Contee Sand And Gravel Co

National Labor Relations Board - Board Decisions

Feb 28, 1985

274 N.L.R.B. 574 (N.L.R.B. 1985)

574 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Contee Sand and Gravel Company, Inc. and Its Alter
Egos Calan Concrete Corp . and Tycon , Inc. and
Drivers, Chauffeurs , and Helpers Local Union
No. 639 , affiliated with International Brother-
hood of Teamsters , Chauffeurs, Warehousemen
and Helpers of America
Tycon, Inc. and Drivers, Chauffeurs , and Helpers
Local Union No . 639, affiliated with Interna-
tional Brotherhood of Teamsters , Chauffeurs,
Warehousemen and Helpers of America
Contee Sand and Gravel Company, Inc. and Drivers,
Chauffeurs, and Helpers Local Union No. 639,
affiliated with International Brotherhood of
Teamsters , Chauffeurs , Warehousemen and
Helpers of America
Calan Concrete Corp . and Drivers , Chauffeurs, and
Helpers Local Union No . 639, affiliated with
International Brotherhood of Teamsters , Chauf-
feurs, Warehousemen and Helpers of America.
Cases 5-CA-13661, 5-CA-13722, 5-CA-
13971, 5-CA-14254-1, 5-CA-14254-2, and 5-
CA-14254-3
28 February 1985
DECISION AND ORDER
BY CHAIRMAN DOTSON AND MEMBERS
HUNTER AND DENNIS
On 7 May 1984 Administrative Law Judge
James M. Fitzpatrick issued the attached decision.
The General Counsel filed exceptions and a sup-
porting brief.
The Board has considered the decision and the
record in light of the exceptions and brief and has
decided to affirm the judge's rulings, ' findings, and
' We agree with the judge's ruling, for the reasons stated by him, to
exclude the General Counsel 's evidence regarding alleged collective-bar-
gaining agreements which the Respondents allegedly refused to execute
in violation of Sec 8 (a)(5) and ( I) of the Act In response to our col-
league's partial dissent , we note that the alleged unfair labor practices
which the parties were attempting to settle during September and Octo-
ber 1981 involved , inter alia , the Respondents ' failure to abide by Re-
spondent Contee's collective -bargaining agreement with the Union Ac-
cording to the General Counsel's offer of proof, an understanding was
reached at those settlement negotiations that the Respondents would exe-
cute new collective -bargaining agreements with the Union Moreover,
those alleged new agreements were purportedly appended to the "Re-
lease and Settlement Agreement" subsequently prepared by the Union
As the General Counsel has acknowledged, the complaint allegation that
the Respondents violated Sec . 8(a)(5) by refusing to sign the alleged new
collective -bargaining agreements necessarily involves consideration of
conduct or statements made during the settlement negotiations The Gen-
eral Counsel argues, however , and the dissent agrees, that the evidence
deemed inadmissible by the judge "was not offered to prove the validity
of a claim which was being discussed during these negotiations, but
rather was offered 'for another purpose To the contrary, we find that
the alleged new collective -bargaining agreements were so closely inter-
twined with the unfair labor practices then under discussion that they
cannot be separated therefrom We further note that Rule 408 of the Fed-
eral Rules of Evidence specifically states, "Evidence of conduct or state-
ments made in compromise negotiations is likewise not admissible " (Em-
phasis added) Thus, where, as here, the alleged unfair labor practice can
be proven only with evidence that otherwise is inadmissible under Rule
408, we do not agree with the dissent that the "for another purpose" ex-
conclusions2 and to adopt the recommended Order
as modified.3
ORDER
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge as modified and set forth in full below and
orders that the Respondents, Contee Sand and
Gravel Company, Inc., Laurel, Maryland; Calan
Concrete Corp., Kensington and Beltsville, Mary-
land; Tycon, Inc., Beltsville, Maryland, their offi-
cers, agents, successors, and assigns, shall
1. Cease and desist from
(a) Failing or refusing to bargain with Drivers,
Chauffeurs and Helpers Local Union No. 639, af-
filiated with International Brotherhood of Team-
sters, Chauffeurs, Warehousemen and Helpers of
America, as the exclusive collective-bargaining rep-
resentative of the Respondent's employees in the
bargaining unit described below, by failing or re-
fusing to abide by the terms of the collective-bar-
gaining agreement effective 16 May 1979 through
15 May 1982 between Contee Sand and Gravel
Company, Inc. and the Union. The appropriate
bargaining unit is:
All ready-mix truck drivers, ready-mix me-
chanics, ready-mix mechanics' helpers and
partsmen, yard helpers, dump truck drivers,
tractor-trailer truck drivers, dump truck and
tractor-trailer mechanics, and mechanics' help-
ers employed by Respondents Contee Sand
ception to Rule 408 encompasses the exception sought by the General
Counsel here
2 In adopting the judge's conclusions , we note that no exceptions were
filed to the 8(a)(5) and (1) violations found by the judge, and that the
General Counsel filed exceptions limited to the judge's exclusion of cer-
tain evidence , referred to above in fn 1, regarding alleged agreements
which the Respondents refused to execute and his failure to find an addi-
tional violation of Sec 8(a)(5) based thereon
s The judge 's recommended Order requires the Respondents to cease
and desist from failing or refusing to recognize and bargain with the
Union and further includes a corresponding affirmative order provision
We note, however , that the consolidated complaint did not allege-and
the judge did not specifically find-that the Respondents generally re-
fused to recognize and bargain with the Union Accordingly, we shall
modify the Order and notice to conform to the actual violations found
Additionally, because it appears that the Respondents are no longer ac-
tively engaged in operations , we shall order the Respondents to mail to
the Union and to each of the employees employed on the dates the Re-
spondents ceased operations copies of the attached notice signed by the
Respondents We also note , in clarification of the judge's remedy, that
backpay is to be computed in a manner consistent with Board policy as
set forth in Ogle Protection Service, 183 NLRB 682 (1970).
Chairman Dotson and Member Dennis , as indicated in her partial dis-
sent, shall modify the judge's Order, consistent with the Supreme Court's
opinion in NLRB v Bildisco & Bildisco, 104 S Ct 1188 (1984), to provide
that the Respondents' liability under the order provisions shall terminate
on 24 August 1982, the date Respondent Contee filed its Chapter 7 peti-
tion in bankruptcy See Edward Cooper Painting, 273 NLRB 1768 (1985)
Member Hunter, for the reasons set forth in his dissent in Edward Cooper
Painting, disagrees with terminating the remedy as of 24 August 1982 be-
cause all of the violations found herein preceded the filing of the bank-
ruptcy petition
274 NLRB No. 82
CONTEE SAND & GRAVEL CO 575
and Gravel Company, Inc., Calan Concrete
Corp., and Tycon, Inc., excluding dispatchers,
supervisory and managerial personnel, owner-
operators, employees of owner-operators, inde-
pendent contractors and employees of inde-
pendent contractors.
(b) Unilaterally altering the terms and conditions
of employment of employees in the above-de-
scribed bargaining unit without notice to, or con-
sultation with, the Union.
(c) Failing or refusing to furnish the Union with
information it requests which is relevant to its
function ^ as representative of employees in the
above-described bargaining unit.
(d) In any like or related manner interfering
with, restraining, or coercing employees in the ex-
ercise of the rights guaranteed them by Section 7
of the Act.
2. Take the following affirmative action which
will effectuate the policies of the Act.
(a) Abide by the terms of the collective-bargain-
ing agreement effective 16 May 1979 through 15
May 1982 between the Union and Contee Sand and
Gravel Company, Inc., except that the Respond-
ents' liability under this provision shall terminate as
of 24 August 1982, the date Contee filed its petition
in bankruptcy.
(b) Make whole the employees in the above-de-
scribed bargaining unit for any loss of pay or bene-
fits suffered by reason of the unfair labor practices
found herein, and make whole the Teamsters
Health and Welfare and Pension Funds for contri-
butions which have not been paid for the benefit of
those employees in the manner described in the
section of the judge's decision entitled "Remedy,"
except that the Respondents' liability under this
provision shall terminate as of 24 August 1982, the
date Contee filed its petition in bankruptcy.
(c) On request by the Union, furnish it informa-
tion relevant to the performance of its obligations
as bargaining representative of employees in the
above-described bargaining unit.
(d) 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 and reports,
and all other records necessary to analyze the
amount of backpay and benefit fund contributions
due under the terms of this Order.
(e) Mail a copy of the attached notice marked
"Appendix"4 to the Union and to all employees
4 If this Order is enforced by a Judgment of a United States Court of
Appeals, the words in the notice reading "Posted by Order of the Na-
tional Labor Relations Board" shall read "Posted Pursuant to a Judgment
of the United States Court of Appeals Enforcing an Order of the Nation-
al Labor Relations Board "
who were employed by the Respondents immedi-
ately prior to their cessation of operations. Such
notice shall be mailed to the last known address of
each employee. Copies of the notice, on forms pro-
vided by the Regional Director for Region 5, after
being signed by the Respondents' authorized repre-
sentative, shall be mailed immediately upon receipt,
as directed above.
(f) Notify the Regional Director in writing
within 20 days from the date of this Order what
steps the Respondent has taken to comply.
IT IS FURTHER ORDERED that the complaint be
dismissed insofar as it alleges violations not specifi-
cally found herein.
MEMBER DENNIS, dissenting in part.
Contrary to my colleagues, I would reverse the
judge's ruling excluding certain evidence that the
General Counsel offered. The General Counsel
sought to prove that the Respondents refused to
execute a collective-bargaining agreement and a re-
lease the parties had agreed on during settlement
negotiations. I would find the General Counsel's
evidence admissible, and I would remand this case
to the judge to take evidence about whether the
parties actually reached agreement and to make
findings about the Respondents' admitted refusal to
execute the written contract and release.
The facts in this case can be stated briefly.
During September and October 1981, the Union
and the Respondents held a number of negotiating
sessions to discuss settlement of two pending unfair
labor practice charges and a pending grievance.
The unfair labor practice charges had been filed
during the summer of 1981 and involved alter ego
status, repudiation of the existing contract, and fail-
ure to provide information. The grievance had
been filed in November 1980 and involved the Re-
spondents' failure to make contributions to fringe
benefit funds under the contract. The complaint al-
leges, inter alia, that on 27 October 1981 the Union
and the Respondents reached complete agreement
regarding the terms and conditions of employment
for unit employees; that the parties agreed to incor-
porate their agreement in a collective-bargaining
agreement and a release settling the pending
claims; but that on 17 December 1981 the Re-
spondents refused to execute the written agree-
ments the Union requested they sign . On 30 De-
cember 1981 the Union filed an unfair labor prac-
tice charge alleging that the Respondents' failure to
execute the agreed-upon contract and release vio-
lated Section 8(a)(1) and (5) of the Act. Because
the Respondents never executed the agreement to
settle the other unfair labor practice charges, all
576 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the pending charges were consolidated for hearing
in this case.
At the hearing, the judge refused to admit any
evidence, either testimony or documents, offered to
prove that the parties reached an agreement, rely-
ing on Rule 408 of the Federal Rules of Evidence.
Rule 408 states:
Evidence of (1) furnishing or offering or
promising to furnish, or (2) accepting or offer-
ing or promising to accept, a valuable consid-
eration in compromising or attempting to com-
promise a claim which was disputed as to
either validity or amount, is not admissible to
prove liability for or invalidity of the claim or
its amount. Evidence of conduct or statements
made in compromise negotiations is likewise
not admissible. This rule does not require the
exclusion of any evidence otherwise discover-
able merely because it is presented in the
course of compromise negotiations. This rule
also does not require exclusion when the evi-
dence is offered for another purpose, such as
proving bias or prejudice of a witness, negativ-
ing a contention of undue delay, or proving an
effort to obstruct a criminal investigation or
prosecution.
In his decision, the judge reaffirmed his ruling
excluding the General Counsel's evidence as evi-
dence of conduct or statements made in compro-
rilise negotiations. The judge noted that there was
no dispute that the Respondents had refused to exe-
cute the written agreements when requested to do
so by the Union, but also noted that the Respond-
ents denied the parties had reached an agreement.
In the absence of any admissible evidence to sup-
port a finding that the Respondents refused to exe-
cute an agreed-upon contract, the judge dismissed
the allegation. Based on independent evidence,
however, the judge found that the Respondents
committed the other unfair labor practice violations
which the parties were attempting to settle during
the negotiations in September and October 1981.
The General Counsel argues that, even though
the rejected evidence clearly involves conduct or
statements made in settlement negotiations, this evi-
dence was not offered to prove the validity of a
claim which was being discussed during these ne-
gotiations, but rather was offered "for another pur-
pose," i.e., to show merely that the Respondents
made an agreement that they later refused to sign.
The General Counsel distinguishes Philadelphia
Building Trades Council (Altemose Construction),
222 NLRB 1276 at fn. 1 (1976), cited in the judge's
decision, because that case involved an attempt to
use evidence of settlement discussions to prove the
same unfair labor practice that the parties were
trying to settle.
I agree with the General Counsel that the reject-
ed evidence is admissible under Rule 408 because it
was offered for a purpose other than to show that
the Respondents committed the unfair labor prac-
tices the parties were trying to settle. The refusal-
to-execute allegation could not possibly have been
involved in the settlement discussions, because the
unfair labor practice charge containing the allega-
tion was not filed until over 2 months later. Fur-
ther, such evidence was certainly not needed to
prove the other unfair labor practices being dis-
cussed, because the judge found those violations
occurred based on independent evidence without
considering the settlement negotiations. I would
find that the General Counsel's evidence was of-
fered to show simply that the parties actually
reached an agreement that the Respondents then
refused to execute. Section 8(d) of the Act requires
the Board at least to consider such evidence about
whether the parties reached agreement where there
is an allegation that one party refused to execute a
written contract incorporating that agreement.' A
party should not be allowed to renege on a con-
tract with impunity because agreement was
reached during settlement negotiations.
Thus, I would reverse the judge's ruling exclud-
ing this evidence and would remand this case to
the judge for further proceedings. Accordingly, I
dissent from my colleagues' adoption of the judge's
decision on this point. I agree with my colleagues'
decision in all other respects, except as to the ap-
propriate remedy for the violations found. Chair-
man Dotson and I agree that the affirmative
remedy for the unilateral change violations should
end as of 24 August 1982, the date when Respond-
ent Contee filed a bankruptcy petition, pursuant to
the Supreme Court's rationale in Bildisco.2 Con-
trary to my colleagues, I would not delete the gen-
eral provision in the judge's recommended Order
requiring the Respondents to recognize and bargain
with the Union, in light of the Respondents' gener-
al repudiation of the collective-bargaining agree-
ment as well as the other 8(a)(5) violations found in
this case.
' Sec 8 (d) defines the duty to bargain as including the obligation to
"execut [e] a written contract incorporating any agreement reached if
requested by either party "
2 NLRB v Bildisco & Bildisco, 104 S Ct 1188 (1984) See Edward
Cooper Painting, 273 NLRB 1768 (1985)
CONTEE SAND & GRAVEL CO 577
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
any liability under this provision shall terminate as
of 24 August 1982.
WE WILL, on request by the Union, furnish it
any information relevant to its bargaining obliga-
tions on behalf of our employees in the bargaining
unit.
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 bargain with
Drivers, Chauffeurs, and Helpers Local Union No.
639, affiliated with International Brotherhood of
Teamsters, Chauffeurs, Warehousemen and Helpers
of America, as the exclusive collective-bargaining
representative of our employees in the bargaining
unit described below, by failing or refusing to abide
by the terms of the collective-bargaining agreement
effective 16 May 1979 through 15 May 1982, be-
tween the Union and Contee Sand and Gravel
Company, Inc. The appropriate bargaining unit is:
All ready-mix truck drivers, ready-mix me-
chanics, ready-mix mechanics' helpers and
partsmen , yard helpers, dump truck drivers,
tractor-trailer truck drivers, dump truck and
tractor-trailer mechanics, and mechanics' help-
ers employed by Respondents Contee Sand
and Gravel Company, Inc., Calan Concrete
Corp., and Tycon, Inc., excluding dispatchers,
supervisory and managerial personnel, owner-
operators, employees of owner-operators, inde-
pendent contractors and employees of inde-
pendent contractors.
WE WILL NOT unilaterally change the terms and
conditions of employment of employees in the
above bargaining unit without notice to and consul-
tation with the Union.
WE WILL NOT fail or refuse to furnish the Union
relevant information it requests for use as the em-
ployees' bargaining representative.
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 abide by the terms of the collective-
bargaining agreement effective 16 May 1979
through 15 May 1982 between Contee Sand and
Gravel Company, Inc. and the Union, except that
any liability under this provision shall terminate as
of 24 August 1982.
WE WILL make whole our employees in the bar-
gaining unit for any loss of pay or other benefits
they may have suffered by reason of our unfair
labor practices, with interest, and also make whole
the Union Health and Welfare and Pension Funds
for contributions we failed to make, except that
CONTEE SAND AND GRAVEL COMPA-
NY INC.; CALAN CONCRETE CORP.;
AND TYCON, INC.
DECISION
STATEMENT OF THE CASE ,
JAMES M. FITZPATRICK, Administrative Law Judge.
This case' concerns a financially troubled corporation
that fell into serious default with its creditors, including
the health and welfare and pension trust funds of the
Union with which it had a collective-bargaining agree-
ment In a partial reorganization, two other corporations
not previously in business took over fractions of the
troubled concern's operations. A year later the prior
company petitioned for voluntary bankruptcy and ceased
operations. The basic question is whether the two new
companies are bound by the collective-bargaining agree-
ment between the prior company and the Union. As set
out below, I find they are. One of the additional issues is
whether the new companies reached agreement with the
Union on new collective-bargaining agreements and then
refused to sign . I find the admissible evidence fails to es-
tablish that such agreements were reached.
These proceedings, consolidated for hearing and deci-
sion , began August 28, 1981 when Drivers, Chauffeurs
and Helpers Local Union No. 639, affiliated with Inter-
national Brotherhood of Teamsters, Chauffeurs, Ware-
housemen and Helpers of America (Local 639 or the
Union) filed charges (Case 5-CA-13661) of unfair labor
practices under Section 8(a)(1), (3), and (5) of the Na-
tional Labor Relations Act (the Act) against Contee
Sand and Gravel Company, Inc., and its alter egos Calan
Concrete Corp. and Tycon, Inc (Contee Sand, Calan,
and Tycon, respectively, and collectively as Respond-
ents). Thereafter the Union filed additional charges
under Section 8(a)(1) and (5), all of which were consoli-
dated with the initial charges and form the basis for the
present proceedings.2 Based on these charges the Gener-
1 The caption has been amended to delete Contee Concrete Company
as a respondent After the hearing the General Counsel moved to delete
that name and withdraw allegations that that respondent is an alter ego
of the other Respondents There being no evidence adduced regarding
Contee Concrete Company, the motion is granted
2 On September 16, 1981, the Union filed 8 (a)(1) and (5) charges in
Case 5-CA-13722 against Contee Sand, Calan, and Tycon, on December
30, 1981, 8(a)(1), (3), and (5) charges in Case 5-CA-13971 against Contee
Sand, Calan and Tycon, on March 5, 1982, amended 8(a)(1) and (5)
charges in Cases 5-CA-13661 and 5-CA-13971 against Contee Sand,
Calan and Tycon, and on April 13, 1982, 8(a)(1) and (5) charges as fol-
lows, in Case 5-CA-14254-1 against Tycon, in Case 5-CA-14254-2
against Contee Sand, and in Case 5-CA-14254-3 against Calan Concrete
578 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
al Counsel for the National Labor Relations Board (the
Board) issued a series of complaints alleging violations of
Section 8(a)(1) and (5) by the Respondents.3 All of the
complaints and amendments have been consolidated.
A variety of issues are presented, the basic issue being,
as noted above, whether either Calan or Tycon is an
alter ego of Contee Sand. Whether there is an issue re-
specting appropriate unit for collective bargaining is un-
clear. The complaint alleges first that all employees of
Respondent Companies constitute an appropriate unit.
Contee Sand admits the appropriateness of such a unit
until July 1981 but not thereafter. The other answering
Respondents deny the appropriateness of that general
unit as to their employees. The complaint also alleges as
alternative and successor appropriate units three seg-
ments of the above general unit, one segment being made
up of Contee Sand employees, another of Calan employ-
ees, and a third of Tycon employees. The complaint fur-
ther alleges that these units were agreed to between the
Union and Respondents. The applicable answers admit
the appropriateness of the described units but deny they
were agreed to. The complaint alleges further that since
June 29, 1981, the Union has been the exclusive repre-
sentative of the employees described in these successor
bargaining units, that Respondents have recognized the
Union, and that such recognition is embodied in recogni-
tion agreements of September 10, 1981. Respondents
deny recognition occurred Also at issue is whether the
Union is entitled to information it requested but was not
furnished. Additional issues are as follows: whether since
June 29, 1981, Calan and Tycon have violated collective-
bargaining agreements to which they were obligated;
whether on October 27, 1981, Respondents and the
Union reached agreements which Respondents unlawful-
ly refuse to execute; and whether in December 1981
Contee Sand subcontracted dump truck operations to
Maryland Equipment, Inc., in violation of a duty to first
give the Union an opportunity to bargain respecting the
subcontracting.
The consolidated cases were heard at Washington,
D.C., on August 24, October 25 and 26, and December
14, 1982, and January 25, 1983, at which times all parties
were afforded an opportunity to appear in person and by
counsel and present evidence and arguments.4
3 A complaint issued October 30, 1981 against Contee Sand in Case 5-
CA-3722 which Contee Sand answered November 9, 1981 On March 29,
1982, Cases 5-CA-13661 and 5-CA-13971 were consolidated with Case
5-CA-13722 and an amended consolidated complaint issued against
Contee Sand and against Calan and Tycon as alter egos of Contee Sand.
These Respondents answered that complaint April 23, 1982, and amended
that answer June 14, 1982 On July 15, 1982 , an amended consolidated
complaint issued in the three cases (Cases 5-CA-13661, 5-CA-13722, and
5-CA-13971) and a further amendment to that consolidated complaint
issued August 10, 1982 On August 12, 1982, Calan answered the com-
plaint issued July 15 and on August 23 answered the amendment to that
complaint. In the meantime, 8(a)(1) and (5) complaints issued on May 26,
1982 in Case 5-CA-14254-1 against Tycon, in Case 5-CA-14254-2
against Contee Sand, and in Case 5 -CA-14254-3 against Calan, and on
June 7, 1982, the complaints against Tycon and Calan were amended On
June 14 , 1982, each of these Respondents separately answered the com-
plaint against it. On August 10, 1982, additional amendments issued in all
three of these cases but no further written answers have been filed
4 Warren Davison, Esq, and Eric Hemmendmger, Esq, are the only
Respondent counsel of record appearing on and after December 14, 1982
Prior thereto various defending counsel entered, and subsequently with-
Based on the entire record, including my observation
of the witnesses and consideration of the briefs filed by
the General Counsel and by Calan and Tycon, I make
the following
FINDINGS OF FACT
1. THE EMPLOYERS INVOLVED
Contee Sand is a Maryland corporation which at times
material to this case maintained its principal office at
Laurel, Maryland, and engaged in Maryland in the
mining and processing of sand and gravel, and the pro-
duction in Maryland and distribution within and without
Maryland of ready-mix concrete and of asphalt. In these
businesses it annually purchased goods and services
valued over $50,000 directly from suppliers outside
Maryland and sold and delivered goods, materials, prod-
ucts, and services valued over $50,000 directly to buyers
in the District of Columbia and other places outside
Maryland. At times material to this case, it has been an
employer as defined in Section 2(2) of the Act engaged
in commerce and in operations affecting commerce as
defined in Section 2(6) and (7) of the Act.
Calan, a Maryland corporation with its principal office
initially at Kensington, Maryland, and subsequently at
Beltsville, Maryland, began operations June 29, 1981 in
the production and distribution in the building and con-
struction industry in Washington, D.C. and surrounding
area, of ready-mix concrete. During the calendar year
preceding August 10, 1982, Calan did business in the
District of Columbia, purchased goods and services
valued over $50,000 directly from suppliers outside
Maryland, and also sold and shipped goods and services
valued over $50,000 directly to purchasers outside Mary-
land. At times material to the issues in this case, Calan
has been an employer engaged in commerce and in oper-
ations affecting commerce within the meaning of Section
2(2), (6), and (7) of the Act.
Tycon, a Maryland corporation , began operations at
Beltsville, Maryland, about July 29, 1981, performing
tractor-trailer services for Contee Sand. The amended
complaint alleges that during the 12 months preceding
August 10, 1982, Tycon purchased goods and services
valued over $50,000 directly and indirectly from sources
outside Maryland and also sold and delivered goods and
services valued over $50,000 directly and indirectly to
purchasers outside Maryland, including Contee Sand,
which purchasers were engaged in commerce within the
drew, their appearances At the opening of the hearing on August 24,
1982, Norman Buchsbaum , Esq, and Douglas Koteen, Esq (Jackson,
Lewis, Schnitzler, and Krupman), Baltimore , Maryland, entered an ap-
pearance for Calan, and Steven Loewy, Esq (Constable, Alexander,
Daneker, and Skeen), Baltimore , Maryland, entered an appearance for
Contee Sand These appearances were withdrawn October 12 , 1982, and
since then Contee Sand has been unrepresented On October 25, 1982,
David Berg, Esq (Goldstein , Blitz , and Rosenberg, P A ), Bethesda,
Maryland, entered an appearance on behalf of Calan and Tycon By
letter of November 27, 1982, he indicated that other counsel was being
sought for these proceedings and implied he would not further represent
his clients in this matter , and he has not participated since then When the
hearing resumed on December 14, 1982, Davison and Hemmendinger en-
tered their appearances for Calan and Tycon and continue to represent
them
CONTEE SAND & GRAVEL CO
meaning of the Act Although Tycon was duly served
with these amended complaints, it did not answer them
and, accordingly, pursuant to Section 102.20 of the
Board's Rules and Regulations, those allegations are
deemed admitted. See SFS Painting & Drywall, 249
NLRB 111, 112-113 (1980); Oldwick Materials, 264
NLRB 1152 (1982). I find Tycon in its operations has
been an employer engaged in commerce within the
meaning of Section 2(2), (6), and (7) of the Act.
Further, because both Calan and Tycon are alleged to
be single employers with, and alter egos of, Contee Sand
which is engaged in commerce under the Act, the Board
has jurisdiction of Calan and Tycon in addressing those
issues.
II. THE LABOR ORGANIZATION INVOLVED
Local 639 is a labor organization within the meaning
of Section 2(5) of the Act. It represents employees of
Contee Sand, of Calan, and of Tycon . It is party to a 3-
year collective-bargaining agreement with Contee Sand
covering the period May 16, 1979, through May 15,
1982.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A The Origins of Contee Sand
Until 1974, Contee Sand was owned and operated by
the Gudelsky family. At that time the family sold a large
part of its sand and gravel interests, including 3000 acres
of real estate containing sand and gravel deposits, fixed
assets on the real estate, mobile equipment, and the right
to use the name Contee Sand and Gravel Company, Inc.,
to Boykin Resources, Inc., the stock of which was
owned by a group of investors not identified in this
record. This was a sale of assets rather than a transfer of
corporate securities. Following the purchase, Boykin Re-
sources, Inc , set up a wholly owned subsidiary corpora-
tion with the name Contee Sand and Gravel Company,
Inc. The purchase by Boykin Resources, Inc., of the
assets was funded by a loan from a group of four insur-
ance companies and a bonding fund secured by a mort-
gage on the realty and fixed assets as well as a pledge of
the stock of the newly formed Contee Sand and Gravel
Company, Inc. Subsequently, in late 1974, the "Boykin"
investor group sold its stock in Boykin Resources, Inc.,
to another investor group headed by Roger Malkin and
Charles Hall which formed a new corporation called
Capitol Resources and Properties, Inc., to make the pur-
chase. The new investors then changed the name of
Boykin Resources, Inc, to Contee Resources. Thus, at
the end of 1974 the Malkin-Hall group owned Capitol
Resources and Properties, Inc., which owned Contee Re-
sources, Inc., which, in turn , owned Contee Sand and
Gravel Company, Inc. (Contee Sand), subject to the un-
derlying secured debt owed the insurance group lenders
Richard Ecroyd, the principal management official at
the time of the events discussed hereinafter, was hired in
February 1975 to be the salaried financial officer for
Contee Sand 5 He had no ownership interest in the Com-
5 At that time the syndicate of investors controlling the parent corpo-
ration, Capitol Resources and Properties, Inc , included Roger Malkin,
579,
pany. As financial officer he reviewed its financial condi-
tion and concluded its debts could not be reconciled
with a reasonable estimate of its earnings power. He in-
formed the investors in the Company of his conclusions.
Eventually a change of management occurred in 1977
and Richard Ecroyd was made president of Contee
Sand, and in 1978 longtime employee James Payne, who
had been with the earlier Contee Sand and had moved
with the sale of assets to Boykin Resources, Inc., was
made vice president of operations. Richard Ecroyd re-
mained president of Contee Sand from 1977 until June or
July 1982 when he was replaced. During his tenure he
basically reported to Levey and to some extent Malkin.
His duties as president were an extension of his function
as financial officer in that his primary purpose was to
move the Company from its untenable financial situation
toward a healthy financial posture and to liquidate its
debts. Working capital for Contee Sand during this
period was provided chiefly through a line of credit
from the Union Trust Company of Maryland. To,secure
this credit Contee Sand pledged to the bank its rolling
stock, that is, the trucks and equipment titled in its name.
Unlike the insurance group creditors which did, not
become involved in management of the Company, the
bank in its surveillance of the line of credit, necessarily
did, and as the financial condition of the Company pro-
gressively deteriorated, bank surveillance increased, ulti-
mately involving the bank in day-to-day management de-
cisions
B. The Operations of Contee Sand
The main office of Contee Sand was in Laurel, Mary-
land. The keystone of its operation was the extraction,
processing , and distribution of sand and gravel . It per-
formed this mining with heavy equipment on the proper-
ty of Contee Resources , Inc., paying a royalty for the
privilege . The construction aggregates thus produced
were sold in the Washington , D.C., Maryland , Pennsyl-
vania , and Virginia markets to a variety of customers, in-
cluding many ready-mix and asphalt enterprises In addi-
tion , Contee Sand enjoyed internal markets in its own
ready-mix and asphalt paving divisions . The ready-mix
operation involved production and delivery of ready-mix
concrete chiefly to construction sites in the Baltimore-
Washington area. Ready-mix facilities were located, at
Kensington , Rockville, Laurel, and Curtis Bay, Mary-
land. Materials for concrete were stored at these loca-
tions and dispensed to ready-mix trucks which delivered
the concrete to the construction sites. The asphalt oper-
ation produced asphalt for roads and parking lots and
also engaged as a general contractor in the installatic n of
asphalt surfaces.
These three basic operations required use of fixed
equipment leased from Contee Resources , Inc., including
equipment for processing sand and gravel , for handling
ready-mix ingredients, and for producing asphalt. Vari-
ous types of rolling stock were also required , including
Hugh Levey, and Charles Hall (who apparently until then was president
of Contee Sand) as well as various other investors including two law
firms
580 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
front-end loaders, graders and asphalt spreaders, dump
trucks, tractor-trailers, and ready-mix trucks Construc-
tion equipment was used in the sand and gravel extrac-
tion and in the asphalt operation . Dump trucks were
used in the sand and gravel operation to deliver material
to the asphalt and to the ready-mix operations . Ready-
mix trucks were used solely in the distribution of ready-
mix concrete . Tractor-trailers were used to haul dry
cement from suppliers to the ready-mix operation , liquid
asphalt from suppliers to the asphalt operation, and also
at times to move heavy equipment and materials . In gen-
eral employees of Contee Sand specialized in particular
work and did not move from one operation to another.
However , there were exceptions such as the dump truck
drivers and tractor trailer drivers who served the various
operations and the few mechanics , including tiremen,
who serviced all the trucks and occasionally other equip-
ment. Contee Sand used 6 or 7 truck tractors to haul
about 15 trailers including low bed trailers , for heavy
equipment , dry tank trailers for cement , and liquid tank
trailers for liquid asphalt The Company owned four or
five dump trucks and leased others as needed or subcon-
tracted the work . In the ready-mix operation it owned
about half of the ready-mix trucks used and leased the
others
t
C Con tee Sand Labor Relations
Throughout the period involved here Local 639 has
represented the Contee Sand drivers operating ready-mix
trucks, dump trucks, and tractor trailers , and the me-
chanics and tiremen . It has not represented employees
operating the plants in the sand and gravel , asphalt, and
ready-mix divisions . As noted earlier Contee Sand and
Local 639 are parties to a 3-year collective-bargaining
agreement effective from May 16 , 1979, through May 15,
1982. This agreement covered ready -mix drivers , ready-
mix mechanics , ready-mix mechanics ' helpers and parts-
men, yard helpers, dump truck drivers , tractor trailer
truck drivers , dump truck and tractor trailer mechanics,
and mechanics ' helpers," which contract language de-
scribes a'unit appropriate for collective bargaining.
The agreement also contains valid union security pro-
visions requiring union membership as a condition of em-
ployment. The evidence shows this provision was en-
forced by the parties and that virtually all employees
covered by the agreement belonged to Local 639. It is
undisputed that Local 639 has been the majority repre-
sentative of the employees in the contract unit. The
agreqment also requires Contee Sand to check off from
its employees ' wages periodic union dues and remit such
amounts to Local 639. Contee Sand continued to check
off dues and remit to the Union for all covered employ-
ees so long as they were employed by that corporate
entity and for 1 month thereafter for those who trans-
ferred to Calan or Tycon. The agreement also provides
for regular contributions by Contee Sand to the Team-
sters Health and Welfare Fund and the Pension Fund.
Contee' Sand made contributions but fell into serious ar-
rears.
D The Financial Troubles of Contee Sand
The early apprehensions of Richard Ecroyd regarding
the economic viability of Contee Sand proved well
founded . As time passed the Company ' s financial straits
increased until its creditors forced the issue by acting to
protect their interests . By the time Ecroyd became presi-
dent in 1977 , company debts totaled about $50 million It
became increasingly delinquent in its payments to the
Teamsters trust funds as required by the collective-bar-
gaining agreement until in June 1980 the trustees of the
health and welfare fund canceled their insurance cover-
age for Contee Sand employees The health and welfare
fund and the pension fund made a variety of efforts, in-
cluding civil law suits, to recover the delinquencies
owed, which at the time of the hearing amounted to
about $ 80,000. The largest creditors were the insurance
companies to whom Contee Sand owed between $30 and
$35 million . The next largest was the Union Trust Com-
pany of Maryland which was owed about $9 million. In
September 1980 the insurance companies foreclosed the
mortgage on the real estate and fixed assets and pur-
chased that property at the foreclosure sale. Contee Sand
was permitted to continue using the facilities under an in-
direct leasing arrangement running from October 1980 to
November 1981 6
The Union Trust Company initially extended working
capital to Contee Sand based on its general credit. But as
the Company 's financial condition worsened , the bank in-
sisted on having its position secured by a pledge of com-
pany personal property and intangibles, including inven-
tory, receivables , and equipment . The bank thereafter in-
creasingly involved itself in the management of the Com-
pany until eventually it was monitoring company re-
quests for credit on a daily basis.
In the meantime , in 1979 or 1980, in connection with
efforts to work out a plan for handling Contee Sand debt
problems, the stockholders of Capitol Resources and
Properties , Inc., including Hugh Levey, Roger Malkin,
and by then Richard Ecroyd , funded a new corporation
called Contee Financial Corporation which , in agreement
with an informal committee of other creditors , purchased
certain debts of Contee Sand at 10 cents on the dollar. In
effect Contee Financial became a partial replacement
creditor of Contee Sand Although the investors in
Contee Financial included Levey , Malkin , and Richard
Ecroyd, the extent of their interests is not apparent.
By April 1981 it had become common knowledge that
Contee Sand was in serious financial trouble. About that
time it discontinued sand and gravel operations at its An-
napolis Junction site, leaving only its Laurel sand and
gravel facilities in operation. The Union Trust Company
continued its efforts begun in 1980 to limit its financing
of the Company and , as set out hereinafter , negotiated
for the spinoff of ready-mix operations to Calan and trac-
tor-trailer operations to Tycon during the period May to
July 1981 In August 1981 the bank began pressuring
Contee Sand management to cease operations entirely
6 The details of this leasing arrangement are spelled out in the record
but are not material to the issues here
CONTEE SAND & GRAVEL CO 581
The lease arrangement under which Contee Sand
mined sand and gravel at Laurel was due to expire in
November 1981 and, about October of that year, the in-
vestors in Contee Resources, Inc , Levey, Malkin, and
Richard Ecroyd, attempted to negotiate a renewal of
that lease arrangement. However, they only succeeded in
achieving two short extensions of the arrangement, ap-
parently because another investor group headed by
Kingdon Gould was interested in purchasing the proper-
ty In December 1981, the pace of Contee Sand oper-
ations lessened considerably because of weather condi-
tions, a normal seasonal condition for the industry. As a
result, the employees, including dump truck drivers,
were laid off. In the meantime the Gould group pur-
chased the real estate involved and in early January 1982
evicted Contee Sand and all subtenants from the proper-
ties. At that point Contee Sand had no access to sand
and gravel facilities and it ceased operations permanent-
ly. Richard Ecroyd testified that at the time of eviction
the assets of Contee Sand consisted chiefly of personalty
to which it held title but which was pledged to the
Union Trust Company as security for its loans. Accord-
ing to him the Company was insolvent. Thereafter the
Gould group launched a new sand and gravel enterprise
under the name of Laurel Sand and Gravel, using the
premises previously used by Contee Sand.
On August 24, 1982, Contee Sand filed a Chapter 7 pe-
tition for bankruptcy with the United States District
Court for the District of Maryland. By letter of August
27, 1982, counsel for Contee Sand urged that the present
proceedings were automatically stayed pursuant to the
automatic stay provisions of the bankruptcy code, and on
September 13, 1982, he formally moved for a stay. On
September 14, 1982, I issued an order to show cause why
the present proceeding should not be stayed. Counsel for
Contee Sand did not appear further in these proceedings
but, in response to the order to show cause, informed me
by letter dated October 8, 1982, that the position of
Contee Sand was (a) that the Chapter 7 bankruptcy pro-
ceedings constituted an automatic stay of the Board pro-
ceedings, (b) that in any event enforcement of any Board
order was stayed under the bankruptcy statutes, (c) that
the officers and directors of Contee Sand had changed
completely and the Company as constituted at that time
was not the alter ego of any other enterprise involved in
the unfair labor practice proceedings, and (d) that
Contee Sand would not participate further in the Board
proceedings. Whether the bankruptcy court has taken
action which affects these proceedings is not apparent.
Nothing in the record indicates that Contee Sand at any
time took the position it would not abide by its collec-
tive-bargaining agreement with Local 639. Cf. NLRB v.
Bildisco & Bildisco, 104 S.Ct. 1188 (1984).
E. The Spinoff of Ready-Mix Operations
1. The creation of Calan
As noted above, during 1980 and early 1981, in its
continuing effort to reduce and ultimately eliminate its
role as the supplier of working capital to Contee Sand,
the Union Trust Company endeavored to work out a
sale of the Company's ready-mix and mobile equipment
on some basis that would realize funds to pay off the
debt to the bank. In June 1981 the bank approved estab-
lishment of a new ready-mix operation which would use
the equipment of Contee Sand on a basis satisfactory to
the bank but without the bank providing other working
capital as it had for Contee Sand. The new operation
would have to provide its own working capital. In coop-
eration with this scheme, Hugh Levey, a principal stock-
holder in Capitol Resources and Properties, Inc, and
Richard Ecroyd, president of Contee Sand,7 raised some
working capital on their own and established Calan Con-
crete Corporation for the purpose of taking over the
ready-mix operations of Contee Sand. Calan began oper-
ations July 1, 1981, with headquarters at the Kensington
facility of Contee Sand Richard Ecroyd became presi-
dent of Calan, although active management rested with
James Payne as vice president and general manager.
From early 1978 until then he had been vice president of
operations for Contee Sand. Richard Ecroyd testified
that Calan operated independently of Contee Sand and
that his purpose in involving himself as an investor in
Calan was to create a job with income for himself inas-
much as the Union Trust Company, with his coopera-
tion, was liquidating Contee Sand and he was working
himself out of a job.
2. The announcement of Calan
No secret was made of the creation of Calan as an
entity to take over Contee Sand ready-mix operations.
As early as late May 1981, Alan Grodnitsky, as attorney
for Contee Sand, informed John Steger, business repre-
sentative for Local 639, that Contee Sand would shortly
be terminating ready-mix operations by selling ready-mix
equipment to the newly formed Calan, that the change-
over was due within a month, and that he would look
forward to meeting with Steger as he hoped for a pro-
ductive, harmonious relationship with Local 639. He also
informed Steger that employment applications would be
given Contee Sand ready-mix drivers and mechanics,
that Calan expected to hire experienced employees and
would consider all Contee Sand drivers and mechanics
for employment. Grodnitsky made similar remarks on
June 10 at a second meeting with Steger which included
John Catlett, secretary-treasurer of Local 639, and
Charles Booth, attorney for the Teamsters funds. On this
occasion Grodnitsky stated he was acting on behalf of
Calan, not Contee Sand. The purpose of this meeting
was to discuss the $80,000 debt Contee Sand owed the
union funds. Grodnitsky explained that Calan intended
only to take over the assets, not the liabilities of Contee
Sand. He said Calan would not be operating from the
Contee Sand offices but rather from Kensington and that
Payne would leave Contee Sand to take charge of the
Calan operation He again expressed his hope for good
relations between Local 639 and Calan. Grodnitsky met
again on June 23 with Catlett, Steger, and also Payne,
who announced he had resigned from Contee Sand effec-
' Richard Ecroyd does not appear to have had any direct equity posi-
tion in Contee Sand He did have an equity in Contee Financial and ap-
parently in Capitol Resources and Properties, Inc
582 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
tive June 19 and was at that time employed by Calan
which would commence operations about June 29 Payne
reaffirmed that all Contee Sand ready-mix drivers and
mechanics who applied to Calan would be hired. When
Catlett said he wanted to discuss Contee Sand employee
problems, Payne refused, saying he was only authorized
to speak on behalf of Calan. He went on to say that he
was optimistic about the prospects for the new company
even though startup expenses would be heavy. He indi-
cated Calan would operate from Kensington but that he
also was negotiating leases for other facilities in Rock-
ville and Laurel He reaffirmed that Calan would not
assume Contee Sand's liabilities.
A further meeting occurred on June 26 with Steger
and Catlett present for the Union and Grodnitsky and
fellow attorney Steven Boardman representing Calan.
Boardman apparently volunteered his opinion that if the
question of Calan's legal duty to assume the collective-
bargaining agreement of Contee Sand were litigated, the
Union probably would prevail, but that he did not think
such litigation necessary because Calan was willing to re-
solve the outstanding health and welfare fund and pen-
sion fund issues at the same time as entering into a new
collective-bargaining agreement with Local 639 Accord-
ing to him, Calan could live with the terms of the Local
639 agreement with Contee Sand and did not expect the
funds to relinquish rights under a court judgment ob-
tained against Contee Sand for the debts owed Catlett
stated the union position that Calan and Contee Sand
were one and the same, that before any discussions could
take place, the $80,000 owed the funds would have to be
paid. Boardman responded, speaking for both Contee
Sand and Calan, that Contee Sand was willing to negoti-
ate a new accelerated schedule of payments for the
$80,000 owed and that Calan would agree to be a guar-
antor of such an agreement. The union officials inquired
as to the identity of the officers of Calan but Boardman
declined to give that information unless the Company
could have a contract with the Union The union repre-
sentatives reiterated the union position that Contee Sand
and Calan were one and the same, but acknowledged
that the primary issue was the money owed the funds.
From these meetings it is apparent that Calan was rec-
ognizing Local 639 as the representative of the drivers
and mechanics to be employed and also desired a collec-
tive-bargaining agreement with the Union. The Union,
on the other hand, was unwilling to enter into an agree-
ment unless the $80,000 debt of Contee Sand was paid
first. Thus, the question posed is whether or not this suc-
cessor enterprise is obligated to pay the collective-bar-
gaining debts incurred by its predecessor. I find it is be-
cause Calan is not only a successor of Contee Sand, but
also, for the reasons discussed hereinafter, its alter ego
and a single employer with it.
That same evening, Friday, June 26, Payne called a
meeting of Contee Sand ready-mix employees, including
35 ready-mix drivers, 2 dispatchers, 4 plantmen, 1 tire-
man, and 3 mechanics, and announced the termination of
Contee Sand's ready-mix operation which he said had
been sold to a new company called Calan He identified
himself as the person in charge of Calan and Jack
Brooks, who until then had also been one of the manage-
ment officials of Contee Sand, as his right hand He
promised jobs at Calan for all who applied, saying he
wanted the same setup as Contee Sand insofar as the
Union was concerned and that he would honor the same
pay scale and benefits.
3 Calan trucks and materials
In taking over the Contee Sand ready-mix operation,
Calan took over not only its personnel but also use of all
its ready-mix rolling stock and the mixing facilities avail-
able to it The fleet consisted of 47 vehicles, mostly
ready-mix trucks, 25 of which were leased from various
leasing concerns and the balance titled to Contee Sand
but subject to the lien of the Union Trust Company as
security for loans. Title to these vehicles was not trans-
ferred to Calan but rather left in the name of Contee
Sand to save sales taxes and registration fees which oth-
erwise would have been incurred. Calan assumed the
leases on the leased trucks But with respect to the old
Contee Sand trucks under lien to the bank, no payments
were made because Calan and the bank were then nego-
tiating for assumption of all remaining Contee Sand
assets. To this extent the bank appears to have silently
funded part of Calan's ready-mix fleet
Although Contee Sand became one of many suppliers
of materials to Calan, it did not supply any concrete In-
stead, the concrete preparation facilities previously avail-
able to Contee Sand were made available to Calan.
These included the batch plants and equipment previous-
ly used by Contee Sand which were owned by the insur-
ance group which had foreclosed on them and which
following foreclosure were available to Contee Sand
under a lease arrangement through Contee Resources.
They were made available to Calan on the same basis,
even to use of the same switchboard, although the tele-
phone number changed. Although the Calan office was
initially set up at the Kensington batch plant, Calan also
enjoyed the use of the Contee Sand batch plant and
truck repair facilities at Laurel, as well as the batch
plants at Rockville and Curtis Bay.
4. Calan operations
When Calan started up on July 1, 1981, the employees
of the Contee Sand ready-mix division went to work for
Calan. As Payne had promised, all who applied were
hired. However, there was really no need to apply be-
cause the Company had insufficient application forms
available, and all who reported were put to work with-
out further ado. The Contee Sand employees who went
to work for Calan included ready-mix drivers, mechan-
ics, tiremen, and batchmen. So far as this record shows,
all employees in the division made the transfer. They
went to work for Calan performing precisely the same
work as they performed for Contee Sand and at or out
of the same locations.
Although the Calan offices were in Kensington while
the Contee Sand offices remained in Laurel, the Contee
Sand personnel office in Laurel continued to handle the
personnel matters of Calan employees. At the time it
ceased ready-mix operations on July 1, 1981, Contee
Sand was supplying concrete to a number of large con-
CONTEE SAND & GRAVEL CO
struction projects pursuant to contracts providing sub-
stantial penalties for nonperformance. As an arrangement
to complete the performance contracted for, Contee
Sand agreed to pay the Calan payroll for 30 days after
its establishment, and to permit Calan the use of its plant
facilities and ready-mix trucks without charge until com-
pletion of those contracts. Thereafter Calan was to com-
pete in the open market for business
During the first month of Calan operations, employee
paychecks were checks of Contee Sand and thereafter
were checks of Calan. Contee Sand also continued
through August 1981 to check off and remit to Local
639 the union dues of ready-mix employees pursuant to
the collective-bargaining agreement According to Busi-
ness Representative Steger, when Calan went into oper-
ation on July 1, 1981, it followed the terms and condi-
tions of the collective-bargaining agreement and, I infer,
this included the checkoff of union dues after Contee
Sand ceased doing so The Union did not bill Calan for
dues checked off after employees transferred but only
billed Contee Sand which ceased remitting dues for
ready-mix employees after August 1981 8 One exception
to Calan's adherence to the collective-bargaining agree-
ment, according to Steger, was its failure to make peri-
odic contributions for employees to the union health and
welfare and pension funds. Whether the funds would
have extended coverage in return for such contributions
is not clear inasmuch as the ongoing negotiations re-
specting the outstanding Contee Sand debt of $80,000 to
the funds turned on whether Calan would accept respon-
sibility for that debt in return for the Union's entering
into a collective-bargaining agreement.
As noted above, Calan began operations using the
equipment previously used by Contee Sand to process
the aggregate which Contee Sand continued to mine pur-
suant to the lease arrangement due to terminate Novem-
ber 30, 1981. Thereafter there were two short extensions
of that arrangement but it finally was terminated by
lessor Kingdon Gould in January 1982, thereby eliminat-
ing Calan's regular source for sand and gravel In addi-
tion, Gould evicted Contee Sand from the property on
which the processing equipment and offices were locat-
ed. By this action Contee Sand was totally closed down
Calan was affected in that it lost its use of those facilities
At that point Calan relocated in Beltsville, Maryland,
and continued to operate by purchasing concrete from
other sources. Not long thereafter Gould sued to obtain
possession of the trucks titled to Contee Sand, including
those being used by Calan. Because of what the Union
Trust Company perceived as a conflict of interest, Calan
then ceased using those trucks and continued operating
with only the leased ready-mix trucks. Meanwhile Rich-
ard Ecroyd, on behalf of Calan, continued negotiating
with the Union Trust Company for the remaining assets
of Contee Sand but they never were able to work out an
arrangement due to the eviction brought about by
Gould Calan finally went out of business in August
1982.
6 Contee Sand continued to remit checked-off dues of tractor-trailer
drivers through September 1981
583
F. The Spinoff of Tractor- Trailer Operations
Prior to the creation of Calan , Tycon was a corporate
shell owned by Capitol Resources and Properties , Inc. In
late July 1981 Tycon was activated with Richard
Ecroyd as its president and Dennis McGrath , another
management official of Contee Sand , as its vice presi-
dent Along with Calan it was involved in the arrange-
ments for a continuation of portions of the Contee Sand
business pursuant to the continuing program of the
Union Trust Company to liquidate Contee Sand debts.
In the spring of 1981 Contee Sand employed four trac-
tor-trailer drivers, one of whom was on workmen's com-
pensation and not working. It was rumored among the
employees at that time that tractor-trailer operations
would be transferred to a company called Tycon in
which Richard Ecroyd would be an investor . When the
tractor-trailer drivers received their paychecks on July
28, 1981 , they found included a notice from Richard
Ecroyd that Contee Sand would cease tractor-trailer op-
erations on July 31 , that those operations would be taken
over by Tycon, and that if the drivers wished to work
for Tycon they could obtain employment applications at
the Contee Sand switchboard . All three working drivers
reported at Tycon the following Monday, August 3, al-
though two of them did not fill out employment applica-
tions until a week or two later . Whether the driver on
workmen 's compensation applied does not appear but it
is clear that the entire active work force transferred from
Contee Sand to Tycon with no hiatus in service
Tycon began operations August 1 , 1981, in Beltsville
in the premises of Maryland Equipment Company, a firm
controlled by Richard Ecroyd . His brother Kevin
Ecroyd , manager of Maryland Equipment , was also
made manager and dispatcher for Tycon . The drivers re-
ported to this new location and, except for that differ-
ence, the operation continued exactly as it had previous-
ly when part of Contee Sand The drivers used the same
tractors and trailers which continued to be titled to
Contee Sand . Tycon paid nothing to Contee Sand for the
use of the tractor-trailers.9 All of the services performed
by Tycon were for Contee Sand . Although Richard
Ecroyd hoped to develop new business , that never mate-
rialized . The drivers ostensibly were working for Tycon,
but were paid during the first month by Contee Sand
checks and Contee Sand continued until September 1981
to deduct their union dues and remit those sums to the
Union As with Calan , the Union did not bill Tycon but
only Contee Sand for employee dues.
On August 11, 1981, when union officials Catlett and
Steger met with Attorneys Grodnitsky and Boardman
concerning the arrears Contee Sand owed the union
funds, Boardman described the activation of Tycon as
being similar to the transfer of the ready-mix business to
Calan , that is, a selloff of Contee Sand assets for the pur-
pose of satisfying secured creditors. Catlett and Steger
a^serted that Contee Sand and Tycon were one and the
same operation . Boardman informed them that Tycon
9 The evidence shows that Tycon took over the tractor-trailer fleet of
Contee Sand although it apparently did not use the entire fleet The fleet
consisted of 7 or 8 tractors and about 15 trailers
584 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
would operate from the offices of Maryland Equipment
Company in Beltsville, rather than in Laurel where
Contee Sand was located, but said he would not disclose
the identity of the officers of Tycon until the Company
had a contract with Local 639.10 The union officials, ap-
parently at this same meeting, asked for information con-
cerning the identity of Tycon employees, the type of
work performed, wages, and an indication of who would
perform the mechanical work. Grodnitsky informed
them that Kevin Ecroyd was managing Tycon and
agreed to subsequently provide in writing the other in-
formation requested
Although Tycon paid the drivers the same hourly rate
as Contee Sand, it did not follow the union contract in
certain other respects. Like Calan, it made no contribu-
tions to the health and welfare and pension funds. Fur-
ther, according to Steger, it did not pay overtime for
work beyond 8 hours in 1 day, nor holiday pay, nor did
it honor the seniority requirements as to work opportuni-
ty, nor were the vacation provisions of the contract put
into effect. Steger took action by meeting with Kevin
Ecroyd along with Tycon drivers Charles Jackson, Ber-
nard Mack, and William Brinn on September 15, 1981, to
discuss the alleged failures to abide by the contract.
Kevin Ecroyd took the position that Tycon had no obli-
gation to honor the Contee Sand agreement, that if he
were advised to do so by Attorney Boardman, he would,
but until then he would not. He specifically declined to
pay time-and-a-half after 8 hours' work in 1 day or to
strictly respect the seniority provisions regarding work
opportunities. In this latter regard, he stated he intended
to rotate work opportunities rather than assign available
work to the most senior employee Steger asserted, and
Ecroyd disagreed, that Tycon was bound to assume the
Contee Sand collective-bargaining agreement and that
the Union would prevail on this issue On the issue of se-
niority for work opportunities, Steger told Kevin Ecroyd
that once the company attorney advised him he should
follow the contract, the Union would expect a retroac-
tive settlement. Steger testified, "He [Kevin Ecroyd]
stated to me if this results in a charge, I will let Brinn
[the driver with least seniority] go right now." Appar-
ently "charge" was used in the sense either of an added
cost to the employer or an additional problem with the
Union. Steger told Ecroyd he did not think it wise for
Ecroyd to make retaliatory statements. I find Kevin
Ecroyd was not making an illegal threat in the circum-
stances. The situation was really a bargaining one on the
issue of whether or not the collective-bargaining agree-
ment applied. Tycon admittedly had changed the terms
of employment to some extent by rotating the work
among the three drivers. If this were to result in an un-
10 The management of Tycon was headed by Richard Ecroyd as presi-
dent , as he was of Maryland Equipment, Contee Sand, and Calan His
brother Kevin Ecroyd managed Maryland Equipment and also Tycon
from the commencement of its operations until sometime in the autumn
of 1981 when he was moved to the main office of Contee Sand in Laurel
and was replaced in Beltsville by Dennis McGrath as manager of Mary-
land Equipment, of another firm called Solvents, and of Tycon McGrath
had previously worked for Contee Sand at Laurel. From this and other
evidence it is apparent that historically managers and supervisors have
been moved about in the operations of Contee Sand and enterprises asso-
ciated with it financially or through managerial relationships
anticipated cost or problem with the Union, elimination
of the junior driver could avoid that problem. For Kevin
Ecroyd to point this out was not, in my view, an illegal
threat. It is apparent from the record there was not
much work for Tycon at that time
Although in this meeting Kevin Ecroyd specifically
refused to honor all of the terms of the Union's agree-
ment with Contee Sand, he in fact recognized Local 639
as the representative of the tractor-trailer drivers and
bargained respecting the grievances, one of which he set-
tled in that he agreed to pay the drivers holiday pay for
working on Labor Day. After the September 15 meeting,
Tycon did not change its position respecting its obliga-
tions under the Contee Sand collective-bargaining agree-
ment.
Prospects for the success of Tycon were never promis-
ing. Contee Sand was its only customer and, as early as
June 1981, its need for tractor-trailer services had dimin-
ished considerably because it was no longer engaged in
asphalt contracting nor, with the startup of Calan, in the
ready-mix business. The Union Trust Company as lien
holder on the tractor-trailer equipment believed that if
Tycon could generate outside business, the bank's
chances of selling the equipment and thereby liquidating
the loans would improve, but that hope for new business
did not materialize. Tycon had the use of the equipment
without charge because the bank apparently viewed it as
part of its program to liquidate debts. Essentially, the
only overhead of Tycon was the payroll. Technically it
owed rent to Maryland Equipment, Incorporated, but
none was ever paid. About January 1982, when it
became apparent that Tycon had not succeeded in gener-
ating a new clientele and had no realistic prospect of
purchasing the tractor-trailers it was using, the Union
Trust Company decided to foreclose on the liens it held
on that equipment. As a result Tycon ceased doing busi-
ness. This occurred about 6 months after Tycon had
been reactivated which would place it in early 1982.
Louis Williams, who did mechanical work for Contee
Sand and later for Calan, testified that he was laid off by
Calan in December 1981 and recalled in April 1982, at
which time Tycon was no longer operating.
G Analysis of the Relationship of Contee Sand to
Calan and Tycon
1. The legal principles
The General Counsel and the Union contend that
Calan and Tycon are bound to the terms of the collec-
tive-bargaining agreement even as Contee Sand. The
General Counsel cites legal precedents applicable to suc-
cessors, single employers, and alter egos Calan and
Tycon contend none of these principles saddles them
with the burdens of the collective-bargaining agreement.
In determining whether an employer is a successor of
another employer, the Board has used the following cri-
teria- (1) whether there has been a substantial continuity
of the same business operations; (2) whether the new em-
ployer uses the same facilities; (3) whether the new em-
ployer has the same or substantially the same work force;
(4) whether the same jobs exist under the same working
CONTEE SAND & GRAVEL CO 585
conditions, (5) whether the alleged successor employs
the same supervisors; (6) whether the same machinery,
equipment, and processes are used; and (7) whether the
same product or services are offered J-P Mfg., 194
NLRB 965, 968 (1972), Miami Industrial Trucks, 221
NLRB 1223, 1224 (1975). The Board does not require
that all of these factors be present to find successorship,
but only enough to warrant a finding that no basic
change has occurred in the employing industry. Lincoln
Private Police, 189 NLRB 717, 720 (1971) Nor does the
Board require that the entire business of the predecessor
be taken over by the successor, it being sufficient if a
part of the old operation survives in the successor
Miami Industrial Trucks, supra; Avenue Meat Center, 184
NLRB 826 (1970). The Board finds more than one enter-
prise to be a single employer where there is common
ownership and financial control which is actual rather
than potential, common management, interrelation of op-
erations, and centralized control of labor relations. Elec-
trical Workers IBEW Local 1264 v. Broadcast Service of
Mobile, 380 U S. 255 (1965); Don Burgess Construction
Corp., 227 NLRB 765 (1977); Western Union Corp., 224
NLRB 274 (1976). But it is not essential that all of these
elements be present Malcolm Boring Co., 259 NLRB 597,
601 (1981). As to whether an enterprise is the alter ego
of another, the Board looks to a greater number of fac-
tors such as whether the enterprises have substantially
identical ownership, management, business purpose, op-
eration, equipment, customers, and supervision of em-
ployees. Crawford Door Sales Co., 226 NLRB 1144
(1976). Again not all of these factors need be satisfied for
a finding of alter ego In H. S. Brooks Electric, 233
NLRB 889 (1977), and also in American Pacific Concrete
Pipe Co., 262 NLRB 1223 (1982), enterprises were found
to be alter egos in the absence of common ownership.
There is also an additional factor which the Fifth Circuit
describes in Carpenters Local 1846 v. Pratt-Farnsworth,
690 F.2d 489, 508 (5th Cir. 1982), in the following
words:
However, the focus of the alter ego doctrine , unlike
that of the single -employer doctrine, is on the exist-
ence of a disguised continuance or an attempt to
avoid the obligations of a collective-bargaining
agreement through a sham transaction or technical
change in operations E g., Amalgamated Meat Cut-
ters Y. NLRB, 663 F.2d 223. 227 (D.C. Cir. 1980).
2 Before and after
As the predecessor enterprise here, Contee Sand in-
cluded both the ready-mix operations and tractor-trailer
operations as well as others. It is a wholly owned corpo-
rate subsidiary of Contee Resources, Inc, which in turn
is a subsidiary of Capitol Resources and Properties, Inc.,
the principal stockholders of which included Hugh
Levey, Roger Malkin, and apparently Charles Hall and
two law firms. Although the size of the stockholders' in-
vestment is not apparent in this record, it is clear that
their equity afforded them too little effective control to
guide the destinies of the enterprise. The real financial
power rested with those who provided the debt capital,
the insurance group on the one hand and the Union
Trust Company on the other These creditors do not
appear to have intervened in the management of the
Company until the increasingly precarious financial con-
dition of Contee Sand required that they take action to
protect their interests The insurance companies fore-
closed on the real estate, the source of the sand and
gravel so important to the operation, and the realty ulti-
mately passed into the hands of the Kingdon Gould
group. In the meantime, Contee Sand's rights to the sand
and gravel continued only on an impermanent lease ar-
rangement which ultimately was not renewed and the
Company was evicted For its part the Union Trust
Company, which at first did not interfere in the manage-
ment of the Company, increasingly involved itself until
in the latter stages it was monitoring on a daily basis the
company checks written to carry on ordinary business.
From the time he became president of Contee Sand in
1977 until he was discharged by Kingdon Gould in June
or July 1982, Richard Ecroyd exercised day-to-day man-
agerial authority and in turn reported to the stockhold-
ers, particularly Hugh Levey and to some extent to
Roger Malkin. How frequently this reporting occurred is
not clear but the sense of the evidence as a whole is that
such reports were frequent In his relations with the
equity holders I find that Richard Ecroyd enjoyed con-
siderable latitude, he being the man at the scene and the
stockholders being absentee owners. But his ability on
their behalf to control the enterprise progressively dimin-
ished. In the period immediately preceding the creation
of Calan and the activation of Tycon in the summer of
1981, the fate of Contee Sand lay in the hands of its
large creditors, one group having the power to cut off
the source of sand and gravel and the other controlling
the flow of working capital and the use of rolling stock
and equipment Both were looking to liquidate their posi-
tions. In this context, the managers of Contee Sand as
well as the stockholders had little real control of the fate
of the enterprise because they lacked control of the es-
sential capital and finances on even a relatively short-
term basis. Management did maintain immediate control
of the products and services supplied customers, the day-
to-day use of equipment, the work of employees, and the
labor relations , but even this authority was subject to the
daily financial monitoring of the bank
With the startup of Calan, it too was dependent on the
source of sand and gravel and the use of processing fa-
cilities in the same way as Contee Sand Similarly, both
Calan and Tycon enjoyed, at the pleasure of the bank,
use of the rolling stock titled to Contee Sand But nei-
ther Calan nor Tycon was generally obligated on the
debts which Contee Sand owed, and to some extent each
presented a new financial picture. The equity capital in
Calan was supplied by Richard Ecroyd and Hugh
Levey, although Ecroyd apparently had not had a signif-
icant ownership in Contee Sand Thus, some change oc-
curred in ownership and financial control from Contee
Sand to Calan. In other respects, and except for the
change of the office to Kensington, Calan was remark-
ably similar to the ready-mix division of Contee Sand
which preceded it. Richard Ecroyd, the president of
Contee Sand, also became president of Calan The imme-
586 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
diate management of day-to-day operations became the
responsibility of Payne who previously directed oper-
ations of Contee Sand. The aggregate for concrete was
obtained from the same source and processed in the same
facilities. The same rolling stock was used. The same
customers were served in that Calan took over perform-
ance of Contee Sand contracts, although it also endeav-
ored to obtain new business. Calan used the same em-
ployees as Contee Sand, working in the same locations,
performing the same work. Under Contee Sand, labor re-
lations were controlled directly by Payne and, above
him, by Richard Ecroyd The same was true with Calan.
Finally, no hiatus interrupted the continuity of oper-
ations as they moved from Contee Sand to Calan.
With Tycon, the situation was similar It was a subsidi-
ary of Capitol Resources and Properties, Inc., as was
Contee Sand, Richard Ecroyd was also Tycon's presi-
dent, Hugh Levey was the director to whom Richard
Ecroyd reported, and his brother Kevin Ecroyd was
general manager and dispatcher. Kevin Ecroyd also was
manager of Maryland Equipment Company which en-
gaged in the business of leasing trucks and was a lessor
of ready-mix trucks to Calan Richard Ecroyd was presi-
dent and in fact controlled Maryland Equipment Compa-
ny. When Tycon was activated, its office was set up on
the premises of Maryland Equipment Company in Belts-
ville It is apparent that very little change in managerial
control occurred with the assumption by Tycon of trac-
tor-trailer operations And there appears to have been no
change whatsoever in ownership inasmuch as previously
Tycon was a dormant subsidiary of the parent corpora-
tion, Capitol Resources and Properties, Inc , of which
Contee Sand was also a subsidiary, and after its activa-
tion Tycon continued to be such a subsidiary. Thus, the
tractor-trailer operations were simply shifted from one
subsidiary to another In other respects Tycon continued
with tractor-trailer operations in a manner unchanged
from operations under Contee Sand and with no hiatus
between the Contee Sand phase and the Tycon phase
The same employees were used, the same equipment was
used, the same services were supplied to Contee Sand,
the only customer, and this service filled the same need
for Contee Sand as before so that a total interrelation of
operations continued I find that labor relations contin-
ued to be controlled by Richard Ecroyd as president of
both companies Although Kevin Ecroyd was the day-
to-day manager of Tycon and the person to whom Busi-
ness Representative Steger took the grievances of trac-
tor-trailer drivers, Kevin made it clear he was taking
orders from his brother. Moreover, he was managing
Tycon as an extra duty added to his existing responsibil-
ities for managing Maryland Equipment Company. Al-
though Tycon was set up in Beltsville rather than in
Laurel where Contee Sand was located, the work per-
formed by the employees, being entirely for Contee
Sand, was for the most part performed in the same loca-
tions as previously Thus, the change of the location of
the headquarters from Laurel to Beltsville appears less
significant than if the work place of the employees also
had changed
A signficant aspect of the context in which these spin-
offs occurred stems directly from the heavy debt burden parent in the record
of Contee Sand. Continued access to the aggregate
mined in Laurel, as well as to the equipment for process-
ing it, was in doubt and at a later point, Kingdon Gould
cut off that access entirely. In order to limit its participa-
tion, the bank already had forced cessation of the asphalt
division of Contee Sand thereby eliminating the need for
some tractor-trailer services. i i The bank was exploring
ways of further liquidating the loans secured by the
equipment and rolling stock With the cooperation of
Richard Ecroyd and Hugh Levey, Calan, and Tycon
were set up to carry on these businesses in entities not
primarily obligated for the debts of Contee Sand. To fa-
cilitate this reorganization the bank allowed them free
use of the equipment and rolling stock. The purpose of
the reorganizers appears to have been to set up viable
enterprises to use and ultimately take over, lease, or pur-
chase that pledged property. Richard Ecroyd testified,
and I find, that his own purpose was to create a replace-
ment job, and income, for himself since Contee Sand was
being phased out It was apparent that if Calan succeed-
ed as a business, he and Levey probably would prosper
because of their investment. Similarly, if Tycon succeed-
ed, the investors in Capitol Resources and Properties,
Inc., probably would benefit. What these reorganizations
did was to remove the ready-mix and the tractor-trailer
operations from Contee Sand into other business forms
which had a better chance of surviving by having es-
caped the debt burden. The $80,000 owed the union
funds was part of that debt burden.
The General Counsel characterizes the transfer of the
two operations to Calan and Tycon as sham transactions
designed to evade legal responsibility under the union
agreement. Respondents contend they were arm's-length
transactions with no carryover of responsibility for the
collective-bargaining agreement. Neither characterization
hits the mark These were certainly not arm's-length
transactions They were parts of a program of internal
reorganization engineered by the interested parties, the
most interested and influential of which was the bank. It
approved and subsidized the transfer of operations to
corporate entities which, although they were not obligat-
ed on the notes owed the bank, had some prospects of
becoming vehicles for liquidating those debts Thus,
these arrangements contemplated that Calan and Tycon
would not be bound on those debts in the same way as
Contee Sand. If, by analogy, the $80,000 owed the union
funds were treated as an ordinary business debt, Calan
and Tycon would not be obligors on those debts either.
The position taken by Payne, Grodnitsky, and Board-
man, as well as the testimony of Richard Ecroyd as a
whole, all indicate that the officials of Calan and Tycon
were attempting to avoid responsibility for Contee Sand
debts, including the debts owed the union funds. There
were indications, of course, of a willingness to be obli-
gated to the funds on some lesser basis such as a guaran-
tor. For its part, the Union held firm on the principle
that Calan and Tycon owed the debts even as Contee
Sand. In sum, the reorganizations resulting in Calan and
The exact date of the termination of the asphalt operation is not ap-
CONTEE SAND & GRAVEL CO 587
Tycon were in the main attempts to avoid preexisting
debts including those owed the union funds. No effort
was made to hide what was happening or to engage in a
sham transaction even though the reorganization was en-
gineered by insiders. But it is clear that debts owed the
union funds intentionally were not assumed, so that one
purpose of the reorganizations was to avoid full obliga-
tion for collective-bargaining debts, as well as other
debts, through the technical changes in operations de-
scribed above See the language of the Fifth Circuit in
Carpenters Local 1846 v. Pratt-Farnsworth, Inc., supra, 690
F.2d at 508. Considering this aspect, as well as others
noted above in which Calan and Tycon closely resemble
their predecessor operations in Contee Sand, it must be
concluded that, for labor relations purposes, each is not
only the successor but a single employer with, and the
alter ego of, that operation of Contee Sand to which it
succeeded
Calan and Tycon are successors because substantial
continuity of operations carried across to the new corpo-
rations. Lathers Local 104 v. McGlynn Plastering, 91
LRRM 3000 (W.D. Wash 1976). Where, as here, each
made clear in advance the intention to keep all the em-
ployees in the respective operation, each at least was ob-
ligated to not unilaterally alter terms and conditions of
employment. NLRB v. Backrodt Chevrolet Co., 468 F.2d
963 (7th Cir. 1972), and see NLRB v. Burns Security Serv-
ice, 406 U.S. 272 (1972), where the Supreme Court sug-
gested that a successor employer that clearly intends to
retain the predecessor's employees may not be free to
unilaterally set terms and conditions of employment In
circumstances where continuity results in almost all as-
pects of the operation, as is the case with Calan and
Tycon, terms of the predecessor's collective-bargaining
agreement bind a successor See Lathers Local 104 v.
McGlynn Plastering, supra.
Beyond these considerations, the circumstances imme-
diately after the transfer without hiatus of the two oper-
ations, while Contee Sand was still in business, Richard
Ecroyd was chief executive of all three companies, and
the Union Trust Company a dominant financial influence
in all three, demonstrate the "presence of a very substan-
tial qualitative degree of centralized control of labor re-
lations," and "a substantial qualitative degree of interrela-
tion of operations and common management-one that
. . . would not be found in the arm's length relationship
existing among unintegrated companies " Operating Engi-
neers v. NLRB, 518 F.2d 1040, 1046, 1047 (D C Cir.
1975). See also NLRB v Campbell-Harris Electric, 719
F.2d 292 (8th Cir. 1983). Not only were these not arm's-
length transactions, but the principal purpose of the new
arrangements was to free these successors from the bur-
dens of preexisting debts, including collective-bargaining
debts. Consequently, the successors, Calan and Tycon,
are legally alter egos of Contee Sand for labor relations
purposes and bound by its collective-bargaining agree-
ment Bell Co., 225 NLRB 474, 481 (1976). The circum-
stances here are similar to those in Pension Fund v. Insul-
Contractors, 115 LRRM 2442, 2445 (E.D La. 1983),
where the district court applied the alter ego doctrine to
bind a successor to the predecessor's collective-bargain-
ing agreement. I find Calan and Tycon are similarly obli-
gated and their failures to fulfill those obligations are
unfair labor practices within the meaning of Section
8(a)(5) and (1) of the Act. Big Bear Supermarkets No. 3,
239 NLRB 179 (1978). Because the collective-bargaining
agreement applies to Calan and Tycon as well as Contee
Sand, their failures to make periodic payments to the
union health and welfare and pension funds were further
rejections of duties owed. While Calan appears to have
followed the union contract in other respects, Tycon re-
fused to do so more generally, and specifically refused to
honor the contractual terms respecting job rotation,
overtime pay, holiday pay and vacation pay. In addition,
neither Calan nor Tycon checked off and remitted union
dues as provided in the contract.
H. Dump Truck Subcontracting to Maryland
Equipment, Inc.
In connection with its mining and processing of sand
and gravel, Contee Sand employed four or five dump
truck drivers to haul sand and gravel from the pits to the
processing facilities. At times when that number of
trucks was insufficient, it subcontracted part of that work
to others Since 1978 Maryland Equipment, Inc has pro-
vided some of the trucks and drivers for this extra work.
The understanding with the Union has been that such
subcontracting would occur only if the available Contee
Sand drivers were fully employed. On at least two occa-
sions the Union had filed grievances claiming Contee
Sand had subcontracted such work although its own
drivers were available. Both grievances were amicably
settled.
In December 1981, Contee Sand laid off all its dump
truck drivers. A member of management told one of the
mechanics at that time that the Company was ceasing
dump truck operations. Richard Ecroyd credibly testi-
fied, and I find, that the drivers were laid off because
cold weather made it impossible to process sand and
gravel and there was no need at that time for their serv-
ices. Until then Contee Sand had been mining sand and
gravel pursuant to extensions of the leasing arrangement
referred to above. But that lease arrangement abruptly
ended in the first week of January 1982, when Kingdon
Gould, who controlled the essential real estate, evicted
Contee Sand from the property Contee Sand had no
control over this event which effectively terminated its
sand and gravel operations. It did not thereafter resume
them. 12 I base these findings on the credited testimony
of Richard Ecroyd. To the extent that the testimony of
Louis Williams indicates Contee Sand engaged in sand
and gravel operations in April 1982 using Maryland
Equipment dump truck drivers instead of its own, I do
not credit him It is not established that it was Contee
Sand that was operating at that time or that Williams
was in a position to know. Other credible evidence indi-
cates Kingdon Gould set up another sand and gravel op-
eration in the same facility under the name of Laurel
Sand and Gravel Company Considering all of the above,
I find there is insufficient evidence to establish that in
12 There is no contention here that Contee Sand unlawfully failed to
bargain with the Union regarding partial termination of its business
588 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
December 1981 and January 1982, or thereafter, Contee
Sand subcontracted dump truck work in lieu of employ-
ing its own laid-off dump truck drivers So far as Calan
and Tycon are concerned, the evidence shows that nei-
ther succeeded to any of the sand and gravel operations,
so that even as alter egos of Contee Sand, their alter ego
status applies only to the operations transferred, not to
operations not transferred. Based on the foregoing I find
that the allegations of violations of Section 8(a)(5) and
(1) because of the layoff of dump truck drivers in De-
cember 1981 and the failure to recall them thereafter
should be dismissed
1. The Failure to Furnish Information
In letters to Respondents' attorneys on June 23, July 9,
and September 3, 1981, the Union requested it be fur-
nished the following information respecting Contee
Sand, Calan, and Tycon:
Corporate charters and bylaws;
Corporate records and minutes showing stock
ownership and officers and directors;
Financial records reflecting accounts payable and
accounts receivable;
Written agreements between them;
Registrations of motor vehicles,
Quarterly federal tax returns showing income
taxes withheld from wages and FICA taxes with-
held.
I find the information requested was relevant to the
Union's performance of its function as representative of
the employees. I base this on the evidence that in June
1980 trustees of the union health and welfare fund and of
the pension fund notified Contee Sand it would no
longer extend coverage to its employees because of its
delinquency in contributions to those funds Contee Sand
continued its delinquency and on November 18, 1980,
Local 639 filed a grievance respecting its failures to
make the contributions The Union's September 3, 1981
request for information, which incorporated earlier re-
quests of June 23 and July 9, 1981, came after Calan and
Tycon commenced operations under circumstances indi-
cating they were successors to parts of the Contee oper-
ation and, arguably, alter egos of, and a single employer
with, Contee Sand. The requested information was rele-
vant to those issues.
Although Respondents deny the allegation of rel-
evance to the Union's representative function, no defense
has been made on that basis. The defense which is made
is that the requested information was later sought by sub-
poenas in the present matter which were honored by
making the information available at the hearing herein.
The hearing commenced August 24, 1982, then recessed
and resumed again October 25, and 26, 1982, then re-
cessed again to December 14, 1982, at which time the
subpoenaed documentation was finally brought to the
hearing and for the first time made available to union
counsel . Before the December 14 hearing date the infor-
mation had been available to the General Counsel, but
that did not meet the needs of the Union in its labor rela-
tions functions prior to December 14, 1982 Electric Fur-
nace Co., 137 NLRB 1077, 1081 (1962); Utica Observer,
111 NLRB 58, 63 (1955). Calan and Tycon also argue
there is no further use for the documents for bargaining
purposes because both Calan and -Tycon are now out of
business and it would be fruitless to order them to post a
notice respecting their failure to furnish information.
This, of course, goes to remedy and is no defense on the
question of whether or not an unfair labor practice oc-
curred.
It is clear from the above that Contee Sand, Calan,
and Tycon all failed to furnish the Union in a timely
manner with requested information relevant to its func-
tion as the representative of the employees of Contee
Sand , Calan, and Tycon. The Union was entitled to this
information not only during bargaining, but also at other
times and in particular with respect to pending griev-
ances (see NLRB v. Truitt Mfg. Co., 351 U.S. 149 (1956);
NLRB v. Acme Industrial Co., 385 U.S. 432 (1967)) and
with respect to questions regarding the alter ego status of
Calan and Tycon (see Leonard B. Hebert, Jr. & Co, 259
NLRB 881 (1981)). Accordingly, I find that in failing
promptly to provide the information Respondents com-
mitted unfair labor practices prohibited by Section
8(a)(5) and (1) of the Act.
J The Refusal to Sign an Agreement
The complaint alleges, and Respondents deny, that on
October 27, 1981, the Union and Respondents reached
full and complete agreement on collective-bargaining
agreements between them which the Union at that time
requested Respondents to execute but which Respond-
ents on December 17, 1981, refused to do. Although Re-
spondents deny such agreements were reached, there is
no dispute that the Union requested them to execute
agreements nor, apparently, that Respondents refused to
do so. It is clear they have not in fact executed such
agreements. Respondents' defense is that there is no ad-
missible evidence to support the allegation that they
agreed and, therefore, they should be dismissed.
In his opening statement the General Counsel pro-
posed to show that during the autumn of 1981 Attorneys
Grodnitsky and Boardman on behalf of Contee Sand,
Tycon, and Calan negotiated with union officials with
the result that they agreed on a release and settlement
agreement encompassing three separate collective-bar-
gaining agreements, one for each of the three companies
and that subsequently the companies refused to execute
the agreements. During the presentation of evidence the
General Counsel offered to prove that attorneys for the
Union and for Respondents conferred on a number of
occasions subsequent to September 3, 1981, for the pur-
pose of resolving disputes between their clients over
moneys owed the union funds and matters of civil litiga-
tion based on those claims including a pending arbitra-
tion proceeding, two of the instant Board proceedings,
and a civil suit in Federal district court; that a verbal un-
derstanding was reached resolving these issues, a part of
the understanding being that Calan and Tycon and Local
639 would enter into collective-bargaining, agreements;
that the union attorney thereafter prepared a document
entitled Release and Settlement Agreement to which was
CONTEE SAND & GRAVEL CO
appended a form of collective-bargaining agreements for
each company, that following delivery of this packet to
Respondents' attorneys, they reneged on the understand-
ing and Respondents have never executed the Release
and Settlement Agreement or the appended collective-
bargaining agreements This evidence was ruled inadmis-
sible under Rule 408 of the Federal Rules of Evidence as
evidence of conduct or statements made in compromise
negotiations. In his posthearing brief the General Coun-
sel renews his request that the excluded evidence be re-
ceived Having reconsidered the matter, I adhere to the
ruling made at the hearing that the evidence is inadmissi-
ble under Rule 408 of the Federal Rules of Evidence.
Building & Construction Trades Council, 222 NLRB 1276
fn. 1 (1976), affd sub nom. Altemose Construction Co. v.
NLRB, 93 LRRM 3085 (3d Cir. 1976). There being no
admissible evidence to support the allegation that the
Union and Respondents reached agreement on the terms
of collective-bargaining agreements which Respondents
have refused to execute, those allegations of the com-
plaint should be dismissed. See NLRB v. H. J. Heinz, 311
U.S. 514 (1941)
CONCLUSIONS OF LAW
1 Respondents Contee Sand, Calan, and Tycon are
(a) Employers as defined in Section 2(2) of the Act.
(b) A single employer for labor relations purposes.
(c) Alter egos of each other for labor relations pur-
poses
(d) Engaged in commerce and operations affecting
commerce within the meaning of Section 2(6) and (7) of
the Act.
2. The following employees constitute a unit appropri-
ate for collective bargaining within the meaning of Sec-
tion 9(b) of the Act.
All ready-mix truck drivers, ready-mix mechanics,
ready-mix mechanics' helpers and partsmen, yard
helpers, dump truck drivers, tractor-trailer truck
drivers, dump truck and tractor-trailer mechanics,
and mechanics' helpers employed by Respondents
Contee Sand and Gravel Company, Inc., Calan
Concrete Corp., and Tycon, Inc., excluding dis-
patchers, supervisory and managerial personnel,
owner-operators, employees of owner-operators, in-
dependent contractors and employees of independ-
ent contractors
3. Local 639 is a labor organization as defined in Sec-
tion 2(5) of the Act.
4. Local 639 is the exclusive representative, as defined
in Section 9(a) of the Act, of employees in the above-de-
scribed bargaining unit.
5. Respondents engaged in unfair labor practices
within the meaning of Section 8(a)(1) and (5) and 8(d) of
the Act by
(a) Failing to abide by the collective-bargaining agree-
ment between Contee Sand and Local 639.
(b) Altering the terms and conditions of employment
of employees in the above-described bargaining unit uni-
laterally and without consulting Local 639.
589
(c) Failing promptly to furnish Local 639 with infor-
mation it requested which was relevant to its representa-
tion of employees in the above -described bargaining unit.
6. The unfair labor practices found above affect com-
merce within the meaning of Section 2(6) and (7) of the
Act.
THE REMEDY
Having found that Respondents engaged in unfair
labor practices, I recommend they be ordered to cease
and desist therefrom and to take certain affirmative
action designed to effectuate the purposes of the Act.
The recommended order will require that they bargain
collectively in good faith with Local 639 as the exclusive
collective-bargaining representative of the employees in
the unit found appropriate herein, that they apply the
terms and conditions of the collective-bargaining agree-
ment between Local 639 and Contee Sand, and that they
furnish Local 639 with information relevant to its collec-
tive-bargaining function The order will require that Re-
spondents, jointly and severally, make whole the em-
ployees for any loss of benefits they may have suffered
by reason of the unfair labor practices found herein, in-
cluding holiday, vacation, and overtime pay for Tycon
employees, and make contributions on behalf of all em-
ployees in the bargaining unit to the appropriate health
and welfare fund and pension fund as required under the
terms of the collective-bargaining agreement referred to
above. See Bros. Concrete Cutting of Eugene, 266 NLRB
No 21 (1983) (not reported in Board volumes); G. T
Knight Co., 262 NLRB 328 (1982); Haberman Construc-
tion Co., 236 NLRB 79 (1978); Vin James Plastering Co.,
226 NLRB 125 (1976). The make-whole remedy shall in-
clude reimbursing employees for contributions they
themselves may have made for the maintenance of their
coverage for such benefits after Respondents unlawfully
failed to contribute, for any premiums they may have
paid to third-party insurance companies for coverage
heretofore provided by the union funds, and for any
medical bills they have paid to health care providers that
the funds would have covered These amounts and any
amounts due for loss of wages, overtime pay, holiday
pay, and vacation pay, and any other amounts which are
easily determined, will be paid with interest thereon
computed at the adjusted prime rate used by the Internal
Revenue Service for the computation of tax payments
Olympic Medical Corp., 250 NLRB 146 (1980); Florida
Steel Corp, 231 NLRB 651 (1977); Isis Plumbing Co., 138
NLRB 716 (1962). Because the provisions of employee
benefit fund agreements are variable and complex, the
Board does not provide at the adjudicatory stage of a
proceeding for the addition of interest at a fixed rate on
unlawfully withheld fund payments The Board leaves to
the compliance stage the question of whether Respond-
ents must pay any additional amounts into the benefit
funds in order to satisfy the "make-whole" remedy.
These additional amounts may be determined, depending
on the circumstances of each case, by reference to provi-
sions in the documents governing the funds at issue and,
where there are no governing provisions, to evidence of
any loss directly attributable to the unlawful withholding
590 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
action, which might include the loss of return on invest-
ment of the portion of funds withheld, additional admin-
istrative costs, etc , but not collateral losses See
Merryweather Optical Co., 240 NLRB 1213 (1979).
I also recommend that Respondents be required to
post the usual notice respecting employee rights and pro-
vide the Union with a copy thereof for posting if it de-
sires. Even though Contee Sand, Calan, and Tycon are
now out of business , a cease-and -desist order and affirma-
tive remedies including a notice are appropriate because
Respondent Corporations , as corporate shells, may again,
like Tycon, be reactivated . The issuance of a Board
order may also have significance for other formal pro-
ceedings , including bankruptcy proceedings , and for the
employees affected by the unfair labor practices.
[Recommended Order omitted from publication.]