Best Roofing Co., Inc.Download PDFNational Labor Relations Board - Board DecisionsJun 11, 1990298 N.L.R.B. 754 (N.L.R.B. 1990) Copy Citation 754 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Best Roofing Co., Inc . and United Union of Roofers, Waterproofers and Allied Workers, Local No. 20, AFL-CIO Best Roofing Co., Inc . and Belton Roofing and Con- struction Inc., alter ego to or successor of Best Roofing Co ., Inc. and United Union of Roofers Waterproofers and Allied Workers , Local No. 20, AFL-CIO. Cases 17-CA-14094 and 17- CA-14322 June 11, 1990 DECISION AND ORDER BY CHAIRMAN STEPHENS AND MEMBERS CRACRAFT AND DEVANEY On September 21, 1989, Administrative Law Judge David L. Evans issued the attached decision. Respondent Belton Roofing and Construction, Inc. filed exceptions and a supporting brief. The Gener- al Counsel filed a brief in support of the judge's de- cision. 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,I and conclusions2 and to adopt the recommended Order as modified. ORDER The National Labor Relations Board adopts the recommended Order of the administrative law judge 'as modified below and orders that the Re- spondents, Best Roofing Co., Inc., and Belton Roofing and Construction, Inc., Belton, Missouri, their officers, agents, successors, and assigns, shall take the action set forth in the Order as modified. 1. Substitute the following for paragraph 1(a). I We correct the following inadvertent errors in the judge's decision The charge in Case 17-CA-14094 was filed October 31, 1988, not Octo- ber 31, 1989, employee Cox was hired as a preapprentice by Respondent Best Roofing in August 1987 not August 1977 These errors do not affect our decision We also shall modify the recommended Order to include the correct name of Linn County and the corrected spelling of Lafayette County 2 In agreeing with the judge 's conclusion that Respondent Belton Roofing and Construction is the alter ego of Respondent Best Roofing, we note that the Respondents share a common business purpose, common ownership , common employees , common customers, and common equip- ment See generally Crawford Door Sales Co, 226 NLRB 1144 (1976), Kenmore Contracting Co, 289 NLRB 336 (1988). Respondent Belton excepts to the judge 's recommended remedy insofar as it requires the Respondents to make employee Cox whole, contending that Cox has already been made whole as a result of a State of Missouri prevailing wage investigation Belton also excepts to the judge 's descrip- tion of the appropriate unit, asserting that the unit description includes shareholders of the Respondents or their close family members We leave to compliance the extent of Belton's make-whole obligation for employee Cox and whether the remedial order properly includes those individuals who Belton contends should be excluded "(a) Failing or refusing to recognize and bargain collectively and in good faith with United Union of Roofers, Waterproofers and Allied Workers, Local No. 20, AFL-CIO as the exclusive bargaining rep- resentative of the employees in the appropriate unit set out below, and failing or refusing to honor col- lective-bargaining agreements applicable to those employees. The appropriate unit is: All persons employed by Best Roofing Co., Inc., and Belton Roofing and Construction, Inc., who perform work within the craft juris- diction of United Union of Roofers, Water- proofers and Allied Workers, Local No. 20, AFL-CIO, which includes journeymen roof- ers, apprentices, and pre-apprentices within the counties of Anderson, Atchison, Douglas, Franklin, Jefferson, Johnson, Leavenworth, Linn, Miami , and Wyandotte in the State of Kansas and Bates, Benton, Buchanan, Carrol, Cass, Cedar, Chariton, Clay, Henry, Hickory, Jackson, Johnson, Lafayette, Pettis, Platte, Ray, St. Clair, Saline, and Vernon in the State of Missouri; excluding all office clerical em- ployees, professional employees, and guards and supervisors as defined in the Act, and all other employees." 2. Substitute the attached notice for that of the administrative law judge. 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. WE WILL NOT fail or refuse to recognize and bargain collectively and in good faith with United Union of Roofers, Waterproofers and Allied Work- ers, Local No. 20, AFL-CIO, in the following ap- propriate unit, or fail or refuse to honor the collec- tive-bargaining agreements applicable to these em- ployees. The appropriate unit is: All persons employed by Best Roofing Co., Inc., and Belton Roofing and Construction, Inc., who perform work within the craft juris- diction of United Union of Roofers, Water- proofers and Allied Workers, Local No. 20, AFL-CIO, which includes journeymen roof- ers, apprentices, and preapprentices within the counties of Anderson, Atchison, Douglas, Franklin, Jefferson, Johnson, Leavenworth, 298 NLRB No. 106 BEST ROOFING CO. Linn, Miami, and Wyandotte in the State of Kansas and Bates, Benton, Buchanan, Carrol, Cass, Cedar, Chariton, Clay, Henry, Hickory, Jackson, Johnson, Lafayette, Pettis, Platte, Ray, St. Clair, Saline, and Vernon in the State of Missouri; excluding all office clerical em- ployees, professional employees, and guards and supervisors as defined in the Act, and all other employees. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exer- cise of the rights guaranteed you by Section 7 of the Act. WE WILL maintain and give full effect to the 1986-1989 collective-bargaining agreement, as ex- tended, between United Union of Roofers, Water- proofers and Allied Workers, Local No. 20, AFL- CIO, and Best Roofing Co., Inc., and Belton Roof- ing and Construction, Inc., retroactive to May 1, 1988, with interest, including but not limited to: (1) Making whole all unit employees for any loss of wages and benefits they may have in- curred since May 1, 1988, because of our fail- ure to apply or maintain the established terms and conditions of such agreements. (2) To the extent that we have not already done so, making required payments to the var- ious trust funds established by the collective- bargaining agreements. . (3) Reimbursing our employees for any actual expenses they incurred that ensue from our failure to make such contributions. BEST ROOFING CO., INC. AND BELTON ROOFING AND CONSTRUC- TION, INC., ALTER EGOS Stephen E. Wamser, Esq., for the General Counsel. Charles C. Curry, Esq., of Grandview, Missouri, for the Respondents. DECISION DAVID L. EVANS, Administrative Law Judge. This matter under the National Labor Relations Act (the Act) was tried before me on July 12, 1989, in Mission, Kansas. The charge in Case 17-CA-14094 was filed against Best Roofing Co., Inc. (Respondent Best or Best) by United Union of Roofers, Waterproofers and Allied Workers, Local No. 20, AFL-CIO (the Union) on October 31, 1989. The charge in Case 17-CA-14322 was filed against Best, naming as its alter ego Belton Roofing and Con- struction, Inc. (Respondent Belton or Belton), by the Union on March 24, 1989. An order consolidating cases, consolidated complaint and notice of hearing (the com- 755 plaint) issued on May 5, 1989.1 Respondents duly filed answers admitting jurisdiction of Best but denying juris- dictional facts regarding Belton and the alleged alter ego status of Best and Belton, and denying the commission of any unfair labor practices. On the entire record, and my observation of the de- meanor of the witnesses, and after considering the briefs filed by the parties, I make the following FINDINGS OF FACT L JURISDICTION Best and Belton are corporations engaged in the con- struction industry as roofing contractors, although, since on or about January 1, Best has accepted no new busi- ness and has generally performed only guarantee work. Both utilize an office in Belton, Missouri. During the year preceding issuance of the complaint, Best, in the course and conduct of its operations in the Belton, Mis- souri area, purchased and received products, goods, and materials valued in excess of $50,000 directly from sup- pliers located at points outside Missouri. As Best admits, I find and conclude that Best is an employer engaged in an industry affecting commerce within the meaning of Section 2(6) and (7) of the Act. Belton also admits that it is an employer within the meaning of the Act; however, it denies allegations of specific facts of its commerce. In view of its admission, and my finding herein that Belton is an alter ego of Best, I further find and conclude that Belton is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. Respondents admit, and I further find and conclude, that the Union is a labor organization within the meaning of Section 2(5) of the Act. II. THE ALLEGED UNFAIR LABOR PRACTICES A. Facts Before it was incorporated, Best was owned by John and Susan Krum as individuals. On November 28, 1984, the Krums signed with the Union a construction industry agreement under Section 8(f) of the Act.2 Best was in- corporated on September 30, 1985; its articles of incorpo- ration list Susan Krum as the sole incorporator. Susan and John Krum are the only corporate officers of Best, its only shareholders, and its board of directors. On June 1, 1986, Susan Krum, as "owner," signed a second contact with the Union; it specifies: It is mutually agreed that this Agreement shall become effective June 1, 1986 and extend to May 31, 1989, and continue from year to year for succes- sive yearly periods, unless notice is given in writing by the Union or the Roofing Contractorss to the i All dates are between October 1, 1988, and May 5, 1989, unless oth- erwise indicated. z The admitted unit is set out below. a The term "roofing contractors" is defined in the preamble to the con- tact as members of Associated Roofing Contractors of Greater Kansas City, Inc, and any other roofing contractor who executes the agreement (such as Best). 756 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD other party not less than sixty (60) days prior to May 31, 1989, or to the expiration of any such annual period, of its desire to modify, amend, or ter- minate this Agreement. The complaint alleges that this contract between Best and the Union is a construction industry contract which established the Union as the majority representative of Best's construction employees within the meaning of Section 8(f) of the Act, and further alleges that said ma- jority status continued, pursuant to the above-quoted sec- tion, for a period of 1 year after May 31, 1989. At the hearing, Best admitted these allegations; Belton denied them. However, in the brief submitted on behalf of both Respondents, page 3, it is stated: Respondents contend that the collective bargain- ing agreement previously existing between Best and Local 20 has been repudiated by Respondents and that said agreement has not continued in effect since its expiration date of May 31, 1989. Best has not formally moved to amend its answer, but, in view of the results herein, this statement will be treated as such a motion, and the motion is granted. In 1988, Best began running into financial trouble. The complaint alleges that beginning May 1, 1988, both Re- spondents refused to adhere to and abide by the terms and conditions of employment set forth in the 1986 agreement by: (i) failing to make payments into the Union's health and welfare fund, pension funds, and appren- ticeship training program, (ii) failing to remit vacation pay withheld from unit employees' wages to the vacation-savings plan, and (iii) making unilateral changes in wages. (Belton was not created until 1989; therefore, the allega- tions of its conduct dating back to mid-1988 necessarily apply to it only as it became the alter ego of Best.) Best formally admits these allegations; Belton denies them. The parties stipulated that, pursuant to a settlement agreement which has subsequently been revoked by the Regional Director, Best has (belatedly) paid to the Union the moneys sought in (i) and (ii), but has not paid any backpay due to employees due as a remedy for (iii). (As detailed herein, Best ceased employing employees in Jan- uary and Belton began employing employees in March; obviously, the stipulation as to (i) and (ii) was intended to apply to fund contributions required of Best up until that point at which it ceased to employ employees, but not any that would be required of it as the alter ego of Belton.) Before the alter ego allegations are addressed, there is first (at least chronologically) an allegation that during the summer of 1988 John Krum bypassed the Union and bargained with an employee directly on the subject of wages. In support of this allegation the General Counsel called Jeff Cox to testify. Cox testified that he began working as a preapprentice for Best in August 1977. (Preapprentices have a lower wage rate under the Union's contracts than apprentices; apprentices have a lower wage rate than journeymen; the use of preappren- tices and apprentices is permitted under the contracts only in specified ratios to the number of journeymen em- ployed.) Cox testified that before work began on a school construction job in the summer of 1988, John Krum called him to the office of Best which was located at the Krum home. Krum told Cox that he could not employ Cox on the school job at the journeyman rate of $17.08 and asked Cox if he would work for $10. (Cox had been paid $9 on his previous job for Best.) Cox agreed to the $10 rate and began working. Further according to Cox, in August Krum again asked Cox to come to the office. Cox testified: So I came to his house, and he-we went in, inside the office, and he said he was going to have to figure out a way to keep me at $10.00 an hour and make it look like he's paying me $17.08 an hour .... Well, we sat down for about two hours and we figured out a way . . . . [T]hey would make out two checks and one check would be like 20 hours, something like 20 hours at $17.08 an hour and the other check would be for-at $9.00 an hour, you know, 17, 18 hours, and then I would sign that check and then turn it around and give it back to him. Cox testified that this procedure was followed through the end of the job, which was in September. John Krum was called to testify for Respondent. He admitted that Cox was given two checks for the period of time in question, but he claimed that this was to cover different jobs upon which Cox was working at different rates. Krum further acknowledged that Cox endorsed back to Respondent the lesser of the two checks for each such pay period; however, Krum further testified that Cox insisted that he not be paid full journeyman wages because he was not worth it. Cox denied that endorsing back the checks was his idea. Respondent had the records which would have shown any legitimate reason for the two-check payment system to Cox, if there had been any such reason. Respondent did not produce any such records, and I draw an adverse inference from its failure to do so. Additionally, I found Cox more credible than Krum, and I credit Cox's testi- mony as quoted above. In early October, the Union struck Best. At the initia- tive of John Krum, the Krums met with Union Business Manager Joseph Wiederkehr and Financial Secretary- Treasurer Carl Keeton on October 14. Wiederkehr and Keeton testified that John Krum asked to be "let out" of the then current contract, but Wiederkehr refused. John Krum testified that upon this refusal I told them that I could not re-sign up for the rest year at the end of the contract. I'm done, because I will try to go ahead and fulfill the finish [sic] part of it, but I cannot re-sign , and they said, well, that's my prerogative. BEST ROOFING CO. Neither Wiederkehr nor Keeton was recalled by the General Counsel to deny this testimony, and I credit the quoted passage of Krum's testimony. It is undisputed that Best gave no written notice of termination of the 1986-1989 contract. Best continued to operate throughout the fall of 1988 by generally ignoring the 1986-1989 contract. Since about January 1, Best has written no new con- tracts and has hired no new employees; however, it has not been dissolved as a business entity, and it still exists. In 1988, Best had four or five contracts with Carlson Construction Company as a subcontractor for placing roofs on restaurants for the McDonald Corporation. On January 11, John Krum executed another subcontract with Carlson for a McDonald's roof in Lee's Summit, Missouri. The contract recites that the subcontractor is: Belton Roofing (John Krum) 331-8117 7103 E. 159th St. Belton, MO 64012 The address and telephone number was the same as the office and telephone number at the Krum's home. At the signature line, John Krum signed as "salesman ." Beneath that line is the instruction: Check one: President-- Owner Part- ner None of the blanks is checked. Krum testified that the contract was performed "after February" by Belton. On February 2, Belton was incorporated by Mrs. Krum. She and John Krum served as the initial board of directors. At some point the Krum's sons, 20 year old Michael and 18 year old Matthew, became the sole shareholders and president and vice president, respec- tively, of Belton. Michael is a full-time college student and lives at home; Matthew lives elsewhere. Matthew's girlfriend is the corporate secretary of Belton. None of these three individuals was called to testify. In March, Belton began operating out of the office Best had used in the Krum home. There has been no charge for the use of the space by Belton. Belton uses the same desk, chairs, and filing cabinets that Best used; there was no sale of this equipment by Best to Belton, and there has been no charge for its use. John Krum tes- tified that trucks used by Best were, and continued to be, titled in his name, but Best had sold them to Belton; they are to be retitled when his sons, on behalf of Belton, pay off the liens on the trucks. Other objects such as wheel- barrows, a kettle, and a roll carrier were sold to Belton by Best, but John Krum could not remember the amounts; there was no written contract of sale. On the contracts performed by Belton since March, all employees, save one, previously worked for Best. The wages paid by Belton have been the same as were paid to them by Best. Belton meets its payroll and other obligations through moneys supplied by John Krum; Krum testified that, until his sons can meet a payroll, he secures the money by drawing on a personal line of credit; he loans the 757 money to his sons, at no interest, and expects to be paid back when Belton becomes a going concern. John Krum supervises the Belton jobs; he is paid noth- ing on a regular basis; he hopes to be paid for his serv- ices, again, when Belton can afford to do so. John Krum testified that he stands behind the work done by Best before February, and sees to it that any warranty work is performed. If a former customer of Best dials Best's old number, the Belton phone rings on another line coming to that telephone. Mrs. Krum assists Belton on its payroll and other bookwork, as she did for Best, although some of these duties are progressively being handed over to Matthew's girlfriend. B. Conclusions As Best admits, it refused to apply its contract with the Union since mid-1988. While it has paid back the funds due to the Union pursuant to a settlement agree- ment in a prior case, it has not paid its employees back- pay. Best's failures to apply the contract for both the fund payments and the wages due the employees were violations of Section 8(a)(5), as I find and conclude. Having credited the testimony of employee Cox, it is clear that Best dealt directly with an employee on the subject of wages in further violation of Section 8(a)(5), as I further find and conclude. According to this record, the Krums' sons, who did not testify, do not do much of anything for Belton except perform labor under the supervision of John Krum or other former supervisors of Best.4 John Krum signs contracts for Belton (albeit nominally as "salesman" where contractual forms make it clear that customers be- lieve they are dealing with someone on the level of a firm's president, owner, or partner); he provides financ- ing of its operations; he provides equipment used by Belton; and there is no evidence that any of this is done in consultation with, much less at arm's length with, his sons who are the putative heads of Belton. In these circumstances, it can only be held that Belton was created as a sham. Belton was an artifice created to avoid Best's contractual obligations to its employees and the Union and, at minimum, it must be concluded that Belton and Best are alter egos, as I further find and con- clude.5 As neither Best nor Belton gave written notice to ter- minate the 1986 contract with the Union, that contract has continued in force and effect by virtue of the "roll over" clause contained therein and quoted above.6 Ac- cordingly, the continued failure of Best and Belton to apply the contract to the employment of the unit em- ployees further violates Section 8(a)(5) of the Act, as I further find and conclude. ' And Michael only performs such labor when he has time off from school Kenmore Contracting Co, 289 NLRB 336 (1988) 6 Northern Illinois Terrazzo Co, 290 NLRB 36 (1988) 758 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD REMEDY Having found that Best and Belton unlawfully failed to apply the terms of the collective -bargaining agreements between Best and the Union to their roofing employees, I shall recommend that they be ordered to cease and desist from such actions and , retroactive to May 1, 1988,7 that they maintain and give full force and effect to the 1986-1989 contract , as extended to May 31, 1990, and thereafter for yearly periods if no effective notice of termination is given. Best and Belton will be required to take the actions necessary to fulfill their contractual obli- gations, including but not limited to: (1) reimbursing their former and current employees for any loss of wages and benefits they may have incurred since May 1, 1988, because of the Respondents ' failure to apply the estab- lished terms and conditions of the agreement ,8 with in- terest;9 (2) making all required payments to the various trust funds established by the collective -bargaining agree- ments;l0 (3) reimbursing their employees for actual costs they incurred (such as payments to health care providers and to third-party insurers) by reason of the Respond- ents' failure to make required contributions to agreed-on health care and insurance plans, with interest ." Addi- tionally, in view of the nature of employment in the con- struction industry, as well as the fact that Respondents operate out of the Krums' home, posting notices to em- ployees at Respondents ' place of business is inadequate to inform the Respondents ' present and former employees of their rights under this decision . Therefore, Respond- ents' shall be ordered to post the attached notice at their place of business , and further ordered to post copies of the notice at their jobsites , and further ordered to furnish signed copies of the notice to the Union for posting at the Union 's office and meeting places.12 On these findings of fact and conclusions of law and on the entire record, I issue the following recommend- ed13 ORDER The Respondents , Best Roofing Co., Inc., and Belton Roofing , and Construction , Inc., Belton , Missouri, their officers , agents, successors , and assigns, shall 1. Cease and desist from (a) Failing or refusing to recognize and bargain collec- tively in good faith with United Union of Roofers, Wa- terproofers and Allied Workers, Local No. 20, AFL- CIO, as the exclusive bargaining representative of the employees in the appropriate unit set out below, and fail- 7 This is the 10(b) date of the original charge in Case 17-CA-14094, of which Belton admits knowledge as of the time it began operations 8 This would include the amounts due Cox that would remedy Best's individual bargaining found violative herein 9 See New Horizons for the Retarded , 283 NLRB 1173 (1987) 10 Interest , if any , on trust fund contributions shall be determined at the compliance stage of this proceeding in the manner set forth in Merryweather Optical Co , 240 NLRB 1213 (1979) 1 See fn 9, supra 12 See generally Apex Decorating Co, 275 NLRB 1459 (1985) 13 If no exceptions are filed as provided by Sec 102.46 of the Board's Rules and Regulations , the findings , conclusions, and recommended Order shall, as provided in Sec 102 48 of the Rules, be adopted by the Board and all objections to them shall be deemed waived for all pur- poses ing or refusing to honor collective -bargaining agreements applicable to those employees . The appropriate unit 'is: All persons employed by Best Roofing Co ., Inc., and Belton Roofing and Construction , Inc., who perform work within the craft jurisdiction of United Union of Roofers, Waterproofers and Allied Work- ers, Local No. 20, AFL-CIO, which includes jour- neymen roofers, apprentices, and pre-apprentices within the counties of Anderson , Atchison, Doug- las, Franklin, Jefferson , Johnson , Leavenworth, Lima, Miami , and Wyandotte in the State of Kansas and Bates , Benton, Buchanan , Carrol , Cass, Cedar, Chariton , Clay, Henry , Hickory, Jackson , Johnson, Layfayette , Pettis, Platte, Ray, St. Clair , Saline, and Vernon in the State of Missouri ; excluding all office clerical employees , professional employees, and guards and supervisors as defined in the Act, and all other employees. (b) In any like or related manner interfering with, re- straining , or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action necessary to effectuate the policies of the Act. (a) Maintain and give full effect to the 1986-1989 col- lective-bargaining agreement , as extended , between United Union of Roofers , Waterproofers and Allied Workers, Local No. 20, AFL-CIO, and Respondents, retroactive to May 1, 1988, including but not limited to: (1) making whole all unit employees for any loss of wages and benefits they may have incurred since May 1, 1988, because of Respondents ' failure to apply or main- tain the established terms and conditions of such agree- ments; (2) to the extent they have not already done so, making required payments to the various trust funds es- tablished by the collective -bargaining agreements; and (3) reimbursing their employees for any actual expenses they incurred which ensue from the Respondents ' failure to make such contributions ; all as set forth in the remedy section of this decision. (b) Preserve and, on request, make available to the Board or its agents for examination and copying , all pay- roll records , social security payment records , timecards, personnel records and reports, and all other records nec- essary to analyze the amount of backpay due under the terms of this Order. (c) Post at their place of business in Belton, Missouri, and at each of their jobsites copies of the attached notice marked "Appendix." 14 Copies of the notice , on forms provided by the Regional Director for Region 17, after being signed by the Respondents ' authorized representa- tive, shall be posted by the Respondents immediately upon receipt and maintained for 60 consecutive days in conspicuous places including all places where notices to employees are customarily posted. Reasonable steps shall 14 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 " BEST ROOFING CO. 759 be taken by the Respondents to ensure that the notices ing, at its office and meeting halls, including all places are not altered, defaced, or covered by any other materi- where notices to employees are customarily posted. al. (e) Notify the Regional Director in writing within 20 (d) Sign and return to the Regional Director sufficient days from the date of this Order what steps the Re- copies of the notice for posting by the Union, if it is will- spondents have taken to comply. Copy with citationCopy as parenthetical citation