E.G. Sprinkler Corp.

National Labor Relations Board - Board Decisions

Feb 28, 1984

268 N.L.R.B. 1241 (N.L.R.B. 1984)

E.G. SPRINKLER CORP.
E.G. Sprinkler Corporation and its alter ego Good-
man Piping Products, Inc. and United Associa-
tion of Journeymen and Apprentices of the
Plumbing & Pipefitting Industry of the United
States and Canada (AFL-CIO). Case 3-CA-
10974
28 February 1984
DECISION AND ORDER
BY CHAIRMAN DOTSON AND MEMBERS
HUNTER AND DENNIS
On 24 March 1983 Administrative Law Judge D.
Barry Morris issued the attached decision. The Re-
spondent filed exceptions and a supporting brief,
and the Charging Party filed an answering brief.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
The Board has considered the decision and the
record in light of the exceptions and briefs and has
decided to affirm the judge's rulings, findings, and
conclusions, 2 but not to adopt the recommended
Order. 3
ORDER
The National Labor Relations Board orders that
the Respondent, E.G. Sprinkler Corporation and its
alter ego Goodman Piping Products, Inc., East
Rochester, New York, its officers, agents, succes-
sors, and assigns, shall
1. Cease and desist from
(a) Refusing to recognize and bargain with
United Association of Journeymen and Apprentices
of the Plumbing & Pipefitting Industry of the
United States and Canada (AFL-CIO) as the ex-
clusive representative for purposes of collective
bargaining of the employees in the following ap-
propriate unit:
All employees engaged in the installation, dis-
mantling, maintenance, repair, adjustments and
corrections of all fire protection and fire con-
trol systems with the exception of steam fire
protection systems.
The judge found, as a factual matter, that on 7 January 1982 Good-
man Piping Products, Inc. began performing sprinkler repair work cov-
ered by the collective-bargaining agreement entered into between E.G.
Sprinkler Corporation and the Union, but without honoring and imple-
menting the terms of that collective-bargaining agreement. Because we
agree with the judge that Goodman Piping Products, Inc. is the alter ego
of E.G. Sprinkler Corporation, we find that the Respondent violated Sec.
8(aX5) and (I) of the Act as of 7 January 1982.
' In adopting the judge's decision, we note that his citations of Blu-
menfeld Theatres Circuit, 240 NLRB 206, 215 (1979), and DMR Corp.,
258 NLRB 1063, 1069 (1981), are inapposite because the Board found in
each of the cited cases that the entities involved constituted a single em-
ployer, rather than that one was an alter ego of the other.
I In order to correct certain inadvertent errors, we shall issue a new
Order in lieu of the judge's recommended Order.
268 NLRB No. 192
(b) Refusing to honor and implement the collec-
tive-bargaining agreement in effect between E.G.
Sprinkler Corporation and the Union.
(c) In any like or related manner interfering
with, restraining, or coercing employees in the ex-
ercise of their rights under Section 7 of the Act.
2. Take the following affirmative action neces-
sary to effectuate the policies of the Act.
(a) Recognize and bargain collectively with the
Union by acknowledging that it is bound by the ex-
isting collective-bargaining agreement in effect be-
tween E.G. Sprinkler Corporation and the Union.
(b) Honor, implement, and apply the collective-
bargaining agreement referred to in paragraph 2(a).
(c) Make whole the Union for any and all benefit
fund and other payments due and owing pursuant
to the collective-bargaining agreement referred to
in paragraph 2(a).4
(d) Make whole unit employees for any losses
they may have suffered by reason of the Respond-
ent's failure to honor and implement the existing
collective-bargaining agreement with the Union.5
(e) 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 other sums and benefits
due under the terms of this Order.
(f) Post at its East Rochester, New York, facili-
ties copies of the attached notice marked "Appen-
dix."6 Copies of the notice, on forms provided by
' Because the provisions of employee benefit fund agreements are vari-
able and complex, the Board does not provide for the addition of a fixed
rate of interest on unlawfully withheld fund payments at the adjudicatory
stage of a proceeding. We leave to the compliance stage the question of
whether the Respondent must pay any additional amounts into the benefit
funds in order to satisfy our "make-whole" remedy. Depending on the
circumstances of each case, these additional amounts may be determined
by reference to provisions in the documents governing the funds at issue
and, where there are no governing provisions, by evidence of any losses
directly attributable to the unlawful withholding, which might include
the loss of return on investment of the portion of funds withheld, addi-
tional administrative costs, etc., but not collateral losses. Merryather
Optical Cao., 240 NLRB 1213, 1216 fin. 7 (1979). Other payments to the
Union, if any, shall bear interest as prescribed in Florida Steel Corp., 231
NLRB 651 (1977). See generally Isis Plumbing Ca, 138 NLRB 716
(1962).
' The Respondent shall reimburse its employees for any expenses ensu-
ing from the Respondent's unlawful failure to make the required pay-
ments referred to in paragraph 2(c) as set forth in Xraft Plumbing & Heat.r-
ing, 252 NLRB 891 fn. 2 (1980), affd. 661 F.2d 940 (9th Cir. 1981).
Backpay shall be made in a manner consistent with Board policy as
stated in Ogle Protection Service, 183 NLRB 682 (1970), with interest as
prescribed in Florida Steel Corp., 231 NLRB 651. See generally Isis
Plumbing Co., 138 NLRB 716.
6 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."
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DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the Regional Director for Region 3, after being
signed by the Respondent's authorized representa-
tive, shall be posted by the Respondent immediate-
ly upon receipt and maintained for 60 consecutive
days in conspicuous places including all places
where notices to employees are customarily posted.
Reasonable steps shall be taken by the Respondent
to ensure that the notices are not altered, defaced,
or covered by any other material.
(g) Notify the Regional Director in writing
within 20 days from the date of this Order what
steps the Respondent has taken to comply.
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL NOT refuse to recognize and bargain
with United Association of Journeymen and Ap-
prentices of the Plumbing & Pipefitting Industry of
the United States and Canada (AFL-CIO) as the
exclusive representative for purposes of collective
bargaining of the employees in the following ap-
propriate unit:
All employees engaged in the installation, dis-
mantling, maintenance, repair, adjustments and
corrections of all fire protection and fire con-
trol systems with the exception of steam fire
protection systems.
WE WILL NOT refuse to honor and implement
the collective-bargaining agreement in effect be-
tween E.G. Sprinkler Corporation and the Union.
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 recognize and bargain collectively
with the Union by acknowledging that we are
bound by the existing collective-bargaining agree-
ment in effect between E.G. Sprinkler Corporation
and the Union.
WE WILL honor, implement, and apply this col-
lective-bargaining agreement.
WE WILL make whole the Union for any and all
benefit fund and other payments due and owing
pursuant to this collective-bargaining agreement.
WE WILL make whole unit employees for any
losses they may have suffered by reason of our fail-
ure to honor and implement the collective-bargain-
ing agreement with the Union, with interest.
E.G. SPRINKLER CORPORATION AND
ITS ALTER EGO GOODMAN PIPING
PRODUCTS, INC.
DECISION
STATEMENT OF THE CASE
D. BARRY MORRIS, Administrative Law Judge: This
case was heard before me at Rochester, New York, on
November 10 and 30 and December 1, 1982.1 Upon a
charge filed on April 5, a complaint was issued on May
21, alleging that E.G. Sprinkler Corporation and its al-
leged alter ego, Goodman Piping Products, Inc. (the Re-
spondents), violated Section 8(aXI) and (5) of the Na-
tional Labor Relations Act (the Act). The Respondents
filed an answer denying the commission of the alleged
unfair labor practices.
The parties were given full opportunity to participate,
produce evidence, examine and cross-examine witnesses,
argue orally, and file briefs. Briefs were filed by all par-
ties.
Upon the entire record of the case, including my ob-
servation of the witnesses, I make the following
FINDINGS OF FACT
1. JURISDICTION
E.G. Sprinkler Corporation (EG), a New York corpo-
ration, with its principal office and place of business in
East Rochester, New York, was engaged in the installa-
tion, repair, and maintenance of automatic sprinkler and
fire protection systems. EG performed yearly services
valued in excess of $50,000 for companies located in
States other than the State of New York. The Respond-
ents admit that they are engaged in commerce within the
meaning of Section 2(6) and (7) of the Act, and I so find.
United Association of Journeymen and Apprentices of
the Plumbing & Pipefitting Industry of the United States
and Canada (AFL-CIO) (the Union) is a labor organiza-
tion within the meaning of Section 2(5) of the Act.
II. THE ALLEGED UNFAIR LABOR PRACTICES
A. The Issue
The issue in this proceeding is whether Goodman
Piping Products, Inc. (GPP) is the alter ego of EG and,
as such, is responsible for carrying out the terms of the
collective-bargaining agreement with the Union.
B. The Facts
EG was incorporated in 1973 with its stock owned 50
percent by James Goodman and 50 percent by George
Edmunds. In 1979 Goodman purchased Edmunds' stock
and thus became sole shareholder of the corporation. He
All dates refer to 1982 unless otherwise specified.
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E.G. SPRINKLER CORP.
operated and managed the Company by himself and was
its only corporate officer.
EG entered into a collective-bargaining agreement
with the Union, which was effective through March 31,
1982. The following employees were within the appro-
priate unit:
All employees engaged in the installation, disman-
tling, maintenance, repair, adjustments and correc-
tions of all fire protection and fire control systems
with the exception of steam fire protection systems.
During 1981 EG had approximately five employees
performing installation work. During that year the Com-
pany experienced severe financial problems. These prob-
lems were based on a failure of its customers to pay for
the work performed by the Company, which in turn led
to a failure on the part of EG to pay its suppliers. Be-
cause of its financial difficulties and cash-flow problems,
EG ceased operations on December 31. Its assets were
surrendered to the bank on January 27, 1982.
GPP was incorporated on May 26, 1981, with Victoria
Goodman, James' wife, as the sole stockholder, director,
and officer of that corporation. The initial purpose of
GPP was to manufacture a new pipefitting. Victoria tes-
tified that the reason for putting the new corporation in
her name was to insure that Edmunds had no share in
the ownership of the new pipefitting. Both EG and GPP
shared the same offices and telephone numbers. Until
October 1981 they were both located at 107 North
Washington Street, East Rochester. At that time they
moved their offices to 120 Despatch Drive, also in East
Rochester.
When EG ceased its operations on December 31, 1981,
James physically took the work orders which still had
money owing. He also took blank EG work order forms
and placed labels with the GPP name on them. On Janu-
ary 7 James did a small job for Rite Aid Corporation,
under an invoice bearing the GPP name. The order had
been received on December 28, 1981, on a job work
order form bearing the name of EG. James testified that
he did additional repair work in January on behalf of
GPP.
The record contains evidence of numerous contracts
for the installation or maintenance of fire protection
equipment negotiated and signed by James on behalf of
GPP during the period of February through October.
James testified that except for one company, Stolt
Realty, all the companies for which GPP did installation
or maintenance work had been prior customers of EG.
Victoria testified that the first employee hired by GPP
was Michael Deberger. She telephoned Deberger in Feb-
ruary or March and offered him employment, doing in-
stallation work. She did not discuss the salary that De-
berger would be paid. Victoria further testified that her
husband was the first person to contact Todd Hopkins,
another employee. She testified that her husband "sort of
just talked me into hiring him" and that it was her hus-
band who decided the salary that Hopkins would be
paid. The next employee hired was Gregg Saulpaugh.
Victoria testified that her husband hired Saulpaugh, de-
cided his salary, and subsequently terminated him.
James testified that EG was involved only in the in-
stallation and maintenance of sprinkler systems. While 80
percent of GPP's work involves sprinkler systems, 20
percent of the work involves air piping. James conceded
that 80 percent of GPP's work fits the definition of arti-
cle 18 of the collective-bargaining agreement, entitled
"Jurisdiction of Work." That the work of both Compa-
nies is substantially the same is further evidenced by the
two Companies' advertisements in the yellow pages.
Except for names, the advertisements are substantially
identical, each stating "Sales-Design-Installation-
Repair-Fire Protection Systems."
James initially testified that, while he did the hiring
and firing of EG employees, it was his wife who per-
formed those functions for GPP. He further initially tes-
tified that it was Victoria who signed certain contracts
for GPP. When he was asked to specify the contracts
signed by Victoria, he stated that he did not know. On
further questioning, he changed his testimony and stated
that it was he who indeed had signed all of the contracts.
In addition, James did the initial work under the GPP
name without his wife's knowledge and it was James
who negotiated and signed a lease for the office on St.
Paul Street. Both James and Victoria have authority to
sign checks. While Victoria is experienced in office
work, she is not experienced in the installation of sprin-
kler systems and she never goes out to the jobsites.
On January 20 or 21 James met with Wesley Wilder,
the Union's business representative. James did not tell
Wilder that he was performing sprinkler work under the
auspices of GPP. James testified that it was his position
that GPP was not covered by the union contract. In ad-
dition, James never offered jobs to any of the former EG
employees who were in the unit and covered by the con-
tract.
C. Discussion and Conclusions
I. Alter ego
In Crawford Door Sales Co., 226 NLRB 1144 (1976),
the Board stated the criteria for establishing alter ego
status:
Clearly each case must turn on its own facts, but
generally we have found alter ego status where the
two enterprises have "substantially identical" man-
agement, business purpose, operation, equipment,
customers, and supervision, as well as ownership.
Not all of these indicia need be present. See Blumenfeld
Theatres Circuit, 240 NLRB 206, 215 (1979); Blake Con-
struction Co., 245 NLRB 630, 634 (1979), enf. granted in
part and denied in part on other grounds 663 F.2d 272
(D.C. Cir. 1981).
The record establishes that both EG and GPP have
been engaged in essentially the same business activities.
While EG did sprinkler work exclusively, 80 percent of
GPP's work is the same. Indeed the yellow pages adver-
tisement for each corporation reflects the same type of
work. The record further reveals that James not only
managed EG but, in fact, he is managing GPP, as well.
He hired, fired, and set salaries for the GPP employees.
1243
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
He signed all of the Company's contracts, and negotiated
and signed the lease for the St. Paul Street office and did
the initial work under the GPP name without his wife's
knowledge. He signed company checks and supervised
the work in the field.
GPP's customers are for the most part former custom-
ers of EG. The record shows that, except for one com-
pany, all of the companies for which GPP did installa-
tion and maintenance work had been prior customers of
EG. Indeed, after a hiatus of only 1 week,2 James per-
formed work for a company on behalf of GPP pursuant
to a work order initially received by EG.
Finally, with respect to ownership, the stock of each
corporation was owned by either James or Victoria. The
Board has held that stock ownership in different corpo-
rations by members of the same family constitutes own-
ership and control which is "substantially identical."
Crawford Door Sales Co., supra, 226 NLRB 1144; DMR
Corp., 258 NLRB 1063, 1069 (1981); J.M. Tanaka Con-
struction, 249 NLRB 238, 241 fn. 29 (1980), enfd. 675
F.2d 1029 (9th Cir. 1982).
I find that EG and GPP have substantially identical
management, supervision, and ownership. Both corpora-
tions engage in substantially the same business and they
both have substantially the same customers. Accordingly,
having considered all of the facts of this case, I conclude
that GPP is the alter ego of EG.
2. Repudiation of collective-bargaining agreement
The complaint alleges that the Respondent repudiated
the collective-bargaining agreement with the Union and
withdrew its recognition of the Union as the exclusive
bargaining representative of the employees in the appro-
priate unit. James testified that it was his view that GPP
was not covered by the union contract. He did not
inform the Union's business representative of the activi-
ties then being performed by GPP. Nor did he offer em-
ployment to any of the former EG unit employees. It is
2 In Blumenfeld Theatres Circuit, supra, 240 NLRB at 217, the Board
held that a 4-week hiatus between the closing of one operation and the
institution of a second was not sufficient to terminate the employer's bar-
gaining obligation.
clear that an alter ego is required to assume the obliga-
tions of its predecessor's collective-bargaining agreement.
See J.M. Tanaka Construction, supra, 238 NLRB at 241.
The Respondents' failure to do so is a violation of Sec-
tion 8(a)(5) and (1) of the Act. See Republic Engineering
Co., 236 NLRB 1150, 1155 (1978); Naccarato Construc-
tion Co., 233 NLRB 1394, 1401 (1977).
CONCLUSIONS OF LAW
1. E.G. Sprinkler Corporation, and its alter ego, Good-
man Piping Products, Inc., are employers engaged in
commerce within the meaning of Section 2(6) and (7) of
the Act.
2. The Union is a labor organization within the mean-
ing of Section 2(5) of the Act.
3. The appropriate unit for purposes of collective bar-
gaining within the meaning of Section 9(b) of the Act
consists of:
All employees engaged in the installation, disman-
tling, maintenance, repair, adjustments and correc-
tions of all fire protection and fire control systems
with the exceptions of steam fire protection systems.
2. By failing to apply the terms of the collective-bar-
gaining agreement between the Respondents and the
Union, the Respondents have violated Section 8(a)(5)
and (1) of the Act.
3. The aforesaid unfair labor practices constitute unfair
labor practices affecting commerce within the meaning
of Section 2(6) and (7) of the Act.
THE REMEDY
Having found that the Respondents have engaged in
unfair labor practices, I find it necessary to order them
to cease and desist therefrom and to take affirmative
action designed to effectuate the policies of the Act. In
addition, I shall order that the Respondents make whole
the appropriate individuals for any losses they may have
suffered by reason of the Respondents' failure to honor
the collective-bargaining agreement with the Union, in-
cluding benefit contributions.
[Recommended Order omitted from publication.]
1244