Big D Service Co/H Vac Inc.

National Labor Relations Board - Board Decisions

Mar 20, 1989

293 N.L.R.B. 322 (N.L.R.B. 1989)

322 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Big D Service Co /H Vac Incorporated and Sheet
Metal Workers International Association, Local
No 9, AFL-CIO Case 27-CA-8076
March 20, 1989
SUPPLEMENTAL DECISION AND
ORDER AND ORDER REMANDING
By CHAIRMAN STEPHENS AND MEMBERS
JOHANSEN AND CRACRAFT
On August 10, 1983, the National Labor Rela-
tions Board issued its Decision and Order in this
proceeding' in which it ordered, inter alia, that the
Respondent, Big D Service Co (Big D), its offi
cers, agents , successors, and assigns , make its em
ployees whole for any loss of wages or other bene-
fits they may have suffered as a result of the Re-
spondent's unfair labor practices, and to make pay
ments on behalf of those employees to the various
trust funds,2 as provided by the May 1, 1980,
through June 30, 1983 collective-bargaining agree
ment between the Colorado Association of Sheet
Metal and Air Conditioning Contractors and Sheet
Metal Workers International Association, Local 9,
AFL-CIO On November 28, 1982, the United
States Court of Appeals of the Tenth Circuit en-
tered its judgment enforcing the Board's Order 3
On May 13, 1985, the Regional Director for
Region 27 issued a backpay specification and notice
of hearing alleging, inter alia , that a controversy
had arisen over the amount of backpay owed under
the terms of the Board's Order and notified the Re-
spondent that it must file a timely answer comply
ing with the Board's Rules and Regulations The
specification also alleged, for the first time, that the
Respondent had an alter ego H-Vac Inc (H Vac),
which was jointly and severally liable for the
unfair labor practices committed by the Respond-
ent In its answer to the specification, H-Vac
denied, inter alia , that it was Big D's alter ego
Big D apparently also filed an answer, which is not
in the record, but it withdrew this answer on Janu
ary 19, 1988
On February 22, 1988, the General Counsel filed
with the Board a Motion for Summary Judgment,
with attachments The General Counsel submits
that the Respondent has failed to file an answer to
the backpay specification as required by the
1 267 NLRB No 25 (1983) (not reported in Board volumes)
2 These include the vacation plan local pension plan national pension
plan health and welfare plan apprenticeship and training fund and the
National Stabilization Agreement of Sheet Metal Industry (SASMI)
3 No 83-2305 unpublished
* The General Counsels Motion for Summary Judgment does not
make reference to or include this answer The formal papers submitted
with the motion however contain an answer from H Vac to the backpay
specification
Board's Rules and Regulations The General Coun-
sel further submits that a Federal district court
found Big D and H Vac to be alter egos and, thus,
the Board is bound by the principles of collateral
estoppel to accept the finding as being determina
tive of the alter ego issue in this case The General
Counsel therefore request, based on the backpay
specification, the Respondent's failure to answer it,
and the decision and order of the district court, as
explained below, that the Board find that Big D
and H-Vac `are alter egos equally responsible,
inter alia, for contributions to various trust funds of
the union"5 and that the Board issue an order find
ing all allegations in the backpay specification to be
true
On February 25, 1988, the Board issued an order
transferring this proceeding to the Board and a
Notice to Show Cause why the General Counsel's
Motion for Summary Judgment should not be
granted On March 28, 1988, H Vac filed a re
sponse to the Notice to Show Cause
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three
member panel
Ruling on the Motion for Summary Judgment
At the time of the issuance of the backpay speci
fication, Section 102 54 of the Board's Rules and
Regulations provided that if an answer is not filed
within 15 days from service of the backpay specifi-
cation, the Board may find the backpay specifica
tion to be true 6
The backpay specification states that the Re-
spondent shall file an answer within 15 days from
the date of the specification, and that if the answer
fails to deny the specifications allegations in the
manner required under the Board's Rules and Reg-
ulations, and the failure to do so is not adequately
explained, the allegations shall be deemed to be
true
On January 19, 1988, Respondent Big D with-
drew its answer to the backpay specification To
date, Respondent Big D has not filed another
answer or offered any explanation for its failure to
6 In addition to seeking reimbursement to the trust benefit funds identi
fled in fn 2 supra the specification also seeks backpay for one former
employee
6 We note that Sec 102 54 of the Board s Rules and Regulations was
amended effective September 29 1986 to provide a 21 day period for
filing an answer This amendment however was not applicable to Re
spondent Big D Moreover Respondent Big D withdrew its previously
filed answer and has not filed another answer to date
We also note that the Board amended its rules governing proceedings
concerning compliance with Agency orders effective November 13 1988
The substance of former Secs 102 54 and 102 55 has been incorporated
into Sec 102 56 as revised and former Sec 102 56 with some modifies
tion has become the new Sec 102 57 while the substance of former Sec
102 57 has become par (c) of the new Sec 102 55 in the revised rules
293 NLRB No 35
BIG D SERVICE CO
do so Nor has Respondent Big D filed a response
to the Notice to Show Cause
On March 28, 1988, however, H Vac responded
to the Notice to Show Cause In its response, H-
Vac asserts, as it had in its answer, that it is not the
alter ego of the Respondent and also that the deci
sion of the district court relied on by the General
Counsel does not collaterally estop the Board from
determining the extent of liability, if any, of H-Vac
Under the doctrine of collateral estoppel relied
on by the General Counsel, once an issue is actual-
ly and necessarily determined by a court of compe-
tent jurisdiction, that determination is conclusive in
subsequent suits based on a different cause of
action involving a party to the prior litigation
Marlene Industries Corp v NLRB, 712 F 2d 1011,
1015-1016 (6th Cir 1983), Parklane Hosiery Co v
Shore, 439 U S 322, 326 fn 5 (1979) Such an issue
is "necessarily determined" if its decision was nec-
essary to support the judgment entered in the prior
proceeding Marlene Industries, supra at 1015 A
review of the district court proceedings on which
the General Counsel relies to support her theory of
collateral estoppel reveals that the alter ego rela-
tionship between Big D and H-Vac was not "nec
essarily determined" by the court
Concurrently with the processing of the instant
case, the Sheet Metal Workers trust funds and
other trust funds filed a garnishment action against
Big D and H Vac in the United States District
Court for the District of Colorado seeking money
owed various trust funds pursuant to the above
stated collective-bargaining agreement The district
court action also alleged that H-Vac was the alter
ego of Big D and was thus liable for Big D's ac
tions The backpay hearing in the instant case was
postponed indefinitely pending issuance of the
court s decision and order
On August 4, 1986, a United States magistrate's
recommendation was issued in which the magis
trate conclude that Big D and H-Vac were alter
egos, would be treated as "synonymous terms and
entities," and that H Vac was liable as a successor
to Big D On April 15, 1987, the district court re-
viewed the magistrates recommendation and issued
a memorandum opinion and order in the case A
supplemental order was issued by the court on Sep-
tember 4, 1987 Based on extensive testimony, doc-
umentary evidence, and written arguments by the
parties, the court concluded that H-Vac is liable to
Big D under a successor corporate liability theory,
that there was merely a switch of names from Big
D to H-Vac, and that Big D and H-Vac should be
treated as the same entity
Based on these court proceedings, we find that
the district court relied explicitly on a successor
323
ship theory in holding H Vac liable to Big D Al
though the court clearly had before it the magis
trate's recommendation that Big D and H Vac be
found to be alter egos, it did not address that rec
ommendation Its general findings that there was a
switch of names and that the two companies be
treated as the same entity were made wholly in
connection with its successorship determination
and therefore fall short of reaching the magistrate's
alter ego recommendation Because established
Board law holds that the basis for a successorship
finding may exist where no alter ego theory is sup-
portable,7 the grounds of the court's successorship
finding and the finding itself do not resolve the
alter ego issue in the present case We therefore
reject the General Counsel's assertion that the doc-
trine of collateral estoppel applies to the backpay
specification's allegation that Big D and H-Vac are
alter egos 8 Accordingly, we deny the General
Counsel's Motion for Summary Judgment with
regard to H-Vac and shall order a hearing limited
to the determination of the issue of the alter ego
status of Big D and H Vac
However, as the Respondent, Big D, has failed
to file an answer to the backpay specification, we
deem those allegations to be true and grant the
General Counsel's Motion for Summary Judgment
with regard to Big D Accordingly, on the basis of
the allegations of the specification, the Board finds
the facts as set forth there with regard to Big D's
backpay obligations, conclude that the contribu-
tions owed to the various trust funds and to the
employee named below are as stated in the compu
tations of the specification, and orders that pay-
ment be made by Respondent Big D as set forth
below
ORDER
It is ordered that the Respondent, Big D Serv-
ices Co, Denver, Colorado, its officers, agents,
successors, and assigns, shall pay net backpay to
Bill Leech in the sum of $1602, with interest, less
tax withholdings required by Federal or state law,
and shall pay the following fringe benefit trust
funds the specified amounts owed on behalf of the
employees listed below
' See Superior Export Packing Co 284 NLRB 1169 (1987) in which
the Board found that two corporations were not alter egos but that one
was a legal successor to the other
8 Member Johansen would in any event find it inappropriate for the
Board to defer on an issue within the Board s primary jurisdiction which
should be decided by the Board in the first instance See Great Lakes
Chemical Corp 280 NLRB 1131 ( 1986) on remand of 746 F 2d 334 (6th
Cir 1984) citing Computer Sciences Corp v NLRB 677 F 2d 804 at 807
(11th Cir 1982)
324 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Clarence
Coleman
Bill Leech QuintonMaxwell
IT IS FURTHER ORDERED that this proceeding is
remanded to the Regional Director for Region 27
for the purpose of arranging a hearing before an
administrative law judge , limiting the proceeding
to a determination of whether H-Vac, Inc is the
alter ego of Big D Service Co , and thus liable for
the backpay awards ordered here
IT IS FURTHER ORDERED that the judge shall pre-
pare and serve on the parties a decision containing
findings , conclusions , and recommendations based
on all the record evidence Following the service
of the judge 's decision on the parties , the provi
sions of Section 102 46 of the Board's Rules and
Regulations shall apply
Vacation $ 1 813 90
Health and Welfare 2 090 11
Local Pension 3 474 46
National Pension 26003
Apprenticeship and
Training 349 33
SASMI 1 243 13
$20240 $1 662 10
182 16 2089 16
333 96 3 540 68
22 26 259 18
31 28 350 70
113 34 125344
IT IS FURTHER ORDERED that the General Coun
sel's Motion for Summary Judgment against Re-
spondent H-Vac , Inc is denied