Barnard Engineering Co., Inc.; Fire Sprinkler, Inc.

National Labor Relations Board - Board Decisions

Jun 15, 1989

295 N.L.R.B. 226 (N.L.R.B. 1989)

226 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Barnard Engineering Company, Inc.; Fire Sprinkler,
Inc. and Road Sprinkler Fitters Local Union
No. 669, United Association of Journeymen and
Apprentices of the Plumbing and Pipefitting In-
dustry of the United States and Canada, AFL-
CIO and Sprinkler Fitters Local 709, United
Association of Journeymen and Apprentices of
the Plumbing and Pipefitting Industry of the
United States and Canada , AFL-CIO. Cases
21-CA-24246 and 21-CA-24032
June 15, 1989
DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
JOHANSEN AND DEVANEY
On March 13, 1987, Administrative Law Judge
Timothy D. Nelson issued the attached decision.
The Respondents filed exceptions and a supporting
brief. The General Counsel filed an answering
brief. Road Sprinkler Fitters Local Union No. 669
filed cross-exceptions and a brief in opposition to
the Respondents ' exceptions and in support of its
cross-exceptions. The Respondents filed an answer-
ing brief to the cross-exceptions.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
The Board has considered the decision and the
record in light of the exceptions and briefs , and has
decided to affirm the judge's rulings, findings,' and
' The judge incorrectly stated that the 8(a)(5) complaint allegations in-
volved a refusal to honor Local 669's 1982 and 1985 collective -bargaining
agreements . In fact the complaint specifically alleges violations with re-
spect to only the 1985 collective-bargaining agreement and for a period
commencing April 28, 1985. The General Counsel, however, sought a
remedy covering both contracts in view of her theory of fraudulent con-
cealment by the Respondents
The Respondents have excepted to some of the judge 's credibility find-
ings. The Board 's established policy is not to overrule an administrative
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 reversing
the findings . In adopting the judge 's credibility resolutions, we note that
he incorrectly stated that Les Lindley, the president and sole stockholder
of Barnard and the former president and sole shareholder of FSI , "admit-
ted" that he gave false sworn testimony at the arbitration proceeding.
While the record reflects that his testimony at the arbitration proceeding
and the hearing below was not consistent in all respects , he did not admit
on the record that he had testified falsely. This error , however , does not
affect our agreement with the judge's discrediting him based on the other
reasons relied on by the judge.
In adopting the judge's finding of fraudulent concealment , we do not
rely on Les Lindley's refusal , in the prior unfair labor practice proceed-
ing reported at 282 NLRB 617 (1987 ), to answer certain questions on
fifth amendment grounds.
' In adopting the judge 's ultimate conclusion of alter ego status, we do
not rely on the following findings of the judge , which are not supported
by the record . Although the judge found that Chip Lindley , Les' son,
who in June 1983 became the sole shareholder and president of FSI, used
moneys generated from Barnard 's operation to capitalize FSI, the record
shows that Chip used moneys from the family trust , which was funded
primarily by Barnard. Further , contrary to the judge, the record shows
that the transition period for the Respondents exceeded 6 months, and
conclusions2 and to adopt the recommended Order
as modified. S
In adopting the judge's finding that Local 669's
charge was not barred by Section 10(b), we agree
that Local 669 did not have clear notice of the al-
leged violations of Section 8(a)(5) more than 6
months before it filed its charge on October 28,
1985. See Southern California Edison Co., 284
NLRB 1205 (1987). In this regard, we note that
when, in the summer of 1984, it acquired informa-
tion that caused it to have a reasonable belief that
the Respondents were related companies,4 Local
669 in September 1984 promptly put the Respond-
ents on notice of the issue by requesting informa-
tion from Respondent Barnard specifically seeking
to determine whether in fact Barnard and Respond-
ent FSI were alter egos. Although Local 669 might
have filed a charge based on the information it pos-
sessed in September 1984, it pursued the reasonable
alternate course of requesting additional informa-
tion in order to determine whether a charge or
grievance would likely have merit. Barnard, how-
ever, not only refused, unlawfully, to provide the
information that Local 669 had requested, but, as
the judge found, fraudulently concealed certain key
details of the two companies' interrelationships
with the intent to mislead Local 669 into believing
that they were entirely separate entities. Thus, the
that Barnard's phaseout period began sometime after it stopped bidding
on jobs in May 1984 . We further note that , contrary to the judge, the
record does not indicate whether FSI purchased gasoline from Barnard
prior to 1984 We also agree with the Respondents that the record does
not show a reason for the September 1983 industry strike or that Les an-
ticipated the strike . Furthermore , we do not rely on the judge's infer-
ences of antiunion motivation , which are not supported by the record,
regarding the original formation of FSI as a purported double-breasted
operation, FSI's acquisition of the C - 16 license in the first place , and the
reactivation of FSI and the September 1983 industry strike. We, howev-
er, find it unnecessary to pass on the Respondents' exception that the
judge mischaracterized Les' testimony as to why Barnard decided to rec-
ognize both Locals commencing in 1970 because there is no dispute that
Barnard recognized both Locals prior to FSI 's reactivation.
a We shall modify the judge's recommended Order by adding the af-
firmative requirement that the Respondents remove from their records
any reference to the unlawful discharge of employee Charles Cepeda.
The Respondents are also required to provide written notice of this re-
moval to Cepeda and notify him that his discharge will not be used as a
basis for future personnel actions concerning him. Sterling Sugars, 261
NLRB 472 (1982).
The recommended Order is also modified to reflect a remedy for the
8(a)(1) violation committed when Supervisor C. J. Lindley told Cepeda
that he was discharged for having testified in an arbitration proceeding
for Local 709
4 Local 669 had learned that Leslie Lindley was the president, qualify-
ing individual for construction bonds , and agent for service of process of
both Companies ; that the Respondents had the same address and tele-
phone number ; and that the Respondents interchanged certain equipment
and personnel.
In view of the foregoing, which the Board in Barnard Engineering Co.,
282 NLRB 617, 620 (1987), found to give Local 669 a "reasonable belief'
that the Companies were related , we do not accept the judge 's finding
that Local 669 had nothing more than a "suspicion" that they were alter
egos We further disavow the judge 's implication that the 10(b) period
did not begin to run until Local 669 possessed prima facie evidence that
the Respondents were alter egos
295 NLRB No. 30
BARNARD ENGINEERING CO. 227
Union 's delay in filing its charge may fairly be laid
at Barnard 's doorstep because it was Barnard's un-
lawful refusal to provide the requested information
and concurrent fraudulent misrepresentations that
frustrated the Union 's attempts to obtain that infor-
mation .5 We conclude that , under these circum-
stances, Local 669 's charge was not untimely filed.
ORDER
The National Labor Relations Board orders that
the Respondents , Barnard Engineering Company,
Inc. and Fire Sprinkler , Inc., Anaheim and Fuller-
ton, California, respectively, their officers, agents,
successors , and assigns, shall
1. Cease and desist from
(a) Telling an employee that he was discharged
for having testified in an arbitration proceeding for
Sprinkler Fitters Local 709 or any other labor or-
ganization. -
(b) Discharging or otherwise discriminating
against any employee for having testified in an ar-
bitration proceeding for Sprinkler Fitters Local 709
or any other labor organization.
(c) Refusing to recognize, during the term of a
collective-bargaining agreement with it, Road
Sprinkler Fitters Local Union No. 669 , as the ex-
clusive collective-bargaining representative of the
FSI employees covered by the agreement.
(d) Unilaterally changing, during the contract
term , wages, hours, or other terms and conditions
of employment of the FSI unit employees set forth
in Local 669 's 1982 and 1985 collective -bargaining
agreements.
(e) Failing and refusing to make trust fund con-
tributions for the FSI unit employees, as required
by Local 669 's 1982 and 1985 collective -bargaining
agreements.
(f) In any other manner interfering with, restrain-
ing, or coercing employees in the exercise of the
rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action neces-
sary to effectuate the policies of the Act.
(a) Offer Charles Cepeda immediate and full re-
instatement to his former job or, if that job no
longer exists , to a substantially equivalent position,
without prejudice to his seniority or any other
rights or privileges previously enjoyed, and make
him whole for any loss of earnings and other bene-
fits suffered as a result of the discrimination against
him, in the manner set forth in the remedy section
of the decision , except that interest will be comput-
ed in the manner prescribed in New Horizons for the
Retarded, 283 NLRB 1173 ( 1987).
(b) Remove from their files any reference to the
unlawful discharge of Charles Cepeda and notify
him in writing that this has been done and that the
discharge will not be used against him in any way.
(c) Make - the FSI unit employees whole for any
losses they suffered since September 1983 as a
result of the Respondents ' failure to honor and
apply Local 669 's 1982 and 1985 collective -bargain-
ing agreements , in the manner set forth in the
remedy section of the decision, except that interest
will be computed in the manner prescribed in New
Horizons for the Retarded, supra.
(d) Transmit the trust fund contributions as re-
quired by Local 669's 1982 and 1985 agreements
for the period commencing September 1983 in the
manner set forth in the remedy section of the deci-
sion.
(e) Preserve and, on request, make available to
the Board or its agents for examination and copy-
ing, all payroll records, social security payment
records, timecards , personnel records reports, and
all other records necessary to analyze the amount
of backpay due under the terms of this Order.
(f) Post at their separate facilities copies of the
attached notice marked "Appendix."6 Copies of
the notice, on forms provided by the Regional Di-
rector for Region 21, after being signed by the Re-
spondents' authorized representative, shall be
posted by the Respondents immediately upon re-
ceipt and maintained for 60 consecutive days in
conspicuous places including all places where no-
tices to employees are customarily posted. Reason-
able steps shall be taken by the Respondents to
ensure that the notices are not altered , defaced, or
covered by any other material.
(g) Notify the Regional Director in writing
within 20 days from the date of this Order what
steps the Respondents have taken to comply.
6 If this Order is enforced by a judgment of a United States court of
appeals , the words in the notice reading "Posted by Order of the Nation-
al 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."
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found
that we violated the National Labor Relations Act
and has ordered us to post and abide by this notice.
5In this respect , we note that Local 669 filed its charge only 3 weeks
after the judge issued his decision in the earlier Barnard case. Section 7 of the Act gives employees these rights.
228 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
To organize
To form, join , or assist any union -
To bargain collectively through representa-
tives of their own choice
To act together for other mutual aid or pro-
tection
To choose not to engage in any of these
protected concerted activities.
WE WILL NOT tell an employee that he was dis-
charged for having testified in an arbitration pro-
ceeding for Sprinkler Fitters Local 709 or any
other labor organization.
- WE WILL NOT discharge or otherwise discrimi-
nate against any employee for having testified in an
arbitration proceeding for Sprinkler Fitters Local
709 or any other labor organization.
WE WILL NOT refuse to recognize, during the
term of its collective-bargaining agreement with us,
Road Sprinkler Fitters Local Union No. 669 as the
exclusive collective -bargaining representative of
our FSI employees covered by the agreement.
WE WILL NOT unilaterally change, during the
contract term, the wages, hours, or other terms and
conditions of employment of our FSI unit employ-
ees set forth in Local 669's 1982 and 1985 collec-
tive-bargaining agreements.
WE WILL NOT fail and refuse to make required
trust fund contributions for our FSI unit employ-
ees, as required by Local 669's 1982 and 1985 col-
lective-bargaining agreements.
WE WILL NOT in any other manner interfere
with, restrain, or coerce you in the exercise of the
rights guaranteed you by Section 7 of the Act.
WE WILL offer Charles Cepeda immediate and
full reinstatement to his former job or, if that job
no longer exists, to a substantially equivalent posi-
tion, without prejudice to his seniority or any other
rights or privileges previously enjoyed and WE
WILL make him whole for any loss of earnings and
other benefits resulting from his discharge, less any
net interim earnings , plus interest.
WE WILL notify Charles Cepeda that we have
removed from our files any reference to his dis-
charge and that the discharge will not be used
against him in any way.
WE WILL make our FSI unit employees whole
for any losses they suffered since September 1983
as a result of our failure to honor and apply Local
669's 1982 and 1985 collective-bargaining agree-
ments, plus interest.
WE WILL transmit the trust fund contributions as
required by Local 669's 1982 and 1985 agreements
for the period commencing September 1983.
BARNARD ENGINEERING COMPANY,
INC. AND FIRE SPRINKLER, INC.
Paul H. Fisch, Esq., for the General Counsel.
Michael H. Hood and Carolyn C. McKitterick, Esqs. (Paul,
Hastings, Janofsky & Walker), of Costa Mesa, Califor-
nia, for Barnard Engineering Co., Inc. and Fire Sprin-
kler, Inc.
John R. Mooney, Esq. (Beins, Axelrod & Osborne, P.C.), of
Washington , D.C., for Local 669.
Jeffrey L. Cutler, Esq. (Pappy and Davis), of Los Angeles,
California, for Local 709.
DECISION
STATEMENT OF THE CASE
TIMOTHY D. NELSON, Administrative Law Judge. I
heard these consolidated unfair labor practice cases, in-
volving alleged violations of Section 8(a)(1), (3), and (5)
of the Act, during 6 days of trial proceedings held in Los
Angeles, California, between 6 and 13 May 1986.1
A preliminary comment about Deklewa:2
This case was pleaded, tried, and briefed in the period
shortly before the Board published its recent decision in
Deklewa, a decision which will have indisputable and
widespread impact on thinking ' (legally and practically)
about labor relationships in the construction sector of the
United States economy. The decision in Deklewa was not
announced , 3 much less available to me, until I had al-
ready dispatched a final draft of this decision for clerical
preparation for my signature . In accordance with the
Board's implied mandate to do so,4 I have withdrawn
that draft and have reconsidered all of my prior findings,
analyses, and conclusions in the light of the more obvi-
ous teachings of Deklewa , especially those declared to be
its "four basic principles ." s I find those principles appli-
cable, prima facie , to this case . In this regard I note that
the Board appears to use the expression "8(f)" as a kind
of shorthand for virtually all cases involving a labor rela-
tionship or contract in the construction industry. This
usage, as well as many other statements which inciden-
tally appear in Deklewa 's text and footnotes, further
imply a presumption , to be applied (retroactively)-that
we should presume the applicability of Deklewa 's "8(f)"
rules and analyses in all construction cases in which
questions are raised implicating the existence, or scope,
of the representational rights of a construction union.
I have concluded that Deklewa will not require me to
substantially revise my findings and conclusions, nor my
i The basic record consists of hundreds of pages of pretrial pleadings
and motions , the trial transcript of 1210 pages, together with 77 exhibits
composing roughly 600 pages, and the various posttrial briefs , motions,
and submissions of authorities lodged with me to date . I grant all pending
posttnal motions respecting the receipt of tendered exhibits, there being
no opposition , except as to my taking notice of the Board 's disposition of
Judge Pollack's related case (I discuss the latter issue elsewhere) The
testimony and colloquy at trial has often been mistransci •ibed, but harm-
lessly so , except in one arguable case , which I order corrected, as fol-
lows: Tr . 559 at lines 5-6; the first sentence should read : "As I said, I
have ruled that it 's admissible , and that it has been authenticated." (And
see Tr. 557: 19-22.)
9 John Deklewa & Sons, 282 NLRB 1375 (1987).
a Official Press Release (R-1786), Wednesday, 25 February 1987
4 The Board intends that Deklewa's principles be retroactively applied,
"to all pending cases in whatever stage" (p. 1389 , my emphasis).
5 See 1385 et seq., setting forth principles for "8(f) cases."
BARNARD ENGINEERING CO. 229
analyses of major substantive issues, except insofar as I
had analyzed the question of the 9(a) status of Local 669
and had decided that Local 669 occupied "full" 9(a)
status (a judgment linked ultimately to principles of col-
lateral estoppel).6
A. Docketing Background; Service-of-Charge
Questions; The State of the Pleadings
The cases derive from a series of separate unfair labor
practice charges filed by sister locals of the same Inter-
national union (Local 669 and Local 709) against Bar-
nard Engineering Company, Inc. (Barnard) and/or Fire
Sprinkler, Inc. (FSI). The charges were ultimately made
the subject of an amended consolidated complaint (the
complaint) which the Regional Director for Region 21
issued on .4 February 1986 against both corporate enti-
ties, as alter egos.7
The 8(a)(3) and ( 1) aspects of the complaint stem from
the Regional Director's investigation into Local 709's
charge, filed solely against FSI in Case 21-CA-24032 on
9 July 1985, that FSI had unlawfully discharged Charles
Cepeda in May 1985 for his union activities or for other
statutorily protected activities and had threatened
Cepeda for engaging in those same activities . The 8(a)(5)
features of the complaint derive from the Regional Di-
rector's investigation into Local 669's charge, filed on 28
October 1985 in Case 21-CA-24246, that FSI is merely
the alter ego or disguised continuance of Barnard (or
that the two are a single employing entity ), that Barnard
unlawfully refused to bargain in good faith by failing to
honor or apply to FSI's employees the Local 669 collec-
tive-bargaining agreements which allegedly bound Bar-
nard , and by other unilateral actions with respect to
FSI's employees which were inconsistent with Barnard's
collective-bargaining relationship with Local 669.
In their separate answers to the complaint, made
through common counsel , Barnard and FSI deny that
they are alter egos and/or that either of them committed
unfair labor practices as alleged . Also, Barnard and FSI
each separately claimed to be without knowledge-and
therefore denied-the filing and service of all charges, as
alleged in the complaint . On the matter of service of
charges, the certificates and other service documents in
the formal papers introduced by the General Counsel
show , and I find , that the original charges in each case
were mailed to addresses used , respectively , by each cor-
8 Practically, Deklewa impinges mainly on my discussion and analyses
at sec . III,A . That section now includes a recent engrafting of Deklewa's
principles to my previous analyses , which in the process were themselves
edited and materially shortened to avoid now -repetitive discussion of
cases and issues which have been given more exhaustive treatment in
Deklewa . Incidentally, in various parts of my decision, particularly after
sec III ,A, I have modified my phraseology to avoid any suggestion that
the parties' relationships involved the "full panoply of Section 9(a) rights
and obligations-as opposed to the more "strictly limited 9(a) status" en-
visioned for such parties under "8(f)" analyses set forth in Deklewa.
The complaint treats Barnard and FSI as a single "Respondent," con-
sistent with its threshhold allegation that , "Since a date unknown to the
General Counsel , but ... peculiarly within the knowledge of Respond-
ent, FSI was established by Barnard as a subordinate instrument to and a
disguised continuation of Barnard."
porate entity and that each entity acknowledged receipt
of them.8
The complaint also alleges-but Barnard and FSI
deny-that an amended charge in Case 21-CA-24032
was filed by Local 709 on 29 January 1986 and was duly
served on "Respondent" on the same date . But the
record is in a particularly confusing state on the matter
of the amended charge since the exhibits comprising the
pretrial formal papers do not contain a copy of that
amended charge, but only a copy of a notice of filing of
amended charge (G.C. Exh . 1(k)), addressed separately
to Barnard and to FSI, which purported to enclose a
copy of said amended charge (which notice was, I find
from the mailing certificates and return receipts, duly
served on and received by both FSI and Barnard ). Since
I have no record basis for determining what the amend-
ed charge was all about , however, I am compelled to
ignore the amended charge in all further consideration of
this case.
Both Barnard and FSI allege as an affirmative defense
to the 8(a)(5) counts that they are barred by Section
10(b) of the Act, containing a 6-month limitation on the
filing of unfair labor practice charges . With respect to
Cepeda's termination , FSI's answer alleges as a second
affirmative defense that FSI fired Cepeda "for good
cause."
Among the trial developments which further narrowed
the scope of the pleadings was the General Counsel's
amendment of his complaint to allege that the "appropri-
ate unit" in which Local 669 is the 9(a) representative-
and which was affected by alleged unfair labor prac-
tices-is the one covered by a series of labor agreements
between Local 669 and employer-members, including
Barnard , of a nationwide multiemployer bargaining asso-
ciation , National Automatic Sprinkler & Fire Control
Association , Inc. (Association). This amendment had the
effect of clarifying that the complaint does not attack
any behavior by Barnard/FSI within Local 709'ssepa-
rate territorial jurisdiction which might have been in
derogation of any contractual or bargaining obligations
owed by Barnard/FSI to Local 709.9
After hearing the General Counsel's "unit" amendment
at trial , Barnard continued to deny that Local 669's As-
sociation-wide unit is an appropriate one and also denied
that Local 669 is the exclusive collective -bargaining rep-
resentative of employees in that unit within the meaning
of Section 9(a) of the Act.
8 The charge in Case 21 -CA-24032 was mailed to a Fullerton post
office box then used as a business address by FSI; someone whose signa-
ture is illegible acknowledged its receipt on FSI 's behalf. Duplicate
copies of the original charge in Case 21 -CA-24246 (naming both FSI and
Barnard) were first separately, mailed to Barnard 's Via Burton, Anaheim
address, Barnard acknowledged receipt of the copy addressed to it; the
copy addressed to FSI was returned "unclaimed," whereupon a new
copy of that charge was addressed to FSI at a business office on Oran-
gethorpe Avenue in Fullerton (also concededly used by FSI) and some-
one whose signature is illegible acknowledged its receipt on FSI 's behalf.
8 And see clarifying colloquy at the opening of the afternoon session
on 6 May.
230 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
B. Related Litigation
On 14 January 1985 Local 669 filed unfair labor prac-
tice charges against Barnard iii Case 21 -CA-23677,
claiming Barnard had violated Section 8 (a)(5) of the Act.
The charge was based on Barnard 's admitted refusal to
furnish certain particularized information about the rela-
tionships between Barnard and FSI , information which
Local 669 claimed to need to determine whether Barnard
had violated the subcontracting and recognition clauses
of the 1982-1985 labor agreement between those par-
ties.10 The Regional Director for Region 21 thereafter
issued. a complaint which substantially sustained the re-
fusal-to-furnish -information charge, and the matter was
thereafter tried before Administrative Law Judge Jay R.
Pollack on 6 June 1985 . Judge Pollack decided against
Barnard "' recommending that the Board order Barnard
to disclose the detailed information which the complaint
had alleged Local 669 was entitled to in order to evalu-
ate whether to pursue its grievance . Barnard excepted to
Judge Pollack 's decision , but did not in those exceptions
contest Judge Pollack 's findings that Barnard and the
Union were then bound , pursuant to bargaining between
the Association and Local 669, to a 1982-1985 labor
agreement . Neither did Barnard contest Judge Pollack's
implicit finding that Local 669 was the exclusive collec-
tive-bargaining representative of the employees , includ-
ing Barnard 's, who were employed by members of the
nationwide Association.
On 5 January 1987 a panel of the Board (Chairman
Dotson and Members Babson and Stephens) entered a
Decision and Order12 which fully affirmed Judge Pol-
lack's rulings and findings and which adopted his recom-
mended Order.
In May 1985 , and again in July 1985 , Local 709 arbi-
trated one or more grievances under its separate labor
agreement with Barnard . The record does not reveal the
precise nature of the issues involved in those proceed-
ings, although it appears from a grievance dated 23 No-
vember 1983 , 113 and from portions of the arbitration tran-
10 As detailed elsewhere below , by that point Local 669 had discov-
ered that FSI had performed at least three jobs within its jurisdiction, the
Home Club project in San Bernardino, the Duke Timber project in
Chino, and the Starcrest project in Perris . (All of the other jobs about
which evidence was received were performed in Local 709 's jurisdic-
tion .) And by that point Local 669 had already sought the information in
question from Barnard and claimed a subcontracting violation (by letter
dated 5 September 1984) and Barnard had denied the claimed contract
violation and had refused Local 669 's demand (by letter dated 17 Septem-
ber 1984, and by subsequent replies).
' 1 JD(SF)-164-85 (Oct. 7 , 1985). _
12 Barnard Engineering Ca, 282 NLRB 617 (1987). Barnard/FSI have
filed a formal opposition to the General Counsel 's motion that I take
judicial/administrative notice of that decision As an official public
record of the Board 's disposition of a contested case , I may take notice of
it, sua sponte , and rely on its juridicial existence and its findings for a
variety of purposes whose legal range and breadth I will not elaborate. It
was therefore arguably unnecessary for the General Counsel to have filed
a formal motion that I take notice of the decision , and seemingly frivo-
lous of Barnard/FSI to have formally opposed my taking such notice. I
am satisfied that my limited reliance on that case , including on its facts-
,luridicial and otherwise-was well within the permissible range of use of
a published decision of the Board.
13 R. Exh. I
scripts which were received into evidence ' 4 or which
were otherwise adverted to in testimony and stipula-
tions,' 5 that the arbitrations involved claims by Local
709 which were roughly parallel to those being pressed
by Local 669 on and after 5 September 1984. Neither
does the record disclose the precise outcome of the
Local 709 arbitration , although counsel for Local 669
represented on the 6 May trial record that Local 709 had
fully prevailed before the arbitrator and, accordingly,
that the 8(a)(5) aspect of the case before me did not im-
plicate any possible failure of Barnard to honor its obli-
gations under its separate labor agreement with Local
709.
C. Questions Decided
I find substantial merit to the complaint ; in so finding I
deal with the following issues of fact and law:
1. At all times addressed by the complaint,
(a) Has Barnard been bound to a series of collective-
bargaining agreements , including a current one, negotiat-
ed between the Association and Local 669 covering a
unit of employees of employer-members of the Associa-
tion who perform installation work within Local 669's
territorial jurisdiction?
(b) Has Local 669 been the exclusive collective-bar-
gaining representative within the meaning of Section 9(a)
of the Act of that unit of employees? (And how does
Deklewa affect that question?)
2. Has FSI operated at all times addressed by the com-
plaint as Barnard 's alter ego?
3. (a) Is the complaint barred by Section 10(b) of the
Act insofar as it alleges that Barnard/FSI (as alter egos)
violated Section 8(a)(5) of the Act by failing to honor
the governing labor agreements when operating within
Local 669's territorial jurisdiction qua FSI?
(b) Did Barnard/FSI (as alter egos) commit the al-
leged 8(a)(5) violations?
4. Did FSI interfere with , restrain , or coerce Charles
Cepeda in the exercise of statutorily protected rights by
firing Cepeda , and by certain remarks made by C. J.
Lindley to him, after Cepeda had testified for Local 709
in the 1985 arbitration between Local 709 and Barnard?
I have given full consideration to the helpful posttrial
briefs and other submissions filed by all parties.1e
14 Alleged discriminatee Charles Cepeda testified for Local 709 on 16
May 1985 ; the related 8(a)(3) and ( 1) counts in the complaint are based
on the claim that FSI fired him for having so testified . Only the tran-
script portions containing Cepeda 's testimony were introduced into this
proceeding.
15 See Tr . 892, containing stipulated excerpts from Les Lindley's testi-
mony in the 9 July 1985 arbitration. '
16 Local 709's brief confined itself to the matter of Cepeda's allegedly
unlawful termination . Because the General Counsel was unprepared at
trial to state a position regarding what remedy might appropriately cure
the alleged 8(a)(5) violations, I directed that he do so in his posttrial brief
and I also made provision for Barnard /FSI to file a separate reply brief
on the remedy question Opening and reply briefs were all duly filed by
28 July 1986 . At various points thereafter counsel for Barnard/FSI
lodged copies of recent cases with me, serving additional copies^of the
same on the other parties.
BARNARD ENGINEERING CO. 231
FINDINGS OF FACT
A. Introduction
Barnard and FSI are California corporations which
operated similar businesses during a transition period of
no more than 6 months in 1983-1984 (the former phasing
out, the latter phasing in during that period) until Bar-
nard withdrew from the union-represented portion of its
traditional business, the same portion of the business
which FSI now actively pursues on a nonunion basis.''
Each corporation is now separately owned by a different
member of the close-knit Lindley family; these central
actors are father and son, both named Leslie Lindley.
Consistent with trial usage and for convenience of fur-
ther reference I will use their ordinary nicknames only-
"Les," the father, who owns corporate Barnard, and
who used to own corporate FSI; "Chip,"" the son, who
now owns corporate FSI.' 8
Many of the significant facts are only marginally in
dispute, and they may be narrated in summary form, nec-
essarily one which slights some points urged by each of
the parties. 1 s
17I find from the pleadings that in the representative year 's period
before the complaint issued Barnard and FSI each separately performed
more than $50,000 worth of services for California customers and that
those same customers had in turn during the same period each purchased
and received more than $50,000 worth of goods and products directly
from outside California.
18 I will also use first names for other Lindley kin who are recurrently
referred to in the record , and take this opportunity to set forth an infor-
mal family tree to which the reader may refer back when memory fails.
These include Les' wife, Barbara ; his father , Bill; his brother , C.J.; his
daughter, Robin; his mother-in-law, Marie (surnamed Asmus); and his
brother-in-law (Marie 's son), John (a/k/a Larry) Asmus As is detailed
incidentally below, all of these "Lindleys" either held some formal cor-
porate title or played an actual managerial or supervisory role in the af-
fairs of either or both Barnard and FSI at various material times . Practi-
cally, however, besides Les and Chip, only C J. actually figured in any
real way in any of the events I describe elsewhere.
19 At worst , the summaries below might be quibbled over, without
really undermining their substantial factual basis , and even then the quib-
bling from Barnard/FSI's quarter would rely heavily on explanations or
characterizations of various sorts tendered by Les or Chip which are
often either uncorroborated , quite improbable or, in some cases , plainly
false. In any case I believe that the additional details which will emerge
in my supplemental narrations below adequately deal with most of that
type of edgenibbling ; accordingly , except in a few cases , I will not pause
to identify and dispose of the many counterarguments and facts which
Les, Chip (or their common attorney) have unpersuasively advanced.
Because of their generally uneasy demeanor and their evasive
manner of testifying I would not believe Les ' or Chip's accounts of
the history of FSI's reemergence and the supposed arm's-length ar-
rangements made between the two corporations unless they are
clearly corroborated by independently reliable proof . A strikingly
slim amount of corroborative evidence was offered to support Les'
and Chips' characterizations . Most of the FSI/Barnard records in
evidence were produced for the prosecuting parties ' inspection only
after a lengthy pretrial battle which culminated in my denying
Barnard's/FSI 's motions to quash extensive subpoenas directed at
each of them And much of the documentation received into evi-
dence fails to corroborate (sometimes it tends to undermine or flatly
contradict) Les' and Chip' s glib characterizations of historical ar-
rangements between them. Moreover, in Les' case , I note that he ad-
mittedly testified falsely under oath about important facts regarding
the FSI-Barnard relationships in the arbitration proceeding involving
Local 709 which was heard in July 1985. I also note as relevant to
the 10(b) fraudulent concealment questions , without placing any reli-
ance on this fact for purposes of evaluating -credibility, that Les re-
fused on fifth amendment grounds to answer a long stung of ques-
B. Barnard's Traditional Operation; its Labor
Relations History; its Expanding Operation
Barnard has always been headquartered on East Via
Burton in the city of Anaheim, engaged (until its phase-
out in 1983) in the field installation. of automatic fire pro-
tection equipment-mostly water sprinkler systems and
controls-in the greater Los Angeles-Orange County
complex of cities in Southern California.
In 1968, Les bought and continues personally to hold
in his name all shares in Barnard; since then he has been
the corporate president, Barbara has been its vice presi-
dent, and (at least for the past decade) Clotilde ("Clo")
Gregory, Barnard's bookkeeper, has been the corporate
secretary-treasurer. Those three also serve as Barnard's
directors, although Les has always been in charge of the
whole operation himself, including its labor relations,
with the assistance of subordinates.
When Les first acquired Barnard, it was a "union"
company which employed only members of Local 709 in
the bargaining unit composed of "fitters" (the generic
term used by the parties to describe rank-and-file field in-
stallation employees). In 1970, Les joined the Association
and he also began to employ Local 669's members, ap-
parently as he began to expand the geographical range of
Barnard's operations.20 Apparently he drew on a regular
crew of members from either union, depending on which
"jurisdiction" he was working in. Admittedly, he would
apply either Local 709's or 669's labor agreement to the
fitters, depending on the same jurisdictional consider-
ations.21
Everyone agrees-and the Board so held in Judge Pol-
lack's case-that Barnard had been bound by Association
action to a labor agreement with Local 669 effective
from 1 April 1982 through 31 March 1985.22 Moreover,
no one disputes Local 669's proof that, commencing on 3
December 1984, Local 669 and the Association began to
negotiate a successor labor agreement, that the Associa-
tions about those relationships in the 1985 unfair labor practice trial
before Judge Pollack.
80 The term "apparently" is used advisedly here and below in this
paragraph , since Les ' testimony about the background is quite vague and
the record is otherwise unclear regarding how it was that Barnard began
to recognize both Locals and to apply their separate labor agreements
from 1970 forward.
Si It is not disputed that as a matter of internal administration , sister
Locals 669 and 709 recognize jurisdictional boundaries . Local 669's juris-
diction is essentially nationwide in scope ; Local 709 's jurisdiction repre-
sents something of an irregularly shaped island within the territory serv-
iced by Local 669; it consists of the city of Los Angeles and an additional
area within 25 miles in all directions from those city limits , extending into
the middle of Orange County , as well as to other specifically identified
locations.
22 If FSI was and is Barnard's alter ego, it, too , would be bound by
that 1982-1985 agreement (and, necessarily , to any successor agreements
to which Barnard might become bound ). Samuel Kosof& Sons, Inc., 269
NLRB 424, 428 ( 1984), citing Carpenters Local 1846 v. Pratt-Farnsworth,
690 F.2d 489 (5th Cir 1982); E. G. Sprinkler Corp., 268 NLRB 1241
(1984); NLRB Y. Tricor Products, 636 F.2d 266, 269-270 (10th Cir. 1980);
Don Burgess Construction Corp, 227 NLRB 765, 774 (1977), citing Operat-
ing Engineers Local 627 (Peter Kiewit Sons Co.) v. NLRB, 518 F.2d 1040,
1045-1047 (D.C. Cir. 1975). In the light of my ultimate finding that FSI
has been from its 1983 reactivation an alter ego of Barnard in the sense of
being Barnard's disguised continuance, all findings hereafter about "Bar-
nard's" legal responsibilities vis-a-vis Local 669 may also be understood
as referring to FSI 's legal responsibilities
232 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
tion continued to. list Barnard as one of its members who
would be bound by those negotiations, and that the As-
sociation and Local 669 eventually concluded a new
agreement sometime in 1985, retroactively effective to 1
April 1985, and continuing in effect through 31 March
1988.23
The current agreement with Local 669, as well as its
1982-1985 predecessor, contains this language at article 3
(my emphasis):
In order to protect and preserve for the employ-
ees covered by this Agreement all work historically
and traditionally performed by them, and in order
to prevent any device or subterfuge to avoid the
protection or preservation of such work, it is
hereby agreed as follows: If and when the Employer
shall perform any work of the type covered by this
Agreement as a single or joint Employer (which
shall be interpreted pursuant to applicable NLRB
and judicial principles) within the trade and territori-
al jurisdiction of Local 669, under its own name or
under the name of another, as a corporation, sole
proprietorship, partnership, or any other business
entity including a joint venture, wherein the Employ-
er (including its officers, directors, owners, partners
or stockholders) exercises either directly or indirectly
(such as through family members) controlling or ma-
jority ownership, management or control over such
other entity, the wage and fringe benefit. terms and
conditions of this Agreement shall be applicable to all
such work performed on or after the effective date
of this Agreement. The foregoing shall not be inter-
preted to apply to separate Employer situations. It
is not intended that this Article be the exclusive
source of rights or remedies which the parties may
have under State or Federal laws.
By 1969 or 1970 Les had expanded the Barnard oper-
ation by establishing a fabrication shop at the Via Burton
headquarters, thus largely eliminating the need to buy
such services and materials from independent suppliers.
The shop fabrication employees are not represented by a
union. The shop also does a relatively small amount of
fabrication and design for independent business custom-
ers. Les put Bill in charge of the shop in about 1975 and
Bill still runs it. Les insists that by sometime around 1982
he wanted to get out of the business entirely, including
the fabrication end, but eventually kept the fabrication
shop operational simply to satisfy Bill's desire to keep
active in his declining "years (i.e., to give Bill "something
to do.") But Les' explanation for retaining the fabrication
shop must be balanced against the fact (as he elsewhere
admitted) that at least 90 percent of Barnard's fabrication
work now goes to Chip's operation of FSI.
When Les bought Barnard's shares he also personally
acquired the Via Burton property and buildings still used
23 Although . the record is not clear about this, the 1985-1988 agree-
ment may not have been fully concluded and ratified until after 6 June
1985, the date on which Judge Pollack heard Case 21-CA-23677; for
Judge Pollack 's decision recites that the 1982-1985 labor agreement was
"the most recent[ly] ... effective" in a "series" of prior labor agree-
ments to which Barnard and Local 669 were bound.
by Barnard, and, as well, an adjacent industrial property
and building-all now part of a connected complex, part
of which he assertedly "rents" to "B&L Rentals," which
is owned by Bill, and which "leases" fire sprinkler instal-
lation equipment, mostly to Barnard (and to FSI, after
FSI's reemergence).24
C. The Initial Formation of FSI
In 1974 Les incorporated a new entity, FSI, with him-
self as president and sole shareholder, Barbara as vice
president, and Marie as secretary-treasurer. He says he
formed this separate corporation to perform installation
of municipal sewer lines, storm drains, and other under-
ground pipelines. He installed- a separate telephone for
FSI in his own office on the Via Burton property. He
obtained a separate type of state license for that work
(C-34, as distinguished from the C-16 license which Bar-
nard holds for fire sprinkler installations). Asked by his
own counsel why he found it necessary to form a sepa-
rate corporation for this municipal work, Les was ob-
lique and evasive, saying generally that it was "under a
different jurisdiction . . . and to not have problems." Les
also soon acknowledged that he used "laborers" on these
municipal jobs (grudgingly admitting-only after first
feigning a lack of recollection--that the "laborers" were
not union-represented). It thus appears that his oblique
references to "jurisdiction" and "problems" were merely
another way of saying that he wanted to perform the
municipal work without being encumbered by his con-
tracts with either Local 709 or 669.25 Les performed
only "a few" such municipal jobs in FSI's name in the
years between 1974-1977, but thereafter allowed FSI to
lay dormant, as he concentrated on typical sprinkler
system fabrication and installation work under Barnard's
name.
In 1975 Les admittedly obtained a C-16 fire sprinkler
installation license for FSI. He did not explain why, but,
considering the facts as I find them above and elsewhere
below, I infer that he had already formed at least the
germ of a plan eventually to use FSI for the same type
of fire sprinkler installation work that Barnard tradition-
ally performed.
24 I use quotes around "rents" and "lease" because the record is silent
as to whether written "leases" are entered into for B&L's use of the
premises, or when B&L furnishes installation equipment to Barnard or
FSI. Neither does the record contain any documentary records showing
that Barnard or FSI actually paid B&L for the "leased" equipment han-
dled through B&L.
25 It is not before me to judge whether Les was legally obliged to
extend either or both of Barnard 's labor agreements with the two fitters'
unions to FSI 's municipal jobs in the mid - 1970s. Details of FSI's struc-
ture and operation at that time were not litigated . Clearly, Les was then
attempting a form of "double -breasting," but absent more detailed infor-
mation , that label does not dispose of the question of the possible alter
ego or single-employer status of Barnard/FSI at that time. Cf Walter N.
Yoder & Sons, 270 NLRB 652 fn 2 (1984)
BARNARD ENGINEERING CO. 233
D. The Reactivation of FSI
1. Chip becomes FSI's owner; FSI achieves gross
sales of nearly $ 1.5 million by the end of FSI 's first
fiscal year
Starting in 1983, after having operated Barnard for
roughly 14 years, Les gradually began a process of cur-
tailing that company 's field installation activities. This
winding down followed a year during which Les says he
had first tried, unsuccessfully, to find a buyer for the
entire business . (He explains that by then he wanted to
devote more time to his auto racing, an activity which
was by then occupying many weeks of his time each
year.) In any case , it also clearly appears from Les' ac-
count that the winding down occurred in the aftermath
of a 3-1/2-week industry strike which started in Septem-
ber 1983 . (Barnard was then admittedly bound to a 1982-
1985 industry labor agreement with Local 709 containing
provisions for wage reopening in 1983, with associated
right to strike if no agreement were reached on new
wage levels by 31 March 1983 . Presumably , impasse on
the wage reopener provision led eventually to the Sep-
tember 1983 strike.)26
In June 1983 (at a time when an industry strike must
have been anticipated by Les as at least a near-term pos-
sibility) Les sold the then-dormant FSI to Chip for $1000
(cash), paid at the family home; Les says FSI with about
$500 in it , thus reducing the net cost of purchase to
about $500.27
FSI corporate minutes reflect that when Les sold
FSI's shares to Chip, he resigned his corporate positions
in FSI and was replaced by Chip. Barbara and Marie
continued to hold their traditional corporate posts in
FSI, but in October 1983 Barbara , too, resigned from her
position in corporate FSI, and was replaced by Robin.
Thus, by October 1983, Marie was the only remaining
holdover from the formal, corporate, directorship as it
had existed when Les had owned FSI's shares.
Chip was 18 years old when he bought 'FSI's shares
from Les. He had just completed high school and was
still living in the family home (where he continued to
reside for the next 27 months , as FSI grew to a thriving
operation). He had worked for years at Barnard while in
school and during vacations , and seemingly was familiar
with all facets of its operation (save, perhaps, for the in-
surance, bookkeeping, and payroll work , which even Les
had apparently left exclusively to Clo Gregory's compe-
tence).
Chip began activating FSI starting in September 1983
(thus coinciding with the industry strike), while still on
Barnard 's payroll . Since then FSI has operated "non-
26 'Les admits that by no later than May 1984, Barnard had completely
stopped bidding on any new installation work. In fact , this record con-
tains no evidence that Les had bid on any new jobs in Barnard 's name at
any point after the 1983 strike, a watershed event , by Les' own account
of the circumstances influencing his decision to curtail field installation
work in Barnard 's name.
27 Corporate minutes (facially dated 1 June 1983) were eventually pre-
pared to reflect this transaction and that it was duly approved by FSI's
corporate officers . Assuming the truth of Les' and Chip's testimony that
some actual purchase transaction was completed in cash at the family
home , I infer that the corporate minutes were prepared after -the-fact and
were back-dated to conform to the event.
union" ; it has denied it is bound to Barnard 's successive
labor agreements with Local 669; it has unilaterally set
all wages and terms and conditions of employment, and
it has failed to make trust contributions called for in
those Local 669 agreements.28
Chip claims he used for initial capitalization $2000 of
his own savings, plus about $ 16,000 in trust moneys
available to him from "The Lindley Family Trust." I
must backtrack briefly to describe that trust arrangement.
In 1976 Les and Barbara had created a 10-year trust,
to expire 31 December 1986.29 Les funded the trust with
substantial assets; these included the annual rents on the
Via Burton property used by Barnard and by B&L (in
1985 those rents totalled $14,400 per year, as reported by
Les), as well as at least one flat bed truck , and two mo-
torized scissors-lifts, the latter equipment used to hoist
workers and material to install ceiling sprinklers. The
equipment placed into trust was always housed at Bar-
nard's Via Burton location , nominally under the custody
of B&L , and it was "leased " to anyone (including FSI,
after September 1983) who might need it (as FSI regular-
ly did). Les testified that Bill handles the "leasing" ar-
rangements, in his capacity as the owner of B&L. There
is no evidence that B&L received any fees for handling
the leasing of the trucks and scissors-lifts; rather, Les'
testimony implies that Bill would have lessees of that
equipment make out checks directly to the Family Trust.
The record does not show whether FSI was ever so
charged when it used the scissors-lifts or trucks which
had been placed into trust.30
As noted, Chip used moneys generated from Barnard's
operation as the main source of the $18,000 which he
used to capitalize FSI. He also rented a separate office
(he has subsequently moved offices twice more), but one
which had no telephone for several months, during
which Chip used the telephone in the family home to
conduct FSI business . His initial staff complement in the
remaining months of 1983 consisted of C.J., as the princi-
28 Chip remained on Barnard 's payroll for 6 months after FSI's shares
were transferred to him, that is until December 1983 . Explaining this con-
tinuing payroll connection to Barnard , Chip vaguely claimed that he con-
tinued to perform miscellaneous tasks for Barnard dung this period.
This seems more invention than fact considering that he was admittedly
simultaneously involved in activating FSI, and was also attending college
(indeed , he remained a nearly half-time college student through the
spring 1985 semester).
29 The trust instruments are not of record ; these descriptions rely on
Les' often-contradictory testimony about them , and from the unaudited
personal financial statements for Les and Barbara prepared by Les' ac-
countants, based on Les' own representations . These record sources are
confusing and seem in the aggregate to be the products of artful composi-
tion, including selective omission of pertinent details . Indeed , Les' ac-
countant-preparers took pains to disclaim in letters accompanying the
vanous "statements of [Les' and Barbara 's] financial condition" that such
statements are (my emphasis throughout ) "limited to presenting in the
form of financial statements information that is the representation of Leslie
and Barbara Lindley [in fact, of Les alone, as he admits]. We have not au-
dited or reviewed the accompanying statement and, accordingly, do not
express an opinion or any other form of assurance on it.
90 From the same sources described in the preceding footnote it ap-
pears that at the end of the 10-year trust term , the trust's interest in the
Via Burton real estate will revert to Les and Barbara As to the scissors-
lifts, Les was erratic in variously describing the arrangement , but ulti-
mately testified that title to them would pass (now has passed ) directly to
the Lindley children on 31 December 1986. He did not explain what will
happen to the title to the flatbed truck.
234 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
pal superintendent (formerly a Barnard foreman, then
later a business partner with Bill in a San Diego sprinkler
equipment rental business, then more recently employed
in Samoa before returning to join Chip in the manage-
ment of the now-revived FSI), as well as two other
former Barnard employees (Guillermo "Gizmo" Ver-
dugo and Andrew Ryan).3 t As Chip acquired further
work in FSI 's name in the ensuing months (a process
which I separately discuss below), FSI's payroll included
several more supervisory, technical , clerical and book-
keeping , and rank-and-file employees from Barnard, as
well as some additional employees with no previous
connnection to Barnard.
By the end of FSI 's first corporate fiscal year (30 Sep-
tember 1984), FSI had emerged as a thriving and appar-
ently profitable sprinkler installation business . Thus Chip
reported gross sales of nearly $1 . 5 million on FSI 's fiscal
year 1983-1984 Federal tax return , together with assets
valued at nearly $760,000, balanced by "liabilities" of the
same amount (a matter to which I return elsewhere
below), and reported gross profits exceeding $ 160,000.
2. How FSI managed to thrive under Chip's
ownership
This often obscure record does not make it easy to re-
construct in detail how it was that Chip succeeded in
bringing' FSI to this highly successful status after only a
single year in business as an 18-year old fledgling con-
tractor who was also regularly attending college on a
part-time basis. I accept that his own initiative and
energy played some role, and that C.J.'s full-time super-
intending also contributed to FSI's ability to grow even
while Chip was distracted by his college attendance; but
it is also clear that Barnard's cooperation, forbearance,
and, in some cases, Barnard's outright gifts, placed a
most influential part in FSI's rapid success, as I set forth
in some greater detail, next.
The most important favors which Les and/or Barnard
bestowed on FSI were those without which the revived
FSI could never have entered the sprinkler installation
business in the first place. One threshold factor cannot be
overlooked: Les had taken Barnard out of the installation
business and had thereby left the field open for Chip's
exploitation. Admittedly, though, Barnard's leaving the
field did not in itself guarantee FSI's success, for there
were other competitors in the business who might be ex-
pected to benefit from Bernard's departure. Thus, I focus
below on the ways in which FSI benefited uniquely from
Barnard's goodwill and generosity.
a. Les agrees to remain on FSI's state license as its
"Responsible Managing Officer"
To qualify for a license as a construction contractor
under California law, a corporation , such as FSI, must
designate a "qualifying individual"-either an officer
(RMO), or an employee (RME), who individually meets
91 As I detail elsewhere below, Ryan may be deemed to have been a
"former Barnard employee" only by virtue of his work in October-No-
vember 1983 on the Whittaker-Tasker jobsite (a job which Les now
claims was "Barnard" work even though other records show that Ryan
was then on FSI's payroll).
the "experience" and "truthful -reporting" standards set
forth in the California Contractors Licensing Code, as
administered by the Contractors State License Board. As
the title implies , an RMO must play an active superviso-
ry or managerial role in his principal 's construction oper-
ations . Neither may an RMO serve two different corpo-
rate entities in that capacity unless the two corporations
are substantially commonly owned and controlled in
ways which Barnard and FSI have otherwise insisted,
for purposes of this litigation , that they are not . 32 When
Les formed FSI in 1975, he registered himself as FSI's
RMO. (He has always admittedly functioned in that
same capacity for Barnard , although he expressed some
doubt whether he was officially so registered with the
state.)
When Les sold FSI's shares to Chip , these actions
were eventually ratified by the corporate officers, as re-
flected in FSI corporate minutes for 1 June 1983. Those
minutes also reflect, however, that while Les then re-
signed his positions as corporate president and principal
director (being replaced by Chip in those positions) Les
agreed to "remain as [FSI 's] RMO until such time as one
of the individuals could qualify to oversee that the oper-
ation operate within the laws of the Contractors State
License Board of the State of California." (Additionally,
Les agreed to be "retained as consultant to review and
stamp plans.") In fact, Les remained officially as FSI's
RMO until February 1986 (when these cases had ripened
to the point of issuance of the ultimate complaint).33
Les otherwise denies that he has played any role, in
fact, in the operation of FSI and it is on this basis that he
has continually maintained in correspondence to the two
fitters' unions, and in the 1985 arbitration with Local
709, that he has had "nothing" to do with FSI. The
record does not plainly show that Les has had any ongo-
ing role in directing FSI's operations (as opposed to
lending his name for state licensing purposes to that cor-
poration as its RMO)-at most, the record shows that
32 An official pamphlet accompanying the Licensing Code generally
describes a "qualifying individual" as one who is "required to directly su-
pervise or control [the] principal's construction operations so as to
secure full compliance with [the Code and the License Board's Rules and
Regulations," explaining further, that "Direct supervision and control in-
cludes any one, or, any combination of . . . supervising construction,
managing construction activities by making technical and administrative
decisions, checking jobs for proper work quality, or direct supervision on
construction sites " And see Cal. Stats. Sec. 7068.1, providing that a
"qualifying individual ... shall not act in [that] capacity . . . for an ad-
ditional individual or firm unless . . . : (a) There is a common ownership
of at least 20 percent. . . (b) The additional firm is a subsidiary or joint
venture with the first. (c) . . . the majority of the . . . officers are
the same."
99 Curiously, while it might be expected that FSI would have sought
out some new, suitably qualified person, to serve as its RMO after Les
resigned that position in 1986, in fact, FSI chose to denominate Mane for
that position-this despite Mane's candid testimony that she knows noth-
ing' of the business and has never played even the slightest role in its
management. (Marie's testimony includes one possible exception to this:
She vaguely stated that "sometimes he [Chip] has something he wants, to
buy or something and [Chip would ask] 'What do you think, Grand-
ma?"'). I can only conclude that this shuffling of RMOs in 1986 repre-
sented desperate, clumsy, and wholly transparent measures taken belated-
ly to disassociate Les from FBI and, by naming Mane Asmus, further to
avoid any appearance that anyone with the surname "Lindley" was in-
volved in running FSI.
BARNARD ENGINEERING CO. 235
Les has reviewed and stamped plans for FSI and that he
appeared on two jobs being handled by FSI to help re-
solve problems. Whether he was ever compensated by
FSI for performing plan-stamping services is in doubt; it
is at least clear that he did not begin to receive any such
compensation until after FSI had been reactivated for a
year-and then it is not clear how his services were
valued nor in what form he was paid, if at all.
b. FSI is allowed to operate under the umbrella of
Barnard 's existing insurance and bonding policies
Another indication that FSI and Barnard have been
treated for some purposes as a single , integrated entity is
the fact that (until 1986) FSI did not have insurance (li-
ability, workmen's compensation , health and welfare) or
job-bonding policies in its own name , but rather, was
"covered" under Barnard 's existing policies which con-
tinued to be carried under Barnard 's name . (Indeed, FSI-
payrolled employees were issued personal insurance
cards bearing Barnard 's name and policy number).34 To
accomplish this, Barnard, in cooperation with the Lind-
ley family's insurance agent, Charles Jennings , found it
necessary to portray Barnard and FSI to the insurance
underwriters as "combined" operations . To justify this
combined approach, Jennings asked Clo Gregory, Bar-
nard's bookkeeper and corporate officer, to furnish docu-
mentation which would support such a portrayal. Greg-
ory, in turn, apparently directed Les' accountants to pre-
pare "combined financial statements" for the two busi-
nesses for the years ending 30 September 1983 and 1984
(G.C. Exh. 32).35 In addition, those accountants pre-
pared personal financial statements in 1985 for Les and
Barbara '(G.C. Exh. 29), which depicted FSI as being
"wholly-owned" by themselves (this despite the corpo-
rate minutes representing that since 1 June 1983 Chip
had been FSI's sole shareholder). Les admitted that those
financial statements were used to allow Barnard's insur-
ance and bonding policies to be extended to FSI's em-
ployees and operations . And insurance agent Jennings
flatly stated that it would have been impossible for FSI,
portrayed as a "separate" business under Chip's owner-
ship, to obtain separate insurance and bonding because,
at that time, insurance companies were simply not under-
writing "new" businesses . He also stated that he would
not "normally" obtain a single policy for two "unrelat-
ed" companies, but acknowledged that he obtained cov-
erage for Barnard/FSI's combined operation "because it
was a family and we've handled their business for 40
years about, and there was compatibility . . . [and, later]
because it was the only way we could underwrite it. We
absolutely could not underwrite it unless we did put
them together."38
34 Since February 1986 FSI has been issued policy coverage in its own
name, but the group number of the policy is the same as that with which
Barnard was always identified
as This is an obvious inference drawn from three related facts : ( 1) Jen-
ning 's testimony that he asked Clo Gregory for a combined statement; (2)
such a combined statement , prepared by Les' accountants, appears in the
insurance file which Jennings maintains as part of his own business
records; (3) Clo Gregory was not called to contradict the inferences de-
rivable simply from (1) and (2), above.
as This "combination" was also extended to "Bill's" company, B&L
Rentals, for the same reasons.
Here, unlike in several other situations noted above
and below , there is documentation of a sort reflecting
that money did, in fact , eventually change hands relating
to the insurance. Thus, a summary exhibit tendered by
Barnard/FSI reflects that although Barnard paid roughly
$9600 in insurance premiums from December 1983
through April 1984 to cover FSI's operations, FSI did
not repay that amount to Barnard until 11 July 1984.
And, thereafter, it was not until 24 October 1985 that
FSI reimbursed Barnard for an additional roughly
$56,000 in accumulated insurance premiums paid previ-
ously by Barnard to cover FSI's operations ' from May
1984 through September 1985.37
Although Les now acknowledges that Barnard's insur-
ance policies were extended to cover FSI's operations,
Les lied about this when he was questioned during a
Local 709 arbitration in July 1985. There, asked, "Is FSI
covered as an insured under any of these policies?" Les
replied, "No, they're [sic] not."
c. Barnard sells, "leases, " or donates vehicles,
materials, equipment, supplies, gasoline, and other
services to FSI on favorable terms, and allows FSI to
complete unfinished Barnard contracts
Les' decision to phase out of installation work in Bar-
nard 's name left Barnard with a lot of idle equipment
and vehicles . Chip and Les testified that a substantial
part of Chip 's $18,000 capitalization was used to buy
four Barnard-owned vans.38
It was not until 1984-mostly in August , and well
after Local 709's agents had begun making inquires about
the appearance of Barnard-licensed vehicles on FSI job-
sites-that the titles to the vans which Chip had alleged-
ly purchased outright from Barnard in 1983 were reregis-
tered under FSI's name.
In addition, Chip was given the use of other Barnard
vans, as well as the two scissors-lifts nominally con-
trolled by B&L but actually held in trust for Chip and
his siblings. As noted, there is no documentary proof that
the scissors-lifts ever were made the subject of a formal
lease, nor documentary proof that money ever changed
hands between the two companies when FSI used them.
The additional vans used by FSI (beyond those four
which Les and Chip say were bought outright by FSI)
present a more complicated picture. Les and Chip testi-
fied that those additional vans were "leased," and,
indeed , certain lease "agreements" for these vans were
received into evidence . But there is much in the record
34 See R Exh. 30, summarizing Barnard billings and FSI payments,
which was tendered after the record closed, pursuant to prearrangement.
In the absence of any objection, I receive that summary into evidence.
Fed.R.Evid ., 1006. I note moreover that here, as in other cases below,
Barnard had "fronted" the money to cover FSI 's operations, and FSI did
not begin to repay on those obligations until after Local 709 (later joined
by Local 669) began to inquire into the relationships between Barnard
and FSI -
as We must take Chip 's and Les' word for it that money changed
hands in this transaction, there are no concurrent records of sale in this
record. And, according to Les and Chip, Les was not even involved in it;
rather, Clo Gregory , was the party who actually "negotiated" with Chip
regarding the purchase puce for those vehicles. Gregory was not called
as a witness; accordingly there is nothing to corroborate the claim that
there had been "negotiations," much less an exchange of money.
236 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
surrounding those "leased" vans which suggests that
they were first made freely available to FSI, without any
arrangements for payment, and that it was not until
agents of the fitters' unions began to make inquiries on
FSI jobsites in the summer of 1984 that Barnard and FSI
chose belatedly to regularize the furnishing of those vans
by creating a "lease" document to cover the arrange-
ment. Thus it appears that the first of the leases, facially
dated "October 1, 1983," was not created until some
later point when, according to Les, arrangements were
made,to allow FSI to replace the license plates on those
vans "because of the problems that were arising with our
vehicles . . . showing up at FSI jobs."39
Other aspects of the van leases create doubt about
their authenticity and regularity: For one thing, they re-
flect on their face that each van was rented for a month-
ly amount ($120 each, regardless of make, model, age, or
condition), a lease amount which did not change over
the ensuing 3 years. Second, one of the leases (the
second one, facially dated "October 1, 1984," received as
R. Exh. 45) was one which Barnard had offered into evi-
dence in a different form during one of the 1985 arbitra-
tions involving Local 709. And Les and Chip each were
forced to acknowledge that Respondent's Exhibit 45 had
been redrawn recently, and then backdated (without any
facial indication that this had been done). Third, all of
the "lease" writings are quite bland in their terms, con-
taining no provisions of the type one might expect to
find in an arm's-length transaction, such as provisons for
maintenance, for insurance or operator liability, restric-
tions on use, and like kinds of protection for the "lessor."
Fourth, Les acknowledges that Chip did not make
monthly lease payments, but, rather, was billed at the
end of each year for the annual use of the vehicles.40
During that same first year of FSI's reactivation (and
continuing to the present), Chip was given the free use
of surplus equipment and tools housed in Barnard's shop,
such as piping and portable threading machines. In addi-
tion, 90 percent of Barnard's shop production went to
FSI, for installation on "FSI" jobs. Les admits that Bar-
nard billed these materials to FSI "at cost" for the first
year of FSI's operations, but he vaguely claims that a
"mark-up" was later billed to FSI at the end of that first
year and at the end of each subsequent year.41
se Until then, the license plates on the "leased vans" had home the
vanity legend, "BECI," a Barnard corporate acronym. And the record
otherwise * shows that the license plates were not changed until the
summer of 1984. Yet the lease dated "October 1, 1983" contains a provi-
sion allowing FSI to "use personalized plates on these vehicles ." It is ex-
tremely unlikely that such a provision would have been included until the
"problems" arose about which Les spoke (i.e., the union inquiries in the
summer of 1984). It is therefore just as unlikely that the lease containing
that provision was drawn as early as "October 1 , 1983 " Moreover, as I
discuss below in main text , Barnard did not actually present a bill to FSI
for its first year 's use of the vans subject to the "lease" until September
1984 (and FSI did not pay that bill until October 1984).
40 See also the'summary contained in R. Exh. 30.
41 There is much confusion about this alleged "mark-up" arrangement.
First, no one from FSI or Barnard was able to say exactly how the al-
leged "mark-up" was arrived at . Second , the Barnard materials billings
and FSI 's payment records (received as a package as R. Exh . 28) do not
contain any detailed breakdowns ,. much less a clear indication of a "mark-
up." Third , FSI's 1983-1984 tax return (another indirect source of infor-
mation in this regard) does not refer to a "mark -up" fee, at all, but rather
labels a certain $60,000 payment from FSI to Barnard (which Les and
Setting aside questions about whether there was ever a
"mark-up" in Barnard 's furnishing of materials to FSI,
Barnard 's and FSI 's records are even more unclear-
indeed , seemingly contradictory-about how much
leeway Barnard gave FSI when it came to payment for
the materials and fabrication services provided by Bar-
nard to FSI . There are at least three sources of informa-
tion about these billings and payments : The first is con-
tained in a package exhibit (R. Exh . 28) showing Bar-
nard 's purported billings and FSI's purported payments
to Barnard ; the second is contained in FSI 's first tax
return (R. Exh . 29) for the fiscal year 1 October 1983
through 30 September 1984 ; and the third is contained in
the "combined financial statement " for the two business-
es (G.C . Exh. 32) which was furnished to the insurance
agent to obtain combined insurance coverage . It is not
easy to reconcile these three record sources, but they at
least clearly show that Barnard was content to finance
FSI's operations by "carrying" FSI for substantial
amounts owed at any given point . Thus, Barnard's
monthly billing records for that first year show that Bar-
nard billed FSI for a total of roughly $848,200 (each bill
being subdivided to identify cost of "materials ," "labor,"
and "miscellaneous"). FSI's payment records for the
same period show that FSI paid Barnard roughly
$633,400, yielding an outstanding end-of-year debt for
materials and fabrication alone of nearly $215,000. But
these figures seem to understate the amount of actual
debt owed by FSI to Barnard when one compares them
to debt figures. in FSI 's tax return and in the
Barnard/FSI combined financial statements . Thus, FSI's
1983-1984 tax return reflects total liabilities of roughly
$759,500, of which the lion's share-more than
$713,000-were in the form of "accounts payable." And
a comparison with the Barnard/FSI "combined financial
statement" for the same period also reveals something
more significant-that it was Barnard which was FSI's
major creditor, apparently to the tune of $651,000; in
short, that Barnard had allowed FSI , during its first
fiscal year, to accumulate a huge debt . 42 It therefore ap-
Chip say was, in fact , the "mark-up" amount) as a "management fee"
owed to Barnard . Les and Chip insist that their common accounting firm
simply made a labeling error in preparing that return , and that, in fact,
neither Les, nor anyone else on Barnard 's payroll , performed any "man-
agement" services for FSI. This is also how they explain a similar "man-
agement fee" entry which appears on the "combined [Barnard/FSI] fi-
nancial statement" furnished by the same longtime accountants to the
family insurance agent so that FSI's operations could be covered under
Barnard 's existing insurance and bonding policies
42 FSI's tax return does not identify to whom the roughly $713,000 in
"accounts payable" was owed ; and that return only names Barnard spe-
cifically as a creditor in a separate portion of the return (there FSI had
specifically identified a $6945 amount "due to Barnard Engineering" as
an "other current liability," separate from its "accounts payable " debt);
but the "combined financial statement" plainly indicates as of 30 Septem-
ber 1984 a $651,000 debt "Due to Barnard Engineering" from FSI. Con-
sidering that Barnard was FSI's major supplier, and that FSI reported a
total accounts payable debt of about $713 ,000 on its tax return for the
year ending 30 September 1984, it is a fair assumption that most of that
debt was owed to Barnard. And the fact that the combined financial
statement for that same point in time reports that FSI owed $651,000 to
Barnard is consistent with that assumption . Accordingly, despite billing
and payment records between the two companies suggesting that FSI
owed about $215,000 to Barnard as of 30 September 1984, other records
of Barnard and FSI suggest that the real indebtedness was nearly three
times that amount.
BARNARD ENGINEERING CO. 237
pears that , in substance , Barnard became not only FSI's
major supplier of fabricated materials , but also FSI's
"bank"-at least during FSI's critical first year of oper-
ations . In that role , it clearly assumed , without independ-
ent consideration , many risks , one of which was the risk
FSI might not be able to repay Barnard for its substantial
production efforts throughout that year.43
Chip and Les admit , moreover , that Barnard furnished
gasoline from its own tanks at the Via Burton property
to fuel the trucks and equipment which FSI used. Both
insist that Barnard billed FSI for those services and that
FSI paid for them , apparently "at cost," and both admit
that FSI thereby bought its gasoline more cheaply than
if it had gone to a retail gas station . 44 But even this un-
derstates the extent of FSI 's "benefit," for the billing and
payment summaries show , once again , that Barnard did
not begin billing FSI for gasoline until June 1984 and
that FSI did not begin making payments-and then only
on the recent 1985 gasoline billings-until April 1985.45
Also, in FSI's first year of actual operations, Les ad-
mittedly turned over four "Barnard" jobs for Chip to
complete, the alleged arrangement being that Barnard
would remain the nominal contracting party, but would
pay FSI for the work done by FSI -payrolled employees
on a pass-through basis .46 Les admits that he never ad-
vised the parties with whom he had contracted that he
had substituted FSI to complete these four jobs. Chip
maintains that C.J. (then on FSI 's payroll) was "iii
charge" of those jobs, but Les admits that Barnard's su-
perintendent, John ("Larry") Asmus (Marie's son) also
appeared on those jobs to make certain that they were
being performed in conformance with Barnard 's underly-
ing contracts with the four customers , since Barnard was
still the only party liable under those contracts.47
Les did not include in his count of four admitted FSI-
"inherited" jobs two other projects done between Octo-
ber 1983 and midsummer 1984 . These were the Whitta-
ker-Tasker job done in October-November 1983, and the
Ontario K-Mart job done in July 1984 (both of them
43 Chip admittedly obtained no bank loans or lines of credit in order to
capitalize and finance FSI's operations.
44 Les vaguely suggested , as in the case of the materials furnished to
FSI from Barnard 's fabrication shop, that FSI paid some "mark-up"
amount for the gasoline . But there is no evidence documenting that such
a mark-up was charged.
45 See the summaries in R Exh . 30. I note from those summaries,
moreover, that it was not until 15 October 1985 that FSI issued a check
to Barnard for roughly $30 ,000, this seemingly reflecting a belated
"catch -up" payment for a variety of past -due "miscellaneous items, not
including materials , purchased [sic] through 5/30/85 ." From my own
study of that exhibit , this amount is accounted for in only small part by
accumulated gasoline and repair billings prior to 1985 , neither does it
appear to match the other "miscellaneous" billings supposedly tendered
from Barnard to FSI since 1984. Once again, an inference is invited that
the two companies were still engaged in post facto attempts to "regular-
ize" the highly informal arrangements which existed between them as
late as October 1985, apparently involving FSI 's free use of equipment,
services, and supplies for which , even now , there are no clear-cut
records.
46 If Barnard and FSI actually signed agreements or otherwise kept fi-
nancial records pertaining to these four "inherited "- jobs, those records
were not introduced into evidence in this proceeding.
47 Larry Asmus continued to be employed as Barnard 's field superin-
tendent until November 1984 , when he then went on FSI 's payroll as an
"engineer," designing sprinkler systems-a function which he had also
served when on Barnard 's payroll.
within Local 709's jurisdiction). Despite the fact that Les
did not list these projects as among those four which he
admittedly turned over to FSI for completion it never-
theless appears that Barnard was using FSI employees to
complete those two additional jobs, as I discuss next.
In the case of the Whittaker-Tasker project it is possi-
ble to find that Barnard and FSI were paying little atten-
tion to the formalities at that early stage of FSI's reemer-
gence in deciding which persons would be deemed em-
ployed by whom for certain jobs). Starting in the second
week of October , and continuing through late Novem-
ber, Local 709 agent James Hosey48 learned that Bill
Shock and Andy Ryan were working on that job, oper-
ating Barnard-registered trucks and equipment. Hosey
knew Shock as a Local 669 member who had regularly
worked for Barnard in the past . He had followed Shock
from Barnard 's Via Burton shop to the jobsite . But when
Hosey asked Shock whom he was working for, Shock
told him that both he and Ryan were employed by FSI
(which company, Shock stated to Hosey, was "non-
union"). Ryan also told Hosey that he was employed by
FSI, adding that he "turn[ed] in [his] time at a separate
spot in the Barnard shop."48
On 17 November, and again a week later, Hosey met
with Les and questioned him about the use of Shock and
Ryan , neither of whom were Local 709 members. In the
process, Hosey asked Les about Shock's statement that
he and Ryan were employed by FSI. Les replied: "I
don't know what you 're talking about ." Les also told
Hosey that he had employed both Shock and Ryan on
the jobsite and claimed in substance that he had assumed
that the job was in Local 669 's jurisdiction, and also that
he had recently dismissed Shock and Ryan and had dis-
placed them with Local 709 members.
Les implicitly acknowledged in his testimony about
this series of events that Shock and Ryan worked on the
Whittaker-Tasker job. He denied at the trial that Barnard
employed Ryan in late October-November 1983, admit-
ting only that he had employed Shock. As I have just
found, however, Les admitted to Hosey during the
second of their November 1983 meetings that Les him-
self had been the person who had hired Ryan. Moreover,
I find from Hosey's testimony that Clo Gregory dug out
Ryan's name from Barnard 's office records, together
with the residence address to which Barnard had trans-
mitted Ryan 's last payroll check, and wrote down and
gave this information to Hosey.
There are multiple curiosities in the evidence about the
Whittaker-Tasker situation : Shock's own statement to
Hosey in October 1983 that he was then employed by
FSI cannot be reconciled with evidence that Shock's
name did not appear on FSI 's payroll until December
1983. Nor can it be reconciled with Les' statement to
Hosey to the contrary-that Les had hired both Shock
and Ryan for that job and, implicitly therefore , that the
job was "Barnard" work . But this statement by Les in
November 1983 cannot be squared with the fact that
Ryan 's name did not appear on Barnard 's payroll at that
48 I rely here on Hosey 's believably narrated account ; I disbelieve Les'
more truncated and evasive account to the extent it contradicts Hosey's.
49 Neither Shock nor Ryan was called to testify.
238 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
time; rather , Ryan had been carried on FSI 's payroll
since 22 October 1983.50 I have found that Les admitted
to Hosey that he had hired Ryan, and that Clo Gregory
even found in Barnard 's records Ryan 's name and the ad-
dress where Barnard had sent him his last paycheck.
This means that either: ( 1) that Ryan , at least, was being
treated by Barnard as a Barnard employee even while
FSI was simultaneously carrying Ryan on its own pay-
roll; or (2) that, although he had been hired by Les and
paid through Barnard's bookkeeping department, Ryan
was otherwise being treated as an FSI employee. In
either case it would appear that FSI was operating as
something less than an independent and distinct entity at
that time . Adding to this confusion of entities is the fact
that although Barnard -registered equipment was being
used on the Whittaker -Tasker job , one of the vans (bear-
ing license plates "BECI 16") was one which was rere-
gistered in FSI 's name in March 1984 (yet, apparently,
this was one of the vans which Chip "initially" pur-
chased outright when , in September 1983, Chip reacti-
vated FSI).51
The only scenario which adequately accounts for the
foregoing is one which presumes that Les originally in-
tended to treat the Whittaker-Tasker job as one which
"FSI" would complete, even though Les himself had
hired Shock and Ryan to do the work, and even though
Barnard-registered equipment was being used on the job
without there having been any lease arrangement be-
tween Barnard and FSI for such use . Otherwise, why
would Shock and Ryan have told Hosey that they were
working for FSI? And why would Ryan's name have
been on FSI 's payroll at the time?52 But Les must have
realized when Hosey appeared on the Whittaker-Tasker
jobsite and learned for the first time about an entity
called "FSI" that this arrangement was vulernable to a
union grievance under the work preservation and sub-
contracting clauses in Barnard 's labor agreement with
Local 709. And Les must have then found it necessary to
"repair" the situation by claiming to Hosey that he had
so See G .C. Exh . 16, p. 2, stipulated to be a list of FSI employees and
their dates of hire by FSI.
51 Because the record is unclear about the timing of purchase and the
identity of the vehicles which Chip purchased , it is possible that when
Les referred to Chip 's "initial" purchase of the four vans , he was not de-
scribing a bulk purchase transaction which occurred in September 1983
Thus , an alternative possibility on this record is that "BECI 16," for ex-
ample, was not purchased by FSI until March 1984 . But if so, neither
was that van ever "leased" to FSI in the meantime-at least the "lease"
agreements do not speak of it (see, and compare, the vehicle identifica-
tion numbers on the lease agreement for 1983 (R Exh 8)) and the vehi-
cle identification number associated with "BECI 16," as it appears on
certified copies of state motor vehicle department records (G.C. Exh. 21,
p. "L").
as Incidentally, I do not here rely on Hosey 's account of what Shock
and Ryan told him to find that Shock and Ryan were then , in fact, em-
ployed by FSI I continue to regard Hosey 's testimony as containing in-
admissible hearsay for those purposes , despite Local 669's counsel's able
efforts to persuade me that FRE Rule 801(d)(2) provides a basis for treat-
ing Shock's and Ryan's out-of-court remarks to Hosey as admissions of a
party. (Shock, later shown to be a "foreman" for FSI, presents a closer
question, which I do not decide.) Rather , in all the circumstances, it
simply seems more probable that Shock and Ryan would not have told
Hosey that FSI was their employer unless they had been so instructed by
Les (who had hired them) to consider themselves as FSI employees. As
to why Les would then have subsequently contradicted this statement
when Les himself met with Hosey , see main text, next.
no idea what "FSI" was-that it was a "Barnard" job,
and that he had simply made a mistake by using non-
Local 709 employees because he had wrongly believed
that the job was within 669's jurisdiction . By making
such a claim (and by supplanting Shock and Ryan with
"709 men") Les seemingly hoped to distract Local 709
and to prevent it from prying further into the relation-
ships between FSI and Barnard until more time had
passed to enable FSI to achieve a more superficially "in-
dependent" status and until such time as paperwork (van
leases, separate payrolls, etc .) could be created to pro-
vide some credence to the notion that FSI was an "inde-
pendent" business entity, rather than a mere arm of Bar-
nard 's operation.53
The foregoing inferences are reinforced by proof re-
garding the handling of the K-Mart work done in the
summer of 1984. K-Mart involved a project-or series of
projects-which Barnard 'admittedly was responsible for,
one portion of which was nevertheless admittedly com-
pleted by FSI-payrolled employees. Les and Chip gave
so many varying, mutually inconsistent , and virtually in-
comprehensible accounts about the K-Mart work that I
would not attempt to find what really happened , except
as follows : Les and Chip admit that some aspects of the
K-Mart work were being performed by Barnard-pay-
rolled personnel, using Barnard -owned trucks and equip-
ment . They likewise admit that other aspects of the job
were being completed by FSI-payrolled persons, using
Barnard-owned trucks and equipment. They claim, more-
over, that by special arrangement with K -Mart, Barnard
continued to bill K-Mart for the work done by FSI-pay-
rolled crews, then reimbursed FSI on a pass-through
basis for such work . Finally, they now admit (after Local
709 and Local 669 agents discovered this) that nominally
"FSI" crewmembers were instructed to identify them-
selves on the jobsite sign-in sheet as "Barnard" employ-
ees. I do not believe Les and Chip to the extent they tes-
tified that Chip landed the K-Mart completion work on
his own ; nor do I accept their explanations for the job-
site sign-in subterfuge . From portions of Les' account-
and from C .J.'s admissions at the time to FSI fitter Wil-
liam Hughesb4 these arrangements appear more probably
to have been linked to a kind of mutual backscratching
between Les and K-Mart by which K -Mart might avoid
"union" problems during the construction phase (by os-
tensibly continuing to use Barnard , a nominally "union"
firm), even while giving a healthy boost to Chip's busi-
ness and allowing the Lindleys (as a family unit) to profit
from their ability to do some of the K-Mart work with-
53 As the parties with firsthand knowledge and records bearing on
these matters, Barnard/FSI must bear the primary responsibility for any
abiding confusion in this record over such matters as when FSI actually
purchased certain vehicles, which vehicles were involved , why title to
those purchased vehicles was not transferred until many months after the
alleged "initial" purchase, which vehicles shown to have been used on
certain jobs were "leased ," and which were "purchased," and which em-
ployees were working for whom on any given job at any given time. Ac-
cordingly , I resolve doubts traceable to confusion in the record against
Barnard/FSI, drawing adverse inferences from their failure to provide a
more coherent, documented explanation of these events
64I believe Hughes , who credibly testified that when C.J. instructed
Hughes to sign in at the K-Mart job as a "Barnard" employee , Hughes
asked him why; C.J. replied , "There's a union problem."
BARNARD ENGINEERING CO.
out honoring the existing labor agreement with Local
709.
I have so far detailed some of the more obvious evi-
dence showing that Barnard 's beneficence enabled FSI
to operate , and other evidence which suggests , as well,
the degree of operational overlap between the two com-
panies, especially in the first year of FSI 's renewed ac-
tivities . There are other examples in this record , which I
summarize next.
(Again, I credit the testimony of FSI-payrolled em-
ployee William Hughes): Hughes went to Barnard's Via
Burton headquarters in early April 1984, looking for
work . He spoke to a receptionist named "Jackie," who
worked behind a window near the front door . 55 Hughes
said to "Jackie" that he had learned that Barnard was
"taking applications for nonunion fitters," to which
"Jackie" responded in a "startled" way, "How did you
hear about that?" Hughes explained that he had gotten
the information through Wayne Yost, then employed as
a fitter for Barnard . "Jackie" then gave Hughes C.J.'s
telephone number . Hughes telephoned C.J., and was
eventually hired on FSI's payroll after meeting with C.J.
at a different office.
Sometime in the next 2 months Hughes and his fellow
FSI-payrolled fitters were instructed to attend a meeting
held at Barnard 's headquarters on Via Burton where Les
and C .J. jointly conducted a "safety meeting ," explaining
the proper use of forklifts and other equipment, using
equipment then on hand at the Via Burton location. Nor-
mally in his employment thereafter , the truck which
Hughes used in his employment with FSI was stored
overnight at Via Burton , where Hughes would get it in
the morning and leave it each night.
(Crediting former Barnard employee Ron Eisele's testi-
mony, despite Les' unconvincing denials about this trans-
action): In June or July 1984, Eisele was informed by a
contractor that he (the contractor) had been "told that
Barnard 's going completely nonunion." As a conse-
quence, Eisele confronted Les at Barnard's headquarters
about this rumor, also asking Les about his own future
job prospects. Les replied that he still intended that
"Barnard is gonna stay Barnard ," explaining further, "I
have opened a little shop to keep competitive with the
non-union ," but also insisting that he could not close
Barnard because of "my long-time contractors."
While still on Barnard 's payroll (even though by then
he was the owner and president of FSI ), Chip took ad-
vantage of proprietary information obtained from Bar-
nard salesmen about the existence of potential jobs for
FSI to bid on (Chip: "I'd hear talk in the [Barnard]
office about jobs that were going to be bid, that sort of
thing . I would place calls to different contractors."
Until Chip hired Sharon Jacobson as his principal
clerical/bookkeeping employee in January 1984, he had
no employees to handle his payroll and bookkeeping
work. During that period Barnard corporate officer and
bookkeeper Clo Gregory "helped out" (Chip's words) in
ss Barnard then employed an office employee named Jacqueline
Pardus, whom Chip referred to in testimony as "Jackie." Pardus went to
work herself for FSI in August 1984 , only shortly after she had spoken
with Hughes . In all the circumstances I find that she was the "Jackie" in
question
239
these tasks, without any compensation from FSI. Indeed,
Chip acknowledges that Gregory continues to donate
her skills to "help-out" FSI occasionally (the record
shows, among other examples , that even in 1984, Greg-
ory submitted a series of employee contributions and re-
ports to a trust fund in which FSI participates, signing
on FSI's behalf as its "Bookkeeper").
Ed Rush (then a Barnard -paid engineer ; now an FSI-
paid engineer) "helped-out"66 on the complicated hy-
draulic design work for FSI's job at the Starcrest-Perris
site in the summer of 1984 . Rush received no compensa-
tion for this work from FSI, although Chip later bought
a computer for Rush 's use, which Rush now uses in his
employment at FSI to do design work for FSI.
Barnard gave Chip the free use of admittedly valuable
computer software-a program used in making hydraulic
calculations; as a consequence , when FSI does computer-
ized hydraulic calculations , those figures are printed out
with Barnard 's name at the top of the sheet.
E. Local 709 's and Local 669s Investigations into
Interrelationships Between Barnard and FSI,• Les'
Attempts to Conceal the Same
Findings in this section are relevant primarily to
Barnard/FSI's affirmative defense under Section 10(b) of
the Act (in substance, that Local 669 was on notice of
the material facts supporting its alter ego charge more
than 6 months before it filed that charge; therefore, Sec-
tion 10(b) bars that charge as untimely) and to the pros-
ecuting parties' related rebuttal thereto (in substance, that
Barnard/FSI fraudulently concealed those material facts
despite Local 669's timely efforts to learn more about
them, thereby tolling Section 10(b)). As I incidentally
detail below, questions about what Local 669 knew-and
when-are mostly indistinguishable from questions about
what Local 709 knew; for the evidence reveals in sub-
stance that by the start of 1984 Local 709 had shared
whatever information it learned with Local 669, thereby
allowing the general conclusion that knowledge gained
by the former may be imputed to the latter.
Local 709 agent Hosey was the first to discover a pos-
sible connection between Barnard and FSI when (as pre-
viously found) in mid-October 1983, he spoke at the
Whittaker-Tasker jobsite with employees Shock and
Ryan and • was told by each of them that they were
working for FSI, even though the "BECI-16" van Shock
was driving was then registered to Barnard and, indeed,
Hosey had followed Shock to the site from Barnard's
Via Burton shop . As previously found , when Hosey con-
fronted Les about this matter, Les professed not to know
anything about FSI, but instead acknowledged that he
had himself hired Shock and Ryan, and implicitly
claimed that Whittaker -Tasker was a "Barnard" job, and
that he had simply made a mistake by hiring Local 669
members to work on that job because he had thought it
was within Local 669's jurisdiction.
Hosey filed a grievance against Barnard in November
1983, ' citing a variety of contract violations related to
66 In fact, Rush signed the plans as the designer , and Les certified
them.
240 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
FSI's performance of work, and seeking an "audit" of
Barnard 's and FSI 's "books and records." So far as this
record shows, Barnard never acceded to the requested
"audit."5 7
By the end of 1983 Hosey had been in contact with
Local 669 agent Michael Slomski, had shared his suspi-
cions and information with him , and the two thereafter
shared whatever information they uncovered as they
continued to pursue the matter of FSI's ties to Barnard. I
describe in summary below what else Slomski and Hosey
learned, what they did about it, and how Les behaved in
response to their actions.
Most of the two unions' supplemental investigations
occurred in midsummer 1984, with exact sequences in
some doubt . During this period Hosey visited a jobsite in
Compton, referred to as the Cadillac-Fairview site.
There he saw Barnard-owned equipment , including a van
bearing a "BECI" license plate, while FSI-payrolled
workers Shock and Ryan , among others , were doing
sprinkler installations. 58
Hosey also visited a San Bernardino site within Local
669's jurisdiction (The Home Club site), where he saw
FSI employees (including Shock and Hughes ) and a Bar-
nard-owned truck with "BECI" plates, being unloaded
by a Barnard-employed driver named "Rex."
Slomski visited another site within Local 669's juris-
diction at Perris (the Starcrest site) where he saw a van
with "BECI" plates, being driven by FSI employee
Shock . Slomski called Hosey and together they visited
the Perris site the next day. They saw FSI employees
Shock and Ryan doing sprinkler installation work, and
they noticed an additional trailer bearing a "Lindley
Motor Car Co." emblem.59 Also, while at the site, they
retrieved a set of construction plans from a trash pile,
showing that FSI was the contractor, but that the plans
had been drawn by then -Barnard employed engineer Ed
Rush , and had been stamped "approved" by Les. In a
later visit to the site they saw a- scissors lift which they
identified with Barnard.60
sr Although the record is not clear on these points , it appears from
Hosey's testimony that this was only the first in a series of related griev-
ances which Local 709 continued to file against Barnard , at least one of
which was not heard by an arbitrator until the following May, when
FSI- payrolled employee Cepeda testified for Local 709 and was fired on
the heels of having given such testimony . Another such grievance was
heard in July 1985 , when Les lied about FSI 's insurance coverage. To
the extent the record is vague on questions about what else Local 709
may have learned in the course of processing these grievances , I will not
presume that Local 709 learned anything of significance. As I note in my
analysis , it was Barnard 's/FSI ' burden as the party(ies) raising the 10(b)
defense , to establish what Local 709 (and , by imputation , Local 669)
learned-and when they learned it-which was material to the alter ego
charge . Accordingly , any lingering vagueness in the record on such
points is chargeable against Barnard/FSI.
58 Apart from the distinctive vanity plates used on the vehicles seen
here and elsewhere by Hosey or Slomski , the union agents were able to
learn the ownership and other pertinent information about those vehicles
through the California Department of Motor Vehicles , by submitting a
license plate number and paying a fee
as The trailer was normally used to transport Les' racing cars; it was
being used in this instance to deliver a piece of heavy equipment used by
FSI at the site . Les implied-but there is no corroborative documenta-
tion-that the trailer was under "lease," through B&L, to FSI.
eo In fact, this was one of the lifts which Les had contributed to the
Family Trust and which was supposedly "leased" to FSI through the
auspices of B&L.
Hosey and Slomski also visited a site at Chino, in
Local 669's jurisdiction (the Duke Timber site), where
they observed FSI employees, including Andy Ryan, in-
stalling sprinkler pipe ; they also saw the white van
which had formerly borne "BECI-16" plates, but which
now bore "FSI" plates-this being the vehicle that
Hosey had seen in use the previous October-November
at the Whittaker-Tasker site.
Finally, Hosey and Slomski together went to the K-
Mart site in Ontario (Hosey had first visited there twice);
they saw FSI employees , including Hughes, doing pipe
installation ; they also saw some vans with "BECI"
plates, and others with "FSI" plates . By a ruse, they
gained access to and copied the sign-in sheet maintained
by K-Mart for construction, workers. They learned that
employees whom they knew to be associated with FSI
(including Hughes and C.J.) had signed-in as "Barnard"
employees. They also learned from a visit to the Ontario
office of building permits that Barnard was the only con-
tractor with a permit to do the K-Mart work in question.
In early August 1984, Hosey again visited Les at Bar-
nard 's offices on Via Burton and asked him about the K-
Mart job-particularly about the appearance of FSI em-
ployees on that jobsite despite the fact that Barnard was
apparently the contractor in charge . Les again replied
that he "knew nothing" about FSI, and claimed that he
had, in fact, "subbed" the job to a company called "First
Alarm" (which, Les independently testified, was owned
by Bill Schoff).61 When Hosey protested that First
Alarm was "not signatory to 709's agreement ," Les re-
plied, "Well, do what you gotta do."
As noted, Local 709 had filed a grievance against Bar-
nard in November 1983, seeking an audit of Barnard and
FSI records to determine whether Barnard had violated
the contract by its use of FSI to perform certain work.
In August 1984, after Barnard had not voluntarily dis-
closed any of the details requested by Local 709 about its
relationship with FSI , both Hosey and Slomski shipped
whatever information they had been able to gather by
then about those relationships to the International head-
quarters of their union in Washington, to be reviewed by
its legal department . Then , on 5 September 1984, Local
669's business manager mailed a letter to Les at Bar-
nard 's headquarters which set in motion the events
which culminated in the 8(a)(5) hearing before Judge
Pollack in August 1985 . In its 5 September 1984 letter to
Les, Local 669 stated, inter alia:
... it appears that Barnard . . . is in violation of
our . . . agreement. . . . In order to ascertain
whether your company is in compliance with the
contract, the Union requests complete and accurate
responses to the attached questionnaire. 62
Si Les' statement to Hosey-and his trial testimony-are both appar-
ently false insofar as they imply that Schoff was an independent contrac-
tor, who had no connection to FSI . Photographs taken at the K-Mart site
by Hosey and Slomski clearly show that Schoff was wearing a T-shirt
with an "FSI" logo on it Elsewhere the record shows that Chip had
purchased such T-shirts and caps to be used by FSI employees.
92 The questionnaire-also referred to in Judge Pollack's case-con-
sists of 4 typed pages , containing 30 requested items of information, all of
them bearing in one way or another on arguable interrelationships be-
tween the two companies.
BARNARD ENGINEERING CO. 241
Be further advised that . . . it appears that Bar-
nard and . Fire Sprinkler , Inc. constitute a single
and/or alter ego employer within the meaning of
the National Labor Relations Act. As such, both
Barnard and FSI are bound by our collective bar-
gaining agreement.
By letter dated 17 September 1984 Les replied that
Local 669's "contention is completely wrong ... [the
two companies] are totally separate entities ." Thereafter
Les listed eight conclusionarily expressed features pur-
porting to support his claim that the two companies
were separate83 and closed his letter by requesting that
Local 669 "specify in detail" what it thought it knew,
"so that we may quickly clear up any confusion."
On 25 September , Local 669's business manager re-
plied to Les in writing , stating, inter alia, that if his union
did not receive by 5 October "the assurance of your
company that a complete response (to the union 's 5 Sep-
tember letter] is forthcoming in prompt fashion, Local
669 will take [appropriate] action."
There was apparently a subsequent letter from the
International union 's attorneys to Les which was not
made a matter of record ; in any case on 17 December
Barnard's attorney , Hood, wrote to the International's at-
torney, Shaw, purporting to reply to Shaw's "letter of
November 30, 1984." There, Hood wrote that Shaw's
claim that Barnard had not provided "true and complete
information" was "without merit ." Hood then reviewed
the written exchanges described above and closed his
letter to Shaw with the statement : "In view of the above,
we believe that adequate response has already been made
... but also offered to "consider" any "information
which [Shaw felt] would lead to a contrary conclusion."
When Barnard's refusal to furnish the requested infor-
mation became the subject of the trial before Judge Pol-
lack in August 1985 , the General Counsel made addition-
al efforts to question Les about certain details regarding
the relationship between Barnard and FSI . In each case,
Les invoked the fifth amendment and refused to
answer.64
This is a substantially complete and representative list-
ing of the General Counsel's questions which Les did not
answer on fifth amendment grounds : ". . . were you
ever President of [FSI]" "Are you aware of the fact that
in the summer of 1984 at a job site in [Perris], California,
a company called [FSI] was performing sprinkler instal-
lation work?"; "Isn't it true that at the [Perris ] job site
there was a trailer which you owned and used to store
race cars?"; "Mr. Lindley , you're a shareholder of [Bar-
nard] and you 're also a shareholder of [FSI]?"; "Isn't it
true that your wife, Barbara . . . is an officer of [Bar-
nard]?" "Isn't it also true she 's a stockholder in [Barnard]
63 (Les' emphasis): ". . completely different owners," "... completely
separate control," "... completely separate personnel, " ":.. completely sep-
arate management, " ":.. bid on jobs independently," "... completely sep-
arate contractors licenses."
64 Judge Pollack overruled Barnard's objections to a series of questions
put by counsel for the General Counsel, whereupon Barnard 's counsel
advised Les not to answer on fifth amendment grounds . The General
Counsel opted not to pursue those matters by seeking immunity for Les
and an order to testify, as contemplated in Sec . 102.31(c) of the Board's
Rules and Regulations
and in [FSI]?"; "Who are the officers of [Barnard] .. .
in 1984?" "Who were the stockholders of [Barnard] in
1984?" "Who were the stockholders at [FSI] in 1984?"
"Isn't it true that on documents filed with the California
State License Board you're named as the qualifying indi-
vidual for both [Barnard] and [FSI]?" "Isn't it true that
Bill Shock, at one time, was an employee of [Barnard
and in reports submitted to -the Union by [Barnard] Mr.
Shock is listed . . . as an employee of [Barnard]?"; "Isn't
it true that . . . E. Rush had done engineering work for
[Barnard] in 1984 and at times previous to that?" "Isn't it
true that E. Rush has also done engineering work for
[FSI]?" "Isn't it true that [a series of identified forklifts
and a flatbed truck] were used on the Perris job?"; ".. .
was [FSI]'s business address in fact your home address in
1984?"; "Do you know of any facts which underly your
belief that answering the pending question runs you in
jeopardy of criminal prosecution of some kind?" "Did
you have access to [the various items of information
called for in Local 669's 5 September 1984 request for in-
formation]?"
F. Cepeda's Discharge
Cepeda, then a stranger to the industry , was hired on
FSI's payroll in April 1984. He was fired on 17 May
1985, a Friday, the day after he had testified as a Local
709 witness in the arbitration hearing . He had admittedly
lost favor with two successive foremen during his 13
months of employment , and his future employment pros-
pects were clearly tenuous at the time he testified. Thus,
Cepeda admitted that he was first supervised by Sam Fa-
vella until January-February 1985, when Favella request-
ed that Cepeda be reassigned. C.J. told Cepeda at this
time that he would be assigned to work under Bill
Shock, but that if this did not work out, he would be
"out the door." On Friday, 10 May 1985 Shock told
Cepeda (and apparently Chip and C.J., as well) that
Shock felt he could no longer work with Cepeda. That
same day Chip sent Cepeda home for the balance of the
day, with instructions to report to C.J. on the following
Monday, the 13th. Cepeda came back on Monday and
C.J. told him that he would supervise him directly until
C.J. could decide what to do with him.
Cepeda worked under C.J.'s direction on the 13th,
14th, and 15th . On 15 May he was also awaiting -a call to
testify at Local 709's arbitration, which had started that
day. (He had received a civil subpoena from Local 709
on the 14th or 15th, but he had not yet told anyone at
FSI about having been subpoenaed .) On the evening of
15 May, anticipating that his turn to testify would come
the next day , Cepeda called FSI's office ; since no one
was in the office , he left a message with FSI's answering
service, explaining that he would not be in the next day.
Called as Local 709's witness at the Thursday, 16 May
arbitration session , Cepeda revealed , inter alia, that he
had participated with other FSI employees in a "safety
meeting" at Barnard 's Via Burton premises which Les
and C .J. had conducted , that he had initially received a
descriptive pamphlet and related identification cards and
documents about his group insurance plan (all bearing
Barnard 's name) from Clo Gregory, at Barnard's Via
242 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Burton premises (he later contradicted himself on this
latter point by saying he had gotten the documentary
materials from "Jackie, at the office of FSI"), that he
had once "picked up [his] check " from Barnard's prem-
ises, that he would visit Barnard 's premises to pick up
materials and equipment for use on FSI jobs, and that,
on' C.J.'s instructions , he would occasionally go to an-
other rental agency to pick up rented equipment and
would occasionally tell that rental agency to bill the
rentals to Barnard's account.
So far as this record shows, neither Les, Chip, nor.C.J.
attended the arbitration sessions , although Les admittedly
received periodic telephone updates from his attorney
about what was transpiring at each day 's session. Both
Les and Chip deny that they discussed Cepeda's testimo-
ny between themselves-or with C.J.-at any point
before the 17th when C.J. fired Cepeda. I find all of this
inherently incredible. It is moreover contradicted by
FSI- payrolled employee Hughes, who believably testi-
fied that on the afternoon of the 16th C.J. himself told
Hughes that he had just gotten a telephone call from Les
in which Les complained that Cepeda "was . . . on the
witness stand testifying against me right now ." More-
over, .since Chip was still living in the family home at
this time, I find it inconceivable that Les would not have
passed on to Chip what he had learned from his attorney
about the testimony of Cepeda, once of Chip's employ-
ees. I thus find that Chip was also lying when he testi-
fied , in substance, that he did not become aware of Cepe-
da's arbitration testimony until after C.J. had already
fired Cepeda. Moreover, from the contents of Cepeda's
discharge conversation with C.J. as set forth below, it is
clear that C.J. had' known-before Cepeda appeared in
the office on the 17th-that Cepeda had given testimony
for Local 709 the previous day.
• When Cepeda again reported to work at FSI on the
morning of Friday, 17 May, he went to C.J.'s office.
Cepeda states that only he 'and C .J. were present in the
ensuing conversations, which ended in Cepeda's being
fired. Chip says that he himself was present during the
conversation . C.J. did not testify. (Chip had fired C.J. at
some point after the arbitration as a result of some falling
out which was never detailed; his whereabouts at the
time of this trial were not disclosed.)
I believe Cepeda, viewing Chip's testimony about his
own presence at the discharge conversation as an inven-
tion born out of apparent necessity-FSI's need to
present a witness who would deny Cepeda' s account of
certain damaging statements made by C.J., under circum-
stances where C.J. was no longer available to FSI as a
friendly witness.
Crediting Cepeda here, I find that C.J. first comment-
ed on Cepeda's "nerve . . . coming in after what you did
yesterday." According to Cepeda, the ensuing conversa-
tion may have lasted as long as 2-1/2 hours, during
which C.J. left the office more than once to instruct his
secretary to make out termination checks, returning each
time within 5 minutes . During that conversation C.J.
said , among other things , that Cepeda had been
"need[ed] ... at work yesterday." (Cepeda protested
that he had been subpoenaed and had "left a message.")
C.J. went on to complain that he had tried to locate
Cepeda twice on the 16th by telephone but had only
learned from Cepeda's nephew and wife that Cepeda
"wasn't at home," that C.J. "should have fired [Cepeda]
way back for going to the Department of Labor" (this
was otherwise unexplained), that C.J. reminded Cepeda
about his earlier warning that Cepeda would be "out the
door" if he couldn't work with Bill Shock, and that C.J.
had placed Cepeda "on probation" on "May 14" [sic]. At
some point C.J. also allowed that Cepeda had appeared
to be doing "pretty good work" on the 15th. At some
point C.J. returned to the arbitration matter, saying that
although the "Union's been trying to gather evidence
against Barnard Engineering and FSI to be one company
... the only thing . . . both companies had in common
was the insurance , because it was cheaper [and that] .. .
nonunion companies have better policies than union com-
panies." C.J. then asked whether the union had "prom-
ised . . . anything" for Cepeda's testimony ; Cepeda said
"No," whereupon C.J. berated Cepeda for being "dumb
for not asking for something for testifying for the
Union." Eventually C.J. departed and returned for a
final time to hand Cepeda a set of terminal paychecks,
whereupon Cepeda asked for a "written" termination
slip. C.J. said that he was not obliged to furnish any such
thing ; Cepeda asked if he was being fired for having tes-
tified, and C.J. said, "No, for not appearing to work
when [he] was needed for work."
Chip's explanation for Cepeda's discharge was, in sub-
stance, that he and C.J. had decided on Friday 10 May
to fire Cepeda, after receiving the most recent informa-
tion that Shock had found Cepeda unfit to work with.
Chip implicitly admits that no one directly communicat-
ed this alleged decision to Cepeda on either that Friday,
nor on the following 3 work days, the 13th, 14th, or
15th, when Cepeda continued to appear for work, and
was allowed to do so. Nor does Chip explain why he
and C .J. were admittedly so determined to locate Cepeda
on the day he was absent to testify , 65 thus inviting the
inference that they needed Cepeda's labor that day. At-
tempting to explain why Cepeda was allowed to work
on the 13th, 14th, and 15th (and, apparently, was expect-
ed to show up for work on the 16th), Chip claimed that
it had been his and C.J.'s intention to allow Cepeda to
finish the workweek. This explanation was not inherently
implausible , but Chip himself made it so when he ex-
plained further that FSI's workweek ended at the close
of business on Tuesday, the 14th. He then appeared to
explain the fact that Cepeda was nevertheless allowed to
work on Wednesday, the 15th (and was not then told he
was fired) because Cepeda would have come in on the
15th anyway; to pick up his paycheck, which Chip says
had been prepared after the workweek closed the previ-
ous evening . This claim is implausible , however, since
the whole point in Chip's explanation for having allowed
Cepeda to work beyond Friday, the 10th, was that
Cepeda would only be allowed to finish the workweek,
and the 15th was the first day in yet another workweek.
65 Chip's testimonial account makes much of the fact that he and/or
C.J. had placed several calls to Cepeda 's residence on the day of his ab-
sence from work (which was on a Thursday, even though Chip mistaken-
ly testified that it had been on a Wednesday)
BARNARD ENGINEERING CO. 243
It also fell to Chip to explain why it was that Cepeda's
absence on Thursday, the 16th, had created so much
fuss, since, according to Chip, Cepeda had not been
scheduled to work that day anyway, but was only going
to be informed that he was fired. Chip had no further ex-
planation for this anomaly in his account.66
Considering Chip's own difficulties in coming up with
a coherent explanation for the timing of Cepeda's dis-
charge, I treat as simply a pretext his suggestion that the
discharge decision had been finalized as early as 10 May.
Such an account is also inconsistent with Cepeda 's cred-
ited version of the entirely different reason-Cepeda's
absence from work on the 16th-which C.J. gave when
he fired Cepeda.67 I thus find as fact that, despite C.J.'s
"out-the-door" warnings to Cepeda in early 1985, FSI
management had made no firm decision about Cepeda's
future as of the 10th, when Shock indicated that he
could no longer work with Cepeda (nor even as of the
15th, when C.J. was continuing to supervise Cepeda di-
rectly). Rather, I find as fact that it was not until Cepeda
testified for Local 709 that FSI management decided to
fire him. Considering the pretextual nature of Chip's tes-
timony, and the obvious resentment betrayed by C.J.
(and by Les himself) over Cepeda's having testified for
Local 709, I find as fact that Cepeda's having testified
was a causative factor in the decision by FSI manage-
ment to fire him.
Analysis
A. Deklewa's Impact
In Deklewa the Board introduced:
... four basic principles . . . [to] provide an
overall framework for the interpretation and appli-
cation of Section 8(f) which will enable parties to
8(f) agreements and employees to know their re-
spective rights, privileges and obligations at all
stages in their relationship. [1] When parties enter
into an 8(f) agreement , they will be required, by
virtue of Section 8(a)(5) and 8(b)(3), to comply with
that agreement unless the employees vote, in a
66 All questioners of Chip about these points-and Chip , himself-be-
trayed some confusion about when it was that Cepeda was absent, thus
resulting in questions and answers which mistakenly presumed that
Cepeda had been absent to testify on Wednesday , the 15th , and had been
discharged on Thursday, the 16th . For example , after being confused
myself by the sequences mistakenly referred to in earlier questioning and
testimony, I asked Chip (Tr 115) why there was "all the fuss about [Ce-
peda's] absence on Wednesday ." In any case, these confusions do not de-
tract from the central weakness in Chip 's various testimonial explanations
for Cepeda's discharge-that even though a firm decision had been sup-
posedly reached on Friday , the 10th, to fire Cepeda as soon as he had
completed the workweek which ended on Tuesday , the 14th, Cepeda
was nevertheless allowed to work through the 15th (with no notice of
any impending discharge) and was even expected to work on the 16th.
67 In crediting Cepeda 's version of his discharge conversation with
C.J. I have taken into account that Cepeda later filed an unemployment
compensation claim wherein he assigned as the reason for his discharge
that "no one wanted to work with me." I do not find that statement to be
so inconsistent with his testimonial version of what C.J. told him as to
warrant discrediting him Cepeda struck me as a confused and unsophisti-
cated personality , but also as one lacking in guile . I thus find it under-
standable that when he filed the unemployment compensation claim he
would report that it had been his difficulties in working with previous
supervisors which accounted for his termination.
Board- conducted election, to reject (decertify) or
change their bargaining representative . [2] Neither
employers nor unions who are party to 8(f) agree-
ments will be free unilaterally to repudiate such
agreements . [3] During , its term , an 8(f) contract
will not act as a bar to petitions pursuant to Sec-
tions 9(c) or (e). [4] In determining the appropriate
unit for election purposes the Board will no longer
distinguish between "permanent and stable" and
"project by project" work forces, and single em-
ployer units will normally be appropriate. John
Deklewa & Sons v. NLRB, at 1375, 1385 [fns. omit-
ted].
Deklewa's principles must be honored here, if , as I will
assume, Deklewa's "8(f)" policies must be applied when-
ever, as herein, the construction union 's status under Sec-
tion 9(a) is put into issue . Put another way, unless shown
otherwise , we should presume in pending cases that par-
ties to a construction labor contract are not entitled to
the "full panoply of Section 9(a) rights and obligations"
(1385), but, rather should be treated as subject to
Deklewa's "8(f)" principles (involving a more "strictly
limited 9(a) representative status" (1387). This view is re-
inforced by the Board's requirement that any party
claiming the full panoply of entitlements under Section
9(a) must "prove" its 9(a) status . 68 The Board 's require-
ment of affirmative proof of 9(a) status69 will clearly be
met if the union wins the vote in a Board election (p.
31), or by applying the "normal presumptions" which
flow when , for example , the proponent of 9(a) status
proves that the union was "voluntarily " recognized
based on a "clear showing of majority support among
the unit employees , e.g., a valid card majority." (1387 fn.
53, citation omitted.) Just as clearly, the burden on the
party urging "full panoply" status under Section 9(a) can
no longer be met by resort to the kinds of "merger," or
"conversion" theories which the Board discarded in
Deklewa ( 1384, 1385; see also 1386 fn. 47).
The Board observed in Deklewa, "Application of the
Board's new 8(f) principles here and in all pending cases
will undoubtedly impose on some parties certain obliga-
tions and liabilities they would not have incurred under
existing law." History will judge whether this was un-
derstatement . "Undoubtedly ," too, nearly all persons in-
volved in the representation and counseling of unions,
employers, and health, welfare, and pension trustees in
the construction industry in the United States will be re-
quired, at a minimum , to review their clients ' own labor
relations histories, practices , and agreements, before de-
termining precisely what those "certain obligations and
liabilities" may consist of, and how heavy their "imposi-
tion" may be in a given case . In that process, lawyers
and other practitioners are certain to disagree-even
within their own counsels-about where Deklewa leaves
68 (Deklewa at 1385 fn 41): "In light of the legislative history and the
traditional prevailing practice in the construction industry, we will re-
quire the party asserting the existence of a 9(a) relationship to prove it."
69 That is, of "full panoply" 9(a) status, as distinct from the more
"strictly limited 9(a) status" envisioned in Deklewa which attaches auto-
matically, without regard to the union's majority status , during the term
of a construction labor agreement.
244 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
them and their clients . Undoubtedly , moreover, Deklewa
will trigger scholarly commentary , will furnish hundreds
of industry seminars with a headline topic, and , not least
of all, will yield , at least in the short term , much litiga-
tion before the Board , and before state and Federal
courts of trial and appellate jurisdiction.
With all those considerations in mind , I will apply
Deklewa with due caution , recognizing on the one hand
that it was intended to introduce an entirely new analyti-
cal framework for thinking about the law of construction
industry labor relations , including the interplay between
and among Sections 8(a)(5), 8(b)(3), 8(d), 8(f), and 9(a),
but recognizing as well its announced and implicit limita-
tions-exemplified in the Board 's expressed desire to
"employ . . . the fine crucible of case-by-case experience
in which to test and refine these principles ." (Id. 1385 fn.
40)
I will next address two related questions which have
had threshold importance in the case from the start but
which now take on different significance as viewed
through post-Deklewa spectacles:
Is Barnard Bound to the 1985-1988 Agreement with
Local 669? Is Local 669's Status a "Full" One
under Section 9(a)?
Deklewa speaks primarily to labor relationships that are
governed by a current labor agreement in the construc-
tion industry . So far as I can discern, it does not materi-
ally speak to the question how one determines whether
such a binding contract exists ; indeed I see nothing in
Deklewa which purports to overrule traditional principles
for resolving such questions , including those principles I
discuss below which cause me to find that Barnard has at
all material times been bound to a series of contracts
with Local 669, including one effective in the period
1982-1985, and one which is currently effective, through
31 March 1988 . Under Deklewa , the existence of a con-
tract is enough to find a duty on the employer's part
under Section 8(a)(5) to honor it through its term, a duty
which will expire before the end of the contract only if
the employees have decertified the union in midterm (id.
1385).
There is no disputing that, by virtue of bargaining
rights it had assigned to the Association , Barnard was
bound to a 1982-1985 labor agreement with Local 669
throughout its term .? ° The only dispute-one which sur-
faced after the trial record opened-is over whether Bar-
nard became bound to the 1985-1988 agreement negoti-
ated between the Association and Local 669. Barnard's
answer had seemed-indirectly at least-to concede this
now-disputed point, for it had unqualifiedly admitted the
complaint allegation that "Since . . . 1970, Barnard has
authorized the Association to negotiate , enter into and
administer collective bargaining agreements with Local
669," and there was no dispute that the Association had,
indeed , negotiated a current agreement , listing Barnard,
70 This has never been in contest . It is implicit in the grievance corre-
spondence between Barnard and Local 669 in late 1984, and the Board
affirmed this in affirming Judge Pollack 's 1985 decision , involving the
same parties . The doctrine of collateral estoppel, discussed below, pre-
cludes any reconsideration of that contract existence question
among many . other firms, as employer-members for
whom the Association was negotiating . Notwithstanding
its answer Barnard sought to prove that it had tele-
phoned and written to the Association at some unstated
point in December 1984, purporting to revoke the Asso-
ciation 's authority to bargain on its behalf, that the Asso-
ciation later claimed to have no record of any such com-
munications , and that Barnard never directly notified
Local 669 of any such intent until February 1986,• at a
time when these cases were scheduled for trial.
Consistent with my summary ruling at trial precluding
this issue from litigation,' 1 I find that even if Barnard
were not estopped by its answer from litigating the ques-
tion whether it was still bound to the Association's
agency during bargaining which yielded the 1985-1988
agreement , its putative proof would be inadequate in law
as a defense to the claim that it became bound to that
agreement . Retail Associates, 120 NLRB 388, 393-395
(1958) (absent mutual consent or unusual circumstances
an employer may not withdraw from established multi-
employer bargaining unless employer gives unequivocal
written notice to the union before bargaining starts, of
sincere intent to abandon multiemployer bargaining and
to pursue negotiations on individual basis thereafter).72
See also J&L Painting Contractors, 239 NLRB 867, 870
(1978) ("the failure of an employer to afford timely writ-
ten notice of its intended withdrawal from group bar-
gaining to . . . the Union, would render the withdrawal
nugatory ." Accord : Elevator Sales & Service, 278 NLRB
627, 632 ( 1986). I therefore find that Barnard was bound
by Association action to the 1985-1988 agreement with
Local 669.
Barnard also denies the complaint insofar as it alleges
that Local 669 occupies "Section 9(a) status" as the ex-
clusive collective-bargaining representative of the em-
ployees in the nationwide unit covered by the series of
labor agreements to which I have found Barnard was
bound.73 In thus denying Local 669's 9(a) status Barnard
has placed on the prosecuting parties the threshold
burden of proving the same.74
71 I direct any reviewing body 's attention to the trial colloquy, Bar-
nard's offer-of-proof, the parties ' arguments , and my eventual summary
ruling at trial on 8 May.
72 Barnard's counsel argued at trial on 8 May that Local 669 "consent-
ed" to Barnard's purported withdrawal , but Barnard 's offer does not even
remotely suggest that Local 669 had independent notice of any desire on
Barnard 's part to revoke the Association's bargaining authority at any
time before the current agreement was cemented , much less that Local
669 had somehow "consented"-or even "acquiesced" in such a desire.
Barnard's counsel also argued that its offer-of -proof raised "unusual cir-
cumstances" within the meaning of Retail Associates to justify the conclu-
sion that Barnard effectively withdrew Nothing in Barnard's offer strikes
me as raising any circumstances warranting an exception to the Retail As-
sociates rule; Barnard has not pursued its arguments in this regard on
brief, accordingly , I will not strain to envision what "unusual circum-
stances" counsel may have been thinking of.
73 Sec . 9(a) of the Act pertinently states:
Representatives designated or selected for the purposes of collective
bargaining by a majority of the employees in a unit appropriate for
such purposes, shall be the exclusive representatives of all the em-
ployees in such unit for the purposes of collective bargaining.
74 This is an allocation of burdens which the Board has expressly con-
firmed in Deklewa supra (fn. 41, while making clear that this burden need
be met only to establish that the "full panoply" of 9(a) rights and obliga-
Continued
BARNARD ENGINEERING CO.
The General Counsel and Local 669, litigating and ar-
guing pre-Deklewa, believe that they satisfied their 9(a)
burden by any or all of the following items of proof in
the record: (a) The history of "successive" labor agree-
ments joining Local 669 and Barnard ; (b) an undisputed
summary of records75 from Local 669's headquarters
showing that in March -April 1985 (a period spanning the
31 March point when the 1982-1985 agreement expired
and the 1985-1988 agreement became retroactively effec-
tive) the overwhelming majority of the roughly 2700 em-
ployees who had then worked in the nationwide unit had
paid "work assessments" to Local 669 (functionally
equivalent to "dues") by the device of voluntary wage
checkoffs ; and (c) Barnard is estopped from denying
Local 669's 9(a) status because Judge Pollack necessarily
found-and the Board necessarily affirmed in its decision
reported at 282 NLRB 617 that Local 669 was the exclu-
sive representative of employees in the nationwide unit,
including Barnard's.
I conclude , post-Deklewa , that none of these claims
will now pass muster.
(a) Even before Deklewa, the Board apparently would
not rely on the mere fact of "successive" labor agree-
ments to establish that the contracting union's status had
"ripened" to that of a 9(a) representative.76
(b) Arguably, before Deklewa, the fact that the vast
majority of employees in the nationwide unit were
paying "work assessments" to Local 669 might have suf-
ficed to show that a majority of employees in the unit
had "designated or selected " Local 669 as their repre-
sentative , within the meaning of Section 9(a). After
Deklewa rejected the "conversion" and "merger" doc-
trines, however, such proof must be regarded as insuffi-
cient to establish that Local 669 occupied "full" 9(a)
status, or that it was entitled to a continuing presumption
of majority status.77
The most persuasive basis, pre-Deklewa , for finding
Local 669's "full" 9(a) status, was the doctrine of collat-
eral estoppel . Since Deklewa, it is a nice question wheth-
er collateral estoppel will now permit such a finding.
"[A]n issue actually and necessarily determined . . . is
conclusive in subsequent suits based on a different cause
of action involving a party to the prior litigation." Mon-
tana v. U.S., 440 U.S. 147, 153 (1979), citing Parklane
Hosiery Co. v. Shore, 439 U.S. 322, 326 fn. 5 (1979).
Accord: U.S. v. Mendoza, 464 U.S. 154 (1984). In apply-
ing this general proposition to this case I note first that
Barnard 's answer to the complaint in Judge Pollack's
eons will apply, rather than the more "strictly limited" 9(a) rights and
obligations which will automatically attach to the parties to 8(f) contracts
during their terms.
76I grant Local 669 's unopposed motion to receive the summaries in
question.
76 In Carmichael Construction Co., 258 NLRB 226 fn . 1 (1981), the
Board "disavow[edl" any reliance on the judge 's reasoning that the "exe-
cution of succeeding contracts makes Sec . 8(f) irrelevant , and therefore
raises the presumption that the Union was the majority representative of
the unit employees."
77 In Deklewa , moreover, the majority of employees employed by John
Deklewa were union members or had "adopted the Union as their collec-
tive-bargaining representative" (1376). This notwithstanding , the Board
found that the relationship was "8 (f)" in character and, accordingly, the
parties operated only under the "strictly limited" 9(a) rights and liabilities
envisioned (but not unmistakably defined) by the Board
245
case denied the allegation that Local 669 was the 9(a)
representative .7 s This was arguably enough to find that
the 9(a) issue was "actually" raised and perhaps "neces-
sarily" determined in Judge Pollack 's case . 79 And al-
though Judge Pollack 's decision nowhere expressly de-
cides the matter, it was seemingly "necessary" to Judge
Pollack 's decision-and to the Board 's affirmance of it
under then prevailing law, that Local 669 be found to
have been the 9(a) representative of the employees in
question ; otherwise Barnard 's relationship with Local
669 would not have been of the type implying a statuto-
ry duty to bargain under Section 8(a)(5), and the labor
agreement could have been terminated at will by Bar-
nard.80
Accordingly, the doctrine of collateral estoppel could
operate to prevent Barnard from now contesting Local
669's "full" 9 (a) status-more precisely , that doctrine
would estop Barnard from denying 9(a) status through
the time when that litigation concluded (any change in
circumstances thereafter being, presumably , matters
which could be raised in subsequent litigation without
running afoul of those principles of estoppel).
And I could therefore rely on the Board 's decision in
Judge Pollack's case to find that Local 669 was the 9(a)
representative of Barnard 's employees in the contracted-
for unit during the term of the 1982-1985 agreement. I
would then be required to determine whether the record
will permit me to conclude that Local 669 continued to
enjoy such a status when the 1982-1985 agreement ex-
pired and was supplanted by the 1985-1988 agreement.
In doing so , I could rely on a standard presumption, that
once a certain state of affairs has been shown to exist,
that the same state of affairs has persisted to the present,
unless shown affirmatively to the contrary by the party
having an interest in making such a showing . Applying
that reasoning to this case, I could place the burden on
Barnard to show, if it could, that Local 669 somehow
lost its exclusive representative status in the nationwide
unit at some point since the litigation of Judge Pollack's
case.
78 The parties stipulated into evidence in this case the pleadings, tran-
script, exhibits, Judge Pollack's decision, and Barnard's exceptions there-
to in Case 21-CA-23677 . References next are to pleadings in that case:
Barnard 's answer had denied complaint paragraph 9(b), containing the al-
legation that Local 669 has been "at all times since March 31, 1982. .
the representative of a majority of the employees in [the nationwide unit]
and, by virtue of Section 9(a) . . . has been and is . . . the exclusive rep-
resentative of all the employees in said unit ." At the hearing , Barnard
amended its answer to admit certain allegations of the complaint , but not
paragraph 9(b).
49 I note that the 9(a) question does not appear to have been highlight-
ed in the trial before Judge Pollack , nor in his decision. But the existence
of an answer denying the allegation , coupled with the General Counsel's
proof in that proceeding that Barnard and Local 669 were bound to the
1982-1985 agreement covering the nationwide unit appears to be enough
to find "actual litigation" of the matter . For "[T]he requirement of collat-
eral estoppel that the issue be 'actually litigated' does not require that the
issue be thoroughly litigated . Collateral estoppel may apply 'no matter
how slight was the evidence on which the determination was made, in
the first suit , of the issue to be collaterally concluded ."' Continental Can
Co. v. Marshall, 603 F.2d 590, 596 (7th Cir. 1979), citing lB Moore, Fed-
eral Practice, par. 9 .441 [2] at 3778 (2d. ed 1974), see also Mother's Res-
taurant Y. Mama 's Pizza, 723 F.2d 1566 , 1570 (Fed. Cir. 1983).
so See, e.g, Jim McNeff v. Todd, 461 U.S. 260 (1983 ), discussed in
Deklewa at 1388
246 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Deklewa 's overall analysis of 8(f)/9(a) issues-and its
"retroactivity mandate"-now cause me to doubt the
foregoing reasoning . More specifically , because of vague-
ness in the Board's requirement that its "new 8 (f) princi-
ples" be applied "to all pending cases in whatever
stage," I can no longer be confident that the Board "nec-
essarily" determined Local 669 's "full" 9(a) status in
Judge Pollack 's case.81
With these overriding doubts I will not find that the
prosecuting parties have met their burden, as redefined in
Deklewa , of proving Local 669's "full" 9(a) status.
Rather , I will assume hereafter that the statutory rights
and obligations under which Local 669 and Barnard
(and, by extension , FSI) operated , were "strictly limited"
to those which trace from , or are "coextensive with the
bargaining agreement which is the source of the union's
exclusive representational authority " (Deklewa at 1387).
B. Is FSI Barnard 's Disguised Continuance or
Alter Ego?
The complaint alleges that Barnard reactivated FSI to
function as its "disguised continuance ." But the prosecut-
ing parties also maintain and argue on brief that Barnard
and FSI together constitute a "single employer." Al-
though these are analytically overlapping theories (the
announced tests for each are nearly identical), there are
practical differences in their application . As I read the
law in this area, the most material difference between the
two notions is that single-employer cases arise when two
nominally distinct businesses with substantially common
management , purposes, and ownership continue to oper-
ate simultaneously in the same market-in tandem, as it
were-whereas alter egos are normally found where one
employing entity purports to go out of business, but is
succeeded in substantially the same business by another
entity, one owned and controlled by substantially the
same persons who owned and controlled the first busi-
ness-the shutdown of the first business and the creation
of the succeeding business often , but not necessarily,
having been done to avoid the labor relations obligations
to which the first business was bound.82
The "disguised continuance" phrase now commonly
associated with alter ego situations appears to stem from
the Supreme Court's usage in Southport Petroleum Co. v.
NLRB, 315 U.S . 100, 106 (1942); see also Howard John-
son Co. v. Detroit Joint Board, 417 U.S . 249, 259 fn. 5
(1974) (second employer is "disguised continuance" of
the first with a "mere technical change in the structure
or identity of the employing entity , frequently to avoid
the effect of the labor laws, without any substantial
81 I wonder if I am to treat the Board 's (also quite recent ) decision in
Judge Pollack 's case as a "pending" case for these purposes; or, alterna-
tively , if I am to construe it consistent with Deklewa 's teachings and
holdings . If so, I doubt-especially in the absence of an express finding
on the "full" 9(a) issue in the prior case-that I may use collateral estop-
pel principles to find a "full" 9(a) issues herein . I wonder as well whether
the equitable principles and practical considerations underlying the doc-
trine of collateral estoppel would be well -served by its application to the
9(a) issues herein
82 See discussion of alter ego -single-employer distinctions in: Gilroy
Sheet Metal, 280 NLRB 1075 (1986); Alabama Metal Products, 280 NLRB
1090, 1095 ( 1986) and cases cited ; see also Samuel Kosoff & Sons, 269
NLRB 424, 427-428 ( 1984).
change in its ownership or management"). Morever, the
distinction between alter ego employers and "single" em-
ployers appears to have additional practical importance
when it comes to the question whether the union con-
tract which binds one entity will bind the other one (in
alter ego situations it will ; in single employer situations it
may not , depending on whether the employees of the
two entities operating in tandem themselves constitute a
single appropriate unit . Alabama Metal Products, supra,
Samuel Kosoff & Sons, supra, and cases cited ; see also ad-
ditional cases cited supra, at sec . II,B, fn. 22.
Barnard and FSI no longer perform sprinkler installa-
tion work in tandem. Barnard 's last such work ceased in
the summer of 1984 . If Barnard/FSI functioned for a
time as a single-employing entity, they have by now
passed that transitional stage . And since the "unit"
within which Barnard/FSI's fitters are contractually en-
compassed is a multiemployer one of nationwide scope
whose own appropriateness would not be affected by the
peculiarities of the Barnard/FSI interrelationships, I will
analyze those interrelationships from an alter ego stand-
point ; and I find it unnecessary to deal further with the
contingent arguments for the proposition that
Barnard/FSI were, for a time, or are now, a single em-
ployer.
The general tests used for determining whether two
nominally distinct businesses are mere alter egos are only
rough guides , not susceptible of mechanical application,
and each case in this area ultimately depends for its out-
come on a unique mix of facts . Crawford Door Sales Co.,
226 NLRB 1144 (1976) ("Clearly, each case must turn on
its own facts, but generally we have found alter ego
status where two enterprises have `substantially identical'
management , business purpose, operation , equipment,
customers and supervision as well as ownership "). Nec-
essarily, therefore , strict precedent is hard to find, and
my conclusions are more influenced by the peculiar facts
which repose in this record than by the way other*fact-
finders have sifted and assayed the different facts con-
tained in the many cases cited to my attention by the
parties.
The cases are seemingly harmonious on one point,
however-a mere transfer of ownership from one family
member to another is insufficient to defeat alter ego
status . Thus, in Advance Electric , 268 NLRB 1001, 1004
(1984), the Board found that the requisite "common
ownership" existed where , "at all times all stock in both
corporations was owned by members of the Shoots
family and all corporate officers and directors also were
members of that family . In such circumstances the Board
and the courts find ownership and control of those com-
panies to be "substantially identical' for purposes of de-
termining alter ego status." (Citations omitted.) See also
Crawford Door Sales, supra ("both Respondents .. .
were wholly owned by members of the Cordes family
and never lost their character as a closed corporation. In
these circumstances we find that ownership and control
BARNARD ENGINEERING CO.
in both enterprises is substantially identical" (id. at
1144)).83
Accordingly, I cannot accept the claim that Barnard
and FSI have "completely separate owners" simply be-
cause Chip bought Barnard 's shares from Les for a nomi-
nal sum . Rather, especially given the close family rela-
tionship between Les and Chip, and that control of FSI
never passed from the Lindley family when Chip pur-
chased FSI's shares, I find that Barnard and FSI are
"commonly owned," for purposes of evaluating the alter
ego issue.
There can be no doubt that Barnard 's union-represent-
ed operation (the field installation of sprinkler systems)
and FSI's operation were essentially identical in purpose
after FSI's reactivation; to this extent, therefore, the two
companies shared a "common business purpose" suffi-
cient to satisfy that criterion for alter ego status. The
two businesses likewise served some of the same custom-
ers-especially in the case of the four Barnard -contract-
ed jobs which Les admitted that he had given over for
FSI to complete , as well as in the case of the K-Mart
completion work done by FSI for which Barnard was
ultimately responsible . 84 It is true, however, that nearly
three-fourths of the customers served by FSI, in its sub-
sequent operations over the last 3 years , are customers
whom Barnard had never served.85 But this does not
strike me as significantly undermining the notion that
FSI is Barnard 's disguised continuance . For we are not
dealing here with the type of business which serves a
steady, "repeat" clientele ; rather, construction-installers
like Barnard and FSI serve a "market area" apparently
comprised of a constantly-shifting and indefinite class of
builders, developers, and firms whose facilities are re-
83 Similarly, . in "single employer" cases, the "common ownership"
factor is not defeated simply because a father owns one company and his
son owns the other in the pair comprising the "single employer ." For ex-
ample, Truck & Dock Services, 272 NLRB 592 in . 2 (1984) ("While no
evidence indicates that Clarence [the father] or Craig [the son] owns any
interest in the other 's company , the record does reveal that Craig in-
formed CTT at age 22 with a high school education and several years
work experience as a truck driver for his father . As noted , Clarence is
actively involved in the day -to-day operations of both companies Thus,
the companies' relationship is a close family one rather than one between
independent companies dealing at 'arms length .' In such circumstances,
the Board often treats ownership by other family members as personal
ownership." (Citations omitted .) See also Neighborhood Roofing, 276
NLRB 861 (1985).
84 And see Gilroy Sheet Metal, supra (inexplicably cited by counsel for
Barnard/FSI in a supplemental memorandum as favoring their position),
wherein the Board found that Sheet Metal and Heating & Air were not
alter egos , in part because, "unlike certain other cases in which the Board
has found a newly created company to be the alter ego of a previously
existing one , Sheet Metal did not take over any unfinished work started by
Heating & Air" (Emphasis added ; citations omitted) Another critical dis-
tinction in Gilroy stressed by the Board , is that Sheet Metal's founding
arose from circumstances "unrelated to the Union ," specifically "personal
health , financial , and marital difficulties." Such factors , particularly the
marital estrangement which sundered the predecessor business in Gilroy,
are not part of the Barnard/FSI background.
85 R. Exh . 13 contains a list of roughly 160 "FSI Customers" served
by FSI since June 1983, of which 44 had been former Barnard customers.
I note that this listing may be itself misleading for our purposes , since it
does not distinguish between major and minor projects , nor does it indi-
cate whether FSI has performed work for some of the listed customers
more than once . Thus, it is conceivable , for example, that the 44 custom-
ers listed as "former Barnard customers" might have accounted for a sub-
stantially larger percentage of FSI 's gross revenues over the past 3 years
than might be suggested by their numerical percentage . on that exhibit
247
quired to be protected against fire . If Barnard had stayed
in the installation business, there is no reason to suppose
that Barnard 's customer list would not have substantially
matched the list of customers whom FSI has since
served . In any event , FSI's customer list hardly implies
that FSI has veered off in •a new "business purpose" di-
rection.
I find also that Barnard and FSI are "commonly con-
trolled," despite the absence of much evidence that Les
has played any direct or ongoing role in the day-to-day
operation of FSI since its reactivation . Again, this does
not seem significant , given the intimacy of the family re-
lationship , Chip 's youth , the fact that he was still living
in the family home , and especially the fact that FSI's ex-
istence as a viable entity still depended so heavily on
Barnard 's and Les' goodwill and extraordinary assist-
ance.
From earlier findings it seems clear enough that Chip
could never - have gotten FSI going as an "independent"
business on his own if Les had not first made available to
Chip, by a variety of devices , Barnard 's financial forbear-
ance as well as its "assets." And here the term "assets"
must be understood quite broadly, for apart from the
human , physical , and intangible assets which Barnard
furnished to FSI-mostly on a less than arm's-length
basis-86 FSI was the beneficiary of two additional
assets without which "Chip 's" business could never have
gotten off the ground : First, Les' agreement to continue
to list himself for State of California contractor licensing
purposes as FSI's "Responsible Managing Officer";
second , but at least as important , Les' willingness (or
"Barnard 's" willingness-there is no purpose in distin-
gushing between the two ) to aver in various financial
statements used to obtain insurance and bonding for FSI
that Barnard and FSI were "combined" operations,
"wholly-owned" by Les, himself. Put another way, had
Les and Chip announced to the world when FSI became
reactivated in 1983, as they now insist , that Les had
"nothing to do" with FSI , then FSI 's contracting license
would have been vulnerable , for lack of an FSI manag-
ing person to qualify as its "Responsible Managing Offi-
cer," and FSI simply could not have obtained on its own
the extensive range of insurance and bonds required for a
California contractor to do business on the scale which
FSI soon undertook.
Counsel for Barnard/FSI argue on brief as to these
features , in substance , that they were mere formalities,
unreflective of the realities in the actual control and
management of FSI day-to-day. As to Les' position as
88 As found earlier , Barnard made available to FSI its 'personnel, its
equipment and fuel , its business expertise and contacts , at least five unfin-
ished installation jobs , and 90 percent of the fruits of its shop production.
As found earlier, Barnard simply donated many of those resources to
FSI; others were the subjects of informal "pay-when -you-can" arrange-
ments (if payment was made at all) or, in the case of some vans, of nomi-
nal "leases" which themselves appear to have been generated more as a
post-facto formality than as part of any arms-length business arrange-
ment. Still other resources (notably, the bulk of Barnard 's shop produc-
tion) were produced for FSI "at cost" (perhaps with some later , ad hoc,
"mark-up"); even then , FSI accumulated a substantial indebtedness to
Barnard for those produced items-a degree of indebtedness which Bar-
nard has not shown it tolerates from any other firms to whom it has fur-
nished fabricated products.
248 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
FSI's RMO, it may be that Les' function was more titu-
lar than real . But, if so, then Les was seemingly engaged
in a fraud on the State of California and it is doubtful
that the state licensing authorities-or a party suing FSI
and its principals for damages-would find this distinc-
tion to be particularly exculpatory. The whole point in
the state requirement that a contractor designate an
RMO seems to be to provide some assurance to the li-
censing authorities-and, in turn , to the consumers of the
contractor's 'services-that the contractor is actually
being managed by someone with requisite experience, re-
sponsibility, and reliability in the industry , someone who
can be held personally to account in the event of a fail-
ure to fulfill other state requirements , or in the event of
fraud, poor workmanship, etc. And by officially agree-
ing, at FSI's formal request in 1983 to "continue" to po-
sition himself as its responsible managing officer, Les
took on a genuine, personal responsibility for FSI's af-
fairs, no matter how little. he may have tended to them
day-to-day.
As to the common insurance umbrella under which
Barnard/FSI operated , there is again the whisper of
fraud implicit in counsel 's attempts to explain why Bar-
nard's and FSI 's operations , though "combined" for in-
surance purposes , were nevertheless "separate" in reality.
Thus, counsel label as a "red herring" (Br. 50) the evi-
dence of the common insurance arrangements , and of the
underlying common financial statements , prepared so
that common insurance could be obtained for the "com-
bined" family operations . ("All [that evidence] shows is
(a) a father's desire to help his son obtain insurance, and
(b) inept and careless accounting practices.") Moreover,
counsel argue (ibid .) that such "inept and careless" ac-
counting was simply done to make it "easiest" for the
"insurance agent" to write coverage for "two different
companies." This argument borders on the obtuse:
Surely,-Les' desire to "help his son obtain insurance" fig-
ured in these transactions ; but, just as clearly, the com-
bined statements were hardly "careless and inept";
rather, they were quite deliberately calculated to portray
Barnard and FSI as combined operations under Les' con-
trol. And they were hardly slapped together simply to
make life "easier" for the "insurance agent," given insur-
ance agent Jenning 's unequivocal declaration that FSI
could never have obtained coverage without its being
presented to the underwriters as merely a subordinate
arm of Barnard , whose own operating history, business
expertise , and other assets were the real basis for the in-
surance-worthiness of the FSI operation.
In substance , therefore , Barnard continued to "con-
trol" FSI because, for a variety of reasons, Barnard's re-
sources were necessary to FSI 's ability to retain its con-
tracting license, to obtain insurance , to obtain vehicles,
tools, and installation products-in short , to do business.
In these circumstances I am not seriously distracted by
the attempts made by counsel for Bariiard /FSI to liken
the instant case to cases. where a father may have given
"limited help" to his son in starting an essentially "new"
business without the son's business being treated as an
alter ego of the father's.87
I have also independently considered-and find distin-
guishable from this case-another recent "family" case,
not cited by Barnard/FSI, Oklahoma City Eastern Ex-
press, 281 NLRB 921 (1986). There the Board found no
alter ego relationship , despite familial ties and some
degree of operational interrelations , and some personnel
and equipment sharing between the two companies. On
the alter ego question , I find ' that case distinguishable pri-
marily on these bases : The original company discontin-
ued only some of its existing operations ; the alleged alter
ego company entered a substantially different business
market than the one abandoned by the original company
(id. at 925); the alleged alter ego company was not "in-
debted" to the orignal company (or to its owner) "for
any financial contribution to [the alleged alter ego] and
Jenkins [the original company's owner] exercises no con-
trol of nor derives any benefits from the operation of
[the new company]" (ibid.); any sharing of trucking
equipment, personnel , offices, or dock space was pursu-
ant to "arms -length" arrangements and the original com-
pany was compensated for such services at the same
rates by outsiders who also used those services (id. 926,
fn. 22); there was no intention in the forming of the al-
leged,alter ego company to "avoid [the original compa-
ny's] union contract" and there was no other persuasive
evidence of an intention to create the new company as a
"disguised continuance" of the original one (Id . at 925).
I have reserved to the end of this discussion a factor
of uncertain importance to the Board in determining
FSI's status as Barnard 's alter ego-whether or not Bar-
nard 's phase out and FSI 's phase in stemmed primarily
from antiunion considerations.
When an intention to escape a union contract or other
labor relations obligations is at the heart of the creation
of a new company to succeed an old one the Supreme
Court has suggested in dicta that this is a "sufficient"
ground in itself to treat the new company as the old
one's alter ego. Southport Petroleum Co., supra, 315 U.S.
at 106; see also Goodman Piping Products v. NLRB, 741
F.2d 10 (2d Cir. 1984), enfg. E. G. Sprinkler, supra. But
will the absence of such an "unlawful intention " defeat
an alter ego finding? Apparently not; for the Board has
87 Counsel for Barnard/FSI make much of Hillsamer Painting Contrac-
tors, 272 NLRB 1366 (1984), where the Board sustained Administrative
Law Judge Thomas A. Ricci 's finding that the two companies were not
alter egos I will not detail the facts of that case , it suffices to note these
principal distinguishing features . Mark, the father, continued in the same
painting business even after his son , Terry, left that business to start his
own, similar, painting contractorship (accordingly , unlike herein, Hill-
samer did not present even a threshhold basis for finding a "disguised
continuance" of the father 's business). Moreover, the degree of "assist-
ance" given by Mark to Terry was minimal (an initial $4000 loan, repaid
by Terry 3 months later ; otherwise , Terry independently borrowed
$32,500 and used $ 16,000 of "his own money" (presumably, those latter
capitalization funds, unlike Chip's, did not come from a family trust
whose assets themselves generated directly from the father's business).
"Finally, and most important of all [Judge Ricci's words , 272 NLRB at
1368] none of [Terry's] employees are, or were, regular former employ-
ees of [Mark 's] company ." Here, of course , FSI staffed itself in large
part-especially in key positions-with veterans from Barnard 's operation,
this being done incrementally, apparently as Barnard 's phase-out from in-
stallation work made them redundant to that operation.
BARNARD ENGINEERING CO.
recently taken pains to disclaim any suggestion that it
will require a "showing of unlawful motivation" in order
to find alter ego; but, at the same time, it has implied
(compare the Court's dicta in Southport Petroleum, supra)
that even the presence of such an intention may not be
enough to find an alter ego . Gilroy Sheet Metal, supra at
fn. 1 ("merely one factor that the Board considers in
weighing the circumstances of any particular case");
Oklahoma City Eastern Express, supra at fn. 1. See also
Fugazy Continental Corp., 265 NLRB 1301 (1982), enfd.
725 F.2d 1416 (D.C. Cir. 1984).
Whatever the precise weight the Board may now
place on this factor, I am persuaded by the evidence in
the record as a whole that FSI was reactivated as a
device by which Les hoped to allow Chip gradually to
succeed him in the running of the union-represented por-
tion of the family business without saddling Chip with
the union obligations to which that end of the business
was bound. There is strong basis for suspecting that Les
originally formed FSI for the purpose of avoiding exist-
ing contract obligations with the two fitters unions. This
suspicion is perhaps justified by the mere facts that Les
used FSI as a nonunion operation in the mid-1970s, and
was revealingly evasive when questioned why he found
it necessary then to start a separate corporation. And the
suspicion that Les has intended since the mid-1970s to
use FSI not merely to perform specialty pipeline jobs for
municipalities , but also for sprinkler installation work of
the type traditionally done by Barnard's unionized fitters,
was substantially enhanced when Les acquired a C-16
sprinkler installation license for FSI before returning that
corporation to dormancy. Neither does it appear to have
been merely coincidental that the reactivation of FSI oc-
curred at a time when Barnard's operation was threat-
ened by an industry strike and the prospect of even
higher wage costs than the costs, seemingly already in-
tolerable to Les, that Barnard was already paying to its
unionized fitters. And certainly Les' admission to Local
709 fitter Eisele in the summer of 1984-that he had
"opened a little shop to keep competitive with the non-
union [shops]"-is strongly probative as evidence of the
real purpose underlying the reactivation of that corpora-
tion.
I can accept for these purposes Les' claim that he also
had personal reasons for wishing to devote less time to
Barnard 's operation and management. Moreover, I will
assume that Chip had by then showed great interest in
getting into the same business himself, and that he was
equipped by virtue of his experience in working for Bar-
nard to manage a sprinkler installation operation (with
healthy collateral assistance from experienced clerical,
bookkeeping, engineering , and supervising staff). But
Les' desire to withdraw from active management of the
business-and Chip's desire himself to go into the same
business from which Les was withdrawing-scarcely ex-
plain why FSI was reactivated as the vehicle to fulfill
those otherwise natural patterns in the perpetuation of a
family enterprise. Plainly, if all Les wished was to have
more free time for his auto racing, and if all Chip wished
was to run a sprinkler installation business, a less compli-
cated, more natural , and likely, way to fulfill those
mutual desires was for Chip to begin to assume manage-
249
rial duties at Barnard as his father withdrew from those
duties.88
I conclude therefore that ulterior motives account for
the reactivation of FSI; I further conclude that the more
probable motivation was to rid the family business of its
labor relations obligations to Local 709 and to Local 669.
C. Are the 8(a)(5) Features of the Complaint Barred
by Section 10(b)?
Section 10(b) of the Act prescribes that "[N]o com-
plaint shall issue based upon any unfair labor practice oc-
curring more than six months prior to the filing of the
charge with the Board and the service of a copy thereof
upon the person against whom such charge is made
Noting that Local 669's charge herein was not filed
until 28 October 1985, Barnard/FSI argue that the com-
plaint is barred to the extent it alleges violations of Sec-
tion 8(a)(5) committed by them more than 6 months
prior to that date, i.e., prior to 28 April 1985.
Barnard/FSI acknowledge, however, that under a "con-
tinuing violation" theory, the extant charge would be
timely insofar as it complained of Barnard/FSI's failure
to honor the wage and fringe benefit provisions in Local
669's labor agreement in the 6-month period before the
charge was filed. E.g., Al Bryant, Inc., 260 NLRB 128,
134 (1982), enfd. 711 F.2d 543 (3d Cir. 1983). Those par-
ties nevertheless assert that the "continuing violation"
theory will not help Local 669 in these unique circum-
stances since no evidence was presented in this case that
FSI performed any work in Local 669's jurisdiction after
the alleged 10(b) cutoff date of 28 April 1985.
The General Counsel and the Union reply that since
Barnard and FSI fraudulently concealed the facts which
demonstrate their alter ego relationship the "limitations"
provisions of Section 10(b) were tolled and, therefore,
there is no bar to the 8(a)(5) aspects of the complaint in-
sofar as they address unfair labor practices committed
since • FSI's reactivation in 1983. I agree with the pros-
ecuting parties that there was fraudulent concealment
which tolled the statue of limitations, and I therefore do
not consider the merits of any theory of prosecution
linked solely to a "continuing violation."
It is settled that Section 10(b)'s "limitations" rule
"does not begin to run on an unfair labor practice until
the person adversely affected is actually or constructive-
ly put on notice of the allegedly offending act." Truck &
Dock Services, supra, 272 NLRB at 593, and cases cited.
It is equally settled that when a party fraudulently con-
ceals the evidence of his unfair labor practice, such con-
cealment necessarily precludes "notice" to the adversely
affected party, and thereby tolls the running of the 6-
months limitations period. Burgess Construction, 227
88 Perhaps, in a rare case, a son's passion for entrepreneurial "inde-
pendence" might explain why the son would prefer starting his own cor-
poration rather than merely assuming a managerial role in his father's
corporation . But that possibility is doubtful in Chip's case, given the ex-
traordinary level of FSI's dependency on Barnard for its own existence,
and the range of less-than-arms'-length dealings between the two entities
which characterize their relationship. In short, I doubt that any desire on
Chip's part to blaze his own trail accounts for the reactivation of corpo-
rate FSI.
250 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
NLRB 765, 766 (1977), enfd. 596 F.2d 378, 382 (3d. Cir.
1979), cert. denied 444 U.S. 940 (1979); Amcar Division,
AMC Industries, 231 NLRB 83, 91 (1977), enfd. 592 F.2d
422 (8th Cir. 1979); Crown Cork & Seal, Inc., 255 NLRB
14, 22 (1981), enfd. (mem. op.) 111 LRRM 2650 (9th Cir.
1982); Pacific Intercom Co., 255 NLRB 184 (1981), enfd.
mem. 679 F.2d 900 (9th Cir. 1982). Finally, the burden is
on the party urging the 10(b) defense to establish that the
charging party was "clearly and unequivocally" on
notice of the allegedly offending act. Strick Corp., 241
NLRB 210 fn. 1 (1979); Crown Cork & Seal, supra.
Here I find that Barnard/FSI have consistently con-
cealed from the two fitters' unions the details of their
interrelationships since FSI's 1983 reactivation-all with
the intent to defraud those unions into believing that the
two entities were "totally separate." Moreover,
Barnard/FSI have failed to demonstrate that Local 669
was "on notice" of those critical details at any time
before the 28 October 1985 date on which Local 669
filed its charge against those two entities as a single em-
ployer and alter ego . 89 Necessary to this conclusion is
the understanding that the "allegedly offending act" in
this case was not merely FSI's "act" of having started
doing business in Local 669 's jurisdiction without honor-
ing Local 669 's labor agreement with Barnard ; rather, it
was FSI 's having done so under circumstances where it
was Barnard 's alter ego which constituted the "offense."
Thus, without evidence which showed, prima facie, the
existence of an alter ego relationship between the two
companies . 90 Local 669 was never on notice of anything
which it might properly treat as a violation of either its
contract with Barnard or as a violation of its representa-
tive status during the terms of these contracts. And it
was precisely that alter ego evidence which this record
plainly shows that Les has always refused to disclose
89 Indeed , it is by no means clear that Local 669 was "on notice" of
those details even when it filed its charge , rather, it appears that many of
the most critical revelations in this case did not come to Local 669's at-
tention until the eve of this trial (and during it)-only after I denied
Barnard/FSI's petitions to revoke the General Counsel 's extensive sub-
poenas duces tecum issued to those companies , and only after the pros-
ecuting parties studied the records thus finally disclosed and then ques-
tioned Les, Chip, and their common insurance agent under oath about
the matters thus revealed. (I consider as among the most critical revela-
tions in this regard Les ' formal agreement-evidenced in hitherto-undis-
closed FSI corporate minutes-to serve as the RMO for the reactivated
FSI, FSI 's coverage under Barnard 's insurance and bonding policies, the
existence of "combined financial statements" purporting to treat
Barnard/FSI as combined operations solely-owned by Les, and the other
evidence detailed in 'my findings showing the "less-than-arm's-length"
nature of the interrelationships between the two companies, and showing
FSI's wholesale dependence on Barnard's gifts and acts of forbearance in
order to activate and maintain its operations.)
90 In an area of the law where the Board has emphasized that each
case will turn on its own facts , it is difficult to be categorical about what
will constitute a "puma facie" case for alter ego status . For present pur-
poses, I will presume, however, that the "general" characteristics set
forth in Crawford Door Sales, supra ("'substantially identical ' manage-
ment, business purpose , operation, equipment , customers, and supervision,
as well as common ownership" must be shown to be present to constitute
a prima facie case . As discussed above and below , Local 669 was pos-
sessed of only fragmentary facts-none of them enough to show such
critical features as "common ownership," or "common management,"
which features could only become evident through detailed inquiry into
these ostensibly "completely separate" companies and discovery of the
less-than-arms'-length arrangements by which FSI was able to become es-
tablished.
whenever either of the two fitters' unions tried to gain
access to it.91
What those unions-particularly Local 669-were
shown to have known , moreover, was not enough to
trigger anything more than a suspicion that Barnard and
FSI were a single employer or were alter egos . Indeed,
the evidence which they became possessed of by visits to
FSI's jobsites was just as consistent with the lawful oper-
ations of two "independent" contracting businesses as it
was with the possibility of an unlawful alter ego re lation-
ship between those businesses.92
In maintaining a contrary view on the 10(b) issue,
Bainard/FSI place heavy reliance on a single case, Al
Bryant, supra, including on certain dicta expressed by
Administrative Law Judge Harmatz regarding the sig-
nificance , for 10(b) purposes , of "exculpatory statements"
made to union agents by the common owner of the two
companies comprising the "single employer" (id. 260
NLRB at 135; see also fn . 19). 1 would limit Bryant's
holding to its unique facts . There, in the portion of the
case which presently concerns us, two companies were
involved, Al Bryant, Inc. (ABI), a firm owned by Al
Bryant which was under a union contract, and Harris-
burg Drywal (HD), a firm also owned by. Al Bryant
which was also headquartered at ABI's premises, doing
identical work to that of ABI, but on a "nonunion"
basis. There the ALJ found that the union (Keystone)
was on notice, for nearly 2 years before it filed its 8(a)(5)
charge, of sufficient evidence of HD 's status as a "single
employer" with ABI, that it should have filed its charge
much earlier . The factors relied on by Judge Harmatz-
and in turn ; by the Board-included some which are ar-
guably comparable to those herein, but they also includ-
ed others which I find critically distinctive. Thus, Judge
Harmatz noted that "Keystone was mindful [since 1977,
roughly 2 years before it filed its 8(a)(5) charge] that its
members had been employed by [HD] that [HD] had
performed work covered by [Keystone's contract with
ABI]; that [HD] had not adhered to the terms of that
contract, and that Al Bryant owned [HD]." 260 NLRB at
135 (my emphasis).
91 Recapitulating highlights from earlier finding In 1983 Les told Local
709 that he didn't know anything about FSI , and he refused to permit
Local 709 to conduct a requested "audit" of the arrangements between
Barnard and FSI which might have unearthed more significant details, in
September 1984 Les unlawfully embarked upon a continuing refusal to
furnish answers to Local 669 's interrogatories about arrangements be-
tween the two companies, insisting instead on conclusionary claims about
the "separateness" of those companies; in 1985 Les lied under oath in
Local 709's arbitration when asked whether Barnard 's insurance covered
FSI's operations, and he took the fifth amendment in the Local 669-initi-
ated unfair labor practice trial before Judge Pollack when questioned
about details of the relationship between Barnard and FSI
92 As Barnard/FSI have insisted throughout these proceedings, the
"mere" facts that FSI used Barnard-owned equipment , or performed
work on Barnard -contracted jobs, are not conclusive evidence of an alter
ego relationship-particularly if, indeed, those arrangements had been
"arm's-length" in character , typical of arrangements between otherwise
independent construction entities. (And the less -than-arm's-length charac-
ter of those arrangements was not something which the fitters ' unions
were shown clearly and unequivocally to have known about). See, by
way of analogy, Crown Cork & Seal, supra, 255 NLRB at 22 ("What the
Union knew about Kasselder 's activities prior to his revelations .. .
would be as consistent with those of a lawfully behaving.... 'volunteer'
as [with] those of an unlawfully behaving agent of Respondent").
BARNARD ENGINEERING CO.
While it is true in the present case that Local 669
knew by midsummer 1984 that FSI existed , that it was
"nonunion ," that it employed at least one former Local
669's member who had formerly worked for Barnard
(Shock), and that FSI was doing work identical to Bar-
nard's in Local 669's jurisdiction , under circumstances
suggesting some tie-in to Barnard (use of Barnard-li-
censed or Barnard-registered equipment), any arguable
comparisons to Bryant end there; for ABI and HD were
both owned by the same individual , Al Bryant, and the
union in that case clearly knew it-indeed , 2 years before
it filed charges, its agents had visited Al Bryant at the
common offices of his "double-breasted" operation, had
obtained his admission that he owned both companies,
and had merely admonished him not to use its union
members for work on HD jobs.93
For all of the reasons noted above, particularly the
fact that FSI was not formally owned by Les and that
Les' denial of any Barnard connection to FSI could not
be disproved by anything that Local 669 did know at the
time, I would not find that Local 669 was "clearly and
unequivocally" on notice as of 28 April 1985 of facts on
which to predicate a charge to the Board that Barnard
and FSI were alter egos . On this basis alone, I would
find that Section 10(b) did not bar the complaint insofar
as it addressed a 8(a)(5 ) violation which first arose when
FSI began working in Local 669 's jurisdiction.
Moreover, as a matter of policy, I question whether
the Board should interpret Section 10(b) in such a way
as to encourage the precipitate filing of an alter ego
charge in preference to the procedures pursued by Local
669 herein, procedures which for practical purposes put
Barnard/FSI on early notice that their alter ego status
was in issue . 94 Thus, it is clear that Local 669 did not
99 Judge Harmatz also made comments, in the nature of obiter dicta,
suggesting that misleading , false, or otherwise "exculpatory statements"
by an employer in such cases are of little or no weight in assessing the
question whether "fraudulent concealment" has taken place . I would not
uncritically adapt that dicta to the facts of this case Certainly , Al Bry-
ant's admission to the Union that he "owned" HD (an admission made at
the common offices of the two businesses) was a more important fact for
"notice" purposes than was his simultaneous and transparently false "ex-
culpatory" statement to the union that he had "nothing to do with" HD.
In a different fact setting such as this one, however , Les' refusal to admit
to any connection to FSI , was not merely a conclusionary "exculpatory"
statement, but a fraudulently false statement of fact-one whose truthful-
ness or falsity could not be known to Local 669 without a thoroughgoing
inquiry into the details of the interrelationships between the two compa-
nies. And, despite Local 669 's timely interrogatories-made within 6
months of the point in midsummer 1984 when Local 669 had learned
enough to be suspicious about those interrelationships-Les continued to
withhold such details as proved to be important to my decision when
they were finally revealed dung this trial.
94 As noted by the Third Circuit in enforcing aspects of Al Bryant
other than those discussed thus far , "there does not appear to be any
clear precedent on when the Section 10 (b) period begins to run with re-
spect to Section 8(a)(5) charges growing out of double breasted oper-
ations." 711 F 2d at 547 . And here , Local 669 's September 1984 interrog-
atories to Barnard at least gave Barnard adequate and early notice so as
to preclude the kind of "belated claim" situation which Section 10(b) was
designed by Congress to guard against ("to bar litigation over past events
'after records have been destroyed, witnesses have gone elsewhere, and
recollections of the events in question have become dim and confused."'
Machinists Local 1424 (Bryan Mfg. Co.) Y. NLRB, 362 U .S. 411, 419
(1960), quoting H.R. Rep . No. 245 , 80th Cong ., 1st Seas 40 (1947).
251
merely sleep on its rights ; once it became possessed in
midsummer 1984 of evidence that FSI was operating
nonunion in its jurisdiction . Rather, by September 1984,
it had sought to invoke its own labor agreement with
Barnard as a device by which it might achieve satisfac-
tion ; and once Barnard demonstrated its refusal to fur-
nish the information which the Board ultimately found
Local 669 was lawfully entitled to, Local 669 acted in a
timely manner to enforce its rights by filing the charge
against Barnard which was ultimately sustained in Judge
Pollack 's case . And it was only after Barnard showed no
sign of promptly complying with Judge Pollack's deci-
sion that Local 669 apparently believed that it could wait
no longer to achieve a resolution of the alter ego issue
which it had raised and diligently pursued since Septem-
ber 1984. In short, Local 669 seemingly did everything
within its power to achieve a "private resolution" of its
dispute with Barnard/FSI before resorting to the Board's
investigative resources to get to the bottom of the alter
ego question , and if by so doing it were to be held to
have run afoul of Section 10(b), it is not difficult to envi-
sion that such a holding would cause similarly situated
unions to forswear contractually established means for
dispute resolution.
D. Did Barnard/FSI Discharge Cepeda for Unlawful
Reasons? Did C.J. Unlawfully Threaten Cepeda for
Having Engaged in Protected Activities?
I have found that Cepeda's having testified as a Local
709 witness in the 1985 arbitration against Barnard was a
motivating factor in FSI's decision to fire him. Although
they resist this finding, Barnard/FSI maintain that even
if this was a motivating factor it was not enough to es-
tablish a prima facie violation, since "Testifying pursuant
to a subpoena is not a protected activity." As authority
for this assertion , Barnard/FSI counsel cite certain dicta
from the decision of Administrative Law Judge James
M. Kennedy in Autumn Manor, Inc., 268 NLRB 239, 242
fn. 8 (1983). Autumn Manor is factually inapposite (in-
volving testimony before a state agency) and the Board
expressly refrained from adopting Judge Kennedy's
dicta . 268 NLRB 239 at fn . 1. Elsewhere , the Board has
consistently held that participation as a witness in an ar-
bitration is an activity protected by Section 7 of the Act;
see Osage Manufacturing Co., 173 NLRB 458, 462 and
case cited at fn. 25 (1968); Crown Central Petroleum Co.,
177 NLRB 322 (1969), enfd. 430 F.2d 724 (5th Cir.
1970); Oil Workers Local 4-23 (Gulf Oil), 274 NLRB 475,
476 (1985) ("arbitration must be shielded against meas-
ures which would tend to discourage any individual
from appearing and testifying fully and truthfully").
Accordingly, I find not only that Cepeda's arbitration
participation was a substantially motivating factor in
FSI's decision to fire him, but also that his participation
was activity which was protected by the Act.
I have found that , at the time he testified for Local
709, Cepeda's future employment prospects with FSI
were tenuous due to his having failed to please either of
his two previous supervisors . And Barnard/FSI argue,
252 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
under Wright Line , 95 that Cepeda would have been fired
for those innocent 'reasons alone even if he had never tes-
tified for Local 709, and that, accordingly, his discharge
may not be found to have been unlawful . I disagree. Al-
though Cepeda was in a tenuous position , and even
though FSI would have been doubtless within its rights
to fire him as of 10 May, when he had been sent back to
the office for failure to satisfy foreman Shock , it is plain
that, for reasons of their own , FSI managers had decided
to give him yet another chance . Thus, rather than firing
Cepeda on the 10th , C.J. decided to allow him to contin-
ue working under his own supervision . And C.J. admit-
ted to Cepeda when he fired him on the 17th that
Cepeda had been doing "pretty good work" on his last
work day before he testified . Under these circumstances
it seems clear that Cepeda would have been permitted to
continue working indefinitely , absent some future lapse
in his work performance . And in these circumstances it is
doubtful that "dual motives " even figured in the decision
to fire Cepeda after he testified. Even if they did so
figure, however, Barnard/FSI failed to come forward
with sufficient evidence to establish that Cepeda would
have been "out the door" without regard to his having
testified . I therefore find that Cepeda was unlawfully dis-
charged in violation of Section 8(a)(1) of the Act.96 I
find , moreover , that by the totality of his remarks in
firing Cepeda , C.J. communicated to Cepeda the message
that his having testified was the reason he was being
fired and that those remarks independently violated Sec-
tion 8(a)(1) of the Act.
I therefore reach these summary
CONCLUSIONS OF LAW
1. Whether considered as separate entities or as alter
ego operations Barnard and FSI are employers engaged
in commerce within the meaning of Section 2(6) and (7)
of the Act.
2. Local 669 and Local 709 are each labor organiza-
tions within the meaning of Section 2(5) of the Act.
3. At all times material , by virtue of its having desig-
nated National Automatic Sprinkler & Fire Control As-
sociation , Inc. (Association) as its agent for purposes of
collective bargaining with Local 669, Barnard has been
bound to a series of consecutive collective -bargaining
agreements negotiated by the Association with Local
669, including the one currently effective , by its terms,
from 1 April 1985, through 31 March 1988.
4. At all times material Local 669 has been entitled to
the "limited" bargaining rights and status under Section
9(a) of the Act as envisioned in Deklewa , as the repre-
sentative in a unit consisting of employees of employer-
members of the Association , including employees of Bar-
nard , who performed work which was covered by the
series of labor agreements referred to above in conclu-
sion 3 and who did so within Local 669's territorial juris-
diction.
95 Wright Line, 251 NLRB 1083 (1980), enfd . 662 F.2d 899 (1st Cir.
1981), cert. dented 455 U.S. 989 (1982). See also Transportation Manage-
ment Corp., 462 U S. 393 (1983) (approving Wright Line tests)
99 Since the remedy would be no different, I do not decide whether
Cepeda's discharge also constituted unlawful discrimination within the
meaning of Section 8(ax3) of the Act
5. Commencing in or about September 1983, FSI was
activated as a disguised continuance of that division of
Barnard 's operations which Local 669 represented, and
FSI is, therefore, an alter ego of Barnard.
6. By virtue of its status as Barnard 's alter ego, FSI is
bound , and has been bound at all times material since its
1983 activation , to the same labor agreements with Local
669 to which Barnard has been bound , and Local 669 has
been the collective -bargaining representative of FSI's
employees working within Local 669's jurisdiction to the
same extent as it has been the representative of Barnard's
employees.
7. At all times since FSI's activation in 1983 when it
has performed work within Local 669's jurisdiction,
Barnard/FSI, as alter egos , have unilaterally failed and
refused to accord recognition to Local 669 as the repre-
sentative of employees in the unit covered by the labor
agreements , and have refused to honor or apply to those
employees the wages , fringe benefits , and other terms
and conditions of employment established in those agree-
ments; by those acts and defaults , and by each of them,
Barnard/FSI have failed and refused to bargain collec-
tively in good faith with Local 669, in violation of Sec-
tion 8(a)(5) and 8(d) of the Act, and, derivatively, of
Section 8 (a)(1) of the Act.
8. On 17 May 1985 , FSI discharged employee Charles
Cepeda because he had testified in an arbitration pro-
ceeding for Local 709 and, through its agent , C. J. Lind-
ley, told Cepeda that he was being fired for having so
testified ; by those acts, and by each of them , FSI has
interfered with , restrained, and coerced employees in the
exercise of the rights guaranteed them in Section 7 of the
Act, in violation of Section 8(a)(1) of the Act.
REMEDY
Having found that Barnard/FSI are alter egos and that
they committed unfair labor practices substantially as al-
leged in the complaint , I find that the Board should
order them to cease and desist therefrom97 and to take
certain other affirmative action required to fully restore
the status quo ante their unlawful acts . I have therefore
provided in my recommended Order that, consistent
with Deklewa , Barnard/FSI confer recognition on Local
669 as the collective-bargaining representative of their
employees performing work in the unit covered by the
1982-1985 and 1985-1988 labor agreements with Local
669, and that they be jointly and severally liable for
making whole all such unit employees employed by FSI
within Local 669's jurisdiction at any time since FSI's re-
activation on or about 1 September 198398 for any losses
97 Because the conduct of Barnard and FSI evidenced a wholesale and
pervasive rejection of the principles of collective bargaining and thereby
struck at the heart of the rights guaranteed to employees by Section 7 of
the Act, I have recommended a "broad" cease -and-desist order.
98 While the proof adduced at trial shows that FSI performed work
within Local 669's jurisdiction on three occasions in midsummer 1984,
the question whether it performed work in Local 669's jurisdiction at
other times before or after midsummer 1984 was not expressly litigated I
would therefore leave to the compliance stage the determination whether
FSI has done additional work since its activation within Local 669's juris-
diction for which Barnard/FSI should be required to make employees
whole.
BARNARD ENGINEERING CO.
they may have suffered , including expenses ,99 as a con-
sequence of Barnard 's and/or FSI 's failure to honor and
apply those agreements to them , 100 with appropriate in-
terest.1101
Counsel for Barnard/FSI resist any make-whole order
which goes beyond 6 months before Local 669 filed the
Section 8(a)(5) charge . They rely on the Board 's state-
ment in Al Bryant that "our normal remedy for violations
of this nature is limited to the 10 (b) period . We see no
reason to extend the remedy beyond that period in this
case." 260 NLRB at 128. I find Al Bryant inapposite; the
violations found therein were all "continuing" violations
occurring within the 10(b) period . Here, unlike Bryant,
the statue was tolled by Barnard/FSI's fraudulent con-
cealment which began as early as November 1983, when
Les first denied any knowledge of FSI's operation in
conversation with Local 709 agent Hosey,' and that pat-
tern of concealment persisted throughout the subsequent
years-until the eve of the this trial-throughout which
Local 709 and Local 669 were repeatedly rebuffed, lied
to, or misled by Les as they diligently sought to extract
details from him about Barnard /FSI's interrelationships.
Accordingly, the governing rule is that set forth in, e.g.,
Don Burgess Construction , supra ("we find that since the
limitations period had been tolled with respect to the
cause of action it must also be tolled with respect to the
remedy . To find otherwise would permit Respondents to
escape from providing a full remedy as a result of the
successful concealment of their unlawful conduct. This
would contravene the equitable principles which allow
the limitations period to be tolled in cases of fraudulent
concealment." 227 NLRB at 766). See also Pacific Inter-
com Co., supra , 255 NLRB at 185 ; Pullman Building Co.,
251 NLRB 1048 (1980), enfd . mem. 691 F.2d 507 (9th
Cir. 1980).
I have also provided that Barnard/FSI shall be liable,
jointly, and severally , to make whole the trusts estab-
lished in the 1982-1985 and 1985-1988 labor agreements
°8 See , e.g, Kraft Plumbing & Heating, 252 NLRB 891 in. 2 (1980),
enfd. 661 F.2d 940 (9th Cir . 1981).
100 See generally Ogle Protection Service, 183 NLRB 682 (1970).
101 Interest on any make -whole amounts found to be due and owing
here shall be computed in accordance with principles set forth in Florida
Steel Corp, 230 NLRB 651 (1977); see also Isis Plumbing, 138 NLRB 716
(1962).
253
for any losses suffered by those trusts as a consequence
of Barnard 's or FSI 's failure to make payments and con-
tributions for unit employees working within Local 669's
jurisdiction since 1 September 1983.102 I have further
provided that Barnard and/or FSI shall honor and apply
for future purposes to all unit employees working within
Local 669's jurisdiction the terms and provisions of the
1985-1988 labor agreement , until that agreement expires,
or until Local 669 shall have become decertified, as con-
templated in Deklewa . 1 03 I have also provided that FSI
shall offer full reinstatement to Charles Cepeda to the
position he occupied immediately before he was unlaw-
fully discharged , 104 and that Barnard and FSI shall be
jointly and severally liable to Cepeda for backpay, with
interest, 105 for any losses he may have suffered as a
result of his discharge.
[Recommended Order omitted from publication.]
108 The question of possible interest owing by Barnard and/or FSI to
the trusts shall be left to the compliance stage . See generally
Merryweather Optical Co. , 240 NLRB 1213 (1979).
1103 Absent. Local 669 's specific demand , nothing herein is to be con-
strued to operate to deprive any such unit employees of any benefits al-
ready conferred as a consequence of any unilateral departures or changes
made by Barnard and/or FSI from the terms and conditions of unit em-
ployment set forth in either the 1982-1985 or 1985-1988 labor agreements
with Local 669. Bellingham Frozen Foods, 237 NLRB 1450, 1467 fn. 30
(1978), enfd. 626 F .2d 674 (9th Cir 1980), cert . denied 449 US. 1125
(1980). Sed also Alondra Nursing Home & Convalescent Hospital, 242
NLRB 595 fn . 1 (1979), enfd . mem. sub nom. Gardena Buena Ventura Inc.
Y. NLRB, 618 F.2d 115 (9th Cir . 1980); Stewart Granite Enterprises, 255
NLRB 576 (1981).
104 Counsel for Barnard/FSI contend that reinstatement is an inappro-
priate remedy where Cepeda was "unfit" for further employment , relying
on cases in which various courts of appeal have refused to enforce rein-
statement remedies on similar grounds (NLRB v. Western Clinical Labora-
tory, 571 F . 2d 457 (9th Cir . 1978), NLRB Y. Apico Inns of California, 512
F.2d 1171 ). I do not find this case to be comparable to the ones just
cited, for here it is clear that FSI had decided for its own reasons not to
adhere to its warning to Cepeda , made 5 months earlier, that any further
unsatisfactory performance on his part would cause him to go "out the
door"; rather, despite evidence showing that on 10 May , Cepeda had
once again failed to satisfy his current supervisor , FSI managers never-
theless decided to allow him to continue working , and did not change
their mind until Cepeda appeared as a witness for Local 709 in the 16
May arbitration session. And even if the appellate decisions relied on by
Barnard/FSI were on all fours with this one , I am bound to adhere to
Board precedent unless and until that precedent is reversed by the Su-
preme Court. Iowa Beef Packers, 144 NLRB 615 (1963), Waco, Inc., 273
NLRB 746, 749 fn . 14 (1984).
105 F. W. Woolworth Ca, 90 NLRB 289 (1950); see also Florida Steel
Corp., supra; Isis Plumbing, supra