Edward C. Kelly Co., Inc.

National Labor Relations Board - Board Decisions

Jun 20, 1977

230 N.L.R.B. 337 (N.L.R.B. 1977)

EDWARD C. KELLY CO., INC.
Edward C. Kelly Co., Inc. and Shaw Mechanical
Contractors, Inc. and Plumbers and Gas Fitters,
Local No. 12, a/w United Association of Journey-
men and Apprentices of the Plumbing and Pipe
Fitting Industry of the United States and Canada.
Case I-CA-11327
June 20, 1977
DECISION AND ORDER
BY MEMBERS JENKINS, PENELLO, AND
WALTHER
On March 2, 1977, Administrative Law Judge
James L. Rose issued the attached Decision in this
proceeding. Thereafter, Respondents filed exceptions
and a supporting brief, and the General Counsel and
the Charging Party filed briefs in support of the
Administrative Law Judge's Decision.'
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as. amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the record and the
attached Decision in light of the exceptions and
briefs and has decided to affirm the rulings, find-
ings,2 and conclusions 3 of the Administrative Law
Judge and to adopt his recommended Order.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board adopts as its Order the recommend-
ed Order of the Administrative Law Judge and
hereby orders that the Respondents, Edward C.
Kelly Co., Inc. and Shaw Mechanical Contractors,
Inc., East Braintree and North Quincy, Massachu-
setts, their officers, agents, successors, and assigns,
shall take the action set forth in the said recommend-
ed Order.
I As the record adequately presents the positions of the parties, the
Respondents' and the Charging Party's requests for oral argument are
hereby denied.
2 In finding that Respondents herein constituted a single employer, the
Administrative Law Judge relied on the amounts of unsecured loans that
Respondent Shaw received from Respondent Kelly Co. and from Kelly
individually. He concluded that these amounts were $20,800 and $79,000
respectively. The record reveals that the total of these loans from both
sources was $36,000. In our view, even this lesser amount is substantial
enough to support the conclusion that Shaw is, to a large extent, financially
dependent upon Kelly Co.
Respondent excepts to the Administrative Law Judge's finding that
Morrissey admitted that she calls upon Kelly's expertise in running the
Shaw business. The record reveals that Morrissey did so testify and also
testified that she had recently been consulted on the "Howard Johnson job"
as to the placement of the fire equipment. The record includes a number of
bills from Kelly to Shaw for "estimating and supervisory" services, the
amounts of which were unilaterally decided upon by Mornssey for Kelly
Co. and paid by Mornssey for Shaw. Morrissey testified that the
aforementioned example of consultation with Kelly is the type of
230 NLRB No. 51
"supervisory" services that were billed. We agree with the Administrative
Law Judge that such circumstances indicate that Shaw would have difficulty
surviving as an independent company but for its relationship with Kelly and
Kelly Co.
3 The Administrative Law Judge failed to take note of the interchange of
employees, namely truckdrivers and estimators, in reaching his conclusion
that there is common control of labor relations. We find this fact significant
and supportive of his conclusion.
No exceptions were filed to the Administrative Law Judge's finding as to
the scope and composition of the appropriate bargaining unit.
DECISION
STATEMENT OF THE CASE
JAMES L. ROSE, Administrative Law Judge: This matter
was heard before me at Boston, Massachusetts, on January
3, 1977, upon the General Counsel's complaint which
alleged that the two named Respondents constitute a single
employer and as such have violated Section 8(a)(5) of the
National Labor Relations Act, as amended, 29 U.S.C. §
151, et seq., by failing and refusing to bargain with the
Charging Party.
All parties appeared and presented evidence. Upon the
record as a whole, including briefs and arguments of
counsel, I hereby make the following:
FINDINGS OF FACT
1. JURSIDICTION
Edward C. Kelly Co., Inc. (herein Kelly Company), is a
Massachusetts corporation engaged in business as a
mechanical contractor. It annually purchases goods,
products, and materials valued in excess of $50,000 directly
from outside the Commonwealth of Massachusetts and
annually supplies to users and others who are themselves
engaged in interstate commerce goods and services valued
in excess of $50,000.
Shaw Mechanical Contractors, Inc., is also a Massachu-
setts corporation engaged in business as a mechanical
contractor. Shaw also purchases goods, products, and
materials valued in excess of $50,000 directly from points
outside the Commonwealth of Massachusetts and annually
supplies to users and others who are themselves engaged in
interstate commerce goods and services valued in excess of
$50,000.
The Respondents each admit, and I find, that they are
employers engaged in commerce within the meaning of
Section 2(2), (6), and (7) of the Act.
1. THE LABOR ORGANIZATION INVOLVED
The Charging Party, Plumbers and Gas Fitters, Local
No. 12, a/w United Association of Journeymen and
Apprentices of the Plumbing and Pipe Fitting Industry of
the United States and Canada (herein the Union), is
admitted by the Respondents to be, and I find is, a labor
organization within the meaning of Section 2(5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. Factual Background
For a number of years Kelly Company has been a
member of the Masters Plumbers' Association of Boston
337
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
and Vicinity, Inc., an employer association representing its
members in dealing with the Union. As a member of the
association, Kelly Company has been signatory to a series
of collective-bargaining agreements with the Union. The
current agreement is effective September 1, 1976, through
August 31, 1978.
According to the testimony of Marion R. Morrissey,
Kelly Company's bookkeeper for many years, in the early
part of 1973 she determined that it would be a good idea to
form a separate corporation in order to make some
"money" on small jobs that Kelly Company was unable
successfully to compete on because of its union labor.
Robert E. Frazier, who had worked for Kelly a number of
years as a master plumber, testified that "Kelly . . . had
been getting beat on a lot of jobs by nonunion firms."
Thus it happened that on March 29, 1973, Morrissey,
Agnes B. Kelly, the wife of Edward C. Kelly, Jr. (herein
Kelly), president, treasurer and director of Kelly Company,
and Patrice A. Kelly, his daughter, incorporated Shaw
Mechanical Contractors, Inc.
Since that time Shaw has been engaged in business as a
mechanical contractor, operating with Frazier's master
plumber's license. Shaw does the same type of work as
Kelly Company, but on somewhat smaller jobs. They do
not, apparently, bid competitively with one another.
In the fall of 1975, Paul Madden, the business agent for
the Union, learned that Kelly Company was "operating
double-breasted" (both union and nonunion), though he
stated that he had suspected this since 1970 or 1971. In any
event, on December 26, 1975, Madden wrote to Kelly
stating that all signs indicated an affiliation between Kelly
Company and Shaw. He wanted "to remedy this situa-
tion," presumably by having Shaw sign and abide by the
association agreement.
On the same day, Madden wrote Morrissey in care of
Shaw indicating that Shaw was not on the Union's list of
fair shops. He enclosed a stipulation to be bound by the
association agreement for her to sign on behalf of Shaw.
On January 5, 1976, Morrissey replied, declining to sign
the contract principally because the types of jobs Shaw was
doing were small projects which "does not command the
present hourly rates that are currently paid to members (of
the Union) and also, the regulations imposed governing
Journeymen/Apprentice ratio, would be a hardship."
Kelly Company does in fact abide by the association
agreement with the Union and does employ journeyman
plumbers. Additionally, Kelly Company employs estima-
tors (who are members of the Union) and Morrissey, the
bookkeeper. In overall charge of the operation is Kelly.
Shaw, on the other hand has one journeyman plumber,
Frazier, who, since the inception of Shaw, is no longer a
member of the Union. Generally, Shaw employs apprentic-
es who are hired from a vocational technical school. Shaw
does not employ estimators. Its bookkeeper is Morrissey,
who, according to her testimony, is also Shaw's chief
executive officer.
425 U.S. 800(1976).
2 Local No. 627, International Union of Operating Engineers, AFL-CIO v.
N.L.R.B., 518 F.2d 1040 (C.A.D.C., 1975), reversing 206 NLRB 562 (1973).
B. Issues
The principal issue raised by the pleadings in this matter
is whether Kelly Company and Shaw form a single
integrated enterprise or are separate employers. If they are
a single integrated enterprise, then it is also alleged that the
mechanical employees of both constitute a unit appropriate
for purposes of collective bargaining; and that the
enterprise has breached its obligations to bargain with the
Union by not applying the association contract to Shaw
employees.
C. Analysis and Concluding Findings
1. Single integrated enterprise
In South Prairie Construction Co. v. Local No. 627,
International Union of Operating Engineers, AFL-CIO, et
at, ' the United States Supreme Court affirmed the circuit
court's finding that two construction companies consti-
tuted a single employer.2 The Supreme Court, quoting with
approval the circuit court's decision, stated:
IT]hat in addition to the "presence of a very substantial
qualitative degree of centralized control of labor
relations," the facts "evidence of substantial qualitative
degree of interrelation of operations and common
management-one that we are satisfied would not be
found in the arm's length relationship existing among
unintegrated companies."
In Radio & Television Broadcast Technicians Local Union
1264, v. Broadcast Service of Mobile, Inc.,3 the Supreme
Court enumerated with approval the criteria considered by
the Board in determining whether or not two companies
constitute a single employer:
The controlling criteria, set out and elaborated in
Board decisions, are interrelation of operations, com-
mon management, centralized control of labor relations
and common ownership. [Citations omitted.]
Most recently the Board in The Carvel Company and C
and D Plumbing and Heating Company4 concluded that two
plumbing contractors were separate employers.
In reaching this conclusion, the Board noted that the two
companies were separate legal entities and had separate
bank and payroll accounts and separate lines of credit, and
that in fact the principal manager of each company was a
different person. There was common ownership of two
companies, but this is not determinative absent common
control of the labor relations policy. And "such common
control must be actual or active, as distinguished from
potential control." 226 NLRB at 11.
Tested by these standards it is my conclusion that in fact
Kelly Company and Shaw constitute a single integrated
enterprise.
While the community of ownership here is not determi-
native, critical to finding the operations interrelated is the
fact that Shaw depends on Kelly individually and/or Kelly
3 380 U.S. 255, 256 (1%5).
4 226 NLRB II111 (1976).
338
EDWARD C. KELLY CO., INC.
Company to supply cash for operating expenses when
needed. From 1973, when Shaw was organized, through
December 31, 1976, Shaw borrowed $79,000 from Kelly
and $20,800 from Kelly Company, of which $72,800 has
been repaid.5 These loans were unsecured and were repaid
without interest.
Such substantial noninterest loans to a rather small
company, even though largely repaid, shows that Shaw
looks to and receives from Kelly and/or Kelly Company its
cash flow. These records suggest that, without Kelly, Shaw
would not be able to operate. In short, from the financial
standpoint, Kelly exercises substantial control over Shaw.
And there are additional indicators that the operations
are interrelated. For instance, Shaw does not employ
estimators but relies principally upon estimators employed
by Kelly Company. It is claimed that Shaw reimburses
Kelly Company for this service. The fact of reimbursement,
however, is at best loose and at worst suspect. For nearly 2
years Kelly Company employees did the Shaw estimating
without any charge for their services. Then Morrissey, on
behalf of Kelly Company, determined that those services
were worth $150 a month. She billed Shaw to that effect as
an agent for Kelly, and then as an agent for Shaw paid the
$3,600. She was unable to testify precisely how she arrived
at $150 a month, or why 2 years elapsed before the service
was billed or paid. Rather than showing an arm's-length
relationship between the two companies, the handling of
estimators suggests an interrelated operation.
The workmen's compensation policy for Shaw employees
is carried as a rider on Kelly Company policy. Again after
about 2 years, Morrissey, on behalf of Kelly Company,
billed Shaw. Morrissey, on behalf of Shaw, paid the bill.
Incidentally, how the amount billed was arrived at
Morrissey could not say nor is it apparent from the
documentary evidence.
Further evidencing interrelated operations is the fact that
such truckdriving as is required by Kelly Company is done
by Shaw employees.
The record also shows common, rather than separate,
management. While Morrissey appears to be generally
familiar with the industry, she was not shown to be
particularly knowledgeable with regard to running a
mechanical contracting business nor did she claim to be.
The same can be said of Frazier, who really functions as a
field foreman. This apparent void in management capabili-
ty is, I find, filled by Kelly.
And, in fact, Morrissey admitted that she calls upon
Kelly's "expertise" in running the Shaw business.
It is noted that Kelly was not called by either Respon-
dent to deny his actual participation in the day-to-day
operation of both Kelly Company and Shaw. From this
failure and given the testimony of Morrissey - that Kelly
Company and Shaw operate from the same building, that
Kelly personally is present much of the time and has in fact
lent his "expertise" - I infer that had Kelly been called he
would have affirmed his participation in the day-to-day
operations of Shaw. Finally in this regard, a business agent
for one of the Union's sister locals in fact called the Shaw
5 This is from ledgers stipulated to by the parties and is at variance with
Morrissey's testimony that such loans amounted to $25,000.
telephone number. Kelly answered and purported to speak
as an agent for Shaw. This was not denied.
While Morrissey claims to be the chief executive officer
of Shaw, in reality the record reveals that she is the
bookkeeper for Shaw, as she is for Kelly Company. The
actual operating control - indeed the determination to
operate a nonunion company along with a union company
- is, I find, in Kelly.
There is little evidence concerning control of labor
relations policy, other than that outlined above concerning
common management. It does appear that Morrissey hires
the Shaw employees while the Kelly Company employees
are hired through the union hall by Kelly or the foremen.
And, of course, the rates are different. However, given
Kelly's substantial involvement in both operations, it is
more reasonable than not to conclude that he, in fact,
controls the labor relations policy of both. Finding that
Kelly is actually in control and supplies the cash flow for
Shaw, along with the interchange of employees to do
particular jobs, leads me to conclude that Kelly Company
and Shaw are not separate employers but in fact form a
single enterprise.
2. The bargaining unit.
It is alleged that the appropriate bargaining unit
constitutes employees of both Kelly Company and Shaw as
follows:
All plumbers, gas fitters, pipe and/or drain layers,
temporary fireman and apprentices of Respondent
(Kelly Company and Shaw) employed at its Allen
Street and/or Colby Road locations, exclusive of office
clerical employees, stockmen, truck drivers, guards and
supervisor as defined in Section 2(1 1) of the Act.
Kelly Company admitted the appropriateness of the
bargaining unit while Shaw denied it. However, in their
joint brief both indicated that the scope and composition of
the bargaining unit is not really a substantive issue in this
matter.
In any event, based upon the record before me, I find
that the mechanical employees of Kelly Company and
Shaw have a sufficient community of interest to be in the
same bargaining unit. While generally employees of Kelly
Company are journeyman plumbers whereas those of Shaw
are apprentices, they nevertheless do essentially the same
kind of work under the same general working conditions
and work out of the same general location. I therefore
conclude that an appropriate bargaining unit within the
meaning of Section 9(b) of the Act is as alleged, except that
truckdrivers will not be excluded, inasmuch as such
trucking as is required is done by apprentice mechanics.
3. The violation of Section 8(aX5)
Concluding that Kelly Company and Shaw comprise a
single integrated enterprise and that the appropriate unit
includes all mechanical employees of Shaw as well as those
of Kelly Company, and given the fact that Kelly is
339
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
signatory to a collective-bargaining agreement covering
those employees, I find that by refusing to abide by the
terms of the collective-bargaining agreement as to the
employees on the Shaw payroll, the Respondents have
violated Section 8(a)(5) of the Act.6
IV. THE REMEDY
Having found that the Respondents have failed to
bargain with the Union by refusing to abide by the
collective-bargaining agreement between the Union and
the Association, I will recommend that the Respondents be
ordered to bargain with the Union and to give retroactive
effect to the agreement as to Shaw's employees to January
5, 1976, 7 and make them whole for any loss of wages or
other benefits that they may have suffered as a result of the
Respondents' refusal to abide by the agreement from and
after January 5, 1976, with interest as prescribed in Isis
Plumbing & Heating Co., 138 NLRB 716 (1962). The
Respondents will also be ordered to pay to the appropriate
source such contributions as are required by the agreement
with respect to such employees, with interest.
CONCLUSIONS OF LAW
1. Edward C. Kelly Company, Inc., and Shaw Mechan-
ical Contractors, Inc., constitute a single integrated
employer engaged in interstate commerce within the
meaning of Section 2(2), (6), and (7) of the Act.
2. Plumbers and Gas Fitters, Local No. 12, a/w United
Association of Journeymen and Apprentices of the Plumb-
ing and Pipe Fitting Industry of the United States and
Canada, is a labor organization within the meaning of
Section 2(5) of the Act.
3. By failing and refusing to recognize the Union as
lawful representative of employees of Shaw within the job
classifications described in the Association's agreement
with the Union, and by failing and refusing to apply the
terms of such agreement to those employees, the Respon-
dents have unlawfully refused to bargain collectively with
the Union and are thereby engaging in an unfair labor
practice within the meaning of Section 8(aX5) and (1) of
the Act.
4. The aforesaid unfair labor practice is an unfair labor
practice affecting commerce within the meaning of Section
2(6) and (7) of the Act.
Upon the foregoing findings of fact, conclusions of law,
and the entire record in this matter, and pursuant to
Section 10(c) of the Act, I hereby issue the following
recommended:
ORDER8
The Respondents Edward C. Kelly, Co., Inc. and Shaw
Mechanical Contractors, Inc., East Braintree and North
Quincy, Massachusetts, their officers, agents, successors,
and assigns, shall:
1. Cease and desist from:
(a) Failing and refusing to recognize Plumbers and Gas
Fitters, Local No. 12, a/w United Association of Journey-
men and Apprentices of the Plumbing and Gas Fitting
Industry of the United States and Canada, as the
representative of all employees in the following bargaining
unit found appropriate under Section 9(b) of the Act:
All plumbers, gasfitters, pipe and/or drain layers
temporary firemen and apprentices of the Respondents
employed at their Allen Street and/or Colby Road
locations, exclusive of office clerical employees, stock-
men, guards and supervisors as defined in Section 2(11)
of the Act.
(b) In any like or related manner interfering with,
restraining, or coercing their employees in the exercise of
the right to self-organization, to join and assist the said
Union, or any other labor organization, to bargain
collectively through representatives of their own choosing,
and to engage in other concerted activities for the purpose
of collective bargaining or other mutual aid or protection.
2. Take the following affirmative action designed to
effectuate the policies of the Act:
(a) Forthwith implement the agreement in existence
between the above-named Union and the Masters Plum-
bers' Association of Boston and Vicinity, Inc., effective
September 1, 1976, to August 31, 1978, and its predecessor
as it applies to all employees of Shaw Mechanical
Contractors, Inc., retroactive to January 5, 1976, including
but not limited to the provisions relating to wages and
other employment benefits and make whole their employ-
ees for any losses that may have been suffered by reason of
the Respondents' failure and refusal to implement said
contract in the manner set forth in the remedy section of
this Decision.
(c) Post at their places of business in Quincy and
Braintree, Massachusetts, copies of the attached notice
marked "Appendix." 9 copies of said notice, on forms
provided by the Regional Director for Region 1, after
being duly signed by the Respondents' representative, shall
be posted by them, immediately upon receipt thereof, and
maintained by them for 60 consecutive days thereafter in
conspicuous places, including all places where notices to
employees are customarily posted. Reasonable steps shall
be taken to insure that said notices are not altered, defaced,
or covered by any other material.
(d) Notify the Regional Director for Region 1, in writing,
within 20 days from the date of this Order, what steps the
Respondents have taken to comply herewith.
6 Cf. Peter Kiewit and Sons' Co. and South Prairie Construction Co., 206
NLRB 562 (1973); cf. Gerace Construction Inc. and Helger Construction
Conpany, Inc., 193 NLRB 645 (1971).
I This is the date alleged that the Respondents began engaging in the
unfair labor practice.
8 In the event no exceptions are filed as provided by Sec. 102.46 of the
Rules and Regulations of the National Labor Relations Board, the findings,
conclusions, and recommended Order herein shall, as provided in Sec.
102.48 of the Rules and Regulations, be adopted by the Board and become
its findings, conclusions, and Order, and all objections thereto shall be
deemed waived for all purposes.
9 In the event that the Board's Order is enforced by a Judgment of a
United States Court of Appeals, the words in the notice reading "Posted by
Order of the National Labor Relations Board" shall read "Posted Pursuant
to a Judgment of the United States Court of Appeals, Enforcing an Order of
the National Labor Relations Board."
340
EDWARD C. KELLY CO., INC.
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
After a hearing in which all parties were given the
opportunity to participate and present its position, it has
been found by the National Labor Relations Board we
have committed certain unfair labor practices. We have
been ordered to cease and desist therefrom, to post this
notice,and to comply with its terms.
WE WILL NOT refuse to recognize and bargain in
good faith with Plumber and Gas Fitters, Local No. 12
a/w United Association of Journeymen and Apprentic-
es of the Plumbing and Pipe Fitting Industry of the
United States and Canada, as a representative of all our
employees including those employees who work for
Shaw Mechanical Contractors, Inc., in the following
appropriate bargaining unit:
AU plumbers, gas fitters, pipe and/or drain
layers, temporary fireman apprentices employed
at the Allen Street and/or Colby Road locations
exclusive of office clerical employees, stockmen,
guards and supervisors as defined in Section 2(11)
of the Act.
WE WILL recognize and give effect to the contracts
existing between the above-named labor organization
and Masters Plumbers' Association of Boston and
Vicinity, Inc., as it applies to the employees of Shaw
Mechanical Contractors, Inc., retroactive to January 5,
1976.
WE WILL make our employees whole for any losses
they may have suffered by our refusal to implement
said agreement.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce our employees in the exercise
of the rights guaranteed them by Section 7 of the Act.
EDWARD C. KELLY Co.,
INC. AND SHAW
MECHANICAL CONTRACTORS,
INC.
341