B.A.F., Inc.

National Labor Relations Board - Board Decisions

Mar 22, 1991

302 N.L.R.B. 188 (N.L.R.B. 1991)

188
302 NLRB No. 29
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 The Respondent has excepted, inter alia, to the judge’s finding that B.A.F.
did not have its own equipment. We note that Aleria Brown testified without
contradiction that B.A.F. had its own office equipment and did not use that
of 4-Star. Aleria Brown also testified without contradiction, however, that
B.A.F. did not have its own construction equipment and that the employees
used that of the general contractor (4-Star). In any event, we agree with the
judge that the evidence taken as a whole clearly warrants a finding that B.A.F.
and 4-Star are alter egos.
1 On brief, the General Counsel moves for the correction of the case caption
in view of the name specified in the Articles of Incorporation, G.C. Exh. 10.
The unopposed motion is granted.
2 The unit is described as follows:
Employees engaged in plumbing, steamfitting, pipefitting, refrigeration
and shopkeeping within the jurisdiction of the Union as set forth in the
preamble of the collective bargaining agreement between the Union and
Mechanical Contractors Association of North Central Ohio, LRD Division
effective July 1, 1988, through June 30 1991.
3 Respondent asserts the affirmative defense of res judicata. At the end of
the trial here 4-Star amended its answer to include the defense of collateral
estoppel.
B.A.F., Inc. and 4-Star Construction Corp. and
United Association of Journeymen and Ap-
prentices of the Plumbing & Pipefitting Indus-
try of the U.S. and Canada, Local 42. Case 8–
CA–21915
March 22, 1991
DECISION AND ORDER
BY MEMBERS CRACRAFT, DEVANEY, AND OVIATT
On September 28, 1990, Administrative Law Judge
John H. West issued the attached decision. The Re-
spondent filed exceptions and a brief, and the Charging
Party filed a brief in response.
The National Labor Relations Board has delegated
its authority in this proceeding to a three-member
panel.
The Board has considered the decision and the
record in light of the exceptions and briefs and has de-
cided to affirm the judge’s rulings, findings,1 and con-
clusions and to adopt the recommended Order.
ORDER
The National Labor Relations Board adopts the rec-
ommended Order of the administrative law judge and
orders that the Respondent, B.A.F., Inc. and its alter
ego 4-Star Construction Corp., South Euclid, Ohio, its
officers, agents, successors, and assigns, shall take the
action set forth in the Order.
Nancy A. Butler, Esq., for the General Counsel.
Mrs. Aleria Brown, of South Euclid, Ohio, for Respondent
B.A.F., Inc.
Gerald F. Penca, Esq., of Cleveland, Ohio, for Respondent
4-Star Construction, Corp.
Joseph Allotta, Esq., of Toledo, Ohio, for the Charging Party.
DECISION
STATEMENT OF THE CASE
JOHN H. WEST, Administrative Law Judge. On a charge
filed June 26, 1989, by United Association of Journeymen
and Apprentices of the Plumbing & Pipefitting Industry of
the United States and Canada, Local 42 (the Union), a com-
plaint was issued January 31, 1990, alleging that (1) B.A.F.,
Inc. (BAF) and 4-Star Construction Corp.1 (4-Star) have been
affiliated business enterprises with common officers, owner-
ship, directors, management, and supervision, have formu-
lated and administered a common labor policy affecting em-
ployees of said operations, have provided services for and to
each other, have interchanged personnel with each other; and
have held themselves out to the public as a single integrated
business enterprise; (2) by virtue of their operations BAF and
4-Star constitute a single integrated business enterprise and
a single employer within the meaning of the National Labor
Relations Act (the Act), and/or BAF is the alter ego of 4-
Star; (3) alternatively, BAF and 4-Star have been parties to
a contract whereunder BAF is the agent for 4-Star in connec-
tion with referring employees to 4-Star for its construction
projects; (4) 4-Star has exercised control over the labor rela-
tions policy of BAF; (5) BAF and 4-Star have been joint em-
ployers of the employees of BAF; (6) since August 1988, the
Union, by virtue of Section 8(f) of the Act and a described
1988–1991 collective-bargaining agreement, is the exclusive
representative of a described unit,2; and (7) since February
16, 1989, Respondent has refused to recognize and bargain
with the Union as the exclusive collective-bargaining rep-
resentative of the employees in a specified unit by refusing
to apply the terms of a described 1988–1991 contract to the
employees in the unit, in violation of Section 8(a)(1) and (5)
of the Act. BAF filed an answer denying each and every al-
legation contained in the complaint and indicating that BAF
ceased operations in July 1989. 4-Star denies violating the
Act.3
A trial was held in Cleveland, Ohio, on May 22 and 23,
1990. On the entire record in this case, including my obser-
vation of the demeanor of the witnesses, and consideration
of the briefs filed by the General Counsel, 4-Star and the
Union, I make the following
FINDINGS OF FACT
I. JURISDICTION
At all times material here, BAF maintained an office and
place of business in South Euclid, Ohio, where it has been
engaged in providing labor services, which services in 1988
were valued in excess of $50,000, for 4-Star, which itself is
engaged in commerce on a direct basis. 4-Star, which has
been engaged in mechanical and general contracting, admits
that in the course and conduct of its business operations it
has purchased and received at its Cleveland, Ohio facility
products, goods, and materials valued in excess of $50,000
directly from points outside of the State of Ohio. Based on
the above, I find that both BAF and 4-Star are employers en-
gaged in commerce within the meaning of Section 2(2), (6),
and (7) of the Act.
In view of the collective-bargaining agreements treated
below and in view of the testimony of the Union’s witnesses,
I find that the Union is a labor organization within the mean-
ing of Section 2(5) of the Act.
189B.A.F., INC.
4 The original appointment refers both to Peter and Pete.
5 She testified that BAF was formed as a female minority corporation. Percy
Brown testified that BAF never became a certified female minority business
enterprise.
6 She testified that she used $100 from her paycheck to pay for the incorpo-
ration.
7 As noted above, Aleria Brown is married to Percy Brown. Bridgette
Brown is her niece and Beverly Brown is married to Percy’s brother Otis. The
letters BAF were taken from the first letter of Beverly, Aleria, and Francine
Brown, who is married to Percy’s brother Wallace.
II. THE ALLEGED UNFAIR LABOR PRACTICE
A. The Facts
4-Star was incorporated in the State of Ohio in 1980.
(G.C. Exh. 10.) The Articles of Incorporation were signed by
Percy Brown, Wallace Brown, and Otis Brown, and Pete
Brown,4 of 1409 Addison Road, Cleveland, Ohio, was ap-
pointed as agent for service. The first three-named individ-
uals are brothers and equal owners of 4-Star and the last-
named individual is their father. Percy Brown testified that
he is the corporate secretary-treasurer, Wallace is president,
and Otis is vice president; that the business purpose of 4-Star
is construction; that 4-Star is a certified minority business
enterprise; and that he and his wife and his brother Otis and
his wife also lived at 1409 Addison Road. At a point in time
4-Star’s office was located at 1409 Addison Road. At the
time of the trial herein its office was located at 2451
Woodhill Road. Percy Brown testified that 4-Star has been
at the Woodhill Road location for approximately 5 years.
BAF was incorporated in the State of Ohio in 1984. (G.C.
Exh. 2.) Beverly Brown, of 1409 Addison Road, was ap-
pointed its agent for service. Aleria Brown testified that it
was her idea to establish this company with some advice
from her husband; that BAF was formed to provide labor for
4-Star on a job 4-Star bided on; and that it was an oppor-
tunity for her to own her own business.5 Just before BAF
was formed Aleria Brown was working as a medical sec-
retary at the University Hospital of Cleveland.6 Percy Brown
testified that it was his idea to start BAF; and that a major
construction company from out of the area, Ti-Bert, ap-
proached 4-Star to provide minority business enterprise labor
services to it on a very large project and he did not want
4-Star to do it because of the possible liability if Ti-Bert
went out of business or defaulted on payments so he ap-
proached his wife and his brothers’ wives about forming
BAF. According to Percy Brown’s testimony, while 4-Star
has employees, it gets the plumbers and pipefitters it uses
from other companies. BAF remained dormant for some
time.
In 1986 BAF began to supply labor to 4-Star. According
to the last page of General Counsel’s Exhibit 2, on July 14,
1986, by action by written consent of the board of directors
of BAF, the following individuals were nominated, ap-
pointed, and elected to act as officers of BAF for a specified
period: Bridgette Brown, president; Aleria Brown, vice presi-
dent; and Mary Gross Hill, secretary/treasurer.7 All three of
the individuals named as officers were also directors. The
written consent did not change the appointment of the agent
for service and Aleria Brown testified that papers were never
filed with the State changing the designated agent. According
to Aleria Brown’s testimony, she owns one-third of the stock
in BAF and the two other officers own the remaining stock.
She testified that she does not own stock in 4-Star and her
husband testified that he does not own stock in BAF.
Michael Sherman, who is a business representative for the
Union, found out that 4-Star was awarded the plumbing con-
tract at the Lorain Correctional Institute project (Lorain). On
June 22, 1987, he contacted Percy Brown and asked him if
4-Star was going to work Lorain or if 4-Start was going to
use a subcontractor. Percy Brown did not know at that time.
Sherman told Brown that a contract package would be sent
to him for his review. The package was mailed the next day.
In July 1987 Percy Brown met with Michael Sherman and
David Mitchell, who is the business manager and financial
secretary of the Union, at Lorain. 4-Star had a contract on
project. Sherman and Mitchell gave Percy Brown a collec-
tive-bargaining agreement. He explained to them that 4-Star
did not provide its own labor in the plumbing trades and that
it secured its labor from BAF. Regarding this meeting, Sher-
man testified that it occurred on July 14, 1987; that he and
Mitchell met with Percy Brown and Richard Burke, who was
introduced as the onsite representative of 4-Star; that he and
Mitchell reviewed the terms and conditions of how the Union
supplies employees, the wages, working conditions, and
fringe benefit reporting forms; that Percy Brown stated that
the plumbing and pipefitting labor would be performed by a
subcontractor; and that BAF was mentioned by Percy Brown
but Aleria Brown was not present.
During two subsequent telephone conversations on July 17
and 21, 1987, Percy Brown told Sherman that BAF could not
secure the wage and fringe benefit bond as required by the
contract. Sherman reviewed the alternatives with Percy
Brown.
Sherman testified that on July 27, 1987, he spoke with
Percy Brown who indicated that he would probably opt for
the weekly payment of fringe benefits and that he would
have the signed agreement onsite the next day, as well as the
letter of request for the foremen pursuant to the collective-
bargaining agreement.
General Counsel’s Exhibit 7 is a letter dated July 27,
1987, from BAF to the Union requesting the Union to send
John Palmer out as foreman for BAF at Lorain. It is signed
by Aleria Brown, vice president, BAF.
On July 28, 1987, Aleria Brown signed a collective-bar-
gaining agreement for BAF with the Union. (G.C. Exh. 3.)
The agreement was effective to June 30, 1988. Aleria Brown
testified that she never met with the Union to discuss the col-
lective-bargaining agreement before she signed it. Her hus-
band, Percy Brown, gave her the agreement and explained it
to her before she signed it.
Sherman went to the Lorain site on July 28, 1987, and
picked up the above-described documents. Percy Brown indi-
cated that weekly fringe benefits would be paid.
Mitchell testified that he first discussed the fact that fringe
benefit payments were late with Percy Brown in October
1987. Assertedly, Percy Brown told Mitchell that he would
get the fringes in as soon as possible.
Percy Brown testified that he did not make job calls into
the Union for workers he needed at Lorain in 1987; that he
did not oversee the work of the employees on the Lorain site
but rather he oversaw Palmer, the project superintendent,
who oversaw the workers; and that he decided when to add
employees and when to lay off employees at the construction
190 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
site. Mitchell testified that in August 1987 he received a job
call from Percy Brown.
General Counsel’s Exhibit 6(f) contains a stub, number
1529, of a BAF check dated ‘‘11/24 1987’’ which reads
‘‘TO 4-Star’’ for $4000. Percy Brown could not explain why
4-Star would have received this check. He testified that 4-
Star never loaned any money to BAF.
Mitchell testified that he received a job call from Percy
Brown in December 1987 requesting manpower. Assertedly
this was the second time Percy Brown made a job call to
Mitchell.
General Counsel’s Exhibit 8 is an Employer’s Quarterly
Tax Return dated ‘‘1–26–88’’ for BAF. It is signed by Aleria
Brown, president.
Aleria Brown testified that she became president of BAF
in February 1988; that she became more active because she
had been laid off from her job at University Hospital; and
that at BAF she took care of the paperwork, including keep-
ing the union reports, typing, and filing. She had a telephone
installed in her own name in her home. She testified that she
never used 4-Star’s telephone or facilities; that she had
BAF’s office equipment in her house, the house she shares
with her husband Percy; that she did not know if BAF used
the same accounting firm as 4-Star; that she signed BAF
checks and her husband Percy was also listed as someone
who could sign BAF checks after Bridgette Brown left the
Company; that she did not pick another officer of BAF to
also sign checks because they were not active with the Com-
pany at the time; that she had 1-1/2 years of college and she
took a construction management course to prepare her for
running BAF; that she had no experience in the construction
industry prior to the establishment of BAF; that she had
never worked personally on a construction project or for a
construction company; and that BAF did not supply labor for
any company other than 4-Star. When Aleria Brown became
active with BAF in February 1988 it was involved with sup-
plying labor to 4-Star at a major project, namely, Lorain.
Bridgette Brown was responsible for running BAF before
that according to Aleria Brown. Aleria Brown’s husband,
Percy, assertedly did not assist her in performing her tasks
when she became active in BAF in February 1988. He did
give her the hours worked by the employees who she sup-
plied to 4-Star.
Percy Brown testified that BAF does not use anything of
4-Star’s things to operate its business; and that BAF has its
own workers compensation certificates and it handles its un-
employment taxes.
Regarding BAF supplying 4-Star with labor, Aleria Brown
testified that the labor is provided pursuant to a verbal agree-
ment; that her husband notified her how many employees he
would need at 4-Star; that she never participated in the su-
pervision of the employees who worked at 4-Star’s construc-
tion sites; that her husband is authorized to indicate what
jobs and tasks BAF employees should perform on the job;
that her husband reported to her regarding what tasks he as-
signed to the individuals and she never overruled his deci-
sions; and that she never actually called the Union and re-
quested that employees be sent to the jobsite. In fact, she tes-
tified that her husband handled the relations between BAF
and the Union. Aleria Brown testified that BAF does not
own any construction equipment; that it uses the general con-
tractor’s equipment; that the general contractor ‘‘is the owner
of the company that asks me to provide labor to their com-
pany’’ or in other words 4-Star; that BAF checks payable to
her husband Percy might be payment to him personally for
advice he gave her or a loan he gave to her on occasion; and
that she did not give her husband loans. Aleria Brown testi-
fied that 4-Star provided loans to BAF but she could not
know how much they involved. Subsequently she testified
that she viewed such transactions as an advancement in pay-
ment for labor provided. And later she testified that ‘‘maybe
[there were] no more than one or two [loans].’’ She could
not recall the amounts or the dates. She did recall that there
were no loan agreements and that the loans had not been
paid back. Subsequently, Aleria Brown testified that 4-Star,
on more than one occasion, provided advancements to BAF
so that it could meet its payroll, and that there was no docu-
mentation signifying that it was an advancement. Also,
Aleria Brown testified that 4-Star advanced money to BAF
to enable it to pay union dues and fringe benefit payments,
and that BAF had an understanding that when it billed 4-Star
for labor BAF provided, the money previously advanced
would be subtracted from the money owed.
Percy Brown testified that 4-Star owns construction equip-
ment but that it has never leased such equipment to BAF.
Mitchell testified that Percy Brown made a job call to the
Union in May 1988. Assertedly this was the third job call
he received from Percy Brown.
Sherman testified that in June 1988 Percy Brown tele-
phoned the Union four times regarding clarification of job
calls for Lorain and another project 4-Star had secured, Elyr-
ia Wastewater Treatment Plant and to ask about the ‘‘shop-
keeper’s’’ provision in the agreement.
Mitchell testified that in July 1988 he spoke to Percy
Brown about the fringe benefit payments being late and
Percy Brown said that he would get the fringes in as soon
as possible. This discussion was assertedly repeated in Au-
gust 1988.
Palmer testified that approximately a year after he was
hired for the project, he was elevated from foreman to the
superintendent’s position when Burkes left the project; that
he took his instructions from Percy Brown; that Percy Brown
and not Aleria Brown instructed him to make job calls to the
Union; that he called in manhours to either an answer ma-
chine or occasionally Aleria Brown; that he was instructed
to distribute paychecks by Percy Brown; that he contacted
Percy Brown if there was a problem at the site; that he dis-
cussed any jurisdictional disputes at Lorain with Percy
Brown and not Aleria Brown; that Percy Brown would bring
fringe benefit reports to the jobsite and Palmer would deliver
them to the union hall; and that when he purchased supplies
with his own money, Percy Brown reimbursed him.
On August 1, 1988, Aleria Brown signed a memorandum
of agreement as president of BAF with the Union. (G.C.
Exh. 4.) The agreement, with specific exceptions, continues
the then current collective-bargaining agreement until June
30, 1991. (G.C. Exh. 14.)
Percy Brown denies that he spoke with Mitchell in the
summer of 1988 and told him not to speak with his wife
Aleria with respect to delinquent fringe benefit reports.
Mitchell testified that in mid-1988 he discussed the late
fringe benefit payments with Aleria and she told him that he
would have to speak with her husband Percy Brown about
it; and that a couple of days later Percy Brown telephoned
191B.A.F., INC.
8 She speculated that this could have been used for office supplies. Regard-
ing what she charged BAF for her services, Aleria Brown testified that she
maybe paid herself by the hour but she could not recall the rate; that she took
payment whenever money was available; and that it was on an irregular basis.
him and advised Mitchell that he ‘‘was to talk with him
[Percy Brown] in regard to labor relations, not Aleria.’’
(Emphasis added.)
Sherman testified that on September 13 or 15, 1988, he
telephoned Percy Brown about a letter Aleria Brown sent to
the Union regarding qualified female journey persons; that he
telephoned Percy Brown because Aleria Brown was not
available; and that he and Percy Brown also discussed delin-
quent fringe benefits with Percy Brown indicating that a
check would be forthcoming.
In September 1988, according to the testimony of Mitch-
ell, a paycheck given to an employee of BAF, Mike White,
had ‘‘bounced.’’ Mitchell telephoned Percy Brown who as-
sertedly said that the check should be redeposited and he
would transfer moneys into the account to cover the bounced
check.
According to her testimony, in November 1988 Aleria
Brown began to work at Mt. Sinai Medical Center where she
was working at the time of the trial herein.
On November 28 or 29, 1988, Sherman telephoned Aleria
and Percy Brown and left messages that the fringe benefit
fund payments were delinquent again; and that he received
a telephone call from Percy Brown the next day and he was
told that it would be taken care of as soon as possible.
Three BAF check stubs, numbers 1123, 1124, and 1125,
are marked payable to ‘‘PB’’ with a question mark near the
initials on each stub. (G.C. Exh. 6(g).) The amount on the
stubs are $600, $800, and $800, respectively. The stubs are
not dated. Stub 1122 is dated ‘‘12/22/88’’ and stub 1126 is
dated ‘‘12/23/88.’’ Aleria Brown testified that she did not
know what these checks were for or whether the checks were
even written. According to the stub, check number 1122 was
made payable to Aleria Brown for $360.8 Aleria Brown testi-
fied that BAF did not pay her husband, Percy Brown, from
time to time. She speculated that it might have involved her
husband obtaining materials, supplies or equipment for BAF
because BAF did not have a credit rating. According to
Aleria Brown’s testimony, 4-Star used its credit to allow
BAF to obtain equipment.
Regarding whether BAF’s check stubs accurately reflect
what was going on between the two corporations, Percy
Brown testified that the only money transferred to BAF from
4-Star was in the form of payments for labor provided; that
at some point 4-Star may have advanced some money ‘‘but
we never provided . . . [BAF] with a loan of any kind other
than an advancement for services to be rendered’’; that he
has personally loaned his wife, Aleria Brown, money for the
purpose of doing something with BAF; that
No agreement was formed or nothing like that and if
you see some checks with my name on them that might
have been a payment back to me from loaning her
money. That could have been a check that I had gotten
from her. I might have—you know, maybe I’d had a
problem with an employee on the job which I wanted
to pay off. It could have been a check that I got for
that. Maybe I needed some material for a job and she
might have advanced me a check. There’s a lot of cir-
cumstances which I could have received a check from
her as just taking money from BAF for me personally
that wasn’t deserved;
that he would have to say that Aleria paid him back for the
loans or personal moneys that he gave her to start up the
business ‘‘but when, I can’t answer that’’; and that he never
used any indebtedness between BAF or his wife, Aleria
Brown, and himself as leverage to control BAF.
Mitchell testified that he called Percy Brown about fringe
benefit payments being late in December 1988 and that Percy
Brown said that he would get them in.
Percy Brown testified that on occasion he might have
made job calls to the Union for workers needed at Lorain in
1988 but that it was not a standard practice; and that he
would only call the Union if he needed a specific minority
or female.
On January 23, 1989, Sherman telephoned Percy Brown
about a fringe benefit delinquency. BAF had secured a bond
so it was on a monthly fringe benefit reporting system. Percy
Brown said that there were some serious problems at Lorain
and he wanted to speak to the union representatives.
On January 26, 1989, Percy and Wallace Brown met with
Sherman and Mitchell at the Union’s office to discuss Lo-
rain. Sherman testified that a delinquent fringe benefit check
was given to the Union; and that Percy Brown stated that (a)
he doubted that there would be any more after that one; (b)
the job and the company were both in serious financial dif-
ficulty; (c) the general contractor, Turner Construction, want-
ed 4-Star to supply additional manpower because the project
was behind schedule; and (d) he was considering additional
subcontracting with family members or independent lump
sum contractors. Mitchell testified that at the end of this
meeting he and Sherman indicated that the use of family
members who were not union members would be a violation
of the collective-bargaining agreement.
After the January 26, 1989 meeting, Mitchell contacted the
bonding company and informed them of what was going on.
On January 31, 1989, Sherman telephoned Percy Brown
and asked him if additional people had arrived on the site.
Percy Brown told Sherman that three independent lump-sum
contractors were on site, namely, Loren Brown Plumbing,
Darell Reese Plumbing, and James Moore Plumbing. Sher-
man testified that Percy Brown then indicated that he wanted
to bring one of his Local 55 journeymen over to work on
the site; and that he told Brown that that would be a viola-
tion of the hiring hall procedure since no job call currently
existed with BAF. Sherman and Mitchell went to the jobsite
and met with Percy Brown and Richard Bickmore, the
Union’s steward on the job. Brown reiterated his position
and Bickmore indicated that his most recent paycheck had
‘‘bounced.’’ Brown was advised that the Union was with-
holding services because of these matters. Sherman testified
that the people who Percy brought onto the site under the
guise of independent lump-sum subcontractors were BAF
employees and consequently there was a violation of the
Union’s referral procedures with BAF; and that he and
Mitchell asked the construction manager, Turner Construc-
tion, if these ‘‘subcontractors’’ had the necessary workers’
compensation, unemployment, and insurance certificates and
they were told that they did not. Mitchell testified that the
individuals he saw working at the Lorain site were Percy
192 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
9 Later in the record the name is specified as Lorne Brown.
10 Szucs, Prochko, and Mulvey were listed as employees by 4-Star on cer-
tified payroll reports of September 1989 which 4-Star filed with the State of
Ohio with respect to Lorain. Percy Brown testified that the documents were
prepared by the 4-Star secretary; that the purpose of the documents is to show
that the employees were paid prevailing wages on this state project; that BAF
was not involved because none of the people are employees of BAF and BAF
no longer supplied plumber labor to 4-Star and at that time the work was
‘‘punch list’’ work.
Brown, Wallace Brown, Otis Brown, and BAF employees:
Warren Brown, James Moore, and Moddy Medifee; and that
after telephone calls to the Secretary of the State of Ohio,
the Department of Industrial Relations, the Ohio Bureau of
Employment Services, Workers’ Compensation, and Plumb-
ers Local 55 in Cleveland, he determined that James Moore,
Darrell Reese, and Warren Brown9 were in fact employees
of BAF for while they were working at Lorain they were si-
multaneously working in Cleveland as BAF employees.
Mitchell also pointed out that the collective-bargaining agree-
ment between the Union and BAF provides that all sub-
contractors to the signatory will be union contractors in re-
gard to plumbing and pipefitting and related work; and that
the agreement has a provision for exclusive hiring hall.
After the above-described checked ‘‘bounced,’’ the Union
contacted the bonding company and advised them that the
Union was going to withhold manpower to limit liability.
Sherman testified that the bonding company agreed; and that
he estimated that BAF was approximately $5000 in arrears
on the fringe benefit payments at this point. Eventually all
the fringe benefit payments were made.
Sherman testified that on February 2, 1989, he and Mitch-
ell went to the Lorain site, informed Percy Brown that there
were some payroll checks that had not been issued yet, that
the fringe benefits were delinquent again, and that they want-
ed to talk about resolving the situation as it existed on the
site. According to Sherman’s testimony, Brown indicated that
nothing could be discussed with the exception of the pay-
checks until the Union ‘‘got square with . . . Brown’s bond-
ing company.’’ Mitchell testified that they told Percy Brown
that the Union had filed a grievance against BAF and they
requested Brown to remove the involved individuals from the
jobsite; and that they told Brown that they advised the bond-
ing company that the Union might be making a claim against
the bond.
On February 16 Sherman and Mitchell met with Percy
Brown at Lorain. The terms and conditions for bringing the
Union’s people back to work were discussed but Brown
would not agree to the terms. Sherman testified that when he
and Mitchell walked the site they found not only the three
independent contractors but also several other people; that
Percy Brown said that they were family members and owners
of the business and none of the Union’s concern; and that
Percy Brown said that BAF had been dismissed as sub-
contractor to 4-Star at Lorain.
Aleria Brown testified that prior to the third-step grievance
meeting of February 1989 she never met union representa-
tives Sherman and Mitchell. Sherman testified that other than
some items of correspondence he did not have any contact
with Aleria Brown after she signed the contract in July 1987.
And Mitchell agreed with Aleria Brown that this was the
first time he met her. Mitchell also testified that Aleria
Brown never made job calls to the Union.
According to Aleria Brown’s testimony BAF became inac-
tive in July 1989 and since then it has not had any employ-
ees or customers.
General Counsel’s Exhibit 9 is BAF’s monthly combined
reporting forms to Plumbers Local 55 in Cleveland for the
period beginning May 28, 1989, and ending November 29,
1989. All the reports which show that BAF had employees
working during this period were signed by Aleria Brown.
The business manager of Plumbers Local 55, Jim Sullivan,
testified that Local 55 had a collective-bargaining agreement
with BAF which was effective from May 1, 1988, to April
30, 1990; that at the time of the trial herein Local 55 em-
ployees were being referred through BAF to a watertreatment
plant; that the foreman on the job is Dick Szucs; that he has
received job calls for Local 55 members from Percy Brown
but the last few calls have been through the foreman; that
he met Aleria Brown once at Local 55’s hall and once so-
cially; that the fringe benefit reports are mailed in; that he
has not received any notification that BAF has gone out of
business; that Szucs, James Prochko, John Mulvey, and
Monty Menefee are members of Local 5510; that Darrell
Reese and Lorne Brown were in the process of becoming
members of Local 55 but it was questionable at the time of
the trial herein; that James Moore is an ex-member of Local
55; that he received job calls from Percy Brown regarding
Lorain in approximately May 1989 after the job, which had
been down for a while, had started back up; and that the job
calls were for employees based on the agreement Local 55
had with BAF.
B. Analysis
In my opinion an alter ego relationship exists between 4-
Star and BAF. As pointed out in Kenmore Contracting Co.,
289 NLRB 336 (1988), in determining alter ego status the
Board considers whether the companies have substantially
identical ownership, management, business purpose, oper-
ations, customers, equipment, and supervision. No one factor
is controlling.
It was noted by the Board in Kenmore that a finding of
common ownership may be made where, although the same
individuals are not shown to be owners of each corporation,
the corporations are solely owned by members of the same
family. In view of (a) Aleria Brown’s financial dependence
on her husband; (b) BAF’s financial dependence on 4-Star;
and (c) the numerous less than arm’s-length dealings spread
throughout the record, it is my opinion that there is common
ownership. BAF was Percy Brown’s idea. At the time he
wanted to shield 4-Star from possible liability. While Aleria
Brown, who apparently worked as a full-time secretary at the
time, testified that she paid the $100 fee when the Articles
of Incorporation were filed, there had to be other start up
costs. For instance, who paid the attorney who drew up the
papers? Apparently it was the same attorney who drew up
4-Stars incorporation papers, the same attorney who rep-
resents 4-Star herein. Percy Brown testified that he would
have to say that his wife paid him back for the loans he gave
to her to start up BAF but he could not say when.
The record indicates that Percy Brown ran 4-Star. It also
indicates that with respect to BAF, Aleria Brown’s role was
almost exclusively administrative in that she handled the typ-
193B.A.F., INC.
11 Under New Horizons for the Retarded, 283 NLRB 1173 (1987), interest
is computed at the ‘‘short-term Federal Rate’’ for the underpayment of taxes
as set forth in the 1986 amendment to 26 U.S.C. § 6621.
12 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 objec-
tions to them shall be deemed waived for all purposes.
ing, filing, and fringe benefit reports. She could not explain
BAF check stubs which were dated during the time she was
active in the running of BAF. She authorized her husband to
sign BAF checks. She could not explain payments to 4-Star
and apparently also to her husband. Her husband handled
whatever negotiations there were regarding the collective-
bargaining agreement between BAF and the Union. In fact
Percy Brown handled almost all the matters which came up
between the Union and BAF. When a problem arose he was
the one who said he would take care of it, i.e., saying that
money would be deposited to cover one of the ‘‘bounced’’
checks. He is not credited regarding his denial that he told
Mitchell to speak to him and not his wife Aleria about the
delinquent fringes. Mitchell testified both Aleria and Percy
Brown told him that he would have to speak to Percy Brown
about the labor relations between the Union and BAF. Aleria
Brown did not deny this. In fact at one point she testified
that her husband handled the labor relations between BAF
and the Union. Percy Brown’s denial is not credited. It must
be concluded that common management existed between
BAF and 4-Star.
With respect to business purpose, the fate of BAF rested
on 4-Star for the latter was the only customer of the former.
4-Star engaged in construction and BAF supplied labor to 4-
Star.
As pointed out by the Charging Party, on brief, the day-
to-day operational decisions of BAF and 4-Star were made
by Percy Brown. He decided what the involved employees
would be doing on a daily basis. He decided how many of
the involved employees would be working on a given day.
He decided who would call the Union for employees, some-
times making the calls himself. The record demonstrates that
Percy Brown was responsible for operating both BAF and 4-
Star and that Aleria Brown’s role regarding BAF was almost
exclusively administrative.
According to Aleria Brown’s, testimony BAF did not have
its own equipment but rather it used 4-Star’s equipment.
BAF and 4-Star are alter egos and as such they violated
Section 8(a)(1) and (5) and Section 8(d) of the Act by abro-
gating the contract with the Union which covered the in-
volved employees.
With respect to the position taken by Respondent 4-Star in
its answer, at the trail herein and on brief regarding res judi-
cata and/or collateral estoppel, the doctrine of res judicata, as
pointed out by the General Counsel at the trial and on brief,
is not applicable when a prior charge is dismissed before it
is adjudicated on its merits. Sheet Metal Workers Local 38,
183 NLRB 110 (1970). Similarly, collateral estoppel does
not apply here.
CONCLUSIONS OF LAW
1. B.A.F., Inc. is an employer engaged in commerce with-
in the meaning of Section 2(2), (6), and (7) of the Act.
2. 4-Star Construction Corp. is an employer engaged in
commerce within the meaning of Section 2(2), (6), and (7)
of the Act.
3. The Union is a labor organization within the meaning
of Section 2(5) of the Act.
4. The Respondent, as alter egos, violated Section 8(a)(1)
and (5) and Section 8(d) of the Act by abrogating the con-
tract with the Union which covered the involved employees.
5. The aforesaid unfair labor practice affects commerce
within the meaning of Section 2(6) and (7) of the Act.
THE REMEDY
Having found that BAF and 4-Star unlawfully failed to
apply the terms of the collective-bargaining agreement be-
tween BAF and the Union to the involved employees, I shall
recommend that BAF and 4-Star be ordered to cease and de-
sist therefrom and that they maintain and give full force and
effect to the involved contract with the Union which covers
the involved employees. BAF and 4-Star will be required to
make employees whole, with interest,11 for any loss they
may have suffered as a result of the refusal to bargain in
good faith with the Union and apply the collective-bargain-
ing agreement for the remainder of its term. In view of the
nature of the employment involved herein, posting notices
solely at the Respondent’s places of business is not adequate
to give notice to the involved employees. It will be rec-
ommended, therefore, that Respondent, in addition to posting
the notice at their places of business, will post copies of the
notice at their jobsites, and furnish signed copies of the no-
tice to the Union for posting at the Union’s office and meet-
ing place.
On these findings of fact and conclusions of law and on
the entire record, I issue the following recommended12
ORDER
The Respondent, B.A,F., Inc. and 4-Star Construction
Corp., South Euclid, Ohio, its officers, agents, successors,
and assigns, shall
1. Cease and desist from
(a) Failing and refusing to bargain collectively and in good
faith with the Union.
(b) Failing and refusing to abide by the collective-bargain-
ing agreement applicable to the involved employees through
June 30, 1991.
(c) In any like or related manner interfering with, restrain-
ing, or coercing its employees in the exercise of their rights
under Section 7 of the Act.
2. Take the following affirmative action necessary to ef-
fectuate the policies of the Act.
(a) Maintain and give full effect to the involved collective-
bargaining agreement.
(b) Make employees whole for any loss they may have
suffered as a result of their refusal to bargain in good faith
with the Union and apply the collective–bargaining agree-
ment for the remainder of its term.
(c) Preserve and, on request, make available to the Board
or its agents for examination and copying, all payroll records,
social security payment records, timecards, personnel records
and reports, and all other records necessary to analyze the
amount of backpay due under the terms of this Order.
194 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
13 If this Order is enforced by a judgment of a United States court of ap-
peals, the words in the notice reading ‘‘Posted by Order of the National Labor
Relations Board’’ shall read ‘‘Posted Pursuant to a Judgment of the United
States Court of Appeals Enforcing an Order of the National Labor Relations
Board.’’
(d) Post at their places of business and at each of their
jobsites copies of the attached notice marked ‘‘Appendix.’’13
Copies of the notice, on forms provided by the Regional Di-
rector for Region 8, 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 customarily posted. Reasonable steps shall
be taken by the Respondent to ensure that the notices are not
altered, defaced, or covered by any other material.
(e) Sign and return to the Regional Director sufficient cop-
ies of the notice for posting by the Union, if it is willing,
at its office and meeting halls, including all places where no-
tices are customarily posted.
(f) Notify the Regional Director in writing within 20 days
from the date of this Order what steps the Respondent has
taken to comply.
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found that we vio-
lated the National Labor Relations Act and has ordered us
to post and abide by this notice.
WE WILL NOT fail or refuse to recognize and bargain col-
lectively and in good faith with United Association of Jour-
neymen and Apprentices of the Plumbing & Pipefitting In-
dustry of the U.S. and Canada, Local 42 as the exclusive
representative of our employees in the appropriate unit, or
fail or refuse to honor the collective-bargaining agreements
applicable to these employees. The appropriate unit is:
Employees engaged in plumbing, steamfitting, pipe-
fitting, refrigeration and shopkeeping within the juris-
diction of the Union as set forth in the preamble of the
collective bargaining agreement between the Union and
Mechanical Contractors Association of North Central
Ohio, LRD Division effective July 1, 1988, through
June 30, 1991.
WE WILL NOT in any like or related manner interfere with,
restrain, or coerce you in the exercise of the rights guaran-
teed you by Section 7 of the Act.
WE WILL maintain and give full effect to the collective-
bargaining agreement of the United Association of Journey-
men and Apprentices of the Plumbing & Pipefitting Industry
of the U.S. and Canada, Local 42 covering the unit employ-
ees.
WE WILL make whole employees for any loss they may
have suffered as a result of the refusal to bargain in good
faith with the Union and apply the collective-bargaining
agreement for the remainder of its term.
B.A.F., INC.
4-STAR CONSTRUCTION CORP.