Diverse Steel, Inc.

National Labor Relations Board - Board Decisions

Apr 30, 2007

349 N.L.R.B. 946 (N.L.R.B. 2007)

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
349 NLRB No. 90
946
Diverse Steel, Inc. and Pinnacle Steel, Inc., alter egos
and International Association of Bridge, Struc-
tural, Ornamental, and Reinforcing Iron Work-
ers Local 321, AFL–CIO. Case 26–CA–20799
April 30, 2007
DECISION AND ORDER
BY CHAIRMAN BATTISTA AND MEMBERS LIEBMAN
AND WALSH
On March 21, 2003, Administrative Law Judge Marga-
ret G. Brakebusch issued the attached decision. The Re-
spondents filed exceptions and a supporting brief. The
General Counsel and the Union each filed cross-
exceptions, supporting briefs, and answering briefs to the
Respondents’ exceptions.
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the decision and the record
in light of the exceptions and briefs and has decided to
affirm the judge’s rulings, findings,1 and conclusions as
modified and to adopt the recommended Order as modi-
fied and set forth in full below.2
The judge found, and we agree, that Respondent Pin-
nacle Steel was an alter ego of Respondent Diverse Steel,
and that these Respondents violated Section 8(a)(5) and
(1) when Pinnacle failed to apply the terms of Diverse’s
collective-bargaining agreement to its ironwork employ-
ees.3 In finding that Pinnacle and Diverse were alter
egos, the judge concluded that “Pinnacle ultimately be-
came the means by which Diverse could [] continue to do
business without the limitations and expenses of the Un-
ion contract” and that “since May 2002, Pinnacle has
functioned as a disguised continuance of Diverse.” We
agree with those findings. The judge, however, failed to
also find that Pinnacle was created for the purpose of
evading the Union. Contrary to the judge, we find that
the record supports a finding that one of the reasons for

1 The Respondents have excepted to some of the judge’s credibility
findings. The Board’s established policy is not to overrule an adminis-
trative law judge’s credibility resolutions unless the clear preponder-
ance of all the relevant evidence convinces us that they are incorrect.
Standard Dry Wall Products, 91 NLRB 544 (1950), enfd. 188 F.2d 362
(3d Cir. 1951). We have carefully examined the record and find no
basis for reversing the findings.
2 We shall modify the judge’s recommended Order to include in-
statement and make-whole relief for those employees who would have
been referred from the Union’s hiring hall to the Respondents for em-
ployment were it not for the Respondents’ unlawful conduct. We shall
also include the appropriate remedial language for the violations found.
We shall substitute a new notice to conform to the language of the
Order.
3 We also agree with the judge that the Respondents did not violate
Sec. 8(a)(3) and (1) by refusing to recall Diverse’s employees to work
on the Rave 18 Theater Project.
forming Pinnacle was to avoid Diverse’s contractual and
statutory obligations under the Act.
The Board generally will find alter ego status where
two entities have substantially identical management,
business purposes, operations, equipment, customers,
supervision, and ownership.4 Not all of these indicia
need be present, and no one of them is a prerequisite to
an alter ego finding.5 Although unlawful motivation is
not a necessary element of an alter ego finding, the Board
also considers whether the purpose behind the creation of
the alleged alter ego was to evade responsibilities under
the Act.6 Where there is evidence that the second com-
pany was formed to take over the business of the first—
in order to reduce its labor costs by repudiating the un-
ion’s collective-bargaining agreement—the Board has
found that the second company was formed with the
unlawful motive of avoiding the first company’s respon-
sibilities under the Act. Midwest Precision Heating &
Cooling, Inc., supra, 341 NLRB at 439.
Here, the relevant facts are that Troy Noe, his wife
Gwen Noe, and Gwen Noe’s mother, Joan Drilling, in-
corporated Diverse Steel in May of 1997 to perform
structural steel erection, rebar installation, rigging, and
machinery moving work. At all times relevant, Diverse
was a member of the association of steel erector employ-
ers and signatory to the Union’s collective-bargaining
agreement. In February 1998, Pinnacle Steel was incor-
porated by Gwen Noe and her father, John Drilling, to
perform the same type of work as Diverse. After Pinna-
cle began operations, Diverse ceased operations. Pinna-
cle has never recognized any union as representative of
its employees. On August 30, 2001, Gwen Noe docu-
mented her resignation as a corporate officer of Diverse
with the State of Arkansas. In November 2001, Pinnacle
began work within the Union’s jurisdiction.
The judge correctly found that Diverse and Pinnacle
shared substantially identical ownership, business pur-

4 Cadillac Asphalt Paving Co., 349 NLRB No. 5, slip op. at 3
(2007); Advance Electric, 268 NLRB 1001, 1002 (1984); Crawford
Door Sales Co., 226 NLRB 1144 (1976).
5 Cadillac Asphalt, supra, slip op. at 3.
6 Cadillac Asphalt, supra, slip op. at 3; Midwest Precision Heating &
Cooling, Inc., 341 NLRB 435, 439 (2004), enfd. 408 F.3d 450 (8th Cir.
2005); Cofab, Inc., 322 NLRB 162, 163 (1996), enfd. sub nom mem.
NLRB v. DA Clothing Co., 159 F.3d 1352 (3d Cir. 1998); Fugazy Con-
tinental Corp., 265 NLRB 1301, 1302 (1982), enfd. 725 F.2d 1416
(D.C. Cir. 1984).
Chairman Battista adheres to his position that the General Counsel
must show, among other things, an intent to avoid legal obligations
under the Act in order to prove alter ego status. See Crossroads Elec-
tric, Inc., 343 NLRB 1502 fn. 2 (2004), enfd. 178 Fed. Appx. 528 (6th
Cir. 2006). However, in light of the evidence of improper motive here,
discussed infra, Chairman Battista finds it unnecessary to address
whether a finding of alter ego status would be warranted in the absence
of unlawful motive.
DIVERSE STEEL, INC. 947
poses, operations, equipment, customers, supervision,
and management. However, the judge also found that
there was insufficient evidence to conclude that Pinnacle
was specifically created with the intention to avoid Di-
verse’s contractual obligations. Contrary to the judge,
we find that there is sufficient evidence to establish that
Pinnacle was formed in part in order to avoid Diverse’s
contractual and statutory obligations under the Act.
The record shows that Gwen Noe stated that she
wanted to resign from Diverse because she felt her hus-
band, Troy Noe, did not get his “money’s worth” from
the Union. Union secretary Doris Mae Eoff testified that
Gwen Noe told her that, according to Diverse’s account-
ant, Diverse would be better off if it went nonunion. The
chairman of Arkansas Best Contractors’ Association,
Boyd Sanders, stated that, during a meeting with Troy
Noe to discuss negotiations with the Union, Noe stated,
“Well, this is all I can do and if I can’t get a contract for
this, I’ll just have to open shop.” In addition to those
three statements, all of which the judge credited, Gwen
Noe testified that: (1) one of the reasons she formed Pin-
nacle was because she wanted Diverse to go nonunion
and that she urged Troy Noe to follow this advice; (2)
her concern was “mainly a financial issue”; and (3) her
accountants (and others) advised her to get Troy Noe to
leave the Union because the benefits required under the
collective-bargaining agreement were too costly. Troy
Noe testified that, to ensure Pinnacle did not become
unionized, Gwen Noe consulted with him before making
hiring decisions in order to determine whether he knew a
particular applicant from his previous involvement in
organizing and “salting” jobs for the Union. Troy Noe
further testified that Pinnacle employed Diverse’s unit
employees on the Rave 18 Theatre Project, and did not
pay them benefits required under Diverse’s collective-
bargaining agreement.
Considered as a whole, the foregoing evidence estab-
lishes that Pinnacle was formed in an attempt to evade
Diverse’s responsibilities under the Act, because the Re-
spondent felt that Diverse’s labor costs were too great.
Thus, in addition to the reasons cited by the judge for
finding Diverse and Pinnacle to be alter egos, we find
that the formation of Pinnacle in order to avoid Diverse’s
responsibilities under the Act further supports an alter
ego finding. See Midwest Precision Heating & Cooling,
Inc., supra at 439.7

7 In finding an unlawful motive, Chairman Battista notes that there is
a distinction between the economic motive of seeking to avoid per-
ceived high labor costs and the antiunion motive of seeking to avoid the
union. Where, as here, the labor costs are embodied in a contract with
the union, the distinction is sometimes not clear. In the instant case, the
Respondent did not go to the Union in an effort to seek to reduce labor
ORDER
The Respondents, Diverse Steel, Inc. and Pinnacle
Steel, Inc., Roland and Little Rock, Arkansas, their offi-
cers, agents, successors, and assigns, shall
1. Cease and desist from
(a) Failing and refusing to recognize and bargain col-
lectively with the International Association of Bridge,
Structural, Ornamental and Reinforcing Iron Workers
Local 321, AFL–CIO, in an appropriate unit of Iron-
workers, by refusing to apply the terms and conditions of
its collective-bargaining agreement, including wage rates
and fringe benefit fund contributions to the employees
and by abrogating the agreement.
(b) In any like or related manner interfering with, re-
straining, or coercing employees in the exercise of the
rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) Within 14 days of the date of this Order, offer full
and immediate employment to those work applicants
who would have been referred to the Respondents for
employment through the Union’s hiring hall were it not
for the Respondents’ unlawful conduct.
(b) Make whole those work applicants who would
have been referred to the Respondents for employment
through the Union’s hiring hall for any loss of earnings
and other benefits they may have suffered by reason of
the Respondents’ failure to hire them, in the manner set
forth in F. W. Woolworth Co., 90 NLRB 289 (1950),
with interest as computed in New Horizons for the Re-
tarded, 283 NLRB 1173 (1987).
(c) Honor and abide by the terms and conditions of its
executed collective-bargaining agreement with the Union
since May 2002, and make whole its employees repre-
sented by the Union for any loss of pay and other bene-
fits suffered as a result of Respondents’ refusal to apply
the collective-bargaining agreement to all unit employ-
ees. Backpay shall be computed as set forth in Ogle Pro-
tection Service, 183 NLRB 682 (1970), enfd. 444 F.2d
502 (6th Cir. 1971), with interest as computed in New
Horizons for the Retarded, supra.
(d) Pay all contractually required fringe benefit fund
contributions not previously paid, in accordance with
Merryweather Optical Co., 240 NLRB 1213, 1216
(1979). In addition, make all unit employees whole for
any expenses resulting from the failure to make such
contributions, with interest, as set forth in Kraft Plumb-

costs. Rather, the Respondent used a ploy to get rid of the Union by
artificially creating a new company to replace the old one. In these
circumstances, Chairman Battista agrees that the Respondent acted with
an unlawful antiunion motive.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD948
ing & Heating, 252 NLRB 891 fn. 2 (1980), enfd. 661
F.2d 940 (9th Cir. 1981).
(e) Preserve and, within 14 days of a request, or such
additional time as the Regional Director may allow for
good cause shown, provide at a reasonable place desig-
nated by the Board or its agents, all payroll records, so-
cial security payment records, timecards, personnel re-
cords and reports, and all other records, including an
electronic copy of such records if stored in electronic
form, necessary to analyze the amount of backpay and
benefit contributions due under terms of this Order.
(f) Within 14 days after service by the Region, post at
their place of business and at each of their jobsites copies
of the attached notice marked “Appendix.”8 Copies of the
notice, on forms provided by the Regional Director for
Region 26, after being signed by the Respondents’ au-
thorized representative, shall be posted by the Respon-
dents and maintained for 60 consecutive days in con-
spicuous places, including all places where notices to
employees are customarily posted. Reasonable steps
shall be taken by the Respondents to ensure that the no-
tices are not altered, defaced, or covered by any other
material. In the event that, during the pendency of these
proceedings, the Respondents have gone out of business
or closed the facility involved in these proceedings, the
Respondents shall duplicate and mail, at their own ex-
pense, a copy of the notice to all current employees and
former employees employed by the Respondents at any
time since May 2002.
(h) Within 21 days after service by the Region, file
with the Regional Director a sworn certification of a re-
sponsible official on a form provided by the Region at-
testing to the steps that the Respondents have taken to
comply.
IT IS FURTHER ORDERED that the complaint is dismissed
insofar as it alleges violations of the Act not specifically
found.
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found that we vio-
lated Federal labor law and has ordered us to post and obey
this notice.

8 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 Judg-
ment of the United States Court of Appeals Enforcing an Order of the
National Labor Relations Board.”
FEDERAL LAW GIVES YOU THE RIGHT TO
Form, join, or assist a union
Choose representatives to bargain with us on
your behalf
Act together with other employees for your bene-
fit and protection
Choose not to engage in any of these protected
activities.
WE WILL NOT fail or refuse to recognize and bargain
collectively with the International Association of Bridge,
Structural, Ornamental and Reinforcing Iron Workers
Local 321, AFL–CIO, in an appropriate unit of Iron-
workers, by refusing to apply the terms and conditions of
our collective-bargaining agreement, including wage
rates and fringe benefit fund contributions, to the em-
ployees and by abrogating the agreement.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce employees in the exercise of the
rights guaranteed them by Section 7 of the Act.
WE WILL, within 14 days from the date of the Board’s
Order, offer full and immediate employment to those
work applicants who would have been referred to us for
employment through the Union’s hiring hall were it not
for our unlawful conduct.
WE WILL make those work applicants who would have
been referred to us for employment through the Union’s
hiring hall whole for any loss of earnings and other bene-
fits they may have suffered by reason of our failure to
hire them, plus interest.
WE WILL honor and abide by the terms and conditions
of our collective-bargaining agreement with the Union
since May 2002 and WE WILL make whole our employees
for any loss of pay and other benefits suffered as a result
of our refusal to apply the collective-bargaining agree-
ment to unit employees and to unit work, plus interest.
WE WILL pay all contractually required fringe benefit
fund contributions not previously paid and make whole
unit employees for any expenses resulting from our fail-
ure to make such contributions, plus interest.
DIVERSE STEEL, INC. AND PINNACLE STEEL,
INC., ALTER EGOS
Rosalind Eddins, Esq., for the General Counsel.
Oscar E. Davis Jr., Esq., for the Respondent.
James E. Nickels, Esq., for the Charging Party.
DECISION
STATEMENT OF THE CASE
MARGARET G. BRAKEBUSCH, Administrative Law Judge.
The charge was filed by the International Association of
Bridge, Structural, Ornamental and Reinforcing Iron Workers
DIVERSE STEEL, INC. 949
Local 321, AFL–CIO (Union) on July 9, 2002.1 An amended
charge was filed by the Union on October 30, 2002, and the
complaint issued on October 31, 2002. An amendment to com-
plaint and notice of hearing issued on February 7, 2003. The
complaint alleges that about May 2002 Pinnacle Steel, Inc.
(Pinnacle) was resurrected by Diverse Steel, Inc. (Diverse) as a
substitute instrument to and a disguised continuation of Di-
verse. The complaint alleges that Pinnacle and Diverse (Re-
spondent) are, and have been at all material times, alter egos
and a single employer within the meaning of the National La-
bor Relations Act (the Act). The complaint further alleges that
Respondent withdrew its recognition of the Union as the exclu-
sive collective-bargaining representative of certain employees
of Respondent and has since refused to recognize or bargain
with the Union. The complaint also alleges that Respondent
refused to recall any of the unit employees to work on the Rave
18 Theater Project in Little Rock, Arkansas, because its em-
ployees joined and assisted the Union and engaged in concerted
activities, and to discourage employees from engaging in these
activities.
I heard this matter in Little Rock, Arkansas, on February 13
and 14, 2003. The General Counsel, the Union, and the Re-
spondent filed briefs, which I have considered. On the entire
record, including my observation of the demeanor of the wit-
nesses, and after considering the briefs, I find that Respondent
engaged in certain conduct in violation of Section 8(a)(5) and
(1) of the Act.
FINDINGS OF FACT
I. JURISDICTION
Respondent, a corporation, is engaged in the building and
construction industry performing structural steel erection in
central Arkansas at its facility in Roland, Arkansas. Respon-
dent stipulated that during a relevant 12-month period Diverse
and Pinnacle have provided services to general contractors
within the State of Arkansas who have met the Board’s juris-
dictional standards by their purchases and services provided
outside the State of Arkansas. Based on the stipulation and
there being no evidence to the contrary, I find that Respondent
is an employer engaged in commerce within the meaning of
Section 2(2), (6), and (7) of the Act and the Union is a labor
organization within the meaning of Section 2(5) of the Act.
II. ALLEGED UNFAIR LABOR PRACTICES
A. Issues
The threshold issue in this case is whether Pinnacle and Di-
verse have been alter egos and/or single employers within the
meaning of the Act. Once General Counsel has established the
existence of an alter ego or single employer, the issue then
becomes the extent to which Pinnacle is liable for Diverse’s
contractual obligations and Diverse’s unfair labor practices
under the Act. General Counsel also alleges that Diverse and
Pinnacle have violated Section 8(a)(3) and (1) of the Act by
refusing to recall any of the unit employees of Diverse to work
on the Rave 18 project performed by Pinnacle. General Coun-
sel submits that Respondent failed to recall these employees

1 All dates are in 2002 unless otherwise indicated.
because they joined and assisted the Union and because they
engaged in concerted activities.
B. Background
In January 1994, Troy Noe formed Central Arkansas ReBar,
Inc. (ReBar), a company specializing in the reinforcement of
steel within concrete structures. Troy Noe was the president
and sole stockholder and his wife, Gwen Noe, was the corpora-
tion’s secretary/treasurer. In May 1997, Troy Noe, Gwen Noe,
and Gwen Noe’s mother; Joan Drilling, incorporated Diverse
Steel, Inc. to do structural steel erection, rebar installation, rig-
ging, and machinery moving. Noe testified that he discontin-
ued the work of ReBar with Diverse Steel Inc. (Diverse) being
more of a change in name and the addition of structural steel
work. Troy Noe is the sole owner of all Diverse stock. Not
only has his name appeared on Diverse’s corporate tax return,
but he applied for, and met the State’s requirements for Di-
verse’s yearly renewal of its contracting license.
Noe has had a relationship with the Union since 1982 or
1983. He became an apprentice instructor for the Union in
1990 or 1991 and continued to teach until 2000. The record is
without dispute that Diverse was a member of the association
of steel erector employers. The most recent contract between
the Union and the Arkansas Best Contractors and the Arkansas
Commercial and Industrial Builders and Steel Erectors Associa-
tion covered the period from May 1, 2001, to May 1, 2003.
The agreement provided that the Union will refer all employees
and wage rates and fringe benefits will be paid consistent with
the collective-bargaining agreement. The agreement was signed
by Thomas Marsh for the Union. Boyd Sanders; chairman of
the Arkansas Best Contractors, and Troy Noe; chairman of the
Arkansas Commercial and Industrial Builders and Steel Erec-
tors Association, signed the agreement on behalf of the em-
ployers.
Noe estimated that as an employer he has been delinquent in
paying health and welfare contributions since at least 1992 or
1993. On March 15, 2002, the Trustees of the Iron Workers of
Saint Louis District Council Annuity Trust, Trustees of the Iron
Workers Saint Louis District Council Pension Fund Trust and
Trustees of the Iron Workers Saint Louis District Council Wel-
fare Plan filed suit against both Rebar and Diverse for failure to
pay the requisite and past due benefit contributions.
C. The Formation of Pinnacle Steel, Inc.
Gwen Noe testified that while she had initially been a full
partner with her husband and a corporate officer in Diverse she
ceased to be a corporate officer in December 1997. She ex-
plained that elections were held for office in 1997 and she
asked that she not be considered for office. Neither Gwen Noe
nor Troy Noe identified any other individuals who ever served
or sought to be Diverse corporate officers other than the three
original incorporating officers. Gwen Noe acknowledged,
however, that here she did not document her resignation as
corporate officer with the State of Arkansas until August 30,
2001. Respondent submitted into evidence a letter dated Au-
gust 30, 2001, that was signed by Joan Drilling. The letter,
addressed to Diverse, confirmed Drilling’s resignation as an
officer of Diverse and acknowledged her understanding that she
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD950
forfeited all her rights to any profits or stock in Diverse.2 Gwen
Noe testified that she resigned her office with Diverse because
her husband wanted to bid on jobs that she thought were too big
for the Company. She added that she also felt that he was not
getting his “money’s worth” from his relationship with the
Union. Despite having resigned her office, she has continued
to do Diverse’s bookkeeping and to maintain its payroll re-
cords. She has authority to sign for certification of payment to
contractors with whom Diverse does business. Noe also admit-
ted that prior to the benefit funds’ lawsuit in 2002 she spoke
with the funds’ attorney about working out a payment plan for
Diverse to repay the deficit benefit funds.
Pinnacle Steel, Inc. (Pinnacle) was incorporated in February
1998. Gwen Noe testified that she is president of Pinnacle and
that she and her father; John Drilling, are the sole owners of
Pinnacle. There is no dispute that since its inception Pinnacle
has not recognized the International Association of Bridge,
Structural, Ornamental, and Reinforcing Iron Workers Local
321, AFL–CIO or any other union as representative of its em-
ployees. Pinnacle’s articles of incorporation list Gwen Noe,
John Drilling, and Joseph Jackson as the Company’s incorpora-
tors. Troy Noe testified that Jackson first came to work for
Diverse in 1997 and that Noe took him “under his wing.”
Gwen Noe described Jackson as a friend who showed an inter-
est in the business but “didn’t have anything financially to
bring to the company.” Pinnacle filed an application form for
Certificate of Authority for the State of Louisiana in August
1998 and filed for Louisiana contracting licenses in 2000 and
2001. To date, Pinnacle has never performed any work in the
State of Louisiana. Gwen Noe testified that initially Pinnacle
did not intend to perform work in Arkansas and it was not until
approximately 1999 that Pinnacle obtained a contracting license
to work in the State of Arkansas. Pinnacle performed two jobs
in 1998 and one 2-month job in 1999. In 2000, Pinnacle per-
formed one job that lasted for 2 days and three additional jobs
that were each completed in 1 day. The Company’s records
reflect that no work was performed during 2001. Gwen Noe
testified that the Company was not able to take any jobs for a
period of a year and a half because Joe Jackson had not wanted
to travel. During the interim, however, he continued to work
for Diverse.
Gwen Noe testified that she takes care of the day-to-day
management of Pinnacle. Her father lives in Russellvill, Arkan-
sas; approximately 75 miles away from the Company’s head-
quarters. She testified that Troy Noe has no ownership in Pin-
nacle and that he only functions in a supervisory/consultative
role.
D. Pinnacle Begins Working in the Little Rock Area and Di-
verse Ceases to do Work
Prior to 2002, Pinnacle performed all jobs outside Little
Rock, Arkansas, and outside the Union’s jurisdiction. In No-
vember 2001, Pinnacle entered into a contract with East-
Harding General Contractors to perform work on what was
identified as the Cantrell West project in Little Rock, Arkansas,
and within the Union’s jurisdiction. The subcontract from the

2 Drilling was not presented to testify in the hearing.
general contractor was written specifically to the attention of
Troy Noe. Noe admitted that after Pinnacle bid for the job,
East-Harding’s estimator called him and discussed the job.
Noe testified that Joe Jackson was scheduled to leave a Diverse
job and take over the supervision of the West Cantrell project.
Both Gwen Noe and Troy Noe testified that approximately a
month before the West Cantrell job was to begin, Jackson left
Diverse and informed Pinnacle that he could not do the West
Cantrell job. Gwen Noe testified that when she went to Troy
Noe and asked him what she should do he suggested that Pin-
nacle subcontract the work to Diverse. With Diverse as the
subcontractor, Pinnacle completed the project between Febru-
ary and May 2002. This was the last job performed by Diverse
and the last time that Diverse utilized the Union to obtain em-
ployees.
On April 23, 2002, Diverse submitted a proposal to General
Contractor Vratsinas Construction Company (VCC) to perform
work on the Rave 18 Theatre Project in Little Rock. Diverse
was awarded the contract and the project began on May 30,
2002. Diverse began unloading the trucks on the jobsite on
June 3. Noe testified that after Diverse was awarded the Rave
18 work he received notice of the premium amount due for
worker’s compensation coverage, which was more than he was
able to pay. He testified that he went to the general contractor
and explained that he could not do the job because he did not
have the requisite insurance coverage. Noe told VCC that the
only way that he could do the job was if Pinnacle had the con-
tract. Noe recalled that the general contractor assured him that
the agreement had been with Noe and that the VCC didn’t care
whether Diverse or Pinnacle was the subcontractor. Pinnacle
submitted a proposal dated June 3. Pinnacle’s proposal mir-
rored3 that which had been earlier submitted by Diverse with
two exceptions; Pinnacle’s cost exceeded Diverse’s by $69,370
and Pinnacle’s proposal did not include a requirement to pay
the prevailing wage rate. Pinnacle was awarded the contract
and performed the work from June 2 until November 20, 2002.
Troy Noe supervised the work as superintendent for Pinnacle.
E. The Formation of Wildcat Crane and Rigging
In July 2001, Wildcat Crane and Rigging Inc. (Wildcat) was
incorporated in the State of Arkansas. Gwen Noe testified that
the company is solely owned by her and her father, John Drill-
ing. Noe acknowledged that while her husband is not involved
with the company, he recommended that she start the company.
Wildcat is an equipment rental company that primarily rents
equipment to Diverse and Pinnacle. Gwen Noe recalled only
two occasions when equipment had been rented to anyone other
than Diverse or Pinnacle4 and the rentals involved equipment
other than the skycap or crane. The record reflected that the
major pieces of equipment used in the steel erection process are
the skytrack, crane, and welder. Gwen Noe admitted that only
Diverse and Pinnacle have rented the skytrack and crane from
Wildcat. The equipment now owned by Wildcat was acquired
from Diverse and Troy Noe. Either Gwen Noe or Troy Noe

3 The two proposals contained almost identical spacing, formatting,
font size, and wording.
4 There had been no charge for one of the rentals.
DIVERSE STEEL, INC. 951
initially purchased the equipment using their own personal
credit. While Wildcat did not purchase the equipment from
Diverse, Wildcat rents the equipment to Diverse for less than
market value. Pinnacle also rents the equipment for less than
market value.
Troy Noe testified that Diverse ceased to own this equipment
when Wildcat was created.5 He testified that he had not wanted
the equipment or the vehicles to be in his name for purposes of
liability and that Wildcat had been created to shield him from
personal liability. He acknowledged, however, that in February
2002 a statement confirming ownership and insurance was
submitted by Diverse to the Bank of the Ozarks and he admit-
ted that he used the Wildcat equipment in an attempt to secure a
loan for Diverse.
The record contains documentation of current liability insur-
ance coverage for five separate vehicles. The insured is shown
to be Troy Noe of Wildcat Crane and Rigging. Pinnacle is
shown as additionally insured on these policies. The coverage
related to four of the vehicles specifies the listed drivers as
Troy Noe, Joseph Jackson, and Gwen Noe.
III. FACTUAL AND LEGAL CONCLUSIONS
A. Whether Pinnacle and Diverse are Single Employers and/or
Alter Egos
General Counsel submits that Pinnacle is a disguised con-
tinuation of Diverse and the two entities have held themselves
out to the public as a single-integrated business enterprise, such
that they are alter egos and a single employer. General Counsel
alleges that Diverse and Pinnacle have been affiliated business
enterprises with common officers, ownership, directors, man-
agement, and supervision; have formulated and administered a
common labor policy; have shared common premises and fa-
cilities; have provided services for and made sales to each
other; and have interchanged personnel with each other.
The Board and the courts have applied the alter ego doctrine
in those situations where one employer entity will be regarded
as a continuation of a predecessor, and the two will be treated
interchangeably for purposes of applying labor laws. The most
obvious example occurs when the second entity is created by
the owners of the first for the purpose of evading labor law
responsibilities; but identity of ownership, management, super-
vision, business purpose, operation, customers, equipment, and
work force are also relevant in determining alter ego status.
See Fallon-Williams, Inc., 336 NLRB 602 (2001), C.E.K. In-
dustries Mechanical Contractors v. NLRB, 921 F.2d 350, 354
(1st Cir. 1990). While the Board considers whether one entity
was created in an attempt to enable another to avoid its obliga-
tions under the Act, the Board has consistently held that such a
motive is not necessary for finding alter ego status. Crawford
Door Sales Co., 226 NLRB 1144 (1976). In looking at the
various factors shared by the entities, the Board has noted that
no one factor is controlling or determinative. NLRB v. Wel-
come-American Fertilizer Co., 443 F.2d 19, 21 (9th Cir. 1971).
The existence of such status ultimately depends on “all circum-
stances of the case” and is characterized as an absence of an

5 He acknowledged, however, that he routinely changes the oil in the
welding machines now owned by Wildcat.
“arms’ length relationship found among unintegrated compa-
nies” Operating Engineers Local 627 v. NLRB, 518 F.2d 1040,
1045–1046 (D.C. Cir. 1975), affd. on this issue sub. nom.
The single-employer doctrine is found when two ongoing
businesses are treated as a single employer based on the ground
that they are owned and operated as a single unit. See Penntech
Papers v. NLRB, 706 F.2d 18 (1st Cir. 1983), cert. denied 464
U.S. 892 (1983). While most of the alter ego criteria remain
relevant, motive is normally irrelevant. In finding single-
employer status, the Board has typically looked to whether
there is (1) common ownership; (2) common management; (3)
functional interrelation of operations; and (4) centralized con-
trol of labor relations. See Broadcast Employees Local 1264 v.
Broadcast Service of Mobile, 380 U.S. 255 (1965). Not all of
the criteria need be present to establish a single-employer
status6 and no single criterion is controlling7. As with deter-
mining an alter ego status, single-employer status “ultimately
depends upon ‘all circumstances of the case’ and is character-
ized by the absence of an ‘arms-length relationship found
among unintegrated companies.’” See Mercy Hospital of Buf-
falo, 336 NLRB 1282, 1285 (2001). See also Hahn Motors,
283 NLRB 901 (1987).
1. Ownership, management, and supervision
Respondent asserts that Troy Noe is the sole owner of Di-
verse and that Gwen Noe and her father, John Drilling, are the
sole owners of Pinnacle and Wildcat. Gwen Noe testified that
she not only makes the decisions concerning Pinnacle’s job
bids, but she also goes to the general contractors to pick up
building plans, types and prepares bids, submits the bids, and
signs the contracts on behalf of Pinnacle. She also maintained
that she visits the jobsites two or three times each day during
the work projects. She explained that her father is an iron-
worker and that she gained experience by watching the con-
struction process. Respondent also submitted evidence to show
that Gwen Noe took the structural steel erection examination
for the Louisiana Contractors Licensing Board in December
1998. While she had not passed the examination, she scored 55
out of a possible score of 70.
2. Toy Noe and Diverse’s relationship with Pinnacle
Despite Noe’s assertion that she operates Pinnacle independ-
ently of her husband, the evidence reflects the contrary. Troy
Noe testified that his only relationship with Pinnacle has been
as a subcontractor and an employee. He testified that as an
employee of Pinnacle, he takes direction from John Drilling
and as a superintendent; he oversees the work on Pinnacle’s
jobsites. While he asserts that he is paid by salary, he gave no
other information as to the amount or the frequency of pay-
ment. Troy Noe’s testimony, however, demonstrates the sig-
nificant role that he plays in Pinnacle’s management. Troy Noe
testified that Joe Jackson first began working for him at Diverse
in 1997 after Jackson completed college. In discussing Jack-
son’s involvement in the two companies, Noe was asked and
answered the following:

6 Denart Coal Co., 315 NLRB 850, 851 (1994), enfd. 71 F.3d 486
(4th Cir. 1995).
7 Canned Foods, Inc., 332 NLRB 1449, 1449 (2000).
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD952
Q. At some point in time, were there discussions be-
tween yourself, Mr. Jackson, and your wife as to potential
even involvement in him in her company?
A. Yes, once I felt confident of him running a job
without me being there or a lot of phone conversations, I
was going to let Gwen and John hire him. I was going
to—
Respondent’s counsel then interrupted his witness and at-
tempted to rehabilitate and redirect his response by inquiring
who made the hiring decisions for the respective companies.
Noe then testified that he made the decision for Diverse and
that his wife and his father-in-law made the decisions for Pin-
nacle. Despite counsel’s redirection, I believe that Noe’s initial
response was the more candid response and reflective of his
true perception of his relationship with Pinnacle.
Respondent asserts that Troy Noe became Pinnacle’s project
manager for the Rave 18 project on June 3, 2002. Noe testified
that as superintendent for Pinnacle, he is responsible for pro-
duction and assuring that quality control standards are met on
the particular job. He contended, however, that even as the
superintendent he was never involved in labor relations deci-
sionmaking for Pinnacle. He testified that he had no involve-
ment in determining wages or benefits and that Foreman Paul
Britton did all of the hiring. Gwen Noe, however, testified that
Troy Noe directly supervised Britton. Although Troy Noe
asserts that he has no involvement in Pinnacle’s labor relations,
he admitted that his wife solicited his opinion with respect to
hiring certain employees. Noe added that because he had been
involved in organizing and “salting” jobs for the union his wife
would ask him if he knew an applicant and she would not hire
him if he were known to Noe. Noe then quickly added that this
had not occurred because, “[of] course, you can’t really dis-
criminate on jobs like that when it comes to salting.”
The subcontract agreement between Pinnacle and East-
Harding Inc. for the Cantrell West project in January 2002 was
specifically directed to the attention of Troy Noe at Pinnacle’s
box office address. The subcontract agreement between Pinna-
cle and East-Harding, Inc. for the Morrillton Medical Clinic in
April 2002 was also directed to the attention of Troy Noe at
Pinnacle’s box office address. Gwen Noe acknowledged that
prior to Troy Noe’s becoming project manager for Pinnacle on
the Rave 18 job in June 2002 he had been active and supervised
other Pinnacle projects. Troy Noe supervised Pinnacle’s 1998
Wal-Mart job in Selmer, Tennessee, Pinnacle’s April 2002
Morrillton Medical Clinic job in Morrillton, Arkansas, as well
as the February 2002 Cantrell West job that was subcontracted
to Diverse. Toy Noe also recalled that he supervised Pinnacle’s
job in Rogers, Arkansas, in September 1998.
Troy Noe acknowledges that he looks for jobs for Pinnacle
and will sometimes take blue prints to his father-in-law for
potential jobs. Noe explained that he has a personal relation-
ship with all of the general contractors’ estimators and they
usually call him about potential jobs whether the bid is from
Diverse or Pinnacle. Gwen Noe confirms that her husband
assists her with preparing bids and proposals and that she gen-
erally discusses her bid with her husband before she submits
the proposal. Gwen Noe recalled that the general contractor
contacted her husband about the Alltell Distribution job. He
came to her with the information and they bid the job together.
The job was performed by Pinnacle in November and Decem-
ber 2002. Gwen Noe admitted that many of the jobs that Pin-
nacle was able to obtain were, in part, related to her husband’s
reputation and business with Diverse. She admitted that the
general contractor’s main condition for Pinnacle’s getting the
Rave 18 job was the assurance that Troy Noe would run the
job. I also note that Pinnacle did not require Diverse to sign
any contract for the subcontracting of the Cantrell West project.
Troy Noe testified that the last job performed by Diverse was
the Cantrell West project that was subcontracted from Pinnacle
and completed by May 23, 2002. Invoices from NES Equip-
ment Services, however, reflect that three booms and a scissor
lift were rented to Diverse for the Rave 18 project from June 3
to 20, 2002. Noe asserted that NES must have simply put Di-
verse’s name on the invoice by mistake, however, he never
contacted NES to tell them that they had incorrectly billed Di-
verse.
3. Gwen Noe’s continuing involvement with Diverse
Gwen Noe asserts that she withdrew as an officer of Diverse
in 1997 and has had no ownership or management authority
since that time. She asserts that while she has continued to do
bookkeeping, payroll, and perform other secretarial functions
she has done so without management authority. Gwen Noe,
however, continues to have authorization to sign checks for
Diverse. Minutes from Diverse directors’ meetings submitted
by Respondent reflect that Gwen Noe continued to attend the
meetings until at least September 28, 2002. Minutes from the
December 22, 2001 directors’ meeting document Gwen Noe’s
meeting with Diverse’s worker’s compensation carrier about its
cancellation of coverage for Diverse. The minutes from the
January 26, 2002 meeting include the statement that Diverse is
barely making payroll and that the Company borrowed money
from Troy and Gwen Noe’s personal savings account and from
their children’s accounts to make payroll. Notes from the meet-
ing on May 26, 2002, reflect that Gwen Noe tried to work out a
payment plan with Diverse’s new worker’s compensation car-
rier. It is also noted that Gwen Noe had been unsuccessful in
obtaining a loan or line of credit from a specific bank. Gwen
Noe also acknowledged that prior to the Union’s trust funds
filing suit against Diverse in March 2002, she had spoken with
the funds’ attorney about a plan for Diverse to pay a $1000
each month toward back due benefits. Troy Noe also acknowl-
edged that notes from Diverse’s directors’ meeting of June 30,
2001, document Gwen Noe having contacted OSHA to work
out a fine reduction for Diverse.
4. Equipment
The equipment used by Pinnacle is the same equipment that
was used by Diverse and initially purchased or acquired by
Troy Noe and Gwen Noe using their personal credit. Gwen
Noe acknowledged that Troy Noe purchased the skytrack now
used by Pinnacle in 1997 or 1998 and he purchased the crane
now used by Pinnacle in 2000. Her father originally gave the
welding machines that are now used by Pinnacle to Troy Noe.
There is no evidence that Pinnacle ever owned any steel erec-
tion equipment of its own and apparently used Diverse’s until
DIVERSE STEEL, INC. 953
July 2001. The record is without dispute that after the incorpo-
ration of Wildcat in July 2001, the ownership of Diverse’s
equipment was transferred to Wildcat without compensation.
Wildcat has subsequently leased the equipment to Diverse and
Pinnacle for less than market value. Although Gwen Noe testi-
fied that Wildcat could rent the skytrack, crane, and welding
machines to companies other than Pinnacle or Diverse, she
could recall only two incidences when this has occurred. In
one of the two examples, no rent was actually charged for the
use of a stud box. She explained, “I did not charge them rent
on that, as they had done a favor for us.” She did not explain
nor was she asked whom she meant by “us.”
During testimony, as Gwen Noe was describing Wildcat’s
equipment, she was asked and answered as follows:
Q. Okay, Where did you acquire the equipment?
A. The skytrack was purchased by Troy, I believe, in
‘97 or early ‘98. The crane was also purchased by Troy
sometime in 2000. One of the welding machines was
given to me or given to the company by my father, And —
Q. When you say the company, which company are
you—
A. Wildcat.
Q. Wildcat
A. Well, they were originally given to Troy when he
first started Central Arkansas Rebar.
As indicated by her response, Gwen Noe appears to ac-
knowledge a continuity of ownership beginning with Rebar and
continuing to Wildcat, a company that is alleged to be separate
and apart from Troy Noe and Diverse.
Gwen Noe testified that while Diverse carried the insurance
on the equipment prior to 2001, Pinnacle has covered the insur-
ance premiums since Wildcat’s formation.
5. Continuity of work force
The record reflects that Joe Jackson began working for Di-
verse in 1997 and continued to work for Diverse until 2002.
After Pinnacle was formed in 1998, Jackson additionally began
working for Pinnacle and at some point was designated as Pin-
nacle’s vice president. Gwen Noe confirmed that there was a
period between November 2000 and February 2002 when Pin-
nacle was not able to do any jobs because Jackson did not want
to travel out of town. During that time, however, he continued
to work for Diverse. Gwen Noe also acknowledged that em-
ployees Robert Glastetter and Paul Britton worked for both
Pinnacle and Diverse.
6. Business purpose, operations, and customers
There is no dispute that there is no difference in the scope of
work performed by Pinnacle and Diverse. Both companies
have a common business purpose of erecting commercial steel
structures. Admittedly, Pinnacle’s clients were primarily cli-
ents of Diverse and both companies have used the same ven-
dors. Union Business Manager Thomas Marsh testified that
several years ago Noe offered to allow Marsh to rent equipment
using his account with a vendor. When Marsh received the bill,
Pinnacle was shown to be the customer. At that time Marsh was
unaware of Pinnacle’s existence. When he questioned Troy
Noe about Pinnacle, Noe denied any knowledge of the identity
of Pinnacle. Noe testified that he had denied the existence of
Pinnacle to Marsh because he didn’t think that it was any of
Marsh’s business.
7. Overall similarity and interrelatedness
The overall record reflects a significant overlap and interre-
latedness in ownership, management, and supervision for both
companies. Throughout the relevant period, Troy Noe has
supervised and managed projects for both Diverse and Pinna-
cle. He has actively assisted his wife in bidding and seeking
work for Pinnacle. While he contends that he is not involved in
the labor relations decisionmaking of Pinnacle, he also admitted
that only when he was confident that Jackson was capable of
running a job did he “let Gwen and John [hire] him.” Con-
trastly, Gwen Noe continued to play an active role for Diverse
by negotiating with insurance carriers, lending institutions, and
the Union’s trust funds for repayment of Diverse’s back due
benefits. She has continued to have authority to write and sign
checks on behalf of Diverse and is responsible for completing
substantial portions of Diverse’s bookkeeping and payroll re-
cords. The record reflects that both Joe Jackson and Paul Brit-
ton served in supervisory capacities for both companies. Re-
spondent contends that Troy Noe has sole ownership of Diverse
and that Gwen Noe has joint ownership of Pinnacle with her
father. January 2002 minutes from the Diverse’s directors
meeting, however, reflect that Diverse borrowed money from
Troy and Gwen Noe’s personal saving account as well as from
the saving account of their children to make Diverse’s payroll.
While Gwen Noe may assert that she has no ownership interest
in Diverse, her actions belie such denial. For Gwen Noe to
subsidize her husband’s company from her personal savings
and her children’s’ savings is more indicative of ownership
than mere employee status. I also note that the Board has found
that where other alter ego factors exist, ownership of two com-
panies by members of the same immediate family is deemed to
be “substantially identical” ownership. Kenmore Contracting
Co., 289 NLRB 336, 337 (1988), enfd. 888 F.2d 125 (2d Cir.
1989). See also J.M. Tanaka Construction, 249 NLRB 238,
242 fn. 29 (1980), enfd. 675 F.2d 1029 (9th Cir. 1982).
Despite Respondent’s establishment of Wildcat to buffer li-
ability, both Diverse and Pinnacle have used the same equip-
ment. Although Respondent asserts that Wildcat now owns the
equipment, no compensation was given to Diverse for the
change in ownership. See Valley Electric, Inc., 336 NLRB
1272 (2001), where the Board took specific note of the fact that
no money ever changed hands in any of the transactions includ-
ing the sale or transfer of assets such as vehicles, real property
or company stock. Diverse has continued to claim ownership
as evidenced by its 2002 documentation for a loan application.
Although Respondent asserts that Diverse and Pinnacle leased
the equipment from Wildcat, such leasing was based on less
than the market value. The facts of the present case are con-
trary to those of Friederich Truck Service, 259 NLRB 1294,
1300 (1982), where the Board did not apply the alter ego doc-
trine. Among the factors relied on by the Board in Friederich in
finding an arm’s-length relationship was the fact that market
value was used for equipment rental.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD954
The record reflects that vendors and customers have contin-
ued to treat the companies as the same entity. Gwen Noe ad-
mitted that many of the jobs that Pinnacle was able to obtain
were based in part on her husband’s reputation and business
with Diverse. Bid responses to Pinnacle have been directed to
the attention of Troy Noe and Pinnacle’s name was substituted
for Diverse or Troy Noe for equipment rental. When Diverse
could not perform the work on the Rave 18 project because of
inadequacy of insurance coverage, the general contractor in-
sisted on Troy Noe’s presence on the project and it didn’t mat-
ter whether the company was Diverse or Pinnacle.
The only major difference in the two companies appears to
be the fact that while Pinnacle has employed some of the same
employees as Diverse and Pinnacle has not utilized the Union
for ironworker’s referral and has not paid union wages and
benefits. The Board has recognized the fact that two companies
that use a different complement of employees does not militate
against a finding of alter ego status. Based on the Board’s ra-
tionale in Angelus Block Co., 250 NLRB 868 (1980), it appears
that such factors are the products of a status designed and im-
plemented by Respondent and results from the failure of the
Respondent to apply the Union contract to Pinnacle’s employ-
ees. Additionally, I note Troy Noe’s admission that because of
“salting” concerns, Gwen Noe consulted with him on potential
hires and did not want to hire employees that were known to
him because of his union affiliation.
The overall record evidence establishes that Diverse and
Pinnacle have substantially identical ownership, business pur-
pose, operation, supervision, and management. In so finding, I
note that both entities are family-owned commercial steel erec-
tion companies with Troy Noe functioning in a major role in
the overall operation and management of both companies.
Both companies use identical equipment and receive the same
favorable treatment from a third family-owned company. Both
companies perform work for the same customers, based in large
part upon Troy Noe’s reputation and past business relation-
ships. Both companies use the same vendors who treat them as
a single enterprise. The Companies have functioned inter-
changeably. Pinnacle subcontracted to Diverse to perform the
Cantrell West project without requiring a written subcontract-
ing agreement. In the alternative, Pinnacle performed the work
that Diverse began but could not complete on the Rave 18 pro-
ject. Respondent argues that Gwen Noe and her father are Pin-
nacle’s sole owners and they make policy decisions while also
providing day-to-day personal oversight on Pinnacle’s jobs.
The evidence, however, reflects that Gwen Noe’s father lives
75 miles away from Little Rock and it is Troy Noe to whom
Gwen Noe turns for assistance with day-to-day decisionmak-
ing. Admittedly, she consults with Troy Noe as to what appli-
cants have union backgrounds, what general contractors to
trust, as well as to seek his assistance with preparing bids.
Respondent cites a number of cases where the Board rejected
a finding of single-employer status, relying on the absence of
common control of labor relations. Respondent argues that the
circumstances are the same in the instant case. While Troy Noe
testified that he has no involvement in the labor relations mat-
ters of Pinnacle, the evidence does not support this assertion.
Noe specifically admitted that Gwen Noe consults with him
about the union background of Pinnacle applicants before they
are hired. Troy Noe also admitted that Gwen Noe and her fa-
ther hired Joe Jackson only after he determined that Jackson
had the ability to handle the job in issue. Accordingly, the evi-
dence reflects that Troy Noe is significantly involved in Pinna-
cle’s labor relations matters.
Respondent argues that the record does not establish that Di-
verse had any desire to run away from obligations under its
collective-bargaining agreement with the Union by utilizing
Pinnacle. Respondent further asserts that absolutely no animus
has been established by a preponderance of evidence. Gwen
Noe admitted that one of the reasons that she wanted to resign
her office with Diverse was her feeling that her husband did not
get his “money’s worth” from his union affiliation. Union sec-
retary Doris Mae Eoff testified that during a conversation with
Gwen Noe in April 2002 Gwen remarked that their accountant
had told Diverse that they would be better off if they went non-
union. Noe candidly testified, “[T]here was no telling what
may have come [out] of my mouth.” She went on to explain
that if she had said it, it was her opinion and what she felt at the
time. As chairman of the Arkansas Best Contractors’ Associa-
tion, Boyd Sanders attended meetings with Troy Noe and the
other contractors in advance of their negotiations with the Un-
ion. Sanders recalled that he had heard Troy Noe state in one
of the prenegotiation strategy meetings “Well, this is all I can
do and if I can’t get a contract for this, I’ll just have to open
shop.” Sanders added that while he recalled only one time that
Noe made such a statement, one of the other contractors in the
association made that statement in almost every meeting.
Based upon the alleged statements by Gwen and Troy Noe it
is apparent that they considered the benefits of Diverse being
nonunion. I don’t find however, that these statements alone
support a finding that Pinnacle was specifically created with the
intention to avoid Diverse’s bargaining obligation. The Board
has however, found two business entities to be alter egos and
held the alter ego employer liable for the predecessor’s contrac-
tual obligations and unfair labor practices, even when evidence
of antiunion animus or an intent to evade contractual obliga-
tions was neither apparent nor shown to have been a factor in
the creation of the alter ego. See Johnstown Corp., 313 NLRB
170, 171 (1993), affd. in pertinent part sub nom.; A & P Brush
Mfg. Corp., 323 NLRB 303, 309 (1997). Accordingly, while
animus is a factor that has been considered, its absence does not
preclude a finding of alter ego status.
The Board has found that the collective-bargaining agree-
ment of one entity does not attach and bind the single employer
because there is a single-employer finding. See Samuel Kossoff
& Sons, Inc., 269 NLRB 424, 429 (1984). The Board has also
determined that the criteria for finding a single employer are
not the same as those used in determining the scope of the unit.
See Acoustics, Inc., 270 NLRB 1046 (1984). Respondent ar-
gues that in the instant case, the question of whether employees
of Diverse and Pinnacle constitute an appropriate bargaining
unit was not legally or factually addressed by either the General
Counsel or the Union in either the pleadings or the ensuing
hearing. Respondent thus argues that for this reason alone no
violation based on single-employer status is appropriate since
the burden of proof and persuasion rests with the General
DIVERSE STEEL, INC. 955
Counsel and/or the Union to establish all necessary criteria.
Because I find Pinnacle to be the alter ego of Diverse, it is not
necessary that I resolve the single employer or the appropriate
unit issue.
Respondent further argues that Diverse had no alternative
but to cease operations when it did because it could not legally
continue to operate under Arkansas law without workers’ com-
pensation insurance for its employees. Respondent acknowl-
edges, however, that the presence of a legitimate reason for
change in ownership has not precluded the Board from finding
an alter ego. Respondent argues that the circumstances of the
present case are distinguishable from Metalsmith Recycling
Co., 329 NLRB 124 (1999), where the Board found alter ego
status even though the respondent argued that there was a le-
gitimate reason for its establishment of the successor company.
Respondent points out that in Metalsmith there was evidence of
independent 8(a)(1) violations and the Board found that the
successor employer was not compelled to resume operation by
government ordinances. While Respondent correctly points out
these distinctions in Metalsmith and the current case, the Board
has nevertheless continued to find that the mere presence of a
legitimate business reason for a change in corporate status does
not preclude an alter ego finding. See Walton Mirror Works,
313 NLRB 1279 (1994), where the predecessor company was
found to be closed by a government taxing authority and more
recently Michael’s Painting, Inc., 337 NLRB 860 (2002),
where one of the reasons for operating the successor company
was to operate without the substantially higher insurance pre-
miums that would have been charged to the predecessor. In
summary, once an employer is found to be an alter ego of an-
other, the labor obligations of the original employer are deemed
to be shared by, and become that of, its alter ego regardless of
the predecessor’s motivation for creating the alter ego, and both
will be held liable, as a single employer, for any violations of
the Act. Branch International Services, 327 NLRB 209, 219
(1998). Accordingly, Respondent’s claim that Pinnacle should
not be compelled to assume Diverse’s bargaining or contractual
obligations with the Union or held liable for any unfair labor
practices committed by Diverse, because Pinnacle was purport-
edly created for a legitimate business reason or because Diverse
had a legitimate business reason for not performing the work is
rejected. Volk & Huxley, 280 NLRB 219, 226 (1986).
Based on the record evidence discussed above, I do not find
that Diverse and Pinnacle have functioned independently nor
dealt with each other in an arm’s-length relationship. Finding
that both companies have substantially identical ownership,
business purpose, operation, customers, equipment, supervi-
sion, and management, I find Pinnacle to be the alter ego of
Diverse. In making this finding, I note that the record is with-
out evidence of any independent 8(a)(1) violations or specific
evidence that Pinnacle was formed in 1998 for the sole purpose
of evading Respondent’s contractual and bargaining obliga-
tions. Diverse, in fact, entered into a subsequent collective-
bargaining agreement with the Union in 2001 after the forma-
tion of Pinnacle. Troy Noe testified at length about his history
with the Union and his experiences in training apprentices. He
also talked about his own disillusionment with the Union and
his opinion that there was no longer the union brotherhood of
years past nor were there union craftsmen as before. As Gwen
Noe testified, she did not believe that Diverse had gotten its
“money’s worth” from its affiliation with the Union. Initially,
Pinnacle did little work in comparison to Diverse and even had
a period of a year and a half when it attempted no work at all.
While Gwen Noe may not have created Pinnacle specifically
for the purpose of evading the Union, it is apparent that Pinna-
cle ultimately became the means by which Diverse could con-
tinue to do business without the limitations and expenses of the
Union’s contract. The record reflects that since about May
2002 Pinnacle has functioned as a disguised continuance of
Diverse and an alter ego to Diverse.
B. Pinnacle’s Contractual Obligations as an Alter Ego
In the complaint, General Counsel alleges that about May 20,
2002, Respondent withdrew its recognition of the Union as the
exclusive collective-bargaining representative of the unit and
on or about May 20 refused to recall any of the unit employees
of Diverse to work on the Rave 18 project. The evidence re-
flects no written or verbal withdrawal of recognition by Di-
verse. The evidence reflects that Respondent simply ceased to
perform work as Diverse but continued as Pinnacle. Function-
ing as Pinnacle, Respondent did not apply the terms of the ex-
isting collective-bargaining agreement, including the require-
ment that the Union be used as a source of referral for iron-
workers and the payment of contract wages and benefit contri-
butions. When two facially different companies are found to be
an alter ego of each other, the collective-bargaining agreement
of one actively binds the other. See E.G. Sprinkler Corp., 268
NLRB 1241 fn. 1, 1244 (1984). Thus, two nominally separate
businesses may be regarded as a single enterprise if one is the
alter ego or “disguised continuance” of the other. If alter ego
status is found to exist, the labor obligations of the original
employer is deemed to be shared by its alter ego and both will
be held liable as a single employer for any violations of the Act.
See Redway Carriers, Inc., 301 NLRB 1113, 1115 (1991).
Thus, as the record establishes that Pinnacle failed to apply the
terms of the union contract to its ironworker employees, I find
that Diverse and Pinnacle have violated Section 8(a)(5) and (1)
of the Act by their failure to do so.
C. The 8(a)(3) Allegations
Finally, the complaint alleges that Respondent violated Sec-
tion 8(a)(3) and (1) by refusing to recall any of the unit em-
ployees of Diverse to work on the Rave 18 Theater Project in
Little Rock, Arkansas, because the employees joined and as-
sisted the Union and engaged in concerted activities and that
Respondent did so to discourage employees from engaging in
these activities. A finding that an employer’s decision or action
discriminated against employees in violation of Section 8(a)(3)
generally requires a showing that antiunion animus was a moti-
vating factor in that decision. In the instant case, there is no
alleged independent 8(a)(1) violations nor any evidence of
specific antiunion animus. Neither Troy Noe’s discussions
with other employers preceding bargaining in 2001 nor Gwen
Noe’s statement to the Union’s office secretary rise to the level
of animus sufficient to support a finding of an 8 (a)(3) viola-
tion.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD956
Additionally, no evidence was presented of specific unit em-
ployees who would have been recalled to the Rave 18 project or
evidence of specific employees who attempted to apply and
were rejected because of their union affiliation. While I find
that Pinnacle violated Section 8(a)(5) and (1) of the Act by its
failure to abide by Diverse’s contractual obligations, I do not
find that Pinnacle violated Section 8(a)(3) of the Act. Under
the test set forth in Wright Line,8 the General Counsel must
initially establish a prima facie case that Pinnacle’s decision not
to recall specific employees to the Rave 18 project was moti-
vated, at least in part, by the employees’ protected activity. I
do not find sufficient evidence to support such a finding in this
case.
CONCLUSIONS OF LAW
1. Respondent Diverse Steel Inc., is now and at all times ma-
terial herein, has been an employer engaged in commerce
within the meaning of Section 2(2), (6), and (7) of the Act.
2. Respondent Pinnacle Steel, Inc. is the alter ego of Diverse
Steel, Inc.
3. International Association of Bridge, Structural, Ornamen-
tal and Reinforcing Iron Workers Local 321, AFL–CIO is a
labor organization within the meaning of Section 2(5) of the
Act.
4. All ironworkers as referenced in the collective-bargaining
agreement9 between the Union and the Arkansas Best Contrac-

8 251 NLRB 1083 (1980), enfd. 622 F.2d 899 (1st Cir. 1981), cert.
denied 495 U.S. 989 (1982).
9 While the collective-bargaining agreement sets out the geographi-
cal jurisdiction applicable to the agreement and numerous other provi-
sions with specificity, the agreement does not define the specific inclu-
sions and exclusions of the appropriate unit.
tors and the Arkansas Commercial and Industrial Builders and
Steel Erectors Association including those employed by Di-
verse Steel, Inc. and Pinnacle Steel, Inc. constitute a unit ap-
propriate for collective bargaining within the meaning of Sec-
tion 9(b) of the Act.10
5. At all times material here, the Union has been the exclu-
sive collective-bargaining representative of all employees in the
unit found appropriate in conclusion of law 4 for the purpose of
collective bargaining within the meaning of Section 9(a) of the
Act.
6. By failing and refusing to apply the terms and conditions
of the collective-bargaining agreement entered into by the Un-
ion and Diverse Steel, Inc., to all employees employed in the
bargaining unit found appropriate in conclusion of law 4, both
Respondent Diverse and Pinnacle violated Section 8(a)(5) of
the Act.
7. The unfair labor practices set forth in conclusion of law 6
violated Section 8(a)(5) and (1) of the Act and affect commerce
within the meaning of Section 2(6) and (7) of the Act.
8. Respondent did not violate Section 8(a)(3) of the Act as
alleged in the complaint.
REMEDY
Having found that the Respondent has engaged in certain un-
fair labor practice conduct in violation of Section 8(a)(5) and
(1) of the Act, I shall recommend that it be ordered to cease and
desist and to take certain affirmative action designed to effectu-
ate the policies of the Act.
[Recommended Order omitted from publication.]

10 Respondent admits that Diverse recognized the Union as the col-
lective-bargaining representative for the unit employees covered by the
May 1, 2001 collective-bargaining agreement.