs other than those listed in the
May 20 letter .4•With regard to work for the Hecht Com-
pany, Homer testified that under the May 6 agreement
he could perform such work in any manner he wished,
without even adding Hecht to the list of exempt jobs, be-
cause this' was ongoing work. which the Trumpowers
continued to perform so long as it was satisfactory to
Hecht. However, this explanation was inconsistent with
Homer's version of his discussion with International Rep-
resentative Monroe According to Homer, Monroe said
that he thought the Trumpowers could retain the Hecht
work while paying union scale Homer disagreed, where-
upon Monroe said he would take care of it because he
knew "how -to handle them " If it were understood be-
tween Homer and Monroe that Hecht Company mainte-
nance work could be 'performed on a nonunion basis,
then there would have been no need for Monroe to sug-
gest to Homer that he would see to it that Hecht agreed
to "compensate the Trumpowers on 'the basis of union
scale Homer testified that Monroe did not say that he
could negotiate a separate maintenance scale, but he was
equivocal and evasive on this point. I credit Monroe's
testimony concerning the May 1981 meetings
The Board and the courts have held that ostensibly
separate firms' may be regarded as a single employer
under the Act where there is interrelation of operations,
together with centralized control of labor relations,
common management , and common ownership or finan-
cial control. NLRB v. M. P. Building Corp., 411 F.2d 567
(5th Cir. 1969) The alter ego doctrine is an extension of
the concept of single employer. Thus, two nominally
separate business entities may be regarded as a single em-
ployer if one is the alter ego or "disguised continuance"
of the other. Southport Petroleum Co. v. NLRB, 315 U.S.
100, 106 (1942). In determining "whether two facially in-
dependent employers constitute alter egos" under the
Act, the Board has long held that "although each case
must turn on its own facts, we generally have found alter
ego status where the two enterprises have `substantially
identical ' [ownership], management , business' purpose,
operation, equipment, customers, and supervision " Ad-
vance Electric, 268 NLRB 1001, 1002 (1984) 5 In Advance
Electric the Board held that in determining whether an
alter ego status was present, it would consider "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," but' that such
intent is not an essential element ofan alter ego relation-
ship. Id. at 1002. However, in Alkire.v. NLRB, 716 F.2d
1014; 1020 (4th. Cir. 1983), the court, Judge Sprouse dis-
4 Pursuant to the Company's request, the Union agreed to make Myers
available as a company witness However, Myers was never called to tes-
tify
5 The concepts of single employer and alter ego should note be con-
fused with that of "Joint employer" Under the latter doctrine, separate
firms which "share, or co-determine, those matters governing essential
terms and conditions of employment" of the employees involved are joint
employers of those employees, regardless of whether the firms are com-
monly owned, operated, or controlled NLRB v Greyhound Corp, 368
F 2d 778, 780 (5th Cir 1966) Joint employer status is not an issue in the
present case
APEX DECORATING CO- 1463
senting , held that in determining alter ego status when
business operations are transferred, " the initial question is
whether substantially the same entity controls both the
old and new employer. If this control exists, then the in-
quiry must turn to whether the transfer resulted in an ex-
pected or reasonably foreseeable benefit to the old em-
ployer related to the elimination of its labor obligations."
In Alkire, the court denied enforcement of the Board's
Order because the evidence failed', to demonstrate such
benefit The circuit courts are not in agreement on this
point. Recently' the Second Circuit Court held that the
Board is not required to find union animus or intent to
evade, union obligations before it can impose alter ego
status Goodman Piping Products v. NLRB, 741 F.2d 10
(2d Cir. 1984). However, in light of Advance Electric, and
the fact that the present case arises within the geographi-
cal venue of the Fourth Circuit, I have considered em-
ployer motivation in ,determining the status of both al-
leged alter egos, Decorating and Coating.
In Walter N. Yoder & Sons, 270 NLRB 652 fn. 2
(1984), the Board recently held.
A "double-breasted" operation is one in which a
contractor operates two companies, one unionized
and the other nonunionized -Depending on how the
companies are structured and operated, each may
be a separate corporation or else both may be so
interrelated that they--constitute a single employer
or one may be the alter ego of the other A collec-
tive-bargaining contract signed by one of the com-
panies would not bind the, other if each were a sep-
arate corporation, -but would 'bind the other if both
constituted a single employer and the employees of
both companies constitute a single appropriate bar-
gaining unit or the nonsignatory company is an alter
ego of the signatory company.
In the present case, by reason of the time limitation
period of Section 10(b) of the Act, the complaint ,does
not allege any unlawful 'conduct prior to July 16, 1982,
i e, more than 6 months prior to the filing of the initial
charge in the present case As Decorating signed the As-
sociation contract and the related agreements in, May
1981, it would not be necessary to, determine that Deco-
rating, was an alter ego of Apex in order to find that
Decorating was bound by, that contract. However, the
General Counsel and the Union are alleging, in sum, that
the formation and the subsequent, operations of- Coating
Were a continuation or resumption, in new form, of the
Trumpowers' prior- efforts to, avoid,-their obligations
under the union 'contract through the operations of
Decorating. The Company contends, by way of defense,
that 'Apex and Decorating went out of business or
became defunct for economic reasons. Therefore it fs ap-
propriate to' consider the status and actions' of Decorat-
ing as evidentiary on the ultimate question of whether
Coating was the alter ego of Apex and, Decorating.
I find that at least from 1980, when Homer assumed
full control and ownership of the business, Apex and
Decorating constituted a single employer under the Act.
Respondents do not contend otherwise: Indeed, Coating
virtually concedes such status, asserting (Br . 10) that
"'the evidence, viewed as a whole, establishes that Homer
was the moving force behind- management and labor re-
lations at Apex and Decorating." I further find that
Decorating was the alter ego of Apex and functioned for
the purpose of obtaining nonunion
,and
thereby ena-
bling Apex to avoid its contractual obligations to the
Union. As indicated, I have credited International Repre-
sentative Monroe's testimony concerning the May 1981
meetings, including his uncontradicted testimony that
Homer, in Kevin's presence, stated that he would' soon
retire, that Kevin would be taking -over all the oper-
ations, and that he did not 'want Kevin to be involved
with the Union: I find that these statements, together "
with Homer's longstanding efforts to avoid contractual
obligations through alter ego operations, are evidentiary
with respect to the subsequent formation, operations, and
status of Coating. With regard to the May 6 agreement, I
find, as testified in sum by Monroe, that the agreement
meant what it said on its face, namely, that all Decorat-
ing's employees would be required to join the Union
within 60 days, that Decorating was required to submit a
list of jobs for which it was already committed- to per-
form work, and that only such jobs would be exempt
from coverage of other provisions of the Association
contract As Decorating never furnished, any list other
than that submitted in the May 20 letter, it follows that
all other Decorating jobs, whether oi- not pending as of
May 6, 1981, were covered by the Association contract.
I specifically find, in light, of the credited testimony of
Monroe and the plain language of the May 6 agreement,
that maintenance work for the Hecht Company was cov-
ered by the Association contract. (The Union left open
the possibility that a lower wage rate could be negotiat-
ed for year-round maintenance work, but Decorating
never requested such negotiations.) Interestingly, no
party has addressed the question of whether the Union
and Decorating could lawfully negotiate an agreement
which partially exempted Decorating's operations from
contractual coverage.6 The Union, Apex, and its alter
ego .Decorating were all bound to a multiemployer' bar-
gaining unit . Article IV, section 1, of the Association
contract expressly limited the Union's-authority to nego-
tiate separate agreements although its applicability to'the
present situation is not clear: In Sangamo Construction
Co, 188 NLRB 159, 160 (1971), the Board indicated that
a union could negotiate an agreement with a member of
a multiemployer 'bargainiag ''association if' such conduct
did' not Have a "significantly. adverse impact 'upon the in-
tegrityof "the'inultiemployer' bargaining 'uriit" orwas not
in de'r'ogation of the As'sociation's bargaining authority
or outside the coverage ,ofi the' ultimate Association's
contract." 'In "the' absence ',of persuasive evidence that
such factors were present, I am inclined to resolve the
doubt in favor'of,validrty of the May 6 agreement.'Ho`w-
ever, the fact that the signatories were- bound to multi-
,- , r - ,.. ..
6 The meaning and legal significance of the Ma y 6 agreement , is at
issue in this case,andm-stu be considered in determining the merits of the
alleged unfair labor practices in this case, e g . whether Respondents un-
lawfully failed to apply the Association contract to Hecht Company
maintenance ,work Therefore I must consider the validity of the May 6
agreement whether or note the parties have discussed this question
1464 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
employer bargaining is an additional reason' the May 6
agreement should be strictly limited to its express terms.
B. The Union 's Efforts to Obtain Compliance with the
Association Contract, the Formation of Coating,
Alleged Alter Ego Status of Coating, and Alleged
Violations of the Association Contract
1." Developments from July 1981 to the meeting in
early March 1982
Beginning in July 1981, Union Business Agent Donald
Caton repeatedly called the Trumpowers in an effort to
.obtain compliance with the Association. contract Caton
-specifically requested a list of the names of employees, so
that the Union could get them signed up as required by
.the contract. He -was unsuccessful. Homer promised to
take care of it but never did. Kevin offered various ex-
cuses, saying that he would talk to his father or that he
did not, know where the records were kept. By January
1981, Kevin simply told Caton to-"get off my back." In
the, meantime, Decorating was making only token ges-
tures toward contract compliance. -Union and trust • fund
records' indicate that Decorating made health and wel-
fare fund payments for four employees in May 1981 for a
total of 117 hours of work, for four employees in June
1981 for a total of 120 hours of work, and for three em-
ployees in July 1981 for 48 hours of work; and submitted
rio other payments for any period. The records further
indicate that Decorating deducted and forwarded union
dues for three or four employees for periods- of time in
May, June, and September 1981, submitted reports indi-
cating that there was no work in July, October, Novem-
ber, and December 1981, and did not forward any other
dues payments. Homer testified that as a favor to
Monroe to show good faith, he put some union members
on Decorating jobs and paid- them union scale and bene-
fits, but did 'not pay the nonunion employees such rates
or benefits Decorating's payroll records. indicate that
Decorating continued to employ painters in 1982. The
May 6, 1981 agreement' required that Decorating's em-
ployees join the Union as a group within 60 days, wheth-
er or not they were working on exempt jobs. Therefore
it is evident that Decorating was failing to honor the As-
sociation contract in at least this regard. The Association
contract, as permitted by Section 8(f) of the Act, re-
quired union membership as a condition of employment
after 8 days of employment, and it is' evident from the
employee income figures for 1982 that some painters
worked much more than 8 days for Decorating. Deco-
rating performed $194,000 worth of maintenance work
for Hecht Company in 1981 and $36,000 worth in 1982,
and continued to perform such work until the first week
in April, but no health and welfare fund payments were
submitted in connection with such jobs. Kevin Trum-
power testified that Decorating performed work 'for
Donohoe Construction Company in the late 1970s, but
professed that he could not recall any other jobs for
Donohoe. However, Keith McKinnon, Donohoe's vice
president for construction operations, testified that in
January. 1982 Decorating entered into a contract for
$28,000 to perform services for Donohoe at the Litton
Computer Services project in Reston, Virginia, and that
this was the last job Decorating performed for Donohoe
(Thereafter only Coating performed work for Donohoe.)
The Litton job was not listed in the May 20, 1981 letter,
and no testimony or other' evidence was presented which
would indicate that Decorating submitted a firm bid for
the work prior to May 5, 1981. Therefore it is evident
that Decorating violated the Association contract by fail-
ing to make health and welfare funds in connection with
this job. Even Apex dragged its feet when it came to,
contract compliance. Evidence was introduced which in-
dicated that Apex made certain 1982 trust fund payments
only after receiving complaints from the funds Unfortu-
nately, the full extent of Decorating's failure to adhere to
the Association contract cannot be determined from Re-
spondents' records because many of those records were
allegedly destroyed by a fire on October 22, 1982. It is
evident that Kevin, who was aware of this limitation on
the evidence which the General Counsel could present,
professed selective recall in the anticipation that the
General Counsel might not be able to prove violations of
the Act. I find it incredible that Kevin, the president of
Decorating since May, 1981, could remember jobs in the
1970s but could not remember the last job which Deco-
rating performed for Donohoe in 1982. Rather, Kevin
demonstrated a pattern of selective recall which pervad-
ed much of his testimony.
In early 1982 International Representative Monroe
contacted Kevin by telephone concerning Decorating's
failure to adhere to the-Association contract. Kevin did
not deny that he was violating the contract. -Rather, he
complained that he was being -outbid and not getting
work. Monroe asked for evidence of his profit margin,
but Kevin avoided answering the inquiry. Instead; Kevin
went on arguing that'he could not-do business under the
union contract. Monroe said that he would advise the
Union to take legal action About March 1 Monroe, ac-
companied by three business, agents, located Homer in
his office. They complained that Homer was not living
up to the contract. Homer answered that Kevin and
George O'Connell were- now running things, and that
they would be "nuts to live up to this agreement."
Monroe asked about rumors concerning a third compa-
ny. Homer answered that he did not know anything
about that Monroe indicated that the Union would take
legal action. Homer testified that the May 1981 meetings
were the only time that the Union disagreed with the
way he operated. However Homer then contradicted this
assertion, testifying that in the spring of 1982 Monroe de-
manded a deadline for commencement of union scale on
Hecht Company -work, and also-demanded health and
welfare fund payments. Homer and Kevin did not other-
wise contradict Monroe's testimony concerning their
contacts in early 1982 I credit Monroe. Significantly,
Homer made no distinction between corporations when
he claimed that Kevin and O'Connell were running
things and, as will be discussed further, he knowingly
and falsely concealed the existence of Coating I find
that Homer's statements and actions at this time consti-
tute evidence that the three Respondent corporations
were in fact operated as a single business enterprise, and
APEX DECORATING CO 1465
that Coating was formed as a means of evading the con-
tractual obligations of Apex and Decorating.
2. The formation of Coating
Coating was-incorporated as a Maryland corporation
on April 30, 1982.7 The articles of incorporation indicate
that George O'Connell and Mildred O'Connell (appar-
ently O'Connell's wife) were the directors. 'In his investi-
gatory affidavit to the Regional Office, O'Connell stated
that "I first started at Madison Coating on or about April
30, 1982 to do the Hecht's job and a few other small
jobs." O'Connell further stated that "at this time" he was
approached by Kevin "about the possibility of going into
business together " However, in his testimony O'Connell
admitted that Coating came into existence as a business.
entity approximately 3 months before its incorporation.
O'Connell testified that in February Kevin asked to
become his partner, and that in March they became part-
ners. Coating's accountant, Thomas Isdainer, testified
that his records indicated that Coating commenced busi-
ness in February, and on February 1 commenced repay-
ing loans from Homer's wife Violet. Kevin and O'Con-
nell testified in sum that they each owned a 50-percent
interest in Coating, although the corporation never
issued any stock Homer testified that he never had any
ownership interest in Coating However in June 1983,
shortly after the Regional Office declined to proceed in
the present case," Coating filed a 1982 Federal Corpo-
rate Income Tax Return, signed by Kevin, which con-
spicuously indicated that Homer and Kevin each owned
a 50-percent interest in Coating. Accountant Isdainer,
who signed the return as preparer, admitted, that there
would be tax implications if Coating were wholly owned
by members of the Trumpower family Nevertheless Is-
dainer testified that the return -was based on erroneous
information. According to isdainer, his associate, a Mr.
Lorrash, who prepared the return, listed the ownership
on the basis of the wrong notes The 1982 return was not
corrected even after Coating filed its 1983 tax return in
July 1984, after the General Counsel issued the present
complaint Indeed, Isdainer testified that Kevin did not
call the alleged error to his attention until after the Gen-
eral Counsel introduced the 1982 return into evidence in
the present case. Isdainer's attempt to cover up for his
clients is as full of holes as the proverbial Swiss cheese.
First, Lorrash, who allegedly made the mistake, was not
called as a witness. Therefore Isdainer's testimony
amounts to little more than hearsay Second, the purport-
ed handwritten notes, on which Larrash allegedly relied,
indicate by arrows that "Kevin" and "George" each
owned 50 percent of Coating. Third, Isdainer admitted
that he reviewed the 1982 tax return. This would mean
that, in order to credit Isdainer, I would have to believe
that Lorrash prepared the return and Isdainer and Kevin
each reviewed it before signing, all without spotting a
conspicuous error which had potential tax consequences.
' All dates hereinafter are in 1982 unless otherwise indicated
8 On May 10, 1983. the Regional Office initially declined to proceed in
the present case On June 2, 1983, the Union appealed to the General
Counsel from that decision On December 30. 1983, the General Counsel
remanded the case for further investigation, and on June 14, 1984, sus-
tained the appeal
As of June 22, 1983, when the 1982 return was filed, the
Trumpowers were not concerned with labor relations
implications of their tax returns In a letter dated June
23, 1983, to Isdainer, Respondents' attorney in.this case
indicated, that. he did not think the General Counsel
would reverse the Regional Director. Therefore the
Trumpowers sought the tax advantages of a closely held
family corporation. However, by July 31-, 1984, when
they filed the 1983 return, the situation had changed.
The Internal Revenue Service probably would not com-
plain if Coating's return falsely indicated that O'Connell
was a 50-percent owner, as this would probably result in
a higher tax. However, the potential additional tax
would be considerably less than Coating's potential liabil-
ity in the unfair labor practice case. As will be discussed,
there is considerable additional evidence which indicates
that Coating. was simply another Trumpower corpora-
tion. I find that Kevin was truthful in this regard when
he signed the 1982 tax-return, and that Homer and Kevin
were and are the co-owners of Coating.
George O'Connell, the president and ostensible found-
er of Coating, did not impress me as a businessman. Con-
sidering his ostensible status, he displayed a remarkable
lack of knowledge concerning the' business of Coating.
O'Connell testified that he ' did not know how much
Coating, paid for its equipment or the location of its bank
account, how Coating obtained the WSSC fob (one of its
largest), or when -Violet Trumpower became Coating's
bookkeeper. He testified in sum that Kevin handled these
matters in addition -to selecting Coating's business loca-
tion, mailing address, accountants, and attorneys, incor-
porating the firm, obtaining licenses, granting promotions
and pay increases, and negotiating nearly all Coating's
jobs: O'Connell testified that he did not obtain any work
for 'Coating other than "a couple of small 'jobs" and
"Hecht stuff," i e , Hecht maintenance work. In fact, as
will be discussed, it was Kevin and not George who ar-
ranged for the Hecht Company to transfer the work
from Decorating to Coating. O'Connell testified that he
began to draw paychecks at Coating from the time he
began with that corporation. However, he was unable to
explain why. Coating's payroll records indicate that he
began drawing paychecks in April, whereas other Coat-
ing personnel began drawing paychecks in March.
O'Connell displayed more knowledge concerning super-
vision of field operations, i.e., the same kind of work
which he performed for Apex, and Decorating O'Con-
nell admitted that he spent 80 percent of his time in the
field, and that his work in connection with the Hecht
Company was the same as before, i.e., field supervision
.O'Connell testified that Kevin "had more knowledge of
how to set up a business than I did," but that O'Connell
signed an application for a license to do business in Alex-
andria, Virginia, because he was the president. This
would be consistent with the Trumpowers' ostensible
method of doing business Coating argues, in sum (Br.
10), that Homer Trumpower had a practice of designat-
ing figurehead corporate officials. If so, then it would
appear that Homer continued the practice when O'Con-
nell became president of Coating. However, O'Connell
did display sufficient knowledge concerning Coating's
1466 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
origins to make a damaging admission . Thus O 'Connell
testified as follows: -
Q. Well, there came a time , as you were saying,
when Homer told you about the problems he was
having with the company.
A. That's right.
Q. What problems did he say he was having?
A. He said his business was going down . He says
he was, trying to keep it going. Then the union
came to them and he said he was going - to sign all
his men up union . So my head started going around
about- what I was going to do.
Q. Okay. So Homer told you that he was going
to have to sign up all his men with the union , right?.
A. Yeah.
Q. And that's when you decided you-were going
to start. Madison Coating?
A. I thought of it for a while. Thought of it in
my mind for a while before I did it.
In sum, O'Connell admitted that Coating, was formed
because the Union was pressuring Homer to operate as a
union contractor: I credit O'Connell's testimony in this
regard, but I do-not credit his assertion that he began
Coating. It is.evident from his own admissions that he
lacked the knowledge or ability to organize and run a
large business such as Coating. Rather, I find that Kevin
organized and functioned as the operating head of Coat-
ing.-Homer and Kevin designated O'Connell as the fig-
urehead president of Coating and his wife and daughter
as 'nominal officers, although they did not'work in the
business O'Connell assumed additional responsibilities
which were commensurate with his progression in the
family business , e.g., he purchased supplies, and within
the limits set by Homer and Kevin, or in consultation
with them ," assigned work , set pay rates for individual
employees, and 'set holidays. ' As president, -O'Connell
could sign paychecks. However, his responsibilities re-
mained substantially that of a field superintendent.. ` -
Kevin and O'Connell testified-- in- sum that they began
'Coating with an initial investment of $10,000, of which
Kevin • put up $1000. and O'Connell. $3000 . Homer,
Kevin, and O'Connell testified- in sum that Homer did
not provide any money for the-business, and they did not
indicate 'in their testimony that anyone else put -up
money for the business. However,' the 1982: tax ,return,.
discussed above, indicated that in 1982: Coating owed
Homer $38,000. Accountant Isdainer testified: that. in fact
Violet Trumpower.'loaned Coating $71,000 during-1982,
but that for tax purposes Homer: and Violet were treated
as a single individual . If Homer,did- not;own at least :50
percent of the voting stock of Coating, there would. have
been no need to list the indebtedness on. the-tax return
(presumably this was another-mistake which 'Isdainer: and
Kevin overlooked when they. signed the return). Is-
dainer's testimony, reflected a pattern which was,demon-
strated throughout this 'hearing Whenever a document
contained entries which tended to indicate that Respond-
ent corporations constituted alter . egos, or a single . em-
ployer, Homer, Kevin; O'Connell, or •Isdainer would
simply dismiss the entry,as a;mistake, even if the alleged
mistake had significant financial implications . 9 'If Homer
and Violet were a single person for . tax' purposes, then
the same rule could well apply to this proceeding. See
Truck & Dock Services, 272 NLRB 592 fn. 2 (1984) I do
not credit Isdainer . I find that the tax return meant what
it said , and that Homer put up most if not all the money
for Coating. Even if Violet rather than Homer put up
the money, this 'would amount to little more than a dif-
ference without a material distinction , in _view ,o_f Violet's
significant involvement in the operations of. all three Re-
spondents. Violet was chief bookkeeper, custodian of
records, and for all practical purposes office manager for
the three corporations, and during- 1982 she was on the
payroll of all' three . corporations.' ° • Isdainer admitted
that, although Violet was not an officer, she had author-
ity to sign- checks for Coating, and that only Violet and
Homer had access to Coating's petty cash accounts Is-
dainer's testimony and records further indicated that
Violet wrote substantial checks for Coating, sometimes
to herself, and some of these to cover. her, personal ex-
penses One check which was introduced in evidence in-
dicated that Coating paid Decorating's legal expenses.
All three corporations used the same accountant (Wayne
Bird) to process their payrolls and generate books and
records. ' -
As indicated, Homer told International Representative
Monroe, before Coating came into existence, 'that he
would soon retire, that Kevin would soon be taking over
all the operations, and that he did not want Kevin to be
involved with the Union Homer's subsequent involve-
ment with Coating indicated that he was using Coating
as the vehicle to achieve these ends. The answer to the
complaint asserts that since September 1982 Homer has
been -a job superintendent for Coating., Homer testified
that, after Apex and Decorating ran out of new work,
Kevin and O'Connell asked him to go to work for Coat-
ing, setting up and running jobs, and he agreed. Homer
testified that he was not involved in hiring or firing and
did not.-recommend such action, and transferred employ-
ees only' if instructed to do so' Homer initially testified
that he was not: even responsible for making sure that
there were enough employees, at the jobsites However,
after being confronted. with, his investigatory affidavit he
admitted that he did in fact exercise such authority. Not-
withstanding Homer 's -ostensibly limited responsibilities
and authority, Coating paid him more than .either Kevin
or. O'Connell., Respondent's payroll records indicate, that
in- 1982 they were paid as follows: ;' , .
Apex
Decoiatmg
I ;
-9 Homer, Kevin, 'and O'Connell weie called by the General Counsel as
adverse - witnesses - Homer was recalled by Coating to testify' concerning
meetings', with International; Representative Monroe Isdamer was Coat-
ing's only other witness • ' ' . ,
10 Accountant Isdainer initially testified that Violet had nothing to do
with the records of Apex and Decorating However, Isdamer subsequent-
ly admitted that after the October 1982 fire she told him that she would
assemble Decorating 's records Isdamer's testimony reflects adversely on
his credibility, . ,
APEX DECORATING CO. 1467
Homer Kevin
O'Con=
Hell
Coating 10,000, 25,000 21,418
Total $41,450 $41,200 $28,334
During 1983, when all three were paid only by Coating,
Hothei received '$44,800, Kevin received $41,800, and
O'Connell received $30,000 Homer testified that Coating
initially paid him $900 per week. Although Homer osten-
sibly had authority and responsibilities comparable to
that of other supervisory personnel, or even less; no evi-
dence was introduced to'indicate that anyone other than
Kevin was paid anywhere near as much as Homer. No
evidence was introduced which would indicate that
O'Connell received dividends. or' other earnings which
would make his income comparable to or higher than
that of his ostensible partner Kevin or his ostensible em-
ployee Homer. Rather, the only evidence of such earn-
ings consisted of payments to Violet and Kevin. In, sum,
the relative total incomes of Homer, Kevin, and O'Con-
nell remained substantially unchanged throughout 1982
and 1983, even after Apex and Decorating ceased oper-
ations The income figures are significant in another re-
spect. Homer testified that he would shift salaries be-
tween the payrolls- of Apex and Decorating, depending
on their relative volume of business. It is evident that
this practice continued, with the inclusion of Coating,
after Coating commenced operations Homer's professed
lack of involvement in personnel matters was refuted by
the, testimony of former Coating employee,Charles Pam-
plin and Union . Business Agent Caton. Pamplin testified
that in November 1982 he inquired by telephone con-
cerning a. newspaper ad for "Painters Needed " The, re-
ceptionist answered "Madison," i.e., the common word
in the names of Decorating , and Coating, and put
"Homer" on the, phone. Homer asked for and Pamplin
gave him his qualifications. Pamplin asked for $7.50 or
$8 per hour. Homer immediately answered that he
would give Pamplin $7 per hour to start, -and $8 per
hour if he,worked out, and told .-him to report the next
day to "Ron" (Foreman Ronald, Hayden) at the Shoney
Inn job in'Tysons Corner, Virginia -Hayden immediately
put Pamplin to. work. Thereafter Pamplin was trans-
ferred to three other jobs, •once by Homer. Pamplin last
worked for Coating at a job at 10th Street and Massa-
chusetts Avenue in Washington, D C. On December 13
he complained to Foreman Ronald Coleman that he was
assigned to helper's work They argued, and Coleman
fired' him Painplin reached Homer by telephone and
protested his discharge Homer said he would check
with Coleman. Thereafter Homer told Pamplin that `.`he
decided he couldn't go against his foreman," and told
Pamplin to go to another job where Kevin would give
him his final paycheck. Business Agent Caton testified
that on several occasions he responded- by telephone -to
newspaper ads for painters, and pretended to be a job ap-
plicant. The phone number was that of Decorating, but
on each occasion the receptionist -answered "Madison "
The receptionist would either switch Caton to Homer
or, if Homer was not in, tell Caton to call back, and on
one occasion said they were not hiring. When, Homer
spoke to-Caton, he asked about his experience and other
information pertinent to employment Homer told Caton
that he would be working for Coating, and on one occa-
sion directed him to report to the Shoney job. With
regard to wages, Homer told him on one occasion that
"it's up, to you,", and on another occasion that "when
you get to the job and go. out on the job, we'll find out
what you're worth " Homer's testimony concerning
these matters was vague and equivocal. Homer testified
that he did not remember hinng Pamplin, but might have
taken down information, but that anyone in the office
could do this. He testified that the foremen did the hiring
and firing and set wages, but-he admitted that they had
to call the office for approval of wage increases. Homer
testified that Pamplin complained to him about the cir-
cumstances of his discharge, and that he answered that
"the foreman handles the hiring and firing." Homer
failed to explain why if he were merely a job superin-
tendent with less authority than a foreman, Pamplin's
protest was referred to him Homer also failed to explain
why job applicants were referred to him if this was not
his area.of responsibility Neither Homer nor any other
witness denied that the receptionist regularly answered
"Madison." Homer's lack of credibility was demonstrat-
ed throughout his testimony. I credit the testimony of
Pamplin and Caton. I find in light of that testimony that
Homer actively participated in- the management of Coat-
ing, and specifically that he had authority to and did
hire,- fire, and -transfer. employees, fix wage rates, and
adjust employee grievances The testimony of Pamplin
and Caton is also significant in other respects Their un-
contradicted testimony demonstrates that, in at least one
respect, Decorating and-Coating held themselves out to
the public as a single business by having their reception-
ist answer the phone with "Madison.". Together with
other evidence which will be discussed, -their testimony
further, indicates that in fact the Respondent corporations
maintained common offices with common personnel, and
utilized -a common telephone, number
In the meantime Kevin, -the operating head of Coating,
continued to perform the same functions for Decorating
which he had been performing, and.for a period of time
drew salaries from both corporations.' Kevin testified that
he left Decorating in April or May; i.e., several months
after the formation of Coating In fact, Kevin never left
Decorating, Rather, the nature of his duties changed as
the'work shifted from Decorating to Coating. -As will be
discussed,i Kevin on behalf of Decorating negotiated con-
tracts which were'- subsequently performed by 'Coating,
and arranged, the' transfer of work `from Decorating to
Coating! -In 1983, long 'after, Decorating ceased oper-
ations, Kevin as "president'", off Decorating and "vice
president" of Apex represented 'both corporations in an
interview with : the Internal Revenue Service relative to
proposed, penalty" assessments (the = position taken by
Kevin with- regard to the demise 'of Apex and Decorat-
ing will be-discussed at a later point in this decision)
Kevin admitted that for at least a month, and probably
for 2 months, he drew, concurrent `salaries from Decorat-
ing and Coating Kevin- testified that Homer refused to
1468 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
accept his resignation from Decorating, and therefore he
did not resign even after becoming involved in Coating's
operations. If so, this would indicate that Kevin ac-
knowledged his father's ultimate authority in the business
regardless of the corporate entity involved.
3. Additional evidence concerning alleged single
employer and alter ego status : common premises,
equipment , personnel , and supervision
Throughout most or all of 1981, and until in or about
August 1982, Apex., and Decorating maintained their
business office at the 8411 Old Marlboro Pike location.
In or about August 1982, Apex, Decorating, and, Coating
moved into three adjoining trailers located in a,complex
of businesses at 3354 Patuxent River Road, Davidson-
ville, Maryland. Homer, Kevin, and O'Connell testified
in sum that Coating never maintained an office at the
Marlboro Pike location. According to O'Connell, he op-
erated Coating out of his home until Coating moved into
two of the three trailers at the Patuxent River Road lo-
cation. The two trailers were owned by Coating, and the
third, a rented trailer, was ostensibly used only by Apex
and Decorating. In fact, as evidenced'by Coating' s insur-
ance records, Coating always shared common offices
with Apex and Decorating. When Coating was formed,
Kevin on behalf of Coating took out an insurance policy,
effective as of March 1, 1982; which included property
coverage for its premises at "8411 Old Marlboro
Avenue, Upper Marlboro, Maryland." Once again,
Homer and Kevin dismissed the document as a mistake.
If so, then the indicated address would have constituted
not merely a mistake but a possible fraud on the insurer.
Kevin testified that in August 1982, pursuant to his re-
quest, the-agent changed the policy to indicate the cor-
rect location of Coating, namely, the Patuxent River
Road location. However, this' change simply reflected
the fact-that all -three corporations moved to Patuxent
River Road at this time . After the October 22 fire, Coat-
ing submitted a claim for its losses , including "the entire
cost of 2- out of 3 trailers" (the third being rented) and
the contents of all three trailers, including' records = and
supplies which were specifically identified as the proper-
ty of Apex .and Decorating, e.g., checks and payroll
records. In a moment of candor, Homer testified that the
fire destroyed the records of: Apex Decorating and Coat-
ing, which were "both all the same," because "we was
all operating the same, one company, so everything was
together." I find- that, from its inception, Coating- shared
common offices with Apex and Decorating, and that
Apex and Decorating transferred their office furnishings
and supplies to Coating without compensation. The shar-
ing and eventual transfer to -Coating 'of. common office
furnishings, equipment, and -supplies : also extended to
field equipment. Business Representative Catoii - testified
that he saw Apex equipment on Coating jobs; and former
Coating employee Pamplin- testified that he worked with
equipment marked "Apex." Homer -testified that he sold
a small amount of Apex-Decorating equipment to Coat-
ing, and Coating presented in evidence canceled checks
from. Coating to Decorating, totaling $3750, ostensibly in
payment for, such equipment. As Coating was owned and
financed-by the Trumpower family, such payment would
simply amount to transferring money from one pocket to
another . If Homer were only interested in raising money
for Apex and Decorating, then it is unlikely that he
would have sold the equipment to Coating, which was
either a family corporation or, as suggested by Respond-
ent, a competitor Rather, these transfers of equipment,
together with other evidence which will be discussed, in-
dicate that Homer was intentionally promoting Coating's
business at the expense of Apex and Decorating. ..
As found, Homer, Kevin, Violet, and O'Connell per-
formed substantially the • same functions for Coating
which they had been performing for. Apex and/or Deco-
rating, except that ( 1) Homer gradually reduced his day-
to-day involvement in anticipation of . retirement, (2)
Kevin, as Homer's son and successor, assumed prime re-
sponsibility for the operation of the business, and (3)
O'Connell assumed, slightly more responsibility which
was commensurate with his progression in the business.
These -changes would have taken place even if Coating
had never been formed. The evidence further indicates
that Coating inherited Apex-Decorating's employee com-
plement and supervisory personnel: Respondents' person-
nel records indicated that Coating began hiring in March
1982: During March and April Coating hired some 18 in-
dividuals,, including supervisory personnel All of them
also worked for Decorating during 1982. In sum, Coat-
ing's initial complement consisted entirely of Apex and
Decorating personnel. Even allowing for the fact' that
employees in the construction industry may work for
several-firms over the course of a year, this would be a
remarkable coincidence. However-it was not a coinci-
dence. O'Connell admitted in his testimony that Coating
performed maintenance work for= Hecht Company, using
the same employees who had been doing such work for
Decorating. Homer in his testimony identified 17 individ-
uals, including O'Connell, • who acted as foreman for
Apex or Decorating during 1981 or 1982.' Thirteen of
them worked for Coating during 1982, and Coating's
payroll records indicate that 11 of them received sub-
stantial - earnings from Coating during that year. Several
were identified' as foremen for Coating. Indeed, as with
offices, telephone service, supplies and equipment, and
payment for services, the Trumpowers simply, disregard-
ed corporate lines when it became too inconvenient to
maintain the pretense of separate businesses. Correspond-
ence from Coating to the-Hecht Company indicated that
a letter dated May 13, 1982, was typed by Kevin's secre-
tary -Thalia Aushereman, who was -on the payroll of
Apex and' Decorating but not Coating during 1982 In
the absence of contrary evidence, the inference is war-
ranted,' and I so find, that Aushereman regularly per-
formed, clerical services for • the Trumpowers without
regard to corporate distinctions . Indeed Kevin admitted
in, his testimony' that she performed work for all three
corporations.- -
4. Alleged transfer of work from Decorating to
Coating
As discussed, Decorating began operations as a non-
union . firm, and continued to operate nonunion, with-
token exceptions in the case of a few union members,
APEX DECORATING CO -- 1469
even after it signed the Association contract . The Gener-
al Counsel , contends '(Br 8-10) that after the Union re-
peatedly demanded compliance with the contract, Deco-
rating passed work to Coating I shall at this point dis-
cuss the alleged jobs in this category i t
a. Hecht Company work
I shall begin with ' Respondents ' Hecht Company-
oper-ations, ' because' ` Coating's" operations as a large scale
painting contractor began with that work , and because
the testimony and -documents concerning that work
which were presented in evidence are particularly illumi-
nating with regard to Coating's relation to Apex and
Decorating and to the reason or reasons Coating eventu-
ally obtained all that work . The Hecht Company oper-
ates some 14 department stores in the greater Washing-
ton, `D C area. In 1979 Apex, i.e, the union firm, per-
formed interior decorating at a new Hecht store in An-
napolis . In 1980 Apex performed remodeling at Hecht's
'Belair store , and in 1982 at its Towson , store. The con-
tract price of the Towson job was $206 ,000, which
would rank that job as one of the largest jobs performed
by any of Respondent corporations Apex did not per-
form any other work for Hecht In 1980, Hecht ex-
pressed interest in having its ' routine painting mainte-
nance performed on a regular basis , by a stable crew.
Victor Hares, who was then one of Homer 's partners,
suggested that Hecht contract , with Decorating, i.e., the
nonunion firm, which could give Hecht a more favorable
rate . Hecht did so, and from 1980 through the first week
of April 1982 Decorating performed the Hecht 'mainte-
nance work In 1980 Decorating remodeled the Fair
Oaks"store, but did not thereafter perform any work for
Hecht other than maintenance . As a result of these con--
tracts Hecht became the Trumpowers ' largest customer
and-a reliable and steady, source of'income. Decorating
would periodically bill Hecht for the maintenance work,
and Hecht - would pay the bills unless it was dissatisfied
with price or performance . There is no indication that at
.least until -April 1, 1982, Hecht expressed any such dis-
satisfaction . On 'April 1, Decorating by Kevin sent a
letter to Hecht, the text -of which was as follows-
Recently our firm has become a. signed union
.painting contractor in the Washington area, having
signed , a. collective bargaining , agreement with
Painter's District Council # 51 This action has, re-
suited in a - marked increase in-the wages which, we
, 'pay our employees.
Therefore , the hourly rate . would have , to be- in-
creased from the present--rate to $28 81 per hour
We assume that this rate would not be economically
" Coating asserts (Br 13) that at the hearing the General Counsel
conceded that only six specific jobs were bid by Decorating but subse-
quently performed by Coating This is a misstatement of the General
Counsel ' s position The parties stipulated that these jobs were bid by
Decorahdg and performed by Coating , However, the General Counsel
did not confine its position to those jobs Indeed, there was much litiga-
tion concerning Hecht Company work , which was not included on the
stipulated list In view of the ostensible destruction of records in the Oc-
tober 1982 fire ,-the total 'number of jobs involved cannot be defined sith
any degree of certainty from the present record
feasible for the Hecht Company to pay, since it is
nearly double the present rate of $1494 per hour
' Finally, we propose that the use of our current
arrangement be terminated by your firm and that
this painting work be turned over to Madison Coat-
ing Systems, Inc., which is headed up by Mr
George O'Connell
Although we regret this loss of sales , we feel that
Mr O'Connell can well serve the needs of Hecht
Company.
Coating began performing the Hecht maintenance work
in the second week of April, using the same crew,
manner of performance, and billing system as Decorat-
ing, and at exactly the same rate. O'Connell continued to
function as superintendent over the work In 1984 Coat-
ing also performed remodeling work at Hecht's Mont-
gomery Mall store.
'Homer flatly testified that Decorating did not transfer
any jobs (including the Hecht work) to Coating Homer
testified that when he told Hecht that he would have to
pay union scale, they told him they would take away the
work from him According to Homer, O'Connell then
told him that his business was "shaky," and that O'Con-
nell might as well do the work himself Homer testified
that O'Connell then began Coating in order to take over
the Hecht work, and that Homer was indifferent about
the,whole matter -because he knew he had already lost
the work Homer testified that he' could not remember
when he spoke to the- Hecht Company, but that Coating
did not then exist, and that Kevin wrote his April 1
letter, as a result of Homer's conversation with Hecht
Homer's testimony is 'inherently contradictory, because
Coating was formed in February, .long before Kevin
wrote his letter. Homer admitted that he never paid
union • scale--to the. employees who performed Hecht
-maintenance work. However, in his. investigatory affida-
vit Homer. told a different story, asserting that "I- could
no longer afford paying the difference between what
Hecht's was, paying and, union- scale." Even apart from
these contradictions,, Homer's,- , explanation was' demon-
strably -incredible. The ;text of -Kevin's April 1 letter
plainly indicates that, it was. Kevin and not the Hecht
Company which initiated the removal -of the mainte-
nance work from -Decorating, =and the concurrent trans-
fer of that work to Coating. Kevin made no reference to
any prior conversation- between ;Homer and Hecht.
Rather, the letter. indicates-that this was the first commu-
nication between the Trumpowers and Hecht concerning
the matter Warren-Simons,. Hecht's-divisional vice presi-
dent for-construction and maintenance, who was present-
ed -as a' General Counsel :witness. testified that he never
told-Decorating that he was taking any work from them
Although ,Kevin addressed' his letter to Hecht.-Director
of Maintenance Bill Bozeman, -Simons was Bozeman's su-
perior.---Thereforeif :such • a threat: were made,' Simons
would; have'authorizedtit or at least 'known of and ap-
proved the threat. _ . i . - - - -
Kevin's April 1 letter was itself replete with false-
hoods Decorating did not "recently" sign a union con-
tract. Rather,, it' signed a union -contract in May 1981
The contract did • not .result in a "maiked increase" in
1470 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
wages paid by Decorating , because Decorating never
paid union scale: Coating was not "headed up" by
O'Connell . Rather , Kevin himself headed up Coating. In
-an effort to justify the comparative figures which he
gave Hecht , Kevin in his testimony presented a detailed
analysis of how he arrived at those figures. i 2 Kevin's
analysis, like Homer 's testimony concerning the Hecht
contract , was factually inaccurate , legally irrelevant, or a
combination of both . If Coating were the alter ego of
Decorating , then Coating would be obligated to maintain
union conditions , including wage scales and fringe bene-
fits, on all 'jobs, including Hecht maintenance work, re-
gardless of Kevin 's analysis of the labor costs, and re-
gardless of whether this might result in loss of the work.
As found , the Union indicated that it was willing to ne-
gotiate a lower wage scale for maintenance work, but
the Trumpowers never acted on the offer. Second, the
credible evidence indicates that Hecht never expressed
an unwillingness td accept union scale . Thus in 1982
Apex , the union firm , performed substantial work for
Hecht, with no evident complaints from Hecht. Third,
Kevin never gave Hecht the option of whether it would
accept union scale if this were necessary to retain the
Trumpowers ' services . Rather Kevin in his April 1 letter
simply presented an assumption that Hecht would not
accept an hourly rate of $28 . 81 per hour, 'and proposed
that Hecht utilize Coating at an hourly rate of $ 14.94 per
hour. Plainly this was an offer which Hecht would not
refuse. Fourth, Kevin's figures were false and blatantly
misleading Kevin admitted that in arriving at those
totals he added an overhead charge of 15 percent of esti-
mated labor costs, regardless of actual overhead costs,
and a profit margin of 10 percent, again without adjust-
ment for the higher union labor costs. Kevin thereby ar-
bitrarily inflated the difference between the union and
nonunion rate to Hecht . Kevin also based the proposed
union rate on contract wage rates and benefits for the
period from May 1982 to May 1983 Kevin did not sug-
gest that nonunion wage rates might also increase during
this period By letter dated May 13, only 6 weeks after
Coating assumed the Hecht maintenance contract, Coat-
ing by "Project Manager" Kevin informed Hecht that its
hourly billing rates would be increased by 9 percent. It is
unlikely that Kevin would have been unaware of at least
the strong possibility of such an increase when he sent
his April 1 letter. The May 13 letter was also significant
in other respects Under the union contract painters and
paperhangers received the same rate of pay. However
Coating's charge for paperhangers • was substantially
higher than that for painters. Indeed Coating's charge for
paperhangers ($22.41 per hour) was approximately. equal
to Kevin 's estimate - of total labor costs per employee
under the union contract. However Kevin based his
April 1 estimate of nonunion costs only on the lower
12 Earlier , Kevin testified that he was not involved in setting wage
rates at Coating , that O'Connell established the pay scale , and that Kevin
learned the pay scales from reading payroll sheets In light of Kevin's de-
tailed analysis of the labor costs of Decorating and Coating , and Kevin's
subsequent action in unilaterally increasing Coating's costs and passing
the increase on to Hecht , it is evident that Kevin 's assertion was false
O'Connell was obviously not capable of presenting an analysis such as
that presented by Kevin
rate for painters . Kevin also failed to figure in O'Con-
nell's wage rate , which '(as of May 13 ) was slightly
higher than that of a paperhanger. '
b. Work performed for L. A. Hilte Associates, Inc.: the
Rivertown Restaurant job in Hyb1a Valley, Virginia
Terri Thurston , an office clerical employee for general
contractor L. A. Hilte Associates , Inc. (Hilte) was, pre-
sented as a General Counsel witness. The substance 'of
her testimony is undisputed , although the parties dispute
the inferences to be drawn from that testimony. Thur-
ston testified and referred to Hilte records which indicat-
ed as follows: On June 22 Hilte President Larry Hilte re-
ceived a telephone bid from "Kevin" of "Madison Co."
to perform painting and wallcovering work at the River-
town Restaurant job in Hybla Valley, Virginia, for a
contract price of $ 32,500 . The memo of this call indicat-
ed that Kevin 's telephone number was 967-3773, but
Larry Hilte subsequently scratched "out that number and
replaced it with 261 -4747. Both numbers were used by
Decorating . i 3 Later Hilte's project manager drafted an
outline of a proposed contract between Hilte and "Madi-
son Decorating," for $28 ,000. However , Larry Hilte
made revisions in ,the proposed contract , including the
price, which he changed to $29 , 500 and which became.
the agreed -upon price . Larry Hilte indicated that the
subcontractor was "Madison Decorating ," whose tele-
phone number was 967-3773. Thurston typed the con-
tract in final form. However, when Thurston telephoned
Decorating to obtain its mailing address she was referred
to Coating at its telephone number (261-4700). Thurston
mailed out the contract , which was returned as signed by
O'Connell , but with the name of the subcontractor
changed to Coating . O'Connell indicated in his covering
letter, dated October 20, that he was president of Coat-
ing, but he neglected to correct the last page of the con-
tract, which indicated that he was signing as president of
Decorating . The contract provided for the work to be
substantially completed by December 20. Thurston testi-
fied in sum that she was unaware of any distinction be-
tween the two corporations , and that until O'Connell re-
turned the signed contract she was under the impression
that the subcontractor was "Madison Coating and Deco-
rating." -
Homer testified that Decorating did not transfer any
jobs to Coating , and that no jobs were bid by Decorating
and passed to Coating However ,_ Coating failed to
present any direct testimony with , regard to the River-
town Restaurant job, and specifically failed to explain
how Coating obtained that work . In light of the uncon-
troverted testimony of Hilte employee 'Thurston, I find
that Decorating successfully bid for that work , and then,
acting on its own, transferred the contract to Coating
without even suggesting to Hilte that any different busi-
ness operation was involved.
is Kevin testified that 261 -4747 was Decorating 's number, and tele-
phone company records indicate that the number was billed to Decorat-
ing from February i to December 13, 1982, when service was discontin-
ued Kevin's April 1 letter to the Hecht Company indicated that 967-
3773 was Decorating 's number Homer testified that Coating's telephone
number was 261-4700
APEX DECORATING CO
c. Work performed for Glen Construction Company:
The American Computer & Electronics (AC & E) job
Decorating performed the Tyson Courthouse job for
Glen Construction Company , that job having been listed
as permissibly nonunion in Decorating 's May 20, 1981
letter to the Union. On January 14, 1982, Decorating by
Kevin submitted a bid to Glen for the painting and wall
.coGecing 'subcontract for' the AC & E job in Gaithers-
burg, Maryland. By letter dated April 28; Decorating by
Kevin submitted • technical data sheets which indicated
the type of materials which Decorating proposed to use
on the job. As late as August 13, the Dodge Reports
listed Decorating as painting subcontractor on the job.14
Nevertheless in August Coating executed a contract with
Glen to perform the work for a contract price of
$14,649. Coating admitted that it did in fact perform the
work. Although O'Connell signed the contract, he testi-
' feed that he was not involved in the bidding, and that
Kevin bid the job. Kevin did not testify as to how Coat-
ing obtained the work 15 Homer testified that he told
Glen that he would not be able to perform the job be-
cause he lacked the money, but did not suggest who
should perform the work. If in fact Decorating lacked
funds to fulfill its subcontract, then the fact would have
been apparent to Kevin by April' 28, when on behalf of
Decorating he submitted the technical data sheets.
(Homer's assertion will be further discussed in connec-
tion with Coating's position as to why Decorating and
Apex became defunct.) No evidence was presented
which would indicate that.Coating submitted a separate
bid for the job, or that Glen reopened the job for further
bidding or considered other bids after Homer allegedly
told them that he could not perform the work. I do not
credit Homer. I find that Kevin; as the operating head of
both Decorating and -Coating, transferred the awarded
subcontracts from Decorating to Coating without sug-
gesting to Glen that any different business entity was in-
volved.16 -
14 The Dodge Reports are a commercial publication circulated among
and relied upon by contractors , subcontractors , and other persons inter-
ested in the building and construction industry,'which periodically lists
contracts and subcontracts bid and awarded Such reports are admissible
in evidence for the truth of the matters contained therein as an exception
to the hearsay , rule Fed R Evid 803 ( 17), Coating argues (Br 13) that
these reports have "extremely dubious evidentiary value" because they
sometimes contaiii mistakes and because contractors do not always- fur-
nish correct information to the publisher ' Coating ' s argument might be
persuasive if other testimony or documents indicated that the pertinent
reports were mistaken However , at least with respect to the AC &,E
job. Respondents ' own records and Homer ' s testimony confirm that
Decorating bid and initially obtained the subcontract -
is Kevin did testify that Glen awarded two painting subcontracts on
the AC & E building The first was for performance of the core,work of
the base building, at thecontract price of$14,649, and the second,was.to
perform work for each tenant as space was rented at a contract price of
$13,641 Coating obtained both contracts
16 The subcontract, which was drafted on August 1, indicated that
Coating's address was 8411 Old Marlboro Pike Homer 'testified that this
must have been a mistake , because none of Respondents was located at
that address at that time In fact , as found , Apex and Decorating moved
from Old-Marlboro Pike to Patuxent'River•Road about-that time The
contract is further evidence that fiom its inception Coating shared
common offices with Apex and Decorating '
1471
d. Work performed for W. M. Schlosser Co., -Inc.: the
Washington Suburban Sanitary Commission job
Andrew Schlosser of general and mechanical contrac-
tor W M. Schlosser Co., Inc., who was presented as a
General Counsel witness, testified in sum as follows. In
February 1982 Schlosser Co. submitted a' bid for work to
be performed for Washington Suburban Sanitary Com-
mission at its Potomac River Water Filtration Plant
project. Prior to February Schlosser discussed with
Kevin a proposed subcontract for the sandblasting and
painting work and Kevin indicated his bid Schlosser tes-
tified that Kevin did not give the name of his company,
although Schlosser assumed that Kevin represented
Decorating As Coating did not then exist, Kevin must
have been speaking on behalf of Apex or Decorating. On
February 2 Schlosser Co. received a telephone confirma-
tion of the bid from "Madison Paint & Sandblast," whose
telephone number was 967-3773, i.e, Decorating's
number Schlosser testified that he negotiated. only with
Kevin, and that he had no prior dealings with Coating.
However on August 25, after Schlosser Co. obtained the
general contract, Coating by O'Connell executed a con-
tract to perform the sandblasting and • painting work for
$57,500. Coating stipulated in this proceeding that it per-
formed the work. The work commenced in August, but
WSSC's daily inspection reports indicated that Decorat-
ing' was performing the work.17 Homer testified that
Kevin asked him to teach sandblasting on the job, and
that he also dealt with Schlosser Co concerning job
problems. However, he did not testify concerning how
Coating obtained the work. Although O'Connell signed
the, contract, he testified that he did not know which
corporation bid the job. Kevin, the key figure in this as
well as the other jobs which were bid by Decorating and
subsequently performed by Coating, failed to testify as to
how Coating. obtained. the work. Again, there is no evi-
dence, of separate bidding by Coating. Rather, the evi-
dence indicates that Kevin - intentionally sought to con-
ceal the distinction between the two corporations. I find,
as with the other, jobs, previously discussed, that Kevin
successfully bid for the work on behalf of Decorating,
and then unilaterally transferred the work to Coating by
the simple expedient of having his employee O'Connell
sign the contract on behalf of Coating.
e. Addt[lonal jobs allegedly bid by Decorating and
subsequently performed'by Coating
Coating- stipulated 'that-during the period from mid-
May toimidlSeptember 1982 it contracted for and subse-
quently` performed the following painting and related
work: 'the' Textronix eastern regional. headquarters job
,for -Donohoe Construction Company -(Donohoe); the
Survival ` Technology' job= in Bethesda, Maryland, for
Kimmel & Kimmel, Inc.; and the Marketplace and
Reston,. Virginia, headquarters office building for Manny
Holtz,' Inc. Dodge .Reports- during this period indicate
Business. Representative Caton testified that he came to the job to17
.investigates complaints by employees that they were not receiving union
scale, and that he was 'informed by WSSC's inspector that Decorating
was the subcontractor
1472 DECISIONS OF.NATIONAL, LABOR RELATIONS BOARD
that Decorating was the painting contractor on these
jobs. The Textronix job is particularly significant Dono-
hoe was a major source of business for Decorating.-In
1978 and 1979 Decorating performed four jobs for Don-
ohoe. The last job performed by Decorating for Dono-
hoe, which was negotiated by Kevin, commenced on or
shortly after March 28, 1982. After obtaining the Tex-
tronix -work, Coating performed six other jobs for Dono-
hoe in 1983 and 1984.' Decorating also performed a
major subcontracting job for Kimmel & Kimmel in 1981.
Notwithstanding that - the Dodge Reports constituted
prima facie evidence that Decorating was the successful
bidder on the indicated jobs, Coating failed to. present
-evidence which' would refute such fact. Incredibly,
Kevin testified that he could - not remember whether
Decorating bid on the Manny Holtz jobs, although in
1982 Kevin was primarily responsible for negotiating
work for Decorating In light of the unexplained transfer
of these subcontracts from Decorating to Coating, the
fact that Kevin was responsible for negotiating contracts
for both :Decorating and Coating in 1982, and the evi-
dence concerning the jobs previously discussed, includ-
ing the Hecht maintenance work, which indicate that
Kevin -engaged in a pattern of transferring lucrative
work from Decorating to Coating, I find that Kevin
tranferred these jobs from Decorating to Coating in the
same manner and for the same reason that he transferred
the other jobs.
5. Coating's position concerning the demise of Apex
and Decorating and concluding findings on alter
ego status and alleged contract violations
By September 1982 Apex and Decorating had no new
jobs. to perform. They- completed those jobs which had
not been- transferred from Decorating to Coating, and
thereafter ceased operations. Homer, Kevin, and O'Con-
nell each testified concerning the alleged reason or rea-
sons for the demise of Apex and Decorating Their ex-
planations were conflicting, inconsistent, and in some in-
stances inherently incredible or based on events which
did not or could not have caused the transfer of work
from Decorating to Coating. Homer, who presumably
would be in the best position to know, testified that
Apex and Decorating were unable to survive in business
because (1) after Decorating signed the union contract,
his firms could not get work because their price was no
longer competitive, and (2) Blake Construction Company
owed him $200,000. Kevin testified that Apex and Deco-
rating became bankrupt (although they never filed for or
were placed in bankruptcy) because they were owed
money, and were unable to obtain work after they signed
the union contract in May 1981 According to Kevin,
Decorating was finishing up some big union jobs for the
Marriott Corporation, was unable to obtain new union
jobs in the Washington, D C. area because union general
contractors 'preferred other painting subcontractors, and
could not compete pricewise in the open-shop market.
"However, at another point Kevin testified that Decorat-
ing was already bankrupt and selling off its equipment in
1981. In 1983 Kevin told the Internal Revenue Service
that Decorating became defunct because of "large uncol-
lected receivables" and "fire loss " The fire loss, which
occurred on October 22, 1982, plainly had nothing to do
with Decorating's loss of or failure to obtain work prior
to that date. Moreover, the documentary evidence indi-
cates that Coating was well insured for the loss to all
three corporations As for the outstanding debt owed by
Blake, that debt would be significant to the extent that it
deprived Apex and Decorating of operating funds. How-
ever, at a time when Apex- and Decorating were sup-
posedly 'short of such funds and forced to -sell off 'their
equipment, Homer and/or Violet were investing some
$7.1,000 in Coating. In sum , Homer was starving Apex
and Decorating while financing Coating's operations
Moreover, if Decorating lacked operating funds, then it
would be particularly anxious to retain the Hecht Com-
pany work, which was a steady and substantial source of
income and required minimal investment (Hecht provid-
ed "front money" for new work, paid Decorating every
2 weeks for maintenance work, and provided a work-
shop in each store for its contractors). Instead, Decorat-
ing unequivocally renounced its maintenance arrange-
ment and proposed to Hecht that Coating perform the
work.
Homer and Kevin's complaint about their professed in-
ability to obtain work at union scale might be superficial-
ly. appealing from an equitable (but not legal) viewpoint
but for the fact that their assertions were contrary to the
weight of the evidence in this case. First, Homer had for
many years been running a double-breasted operation.
His attempts to thereby avoid his obligations under union
contracts were nothing new. Rather, Coating was simply
the latest and most far-reaching effort toward that end.
Second, Homer warned the'Union of his intentions when
he told International Representative Monroe that Kevin
would be taking over all the operations and that he did
not want Kevin to be involved with the Union. Indeed,
among the three principal witnesses, O'Connell came
closest to the truth when he testified that Coating was
formed because the Union demanded that Homer comply
with the contract, although he falsely testified that Coat-
ing was his idea. Third, the record is devoid of credible
evidence that -Homer and Kevin tried to maintain Apex
or operate Decorating on a union basis. Rather they
always ran Decorating as-a nonunion contractor. Deco-
rating accepted concessions from the Union and then
unilaterally extended these-concessions to all of its oper-
ations. Decorating never acted on the Union's suggestion
that they could. negotiate a lower rate for maintenance
work such as that performed for Hecht. No testimonial
or documentary evidence was presented which would
demonstrate that Apex or Decorating bid on •a union
basis but failed to obtain -specific work. Rather, the evi-
dence indicates that Decorating successfully bid for con-
tracts and then passed them* to' Coating. I find that Apex
and Decorating went out of business because Homer and
Kevin decided that-they no longer would operate either -
in whole or part as a union contractor. Therefore they,
refrained from-bidding on 100-percent union jobs, and
transferred other work to Coating in order to avoid the
Association contract.
There remains the ultimate question of Coating's
status. On consideration of the evidence, I -find that
APEX DECORATING CO 1473
Apex, Decorating, and Coating constituted a single em-
ployer under the Act, and that Coating was the alter ego
of Apex and Decorating. Therefore Coating was bound
by the Association contract, and violated Section 8(a)(5)
and (1) of the Act by failing and refusing' to apply the
terms and conditions of that contract to its operations.
All the elements of single employer and alter ego status
are present. All three corporations were and are com-
monlyi,owned by. the Trumpower family. Since 1980
Homer has'been the sole owner of Apex and Decorating,
and Homer and Kevin are co-owners of Coating. As
Homer intended to retire' and turn over the business to
Kevin, this change probably' would have taken place
even if they had not formed Coating. Coating ` was fi-
nanced by Homer and/or his wife Violet, and Kevin ran
the day-to-day operations of Coating, as he had run the
operations of Decorating, with Homer retaining the ulti-
mate authority so long as he remained active in the busi-
ness. Violet continued to function as office manager for
all three corporations. Such ownership and management
within one immediate family constitutes strong indicia of
a single employer and alter - ego relationship. Truck &
Dock Services, supra, at fn. 2; E. G. Sprinkler Corp., 268
NLRB 1241 fn. 1 (1984), enfd. 741 F.2d 10 (2d Cir.
1984). Coating's initial personnel complement, including
supervisors, consisted entirely of individuals who had
worked for Apex and Decorating. George O'Connell,
notwithstanding his title of""president," continued to
function as a job superintendent The Trumpowers con-
tinued to shift personnel and salaries from one corpora-
tion to another as warranted by the workload. The three
corporations shared common offices, office and field
equipment, office secretary, and telephone service, and
were held out to the public as a single business enter-
prise. Indeed, the Trumpowers. intentionally sought to
conceal or minimize the distinction between Decorating
and Coating in order to assure their customers that,
while there might be a change in corporate name, they
were still doing business with the Trumpower family.
Coating continued to engage in substantially the same
business as Apex and; Decorating, namely, that of a
painting and wall covering contractor in the building and
construction industry. Coating, like Apex and Decorat-
ing, has also performed sandblasting. Unlike Apex and
Decorating, Coating has not done fireproofing, but has
done some carpeting and flooring. Kevin testified that,
unlike Apex, Coating is not presently doing .bonded
work. He testified that Coating began with small jobs
and Hecht maintenance , but "after I got there I started
pursuing big jobs." However, much of the difference be-
tween jobs formerly performed by Apex or Decorating
and those now performed by Coating simply reflects the
fact that Coating has refrained from bidding on 100-per-
cent union jobs. Where the Trumpowers were able, to
retain customers of Apex or Decorating under nonunion
conditions, e.g., Hecht .Company, Donohoe Construc-
tion, Glen Construction , and Kimmel & Kimmel, they
did so by the simple expedient of transferring contracts
from Decorating to Coating The Trumpowers' business
purposes remained the same,.namely, to engage in the
business as a painting and wallcovering contractor in the
building and construction industry, to make money for
themselves, and to retain the pretense of honoring a
union contract while surreptitiously transferring their
business to a nonunion operation. In sum, I find that
Apex, Decorating, and Coating had substantially identi-
cal ownership, financing, management and supervision,
interrelated operations, centralized control of labor rela-
tions, and common equipment and customers (except to
the extent that Coating shifted and diversified its oper-
ations in order to avoid union jobs and assume more
nonunion work). I further find that Apex and Decorating
formed Coating to carry on their operations and nomi-
nally went out of business in order to evade their obliga-
tions under the Association contract. Therefore I find
that Apex, Decorating, and Coating constituted a single
employer under the Act, and that Coating was from its
inception and is the alter ego of Decorating and Apex.
CONCLUSIONS OF LAW
1 Apex, Decorating, and Coating constitute a single
employer engaged in commerce within the meaning of
Section 2(2), (6), and (7) of the Act.
2. Decorating is the alter ego of Apex and Coating is
the alter ego of Apex and Decorating.
3. The Association is a multiemployer bargaining asso-
ciation.
4. The employer-members of the Association, includ-
ing Apex and Decorating, are employers engaged in
commerce within the meaning of Section 2(2), (6), and
(7) of the Act.
5. The Union is a labor organization within the mean-
ing of Section 2(5) of the Act.
6 All journeymen and apprentices, including tempo-
rary employees employed by the employer members of
the Association, including Apex, Decorating and their
alter ego Coating, in connection with commercial paint-
ing and drywall finishing contracts in the Washington,
D C. Metropolitan area, excluding all other employees,
professional employees, guards and supervisors as de-
fined in the Act, constitute a unit appropriate for the
purposes of collective bargaining within the meaning of
Section 9(b) of the Act
7 At all times material herein, the Union has been and
is the exclusive representative of the employees of Apex,
Decorating, and Coating in the appropriate unit.
8. By failing and refusing to honor the collective-bar-
gaining agreement between the Association and its em-
ployer-members and the Uniori which was effective by
its terms through May 15, 1984, and by failing to apply
the terms and conditions of that agreement to their em-
ployees, Respondents have violated and are violating
Section 8(a)(5) and (1) of the Act.
9 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 REMEDY
Having found that Respondents have committed viola-
tions of Section 8(a)(1) and (5) of the Act, I shall recom-
mend that they be required to cease and desist therefrom,
and from like or related conduct, and to take certain af-
firmative action designed to effectuate the policies of the
1474 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Act. I shall recommend that Respondents be ordered to
maintain and.give full -effect to the 1981-1984 Associa-
tion • contract, and any amendments thereto and subse-
quent agreements covering the unit employees, retroac-
tive to July 17, 1982, a date 6 months prior to filing and
service of the initial charge in this case, and.therefore the
cutoff point under Section 10(b) of the Act. Esgro, Inc,
135 NLRB 285, 286 (1962) I shall recommend that Re-
spondents be ordered to take such actions as are neces-
sary to fulfill their contractual obligations, including but
not limited to the following: Respondents shall reimburse
their employees for any loss of wages and benefits they
incurred- because of Respondents', failure to apply or
maintain the established terms -and 'conditions of such
agreements, with interest, in the manner set forth in Ogle
Protection Service, 183 NLRB 682 (1970), and Florida
Steel Corp., ; 231 NLRB 651 (1977) See European Parts
Exchange, 270 NLRB 1244 fn. 2 (1984). Respondents
shall make the contractually established payments to the
various trust funds established by the collective -bargain-
ing agreements In accordance 'with Board policy, the
amount of interest, if any, due on such payments shall be
determined at the compliance stage of this proceeding.
Merryweather Optical Co., 240 NLRB 1213, 1216 fn. 7
(1979). Resporidents`shall reimburse their employees for
any medical or dental bills they have paid to health care
providers that the contractual -policies would have cov-
ered,-'for any' premiums they may have paid to third-
party insurance companies to : continue medical and
dental coverage in the absence of Respondents' required,
contributions, and for contributions they themselves may
have made for the maintenance of- the contractual health
and welfare, pension; industry, and apprenticeship funds
after Respondents unlawfully discontinued or failed to
make contributions to, those funds. Kraft' Plumbing &
Heating, 252 NLRB'-891 fn.-2 (1980), enfd. 661 F.2d 940
(9th Cir. 1981). Reimbursement shall be with interest in
the manner prescribed in Florida Steel Corp, 231. NLRB
651 (1977) See generally Isis Plumbing-Co., 138 NLRB
716 (1962). Respondents shall also be required- to. reim-
burse the Union for any dues which, pursuant to dues-
checkoff authorizations, they failed to deduct from em-
ployees' paychecks and transmit to the Union as-required
by contract, insofar as the Union has not obtained such
dues directly from employees, with interest In view of
the nature of employment in the building and construc-
tion industry, I find that notice posting at Respondents'
place of business would 'be inadequate to inform Re-
spondents' present and former employees of their rights
under.this decision and recommended Order. Therefore I
am recommending that Respondents be further ordered
to post copies of the notice at their jobsites, and to fur-
nish signed copies of the notice for posting at the
Union's office and meeting places.
On these findings of fact and conclusions of law and
on the entire record, I issue the following recommend-
ed18
18 If no exceptions are filed as provided by Sec 102 46 of the Board's
Rules and Regulations, the findings, conclusions, and recommended
Order shall, as provided in Sec 102 48 of the Rules, be adopted by the
Board and all objections to them shall be deemed waived for all pur-
poses
- ORDER
The Respondents , Apex Decorating Co,-Inc, Madison
Decorating Company, and Madison Coating Systems,
Inc., Alter Egos, Davidsonville, Maryland, their officers,
agents, successors , and assigns, shall
1'. Cease and desist from -
(a) Failing or refusing to recognize and bargain collec-
tively in good faith with Painters and Allied Trades Dis-
trict Council No. 51, International Brotherhood of Paint-
ers and Allied Trades, AFL-CIO as the exclusive bar-
gaining representative of their employees in the appropri-
ate unit , and failing or refusing to honor' collective-bar-
gaining agreements applicable.to those employees.
(b) In any like or related manner interfering with, re-
straining , or coercing employees in the exercise of their
rights under Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) Maintain and give, full effect to the collective-bar-
gaining agreement between the -Union . and Painting,
Decorating and Drywall Finishing Contractors of Wash-
ington , D.C. and Vicinity and its employer-members,
which was' effective by its terms from May 1981 through
May 15, 1984, and any amendments thereto and subse-
quent agreements covering the unit employees;, retroac-
tive to July 17, 1982, including but not limited to: (1)
making whole all unit employees for any loss of wages
and benefits they incurred' because of the, Respondents'
failure to apply or maintain the established terms and
conditions of such agreements; (2) making the contrac-
tually established payments 'to the various trust funds es-
tablished by the collective-bargaining agreements , (3) re-
imbursing their employees-for any expenses ensuing from
the Respondents' failure to make such contributions; and
(4) reimbursing the Union for any loss of dues caused by
the Respondents' failure to deduct- dues pursuant to
checkoff authorizations and remitting same to the Union
as required by contract; all as set forth in the section of
this decision entitled "The Remedy "
'(b) Preserve and, on. request, make available to the
Board or its agents for examination and copying, all pay-
roll records, social security payment records, timecards,
personnel records and reports, and all other records nec-
essary to analyze the amount of reimbursement due
(c) Post at their place of business and at each of their
jobsites copies of the attached notice marked "Appen-
dix."' 9 Copies of the notice; on forms provided by the
Regional Director for Region 5, after being signed by
the Respondent's authorized representative, shall - be
posted by the Respondent immediately upon receipt and
maintained for 60 consecutive days in conspicuous places
including all places where notices to employees are cus-
tomarily posted. Reasonable steps shall be taken by the
Respondent to ensure that the notices are not altered, de-
faced, or covered by any other material.
is 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. Relations Board "
APEX DECORATING CO 1475
(d) Sign and return to the Regional Director sufficient
copies of the notice for posting by the Union, if it is will-
ing, at its office and meeting halls, including all places
where notices to members are customarily posted.
(e) Notify the Regional Director in writing within 20
days from the date of this Order what steps the Re-
spondents have taken to comply.
APPENDIX
ec; .
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 or-
dered us to post and abide by this notice.
WE WILL NOT fail or refuse to recognize and bargain
collectively and in good faith with Painters and Allied
Trades District Council No. 51, International Brother-
hood of Painters and Allied Trades, AFL-CIO as the ex-
clusive representative of our employees in the appropri-
ate unit, or fail or refuse to honor collective-bargaining
agreements applicable to those employees. The appropri-
ate unit is.
All journeymen and apprentices, including tempo-
rary employees employed by the employer members
of Painting, Decorating and Drywall Finishing
Contractors of Washington, D.C. and Vicinity, in-
cluding Apex Decorating Co., Inc., Madison Deco-
rating Company and their alter ego Madison Coat-
ing Systems, Inc, in connection with commercial
painting and drywall finishing contracts in the
Washington, D C. Metropolitan area, excluding all
other employees, professional employees, guards
and supervisors as defined in the Act.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce you in the exercise of your right
to engage in union or concerted activities, or to refrain
therefrom.
WE WILL maintain and give full effect to the collec-
tive-bargaining agreement between District Council No
51 and the above-named contractors association and its
employer-members which was effective by its terms from
May 1981 through May 15, 1984, and any amendments
and subsequent agreements covering the unit employees,
retroactive to July 17, 1982, including but not limited to:
Making whole all unit employees for any loss of
wages and benefits they incurred because of our fai-
lire to apply or maintain the established terms and
conditions of such agreements, with interest,
Making the contractually established payments to
the various trust funds established by the collective-
bargaining agreements,
Reimbursing our employees for any expenses en-
suing from our failire to make such contributions,
specifically: any medical or dental bills they have
paid to health care providers that the contractual
policies would have covered, any premiums they
may have paid to third party insurance companies
to continue medical and dental coverage in the ab-
sence of our required contributions; and contribu-
tions they may have made for the maintenance of
the contractual health and welfare, pension, indus-
try, and apprenticeship funds after we unlawfully
discontinued or failed to make contributions to
those funds, all with interest, and
Reimbursing District Council No 51 for any loss
of dues caused by our failire to deduct dues pursu-
ant to checkoff authorizations and remitting same to
the Union as required by contract, with interest.
APEX DECORATING CO, INC., MADISON
DECORATING COMPANY, AND MADISON
COATING SYSTEMS, INC., ALTER EGOS