Elevator Sales And Service, Inc.

National Labor Relations Board - Board Decisions

Feb 19, 1986

278 N.L.R.B. 627 (N.L.R.B. 1986)

ELEVATOR SALES & SERVICE 627
Elevator Sales and Service , Inc. and Local Union
No. 5, International Union of Elevator Con-
structors
Kencor, Inc. and Local Union No . 5, International
Union of Elevator Constructors . Cases 4-CA-
13124 and 4-CA-13151
19 February 1986
DECISION AND ORDER
BY MEMBERS JOHANSEN, BABSON, AND
STEPHENS
On 19 March 1985 Administrative Law Judge
Irwin H. Socoloff issued the attached decision. Re-
spondent Kencor filed exceptions and a supporting
brief, and the General Counsel and the Charging
Party filed briefs in opposition to Kencor's excep-
tions and cross-exceptions and supporting briefs.
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 and to adopt the recommended
Order.'
ORDER
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge and orders that the Respondent, Elevator
Sales and Service, Inc., and its alter ego Respond-
ent Kencor, Inc., Broomall, Pennsylvania, its offi-
cers, agents, successors, and assigns, shall take the
action set forth in the Order.
' Respondent Kencor has requested oral argument The request is
denied as the record, exceptions, and briefs adequately present the issues
and the positions of the parties.
Joel H. Levinson, Esq., for the General Counsel.
Patricia H. Jenkins, Esq., Media, of Pennsylvania, for Re-
spondent Elevator Sales and Service, Inc.
Edward C. German, Esq., Edward T Bresnan, Esq., and
Frederick C. Hanselmann, Esq., of Philadelphia,.Penn-
sylvania, for Respondent Kencor, Inc.
Sally M. Armstrong, Esq., of Washington, D.C., for the
Charging Party.
DECISION
STATEMENT OF THE CASE
IRwIN H. SocoLoFF, Administrative Law Judge. On
charges filed on August 6 and 19, 1982, by Local Union
No. 5, International Union of Elevator Constructors (the
Union) against Elevator Sales and Service, Inc. and
Kencor, Inc. (the Respondents) the General Counsel of
the National Labor Relations Board, by the Regional Di-
rector for Region 4, issued an order consolidating cases
and consolidated complaint dated September 30, 1982, al-
leging violations by Respondents of Section 8(a)(5), (3),
and (1) and Section 2(6) and (7) of the National Labor
Relations Act (the Act). Respondents, by their answers,
deny the commission of any unfair labor practices.
Pursuant to notice, trial was held before me in Phila-
delphia, Pennsylvania, on February 24, April 4 through
7, and May 24, 1983, at which the General Counsel, the
Charging Party, and the Respondents were represented
by counsel and were afforded full opportunity to be
heard, to examine and cross-examine witnesses, and to in-
troduce evidence. Thereafter, the parties filed briefs
which have been duly considered.
On the entire record' in this case, and from my obser-
vations of the witnesses, I make the following
FINDINGS OF FACT
1. JURISDICTION
Respondent Elevator is a Pennsylvania corporation,
which was engaged, until mid-1982, in the installation,
service, and repair of elevators from a facility located in
Upper Darby, Pennsylvania. Respondent Kencor is a
Pennsylvania corporation engaged in the service and
repair of elevators from a facility located in Broomall,
Pennsylvania. During the year preceding trial in this
matter, each Respondent sold goods and performed serv-
ices, valued in excess of $50,000, outside of the Common-
wealth of Pennsylvania. I find that Respondent Elevator
and Respondent Kencor are employers engaged in com-
merce within the meaning of Section 2(2), (6), and (7) of
the Act.
II. LABOR ORGANIZATION
International Union of Elevator Constructors and its
Local No. 5 are labor organizations within the meaning
of Section 2(5) of the Act.
III. THE UNFAIR LABOR PRACTICES
A. Background
Respondents are companies incorporated, owned, and
operated in the Philadelphia, Pennsylvania, and New
Jersey areas by members of the Kennedy family. Until it
ceased business operations, about July 1982, Respondent
Elevator, as noted, engaged in the construction, mainte-
nance, and repair of elevators and employed elevator
constructor mechanics and helpers. In 1969, it recog-
nized the International Union of Elevator Constructors
and its Local No. 5 as the collective-bargaining repre-
sentative of those employees. At that time, the parties
agreed to be bound by the terms of the 1967-1972 con-
tract between the International Union and National Ele-
vator Industry, Inc. (NEII), a nationwide multiemployer
bargaining association composed of employers that man-
ufacture and service elevators.2 In 1976, Respondent El-
' C.P. Exh 1 is received in evidence
2 NEII and the International Union bargain on a nationwide basis.
278 NLRB No. 94
628 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
evator became a member of NEII and, by virtue of that
association , was bound by the agreement negotiated by
the International Union and NEII, effective July 1977 to
July 1982.
Respondent Kencor was incorporated in 1981 and,
during the first half of 1982, the Kennedy family phased
out the operations of Respondent Elevator and began op-
eration of Respondent Kencor as an elevator service and
repair business employing elevator constructor mechan-
ics and helpers. Respondent Kencor has not honored the
1977-1982 agreement or its successor which runs from
July 1982 until July 1987.
In the instant case, the General Counsel contends that
Respondent Kencor is the alter ego of Respondent Ele-
vator and that Respondents violated Section 8(a)(5) and
(3) of the Act by repudiating the contracts negotiated by
the International Union and NEII. It is further urged
that Respondents violated Section 8(a)(5) by refusing to
furnish information requested by the Union concerning
the relationship between Respondents . Respondents deny
that the one is the alter ego of the other and assert,
therefore, that Respondent Kencor is not bound by the
agreements between the International Union and NEII.
They further contend that the charges were untimely
filed and that, in any event, Respondent Elevator with-
drew from NEII prior to the start of negotiations for the
1982-1987 contract.
B. Facts3
In January 1971 John F. Kennedy, who had previous-
ly run an elevator business as a sole proprietorship, rear-
ranged same under corporate form and began operation
of Respondent Elevator. At that time, Kennedy was
elected president and treasurer of Elevator ; his wife Mar-
garet was elected vice president ; his sons Richard and
James Donald were elected vice presidents, and his
daughter Maureen was elected secretary . Ownership in
the corporation was as follows:
Mr. and Mrs. John F.
Kennedy 510 shares (51 percent)
Richard Kennedy 200 shares (20 percent)
James Donald
Kennedy 200 shares (20 percent)
Maureen Kennedy
Geyer 90 shares (9 percent)
John F. Kennedy ran the day-to-day affairs of Respond-
ent Elevator while Richard and James Donald per-
formed elevator repair services and Maureen did the
bookkeeping and secretarial work of the Company. On
December 20, 1975, Maureen Kennedy Geyer married
William Muesham and, on January 3, 1977, William
a The factfindings contained herein are based on a composite of docu-
mentary and testimonial evidence introduced at teal. Where necessary to
do so, credibility resolutions have been set forth , infra. In general, I have
viewed with suspicion the testimony of Richard Kennedy, president of
both Respondents , and Maureen Muesham , the secretary and bookkeeper
of Respondent Elevator and the treasurer and bookkeeper of Respondent
Kencor, in view of their demeanor as witnesses, the lack of internal con-
sistency in their respective testimony , and the inherent improbability of
certain of the testimony of each.
Muesham began employment with Elevator as an expe-
diter and as the general manager.
John F. Kennedy died on September 9, 1978. He left
his stock in trust for the benefit of his wife and another
daughter, who was institutionalized, naming as trustee a
Father Flynn. Thereafter, Richard was elected president
of Respondent Elevator. In the ensuing years, Richard
Kennedy attempted, unsuccessfully, to buy his mother's
interest in the business. By 1981, Richard, James Donald,
Maureen, William Muesham, and their cousin Donald W.
Kennedy decided to leave Elevator and form Respond-
ent Kencor.
Prior to the death of John Kennedy, on August 25,
1977, Southeast National Bank approved a $75,000 loan
and a $25,000 working capital line of credit for Elevator.
Collateral for the loans included the personal guarantees
of Richard, James Donald, Maureen, and their spouses; a
security interest in the accounts receivable, equipment,
inventory, furniture, and fixtures of Elevator; and a judg-
ment for $75,000 against Elevator's Upper Darby, Penn-
sylvania building. Although John F. Kennedy was still,
officially, the chief executive officer of Respondent Ele-
vator, Richard Kennedy signed the loan agreements as
president.
In July 1979 Industrial Valley Bank and Trust Compa-
ny granted a $175,000 loan to Elevator, the proceeds of
which were used to pay money owed to suppliers and to
the Internal Revenue Service. Collateral for the loan in-
cluded the personal guarantees of Richard, James
Donald, Maureen, and their spouses and security inter-
ests in Elevator's inventory, accounts receivable, equip-
ment, and its Upper Darby, Pennsylvania real estate.
Respondent Kencor was incorporated ' in July 1981.
Twenty-five percent ownerships were given to Richard
Kennedy, James Donald Kennedy, Donald W. Kennedy,
and to Maureen and William Muesham jointly. All
except Donald W. Kennedy and William Muesham were
owners of Respondent Elevator and all five individuals
had been employed by that Respondent for some years.
The record does not establish whether $1000, for the
capital stock of the new Company, was ever paid. How-
ever, Richard Kennedy testified that he made deposits
into Kencor accounts, in late 1981, which were, or may
have been, personal contributions. Richard Kennedy was
elected president of Kencor, James Donald Kennedy and
Donald W. Kennedy were elected vice presidents, Maur-
een Muesham was elected treasurer, and her husband
William Muesham was elected secretary. The five
owners and officers form Respondent Kencor's "manage-
ment council."
In November 1981 Elevator was forced to sell its
building in order to pay back taxes to the Internal Reve-
nue Service. To perform at closing, Elevator needed ad-
ditional funds for the payment of debts secured by liens
and judgments. Thus, Richard Kennedy testified, both he
and Maureen borrowed $5000. They lent the $10,000 to
Respondent Kencor which, in turn, lent it to Respondent
Elevator. According to Kennedy's testimony, he and
Maureen did not wish to make the loans directly to Ele-
vator because they knew, in view of Elevator's financial
condition, that there would be no hope of repayment.
ELEVATOR SALES & SERVICE 629
Kennedy did not explain why Kencor had any better
reason to make such loans to Elevator. In any event,
Kennedy testified, Kencor, about November 5, 1981, exe-
cuted demand notes evidencing the two $5000 debts to
himself and Maureen and calling for the payment of in-
terest. Those notes, purportedly signed by Richard Ken-
nedy on behalf of Kencor, were not produced at trial. It
is undisputed that Respondent Kencor has made no pay-
ments, of either principal or interest, to Richard and
Maureen. Respondent Elevator, by Richard Kennedy,
executed two $5000 notes, calling for payment of 14-per-
cent interest, in favor of Respondent Kencor. One of the
notes was forgiven in November 1982 in exchange for
two trucks owned by Elevator.4 The second note is still
outstanding and neither principal nor interest has been
paid on it.
By an agreement dated November 2, 1981 , Respondent
Elevator agreed to convey to Respondent Kencor 62 of
its customer accounts (maintenance and service con-
tracts), effective May 1 , 1982. In consideration , Respond-
ent Kencor assumed liability for the outstanding balance
of $32,000 owed by Elevator to Southeast National
Bank. That loan, as noted, had been guaranteed by Rich-
ard, James Donald , Maureen, and their spouses, all of
whom re-executed personal guarantees, pledging their
homes. In addition, Donald W. Kennedy, who was not a
guarantor of the loan to Elevator, became a guarantor of
the assumed loan. The Elevator -Kencor agreement was
signed by Richard Kennedy, acting for both the seller
and the buyer. It was drafted, for Kencor, by William
Muesham, at a time when he was still on Elevator's pay-
roll. Professional appraisal of the fair market valued of
the transferred customer accounts was not obtained. Nor
was the advance approval of the customers sought, some
of whom did not allow Kencor to service their elevators
after ' the May 1 transfer date , necessitating renegotiation
of those service contracts. At least 17 of the 62 trans-
ferred contracts were subject to an annual rebidding
process.
On January 4, 1982, Respondents executed an agree-
ment under which Elevator agreed to sell its entire in-
ventory to Kencor in exchange for the assumption by
Kencor of Elevator's debt to Industrial Valley Bank and
Trust Company which then had an outstanding balance
of $132,000. New personal guarantees , pledging their
homes, were executed by Richard, James Donald, Maur-
een, and their spouses. In addition, Donald W. Kennedy,
who was not a guarantor of the loan to Elevator, became
a guarantor of the assumed loan and he pledged his
home. Closing took place on April 20, 1982. A physical
inventory was not performed at the time of transfer.
While Richard Kennedy, in his testimony, insisted that,
in fact, the fair market value of the transferred inventory
was about $132,000, he conceded that, regardless of the
worth of the transferred inventory, it was to be sold to
Kencor for assumption of the $132,000 debt since the
family members were personally liable for payment of
that debt. The Elevator-Kencor agreement was signed
by Richard Kennedy and- Maureen Muesham on behalf
of Elevator and by Richard Kennedy and William Mue-
sham for Kencor.
On January 1, 1982, Richard Kennedy formally an-
nounced his intention to leave Elevator, effective May 5,
1982. He testified that earlier he had informed his mother
Margaret:
I told her that I was going to take as much of the
business as I could and she felt that I stole the busi-
ness-we stole the business. It was not very easy. I
told her that I was tired of having 100 percent of
the liabilities and the pressures, and no ownership-
no majority stockholder. I didn't have the benefits
of having a company-not that I would want Ele-
vator because it was apparent at this time that
maybe Elevator wasn't going to succeed.
Kennedy further testified that between January 1 and
May 5 while still on the Elevator payroll he solicited the
Elevator customers on behalf of Kencor. Kennedy told
customers that the family was forming a new company.
In certain cases, Kencor, by Richard Kennedy, began to
perform service work for customers during the January
to May ,period. Kennedy testified that he used his own
tools and , apparently , Elevator 's inventory. Maureen
Muesham, who also remained on Elevator 's payroll until
May 5, performed the bookkeeping work for Kencor
during the months preceding May 5. On that date, she
became an employee of Kencor but, nonetheless, contin-
ued to handle Elevator's bookkeeping work. Although,
as noted, the contractual closing date for the exchange of
inventory was April 20, Kencor did not complete remov-
al of the inventory from Elevator premises5 until July.
During the interim, Kencor did not pay a storage fee to
Elevator. Indeed, during this period, as Elevator wound
down its service business , and Kencor moved into full
operation, the two Companies, apparently, shared use of
the inventory.
While Elevator was, and Kencor is, in the business of
servicing and repairing elevators, Richard Kennedy, in
his testimony, distinguished the functions of the two
Companies in the following mannner.
Elevator, unlike Kencor, did construction work, while
Kencor, unlike Elevator, has branched out into the field
of building systems maintenance. However , Kennedy
conceded that, as of the time of trial, 1 year after Kencor
commenced operations it had no contracts, and had re-
ceived no fees, for nonelevator building maintenance
service work. On the other hand, Kencor has performed
at least one construction job. Further, Kennedy testified,
in late 1979 or early 1980, Elevator made the decision to
get out of construction work because it was losing
money in that area . Accordingly, Elevator withdrew its
outstanding construction bids, but completed work on
contracts already awarded. Construction billings for Ele-
vator, which were at, $1,148,926 in 1980, declined to
$558,577 in 1981 and to $51,180 in 1982 . During the same
period, Elevator's, billings for service and repair work re-
mained relatively constant, about $500,000 per year. Re-
4 Respondent Elevator also owned three other vehicles, two of which
are now used by Respondent Kencor
5 After sale of its building, Elevator continued to occupy the premises
for 1 year as a lessee
630 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
spondent Elevator, in its service and maintenance work,
utilized form contracts covering either full service or oil,
parts, and grease service. Kencor utilizes the same con-
tracts.
Richard Kennedy and Maureen and William Muesham
officially left Elevator and joined Kencor on May 5,
1982. A few days earlier, on May 1, one of the following
form letters was sent to the Elevator customers, both
those that were included in the 62 purchased accounts
and those that were not:
Gentlemen:
Let us take this opportunity to introduce our-
selves. Kencor, Inc. is a company engaging in total
building systems maintenance, specializing in build-
ings six stories and under. However, the heart of
our business is elevators, just as the elevator is the
heart of your building. We are incorporated in
Pennsylvania, and licensed to do business in New
Jersey.
Effective May 1, the elevator maintenance con-
tract formerly held by Elevator Sales and Service,
Inc., has been purchased by Kencor. We regret the
circumstances that made this necessary, however,
we eagerly look forward to seeing you in the
future.
We fully realize the potential trauma that accom-
panies such a transition, but-we can assure you that
there is no need for concern. Your equipment will
be maintained by highly skilled, and competent
technicians. Consequently, you can be assured that
you will receive high quality service at a reasonable
price.
Kencor was founded by Richard Kennedy, who
was formerly chief executive officer of Elevator
Sales, and Service. As you know, the Kennedy
family has three generations' experience in the ele-
vator business. Experience of this kind cannot be
discounted.
If you have any questions, please call us immedi-
ately at 215-353-6459. Welcome to the Kencor
family.
Very truly yours,
Kencor, Inc.
Maureen Kennedy Muesham
Treasurer
TO ALL OUR VALUED CUSTOMERS:
We are pleased to announce that your elevator
maintenance contract with Elevator Sales & Serv-
ice, Inc. was purchased by Kencor, Inc. to be effec-
tive May 1, 1982.
All terms, conditions of the existing contract
remain unchanged.
We look forward to continuing harmonious rela-
tionships.
Very truly yours,
Kencor, Inc.
Richard A. Kennedy
In 1982, Elevator billed some 142 customers pursuant
to a full-service contract or a parts, oil, and grease con-
tract. Kencor billed some 127 of these 142 former Eleva-
tor customers, during 1982, for performance of the same
services. Of the 127 customers, 108 were billed by
Kencor on the next month following the last Elevator
billing, that is, without interruption in the monthly bill-
ing cycle. Kencor billed 18 former Elevator customers
following a 1-to 3-month interruption in billing during
which time the customer was persuaded to accept the
switchover to Kencor. One customer was not billed until
9 months after the last Elevator billing. Kencor contin-
ued the former Elevator billing rates. In all, Kencor
serviced some 176 customers during its first year of oper-
ation, about 150 of which were formerly customers of
Elevator.
As noted, Elevator ceased to function in July 1982. At
that time, it had three unfinished construction projects
including one for the installation of an elevator at build-
ing 57 of the Navy Yard. Richard Kennedy testified that,
because the Kennedy family members were personally
liable for completion of the Navy Yard job, Kencor de-
cided that it would complete the work previously begun
by Elevator. This was done in July 1982. According to
Kennedy's testimony, Kencor received oral permission
from the Navy to assume this otherwise unassignable
contract of Elevator's. However, he conceded that Ele-
vator and Kencor failed to comply with contractual re-
quirements for subcontracting. There was no written
agreement between Elevator and Kencor concerning
Kencor's completion of the job. Indeed, it is interesting
to note that, while Kennedy testified that an employee
named Kevin Ahern helped complete the job for
Kencor, Ahern testified that all of his work on the Navy
Yard job was performed for Elevator.
Kencor submitted a bill to Elevator, for work in com-
pleting the Navy Yard project in September 1982. Rich-
ard Kennedy testified that he does not know whether or
not Elevator ever paid this bill. Maureen Muesham testi-
fied that Kencor received payment through a complicat-
ed procedure that can only be explained by an account-
ant. What is clear on this record is that the proceeds for
completion of the project, $13,420, were sent to Elevator
which used the entire sum to make payment of taxes due
the Internal Revenue Service.6
The following is a list of all employees of Respondent
Kencor, from its inception to the date of trial:
Name Starting Date
Richard Kennedy 5/5/82
Maureen Mueshani 5/5/82
William Muesham 5/5/82
Margaret Kennedy 5/5/82
Donald W. Kennedy 6/30/82
6 The Navy's check to Elevator was endorsed by Maureen Muesham
"For deposit only, Elevator Sales & Service," then stamped "Kencor,
Inc.," and deposited into a Kencor account . Muesham then wrote a
check to IRS, drawn on a Kencor account, for the same amount. A letter
was sent to IRS, on Kencor stationery , along with the check, instructing
IRS to credit the amount to Elevator.
ELEVATOR SALES & SERVICE 631
James Donald
Kennedy 6/30/82
Kevin Ahern 6/30/82
Craig Geyer 6/30/82
Richard McBride 7/14/82
Joseph Nardelli 8/4/82
Edwin Yeager 4/14/82
Richard Kennedy, as noted, was the president and
chief executive officer of Respondent Elevator and trans-
fered to the same position at the same salary at Kencor.
Maureen Muesham, who was the corporate secretary
and performed the bookkeeping duties for Respondent
Elevator, became the corporate treasurer at Kencor
where she performs the same bookkeeping duties at the
same salary. William Muesham was, officially, an expedi-
tor and general manager for Respondent Elevator. Mue-
sham is trained and experienced in the field of labor rela-
tions and there is record evidence showing that he per-
formed personnel functions for that Respondent. At
Kencor, he holds the position of corporate secretary and
also performs personnel functions. Muesham 's starting
salary at Kencor was the same as that previously earned
at Elevator. Margaret Kennedy, a vice president of Ele-
vator, holds no corporate position at Kencor. At Eleva-
tor, she received a weekly salary of $90 per week for
performance of part-time clerical functions. She was paid
the same salary, for performance of the same duties, at
Kencor. James Donald Kennedy was a vice president of
Elevator and a salaried management employee who also
performed bargaining unit work. At Kencor, he is also a
vice president and salaried, management employee who
performs mechanics work. hen he transfered from Ele-
vator to Kencor, he continued to receive the same
salary. Donald W. , Kennedy performed bargaining unit
work for Elevator at'an hourly rate. At Kencor, he is a
vice president and continues to perform mechanic work.
At the time of transfer, he was paid at the same hourly
rate previously received at Elevator. Kevin Ahern
worked as a full-time employee of Elevator doing bar-
gaining unit work at an hourly rate. He switched to
Kencor to do the same work at the same rate of pay.
Craig Geyer, Maureen ' Muesham 's son , was a periodic
full-time hourly employee of Elevator. He switched to
Kencor and-received the same hourly rate. Joseph Nar-
delli and Richard McBride were, when hired to do me-
chanical work by Kencor, former employees of Elevator
who had performed bargaining unit work. Edwin
Yeager, an hourly employee of Kencor, never worked
for Elevator.
While there is a "management council" at Kencor
made up of the five owners, Kencor, like Elevator, is run
by Richard Kennedy. He is assisted, with respect to
labor relations matters, by William Muesham. The man-
agement council appears to be a ratifying body which
meets, informally, once per month. No minutes are kept
of those meetings . At inception, until time of trial, the
basement of Maureen Muesham's home served as Kencor
headquarters.
On August 19, 1981, Respondent Elevator sent a letter
to NEII, withdrawing from that association and inform-
ing it that "`NEII is no longer authorized to represent El-
evator Sales & Service, Inc. in any future bargaining."
Elevator did not send to Local 5, or to the International
Union, a copy of its withdrawal letter and neither NEII
nor Elevator provided written notice of this matter to
the Local or the International. The subject was refer-
enced in a December 21, 1981 letter from Elevator to the
International, concerning a grievance, and stating that
"You may be aware of the fact that we have withdrawn
from NEII, effective August 19, 1981." On February 4,
1982, the International Union received from NEII an up-
dated membership list which did not include the name of
Elevator.
The International Union notified NEII in October
1981 of its desire to enter into negotiations for a new
contract to cover the period July 1982 to July 1987. Ac-
cordingly , meetings were set for December -2 and 3,
1981, in Washington, D.C. John Russell, the secretary-
treasurer of the International, testified that negotiations
began on that date. James Walker Jr., manager of labor
relations for NEII, termed the December 2 and 3 meet-
ings as preliminary to actual negotiations but he also tes-
tified that the purpose of those meetings was "to begin
negotiations, to establish ground rules, to highlight some
of the issues we would be discussing in negotiations to
come." Walker further testified that, at the meetings,
each side proposed many contractual changes including
wage rates and overtime provisions. Written proposals
were not exchanged until February 16, 1982. Final agree-
ment on a new contract was reached on July 8, 1982.
Richard Kennedy testified that, in September 1981,
Robert Williams, Local 5's business manager, in the
course of discussion of a grievance, told Kennedy that
Williams knew that Elevator was no longer a member of
NEII. Kennedy attributed a similar statement to George
Koch, vice president of the International Union, alleged-
ly made in December 1981. As stated at footnote 2, I
found Kennedy an unreliable witness and I discredit his
testimony in this regard and I credit the forthright deni-
als of Williams and Koch. Kennedy further claimed that
significance should be attached to the fact that, in the fall
of 1981, the Union dealt directly with him on a griev-
ance matter, rather than dealing with' NEII. According
to Kennedy, the normal pattern for handling of disputes
between Local 5 and Elevator had been, theretofore, to
"go through NEII." Kennedy's testimony in that regard
is undermined by documentary evidence.
There is record evidence showing that Robert Wil-
liams had heard rumors by late 1981 or early 1982 that
Respondent Elevator would become a nonunion business.
However, he credibly testified that he did not learn of
the existence of Respondent Kencor until March 1982,
when he saw a bid, on Kencor stationery, containing
Richard Kennedy's name. It was not until July 1982 that
Williams received a report of actual; work being per-
formed by Kencor. At that time, members of Local 5 re-
ported to him that nonunion employees were installing
an elevator at building 57 of the Navy Yard. Williams
visited the Navy Yard and observed equipment and ma-
terials marked with the name of Respondent Elevator.
On July 6, Williams sent a letter to Kennedy, stating:
It has come to our attention that your company
is or may be in violation of the ' current agreement
632 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
between the National Elevator Industry, Inc., and
the International Union of Elevator Constructors,
by reason of the operation by your company or its
principals of another company called Kencor, Inc.,
or by the performance of work which would other-
wise be performed by your company. We believe
that there is or may be a violation among other
things, of Articles II, III , IV, V, VI, IX, X, XI,
XII, XIII, XVIII, XIX, and XXII of the Standard
Agreement.
Kencor, Inc. is presently performing services pre-
viously performed by your company with your em-
ployees. In addition, we believe that there is a con-
nection between your company and Kencor, Inc.,
either financially or through management personnel,
or both, and we believe that the object of creating
Kencor, Inc., was to circumvent the provisions of
the Standard Agreement.
The purpose of this letter is to request informa-
tion needed by the union in order to evaluate
whether a violation of the contract has occurred,
and whether a grievance should be filed. To this
end, we would appreciate your preparing answers
to the following questions:
1. What positions in Kencor, Inc. are held by
each officer, shareholder, director or other manage-
ment representative of your company?
2. State the name of each person who has a func-
tion related to labor relations for your company and
for Kencor, Inc.
3. Do Kencor, Inc. and your company share any
services such as clerical, administrative, bookkeep-
ing, managerial, drafting, estimating , and bonding?
If the answer is yes, please specify the nature and
extent of the shared services.
4. What services including clerical, administra-
tive, bookkeeping, managerial, drafting, estimating
and bonding are performed for Kencor, Inc., by or
at your company.
5. What supervisory functions are performed by
supervisory personnel of your company over em-
ployees of Kencor, Inc.?
6. What insurance or other benefits are shared in
common by employees of your company and em-
ployees of Kencor, Inc.? ,
7. Do Kencor, Inc. and your company share any
equipment, tools, vehicles or supplies? If the answer
is yes, please specify the nature of the materials so
shared and the extent to which such materials are
shared.
Please submit this information within ten days of
the receipt of this letter so that we can properly
evaluate whether to file a grievance concerning this
matter.
No response was received by Williams. On August 19,
1982, Williams sent letters to Respondent Elevator and
Respondent Kencor stating that Respondents were
bound by the terms of the agreement negotiated by the
International Union and NEIL and complaining of Re-
spondents' failure to apply the terms and conditions of
the agreement. Neither Respondent replied to those let-
ters.
C. Conclusions
1. Statute of limitations
Respondents contend that the complaint allegations are
time-barred by virtue of Section 10(b) of the Act. Sec-
tion 10(b) provides that a complaint shall not issue based
on unfair labor practices which occurred more than 6
months prior to the filing of charges with the Board. In
this case, Respondents assert, Elevator withdrew from
the multiemployer bargaining association more than 6
months before the charges were filed on August 6 and
19, 1982. Therefore, according to this argument, neither
Respondent may be found to have committed an unfair
labor practice by refusing to honor the 1982 to 1987
agreement, reached in July 1982. Also, Respondents
argue, record evidence shows that the Union knew of
the existence of Respondent Kencor for more than 6
months before it filed charges. Accordingly, it is urged,
allegations that Kencor repudiated either the 1977 to
1982 contract or the 1982 to 1987 agreement are time-
barred.
As shown, agreement on the new contract was
reached on July 8, 1982. Thus, even assuming that a
withdrawal from the multiemployer bargaining group oc-
curred more than 6 months before the charges were
filed, the complaint allegations are not time-barred. For,
it is the refusal to execute and apply the agreement nego-
tiated by the multiemployer association; not the purport-
ed withdrawal from group bargaining, which triggers the
10(b) limitations period. Preston H. Haskell Co., 238
NLRB 943 (1978), enf. denied 616 F.2d 136 (5th Cir.
1980). I also reject Respondents' contention that the
complaint is time-barred because the Union knew of the
existence of Kencor for a period longer than 6 months
before its charges were filed. Rumors aside, the Union
did not learn of Kencor until March 1982. Kencor did
not hire its first employee until April of that year. The
Union did not learn of actual work being performed by
Kencor until July 1982. All of those pivitol events oc-
curred within the 10(b) limitations period which did not
begin to run until the Union learned that work was being
performed contrary to the terms of the applicable con-
tract. Al Bryant, Inc., 260 NLRB 128 (1982).
2. Withdrawal from the Association
Absent mutual consent, or unusual circumstances,
withdrawal of an employer from a duly established mul-
tiemployer bargaining unit can be effected only by an
unequivocal written notice to the union expressing a sin-
cere intent to abandon the multiemployer unit and
pursue negotiations on an individual employer basis.
Such written notice must be given prior, to the com-
mencement of negotiations. Retail Associates, Inc., 120
NLRB 388 (1958); Callier's Custom Kitchens, 243 NLRB
1114 (1979), enfd. in part 630 F.2d 595 (8th Cir. 1980).
As shown in the statement of facts, Respondent Eleva-
tor sent a letter to NEII, withdrawing from that Associa-
tion, on August 19,,1981. However, it is undisputed that
ELEVATOR SALES & SERVICE. 633
written notice was not sent either to the International
Union or to Local 5. Even were I to find that the refer-
ence contained in the December 21, 1981 letter from Ele-
vator to the International or the fact that Elevator's
name did not appear on the NEIL membership list re-
ceived by the International on February 4, 1982, was suf-
ficient written notice of intent to abandon the multiem-
ployer unit, I would nonetheless conclude that the notice
was untimely . For the parties commenced negotiations,
looking toward a new agreement ; on December 2 and 3,
1981, when, by preagreement, they met face to face and
each side proposed many contractual changes including
wage rates and overtime provisions . It is not determina-
tive of this issue that written proposals were first ex-
changed some 2 months later as the parties, generally,
disclosed their bargaining demands on December 2 and
3. See Carpel Co., 226 NLRB 111 (1976), enfd. 560 F.2d
1030 (1st Cir. 1977), cert. denied 434 U.S. 1065 (1978).
3. Alter ego; refusal to honor the contracts; request
for information
While there is some difference in shareholder configu-
ration, both Respondent Elevator and Respondent
Kencor are closely held corporations owned and operat-
ed by members of the Kennedy family. Richard Kenne-
dy, as chief executive officer, ran the business of Re-
spondent Elevator and now runs the business of Re-
spondent Kencor. Both at Elevator, and at Kencor, Ken-
nedy has received the assistance of his brother-in-law,
William Muesham, with respect to labor relations matters
and, of his sister, Maureen Muesham, with respect to
bookkeeping, billing, banking, and bill paying.
Historically , Elevator engaged in elevator construction
work and in the service, maintenance , and repair of ele-
vators. However, some 2 years or more before Kencor
began operations, Elevator decided to phase out its con-
struction work while continuing with its service work. It
carried out that decision . Kencor , too, is engaged in the
service , maintenance, and repair of elevators . It uses the
same form contracts previously used by'Elevator and, es-
sentially , services the same customers , at the same rates,
using the same inventory, and much or all. of the same
equipment previously used by Elevator. The individuals
employed by Kencor are, with but one exception, former
employees of Elevator. Indeed, for the most part, those
individuals simply transfered payrolls and continued to
perform the same functions at the same rates of pay.
As shown in the statement of facts, during the transi-
tion period , employees of Respondent Elevator per-
formed unpaid services for Respondent Kencor. Later,
those on the payroll of Kencor performed services for
Elevator without remuneration. In particular, Richard
Kennedy, while still president of Elevator, solicited its
customers for Kencor and performed mechanical serv-
ices for some of those customers as an agent of Kencor.
Maureen Muesham performed bookkeeping and related
functions for Kencor, while on Elevator's payroll, and
for Elevator, while on Kencor's payroll. Of even greater
significance , the two Respondents engaged in a series of
financial transactions that were not arm's length bona
fide business dealings but, rather , were the product of a
family business undergoing a paper reorganization. Thus,
Kencor purchased 62 of Elevator 's customer accounts
without independent appraisal of the value, if any, of the
purchased accounts . Kencor purchased Elevator 's inven-
tory , again without independent appraisal of its value. In
both cases , the consideration for the transaction was as-
sumption by Kencor of those debts of Elevator for
which the family members were personally liable. Simi-
lar considerations motivated Kencor to lend money to
Elevator that, the family members knew, Kencor had no
hope of recovering . Notes were drawn and passed
among Elevator, Kencor, and the family members, but
principal and interest went unpaid . Kencor stored its in-
ventory on Elevator premises and paid no rent. Elevator
sold vehicles to Kencor without appraisal of their value.
Kencor completed a construction job, begun by Eleva-
tor, for which it received no payment . It did so because
the same family members who owned and ran Elevator,
and then owned and ran Kencor , were personally re-
sponsible for completion of the project. The record evi-
dence also suggests a commingling of the assets of the
two Companies and of the family members and a lack of
new capital invested , in the new enterprise.
In light of the common ownership , management, oper-
ation, and control by members of the Kennedy family of
the two Respondents , their common business purpose,
customers , and employees and the significant business
transactions between them which were not at arm's
length or bona fide dealings , I find that the changeover
from Elevator to Kencor was, simply , the paper reorga-
nization of a family business . I conclude that Respondent
Kencor is the alter ego of Respondent Elevator.
Since Elevator's withdrawal from NEU was not com-
municated to the International Union, or to Local 5,
before commencement of negotiations with respect to the
1982 to 1987 contract, Elevator, indisputably bound by
the terms of the 1977 to 1982 contract , is also bound by
the terms of the 1982 to 1987 agreement . Its alter ego,
Kencor, is also obligated to abide by the terms of those
agreements. By refusing to recognize the Union and
honor the contracts , Respondents violated Section 8(a)(5)
of the Act.7
Respondents further violated Section 8(a)(5) of the
Act by refusing to furnish the information requested by
the Union - on July 6, 1982. Where, as here, a union has
shown the probable relevance of information regarding
an employer 's relationship with another company to pos-
sible circumvention of contractual requirements , the em-
ployer is obligated to furnish the information. Boyers
Construction Co., 267 NLRB 227 (1983).
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES
UPON COMMERCE
The activities of Respondent set forth in section III,
above occuring in connection with their operations de-
scribed in section I, above, have a close, initimate, and
substantial relationship to trade, traffic, and commerce
among the several States and tend to lead to labor dis-
T In view of my disposition herein, I need not decide whether Re-
spondents also violated Sec. 8 (a)(3) of the Act by the same conduct.
634 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
putes burdening and obstructing commerce and the free
flow of commerce.
V. THE REMEDY
Having found that Respondents have engaged in cer-
tain unfair labor practice conduct in violation of Section
8(a)(5) and (1) of the Act, I shall recommend that they
be ordered to cease and desist therefrom and to take cer-
tain affirmative action designed to effectuate the policies
of the Act.
CONCLUSIONS OF LAW
1. Respondents Elevator Sales and Service, Inc. and
Kencor, Inc. are employers engaged in commerce, and in
operations affecting commerce, within the meaning of
Section 2(2), (6), and (7) of the Act. Respondent Kencor,
Inc. is the alter ego of Respondent Elevator Sales and
Service, Inc.
2. International Union of Elevator Constructors and its
Local Union No. 5 are labor organizations within the
meaning of Section 2(5) of the Act.
3. All elevator constructor mechanics and all elevator
constructor helpers employed by Respondents and by
members of National Elevator Industry, Inc. constitute a
unit appropriate for the purposes of collective bargaining
within the meaning of Section 9(b) of the Act.
4. At all times material herein the Union has been, and
is now, the exclusive representative of all employees in
the aforesaid bargaining unit for the purposes of collec-
tive bargaining within the meaning of Section 9(a) of the
Act.
5. By refusing to recognize and bargain with the
Union, as the exclusive representative of the bargaining
unit employees, concerning rates of pay, wages, hours,
and other terms and conditions of employment, and by
refusing to adhere to the terms- of the July 9, 1977 to
July 8, 1982 agreement' between National Elevator In-
dustry, Inc. and International Union of Elevator Con-
structors, and its successor agreement, Respondents have
engaged in unfair labor practice conduct within the
meaning of Section 8(a)(5) of the Act.
6. By refusing to furnish the Union with the informa-
tion requested by it on July 6, 1982, Respondents have
engaged in unfair labor practice conduct within the
meaning of Section 8(a)(5) of the Act.
7. The aforesaid unfair labor practices affect commerce
within the meaning of Section 2(6) and (7) of the Act.
On these findings of fact and conclusions of law and
on the entire record, I issue the following recommend-
ed8
ORDER
The Respondent, Elevator Sales and Service, Inc., and
its alter ego Respondent Kencor, Inc., Broomall, Penn-
sylvania, their officers, agents, successors, and assigns,
shall
6 If no exceptions are filed as provided by Sec 102 46 of the Board's
Rules and Regulations, the findings, conclusions, and recommended
Order shall, as provided in Sec 102 48 of the Rules, be adopted by the
Board and all objections to them shall be deemed waived for all pur-
poses
1. Cease and desist from
(a) Refusing to bargain collectively concerning rates of
pay, wages, hours, and other terms and conditions of em-
ployment with International Union of Elevator Con-
structors and its Local Union No. 5 as the exclusive bar-
gaining representative of its employees in the appropriate
unit.
(b) Refusing to adhere to the terms of the collective-
bargaining agreements between National Elevator Indus-
try, Inc. and International Union of Elevator Construc-
tors covering the periods July 1977 to July 1982 and
July 1982 to July 1987.
(c) Refusing to furnish the Union with the information
requested by it on July 6, 1982.
(d) 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) On request, bargain with the Union as the exclusive
representative of all employees in the aforesaid appropri-
ate unit with respect to rates of pay, wages, hours, and
other terms and conditions of employment.
(b) Adhere, retroactively, to the terms of the 1977 to
1982 and the 1982 to 1987 agreements between National
Elevator Industry, Inc. and International Union of Ele-
vator Constructors.
(c) Furnish the Union with the information requested
by it on July 6, 1982.
(d) Make the unit employees whole for any losses they
may have suffered as a result of the refusal to adhere to
the 1977 to 1982 and the 1982 to 1987 agreements, with
interest thereon to be computed in accordance with Flor-
ida Steel Corp., 231 NLRB 651 (1977). See generally Isis
Plumbing Co., 138 NLRB 716 (1962).
(e) Preserve and, on request, make available to the
Board or its agents , for examination and copying, all
payroll records, social security payment records, time-
cards, personnel records and reports, and all other
records necessary to analyze the amount of backpay due
under the terms of this Order.
(f) Post at their Broomall, Pennsylvania facility copies
of the attached notice marked "Appendix."9 Copies of
the notice, on forms provided by the Regional Director
for Region 4, after being signed by the Respondent's au-
thorized representative, shall be posted by the Respond-
ent immediately upon receipt and maintained for 60 con-
secutive days in conspicuous places including all places
where notices to employees are customarily posted. Rea-
sonable 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 Re-
spondent has taken to comply.
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 Nation-
al 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 "
ELEVATOR SALES & SERVICE 635
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 bargain collectively concern-
ing rates of pay , wages, hours, and other terms and con-
ditions of employment with International Union of Ele-
vator Constructors and its Local Union No. 5, as the ex-
clusive bargaining Representative of our employees in
the appropriate bargaining unit consisting of all elevator
constructor mechanics and all elevator constructor help-
ers employed by us and by members of National Eleva-
tor Industry, Inc.
WE WILL NOT refuse to adhere to the terms of the col-
lective-bargaining agreements between National Elevator
Industry, Inc. and International Union of Elevator Con-
structors covering the periods July 1977 to July 1982 and
July 1982 to July 1987.
WE WILL NOT refuse to furnish the Union with the in-
formation requested by it on July 6, 1982.
WE WILL NOT in any like or related manner interfere
with, restrain , or coerce you in the exercise of the rights
quaranteed you by Section T of the Act.
WE WILL , on request, bargain with the Union as the
exclusive representative of all employees in the appropri-
ate unit with respect to rates of pay, wages , hours, and
other terms and conditions of employment , and WE WILL
adhere, retroactively , to the terms of the 1977 to 1982,
and the 1982 to 1987 agreements between National Ele-
vator Industry , Inc. and International Union of Elevator
Constructors.
WE WILL furnish the Union with the information re-
quested by it on July 6, 1982.
WE WILL make employees whole for any losses they
may have suffered as a result of our refusal to adhere to
the terms of the 1977 to 1982 and the 1982 to 1987 con-
tracts , plus interest.
ELEVATOR SALES AND SERVICE, INC. AND
KENCOR, INC.