Gerace Construction, Inc.

National Labor Relations Board - Board Decisions

Oct 8, 1971

193 N.L.R.B. 645 (N.L.R.B. 1971)

GERACE CONSTRUCTION, INC. 645
Gerace Construction , Inc. and Helger Construction
Company, Inc. and United Brotherhood of Carpen-
ters and Joiners of America , AFL-CIO, Local No.
1654 , and Bricklayers , Masons and Plasterers
International Union of America , AFL-CIO, Local
No. 7, Saginaw , Michigan, and Local Union No.
1098, Laborers International Union of North
America, AFL-CIO, and Local 324, 324-A,
324-B , and 324-C, International Union of Operat-
ing Engineers , AFL-CIO. Cases 7-CA-8222,
7-CA-8223, 7-CA-8224, and 7-CA-8225
October 8, 1971
DECISION AND ORDER
BY CHAIRMAN MILLER AND MEMBERS JENKINS
AND KENNEDY
On March 26, 1971, Trial Examiner Herbert
Silberman issued his Decision in the above-entitled
proceeding, finding that the Respondents had en-
gaged in and were engaging in certain unfair labor
practices and recommending that they cease and
desist therefrom and take certain affirmative action,
as set forth in the attached Trial Examiner's Decision.
The Trial Examiner further found that the Respon-
dents had not engaged in certain other unfair labor
practices alleged in the complaint and recommended
that the complaint be dismissed with respect to those
allegations. Thereafter, the Respondents filed excep-
tions to the Trial Examiner's Decision and a support-
ing brief, and the General Counsel filed cross-excep-
tions and a brief in support thereof.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
powers in connection with this case to a three-member
panel.
The Board has reviewed the rulings of the Trial
Examiner made at the hearing and finds that no
prejudicial error was committed. The rulings are
hereby affirmed. The Board has considered the Trial
Examiner's Decision, the exceptions and briefs, and
the entire record in this proceeding, and hereby
adopts the findings, conclusions, and recommenda-
tions of the Trial Examiner, only to the extent
consistent herewith.
The Trial Examiner found, and we agree, that the
Respondents have common stockholders and com-
i N L R B v. Condenser Corporation, 128 F 2d 67, 71 See also J Howard
Jenks, d/b/a Glendora Plumbing, 165 NLRB 101, L & S Construction
Company, Inc, 155 NLRB 524, AAA Electric, Inc and Simms Electric Co,
190 NLRB No 23
2 Joe Robertson & Son, Inc. 174 NLRB No 160, Bel-Air Door, et al,
150 NLRB 481
•i Los Angeles Newspaper Guild, Local 69, et al (Hearst Corp), 185
NLRB No 25, enfd 443 F 2d 1173 (C A 9), Poole's Warehousing, Inc, 158
mon directors who have the legal right to control and
direct the affairs of Helger Construction Company,
Inc. However, we disagree with his finding that the
Respondents function as a single enterprise and
therefore constitute a single employer under the Act.
A critical factor in determining whether separate
legal entities operate as a single employing enterprise
is the degree of common control of labor relations
policies.' Thus, the Board has found common
ownership not determinative where requisite common
control was not shown,2 and the Board has held with
court approval that such common control must be
actual or active, as distinguished from potential
control.3
The record shows that Helger Construction is a
separate legal entity with separate bank and payroll
accounts. While Gerace Construction and Helger
share a common bookkeeper, she keeps separate
corporate records, and the two companies file
separate tax returns. Francis Gerace initially con-
trolled a majority of Helger's stock, and he and
Wardin, who is an official of Gerace Construction,
constituted two of Helger's three directors. However,
in late November 1970, Francis Gerace resigned as a
director of Helger and transferred his shares of stock
to Lawrence E. Sweebe, who has been Helger's
principal managerial official since its inception.
Sweebe has no such authority with respect to Gerace
Construction. While Sweebe initially consulted Fran-
cis Gerace and Wardin on policy matters, the record
shows that he has progressively assumed more
independent responsibility. Sweebe testified that as of
the date of the hearing, January 13, 1971, he consulted
with other officials on only I of every 10job bids, and
that he is in complete charge of day-to-day opera-
tions.
The record also shows that the two companies
submit separate job bids and normally do not bid on
the same jobs, and that Helger operates on its own
capital without guarantee of performance by Gerace
Construction or Francis Gerace.4 There is no showing
that Gerace Construction has lost business to Helger
or that any Gerace employee has lost work he
otherwise would have had. Helger's contracts amount
to less than $50,000 while Gerace's are seldom less
than $250,000. Unlike Gerace, Helger operates an
open shop without regard to craft lines and pays
employees less than Gerace's contract rates.5 The two
companies have separate health and welfare and
NLRB 1281, Miami Newspaper Printing Pressmen 's Local No 46 v
NLRB,322F2d405(CADC).
4 Cf B & B Industries, Inc, 162 NLRB 832, in which the Board found
that the collective-bargaining agreements between the unions and one of
two companies did not cover employees of both, even though the
individual owner of one company signed, as financial guarantor, the bids
submitted by the other
5 Helger belongs to the Associated Building Contractors of Michigan;
193 NLRB No. 91
646 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
workmen's compensation insurance contracts. Ge-
race has an average employee complement of 95;
Helger has only 16. While some Helger employees
previously worked for Gerace on occasion, there is no
interchange of employees. It is undisputed that Helger
uses Francis Gerace's trailer for its temporary office
and some tools and equipment of Gerace Construc-
tion. However, Helger pays rent for them. Moreover,
the renting of tools and equipment appears to be
common practice in the construction industry.
We find the above facts show that Francis Gerace
was the prime mover in organizing Helger Construc-
tion and that he and Wardin had potential control
over its operations, but such control was gradually
relinquished to Sweebe who in fact had actual control
over Helger's operations and employees. In these
circumstances and upon the entire record, as outlined
above, we find that Gerace Construction and Helger
Construction constitute separate employers under the
Act and that the employees of each constitute
separate bargaining units. Accordingly, we find that
the Respondents had no obligation to recognize the
Charging Parties as bargaining representatives of
Helger's employees or extend the terms of the existing
agreements to such employees.6 We shall therefore
order that the complaint be dismissed.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby orders that the complaint
herein be, and it hereby is, dismissed.
Gerace belongs to the Michigan Chapter of Associated General
Contractors of America, Inc
fi While Helger was organized by Francis Gerace, president of Gerace
Construction, Inc. to operate in the area of small construction jobs, the
Trial Examiner found, and we agree, there is no adequate proof that the
organizing of Helger was motivated by a desire to discourage union activity
or to destroy the Unions' majority status in relation to the existing
bargaining units of Gerace Construction's employees The Unions'
majorities in such units were not challenged
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
HERBERT SILBERMAN , Trial Examiner. Upon charges
filed on September 24, 1970, and amended charges filed on
November 19, 1970, a consolidated complaint, in the
above-numbered cases, dated November 24, 1970, was
issued alleging that the Respondents Gerace Construction,
Inc., herein called Gerace Construction, and Helger
Construction Company, Inc., herein called Helger, have
engaged in and are engaging in conduct constituting unfair
labor practices within the meaning of Section 8(a)(1), (3),
and (5) of the National Labor Relations Act, as amended.
In substance, the consolidated complaint alleges: (1) that
about May 27, 1970, Gerace Construction formed Helger to
do construction work similar to the work being performed
by Gerace Construction in order to divert work to Helger
and thereby to evade its obligations under the terms of the
collective-bargaining agreements between Gerace Con-
struction and the Charging Parties; (2) that since its
organization Helger has been paying its employees
substantially less than Gerace Construction; (3) that
Gerace Construction and Helger constitute a single
employer for the purposes of the application of the Act; (4)
that the employees of Helger constitute accretions to the
collective-bargaining units of Gerace Construction's em-
ployees; (5) that Respondents unlawfully have refused to
recognize the Charging Parties as the representatives of
Helger's employees pursuant to the terms of the applicable
collective-bargaining agreements between the Charging
Parties and Gerace Construction and unlawfully have
failed to apply the terms of said agreements to Helger's
employees; (6) that Respondents, although requested,
unlawfully have refused to furnish the Charging Parties
with information which is relevant and necessary to the
discharge by the Charging Parties of their functions as
collective-bargaining representatives; and (7) that Respon-
dents' purpose has been to undermine the bargaining,
contractual, and representative status of the Charging
Parties and to discourage union activities on the part of
their employees. Respondents duly filed answers which
generally deny that they have committed the alleged unfair
labor practices. A hearing in these proceedings was held in
Midland, Michigan, on January 13, 1971. Subsequent to the
hearing, the Respondent and Charging Party filed briefs
with me which have been carefully considered.
Upon the entire record in the case, I make the following:
FINDINGS OF FACT
1. THE BUSINESSES OF THE RESPONDENTS
Gerace Construction and Helger are Michigan corpora-
tions engaged in construction work as general contractors.
During the fiscal year which ended February 28, 1970,
which period is representative of its operations, Gerace
Construction derived gross income in excess of $500,000
and purchased and caused to be transported and delivered
to its principal place of business and to its various
construction sites in the State of Michigan goods and
materials valued in excess of $200,000 of which an amount
in the excess of $50,000 was transported from sources
outside the State of Michigan through channels of
interstate commerce. Since about May 27, 1970, which
period is representative of its operations, Helger has
obtained construction contracts from which it will receive
revenue in excess of $100,000. During this same period, in
the course and conduct of its business operations, Helger
has performed construction work in excess of $50,000 for
companies who are engaged in interstate commerce and
who annually purchase products and goods valued in
excess of $50,000 directly from suppliers located outside the
State of Michigan. Respondents admit, and I find, that
Gerace Construction and Helger are each engaged in
commerce within the meaning of Section 2(6) and (7) of the
Act.
GERACE CONSTRUCTION, INC. 647
II. THE LABOR ORGANIZATIONS INVOLVED
United Brotherhood of Carpenters and Joiners of
America , AFL-CIO, Local No. 1654, herein called
Carpenters ; Bricklayers , Masons and Plasterers Interna-
tional Union of America , AFL-CIO, Local No. 7, Saginaw,
Michigan , herein called Bricklayers ; Local Union No.
1098, Laborers International Union of North America,
AFL-CIO, herein called Laborers ; and Local 324, 324-A,
324-B and 324-C, International Union of Operating
Engineers , AFL-CIO, herein called Operating Engineers,
are labor organizations within the meaning of Section 2(5)
of the Act.
III. THE UNFAIR LABOR PRACTICES
Respondent Gerace Construction has been operating as a
general contractor in the Midland, Michigan, area for more
than 12 years. Its annual revenues in recent years has
approximated $5 million and the value of its individual
construction projects has ranged from upwards of $100,000
to above $1 million . From the inception of its business
Gerace Construction has recognized and has had contrac-
tual relations with the Charging Parties.' Described
colloquially, Gerace Construction is a union contractor.
The collective-bargaining agreements provide that Gerace
Construction recognizes the respective Unions as the
representative of all its employees within the classifications
covered by each contract2 and the terms of each contract
apply to all such employees of Gerace Construction.
Francis E. Gerace, president of Gerace Construction,
testified that since early 1969 Gerace Construction has not
been able to get any jobs under $100,000. Among the
reasons he ascribed for this situation was that union
jurisdictional problems had unduly increased labor costs.
For some period of time he had been giving consideration
to forming another company which would be better able to
compete for the smaller jobs. His plan was to organize a
nonunion firm which could recapture the type of work that
Gerace Construction had lost.3 The impetus for effecting
this amorphous design occurred in May 1970.
The expiration dates of the then subsisting collective-
bargaining agreements with the Charging Parties were
April 30, 1970. Renewal negotiations began on March 24
and about April 1 the expiration dates of the contracts were
extended until May 31, 1970. In mid-May Donald Wardin,
who was then vice president in charge of field operations of
Gerace Construction, learned about a remodeling job that
Dow Chemical Company wished to undertake. He was
unable to bid for the job on behalf of Gerace Construction
because a condition imposed by Dow Chemical was that
the contractor must guarantee completion without any
work interruption. Gerace Construction was then unable to
give such undertaking because of the possibility that there
might be a strike commencing on June 1, 1970.4 The
opportunity to get the Dow Chemical remodeling job
precipitated the decision on the part of Francis E. Gerace
to form another company-which would operate
nonunion-and which would be in a position to give the
guarantee that Dow Chemical was insisting upon before it
would award the job. Accordingly, Helger was organized
and in fact obtained the particularjob.
The principal issues in this case arise out of the
organization of Helger: whether Helger and Gerace
Construction together constitute a single employer and, if
so, whether Gerace Construction's collective-bargaining
agreements cover Helger's employees as accretions to the
units described in the respective contracts.
As of November 24, 1970, the management of Gerace
Construction was as follows:
Number of
Shares of
Name Stock Owned Director Office Held
Francis E. Gerace 5,300 Yes Pres. & trea.
Helen Gerace, wife 4,000 Yes Secretary
Harlan 0. Peterson 3,400 Yes Vice pres. of engi-
neering & estimating
Gerace Construction is a member of the Michigan chapter , Associated
General Contractors of America, Inc , and the applicable contracts are
between the Association and the individual unions or the bodies with
which such unions are affiliated
2 The work classifications are defined differently in the various
contracts Thus, the Carpenters contract covers "all employees performing
work coming under [its] jurisdiction", the Operating Engineers contract
covers "all work performed at the site of construction, building, repair,
alteration or demolition and all railroad construction work within the
property limits", the Laborers contract covers "all building and heavy
construction work, excluding highway work, performed within the
geographical jurisdiction of the union"; and the Bricklayers contract covers
"all Employees performing work coming under the jurisdiction of the
[union ] "
s Gerace explained that Helger was formed "with the idea .. that a
man would be able to do any work for which he was qualified," and would
not be limited to work within his craft classification " and this in itself was
quite a savings in cost and we thought this would put us back competitive
with other smaller contractors in our area."
4 As it happened both the Laborers and the Carpenters called strikes on
June I which lasted for I and 2 weeks, respectively
648 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Number of
Shares of
Name Stock Owned Director Office Held
Donald Wardin 500 Yes General superintendent
(before May 26, V.P.
of field development)
J. Fisher None Yes None
H. Arbury None Yes None
The Articles of Incorporation of Helger was signed by the
incorporators on May 26, 1970, and was filed with the
Michigan Department of Treasury, Corporation Division,
on June 15, 1970. However, the bid for the Dow Chemical
remodeling job was submitted on behalf of Helger before
that company was formally incorporated and work on the
job was started on May 26, 1970, the same day that the
incorporators signed the Articles of Incorporation.
The incorporators of Helger, who were its first Board of
Directors, and the number of shares subscnbed to by each
of the incorporators were as follows:
Francis E. Gerace-2,080 shares
Donald 0. Wardin-960 shares
Lawrence E. Sweebe5-960 shares
As of November 24, 1970, the management of Helger was as follows:6/
Number of
Name Shares Owned Director Office Held
Lawrence E. Sweebe 480 Yes President &
treasurer
Donald 0. Wardin 480 Yes Vice president
& secretary
Francis E. Gerace 1,040 Yes None
When Helger commenced business operations in May
1970 its affairs were managed by Gerace Construction
personnel. Lawrence E. Sweebe, who from the inception of
Helger has been its principal managerial official, was then
employed full time by Gerace Construction. For approxi-
mately the first 5 months of Helger's business existence
Sweebe was paid by Gerace Construction. During this
penod, for the most part, Sweebe conducted the business of
Helger from his home. However, from time to time Sweebe
was contacted dunng his normal working hours for Gerace
Construction about matters concerning Helger. The
bookkeeping for Helger since its organization has been
performed by Helen Gerace in her home for which she
receives no compensation.
In September 1970, Helger's Board of Directors formally
elected Sweebe to the office of President and Treasurer of
the Company.? As of that date Sweebe was transferred
from the payroll of Gerace Construction to the payroll of
5 Sweebe was then employed by Gerace Construction as a project
manager
6 In late November 1970 Francis E Gerace transferred to Sweebe his
shares of stock in Helger and resigned as director of Helger However.
Respondents specifically stated at the hearing that they will make no
Helger. Also, in September 1970, a trailer owned by Gerace
Construction was moved to an unimproved plot of land in
Midland, Michigan, which is owned by Francis E. Gerace,
and since that date has been used by Helger as its
temporary office. A building is now being constructed for
Francis Gerace by Helger on this land which will be used as
Helger's permanent office. Helger has been paying rent to
Gerace Construction for the use of its trailer but has been
paying no rent to Francis E. Gerace for the use of his land.
The location of Helger's present offices is about one-half
mile from the offices of Gerace Construction. Helger rents
power tools and equipment from Gerace Construction and
also from an unrelated business organization . However,
more than one-half of such equipment and tools are rented
by Helger from Gerace Construction.
Helger keeps separate bank accounts, payroll accounts,
and corporate records. It files tax returns in its own name.
It has never borrowed any money and its performance
contention that such transfer of stock by Francis E Gerace affects any
rights or liabilities that might be determined as of a time prior to the
disposition of said shares of stock
7 According to Sweebe he assumed the office of president and chief
executive officer of Helger in July 1970.
GERACE CONSTRUCTION, INC.
bonds are not endorsed by Gerace Construction or Francis
Gerace.
Both Helger and Gerace Construction are engaged in the
same general business. The principal difference between
their operations is the size of their undertakings. Except for
one project obtained from the Ford Press which amounted
to a little more than $125,000 all otherjobs done by Helger
have involved contracts calling for gross payments of less
than $50,000. Gerace Construction, on the other hand,
seldom performs work involving a contract of less than
$250,000 and most of its jobs are for substantially larger
amounts. Helger 's peak employment work force has been
16, while Gerace Construction's average work force is 95.
The principals of Gerace Construction have given
substantial assistance to Helger in obtaining contracts for
work. Thus, Helger's first job for Dow Chemical was
obtained largely through the intercession of Donald
Wardin. Francis Gerace testified that the opportunity to get
this job was the precipitating reason for the organization of
Helger . The largest job obtained by Helger was for Ford
Press. Francis Gerace introduced Sweebe to the principals
of Ford Press and assisted Sweebe in the preparation of the
bid for that job. Normally the two Companies do not bid
for the same jobs. There have been only one or two
exceptions and in one such instance where both Companies
submitted bids (although on different bases) for a job for
the Township of Milwaukee, the amount of Helger's bid
was determined jointly by Sweebe and Francis Gerace. The
latter has reserved to himself the authority to restrict
Helger 's opportunity to compete with Gerace Construction.
According to Francis Gerace, "The only control that I as an
individual had (with respect to the jobs bid by Helger) was
the determination I did not desire the two companies would
compete with one another." The reason for this limitation
was to allay disquiet on the part of management employees
of Gerace Construction arising from the prospect of Gerace
Construction losing work to Helger.
According to Sweebe, initially, he prepared the bids for
jobs presented on behalf of Helger with the assistance of
both Francis E. Gerace and Donald Wardin. However, as
time went by, he has assumed more independent responsi-
bility and as of the date of the hearing he consults with
Wardin or Gerace on only I out of every 10 bids. Sweebe
further testified that he is in charge of the day-to-day
operations of Helger but that with respect to such matters
he consults frequently with Donald Wardin.
The first individual employed by Helger, other than the
incorporators, was Walter Sasse , who was hired as a job
superintendent by Wardin and Sweebe acting together.
Sasse previously worked for Gerace Construction as a job
superintendent , although at the time he was hired by Helger
he was not actually employed. Sasse in turn hired his son
who was then working for Gerace Construction. A second
job superintendent hired by Helger is a Mr. Krotzer who
previously had been employed by Gerace Construction as a
journeyman bricklayer and also as a supervisor of
brickwork and building work. In addition, other employees
of Helger on occasion have worked for Gerace Construc-
tion.
649
Helger does not recognize the Charging Parties as the
representatives of any of its employees, does not observe
the terms of the collective-bargaining agreements between
Gerace Construction and the Charging Parties, and pays its
employees lower wage rates than are called for by the terms
of said agreements . The job classifications for the
employees of Helger and the wage rates being paid them
were established after consultation among Francis Gerace,
Wardin, and Sweebe.
In August 1970 each of the Charging Parties wrote to
Gerace Construction, care of Francis E. Gerace, a
substantially identical letter, in pertinent part, reading as
follows-
In order to better police our collective bargaining
agreement with you, we request you provide us with the
names, addresses, social security numbers, dates hired,
and rates being paid of all [Carpenters, Laborers, etc. as
the case may have been ] working for you either under
the company name of Gerace Construction Company
or Helger Construction Company for the week
beginning August 3rd, 1970.
An identical reply was sent to each of the Charging Parties,
as follows:
You may obtain the information you requested
covering employees of Gerace Construction Company
via the Health and Welfare Reports which are sent to
your office each month.
Representatives of the Charging Parties on two different
occasions visited the offices of Gerace Construction to
discuss Helger's operations with Francis Gerace and each
time the latter advised them, in effect, that Helger was
unrelated to Gerace Construction. Thus, Francis Gerace
told Lee Bargeron, business representative of the Laborers,
that there was no chance that Gerace Construction would
take over Helger. Similarly, Arthur Clark , business
representative for Tri-City Building and Construction
Trades Council, and Chester Cabray, Bricklayers business
representative, were told by Francis Gerace that they would
have to talk to someone else about the Ford Press job which
was being done by Helger and suggested that they speak
with Sweebe.
CONCLUSIONS
Section 2(2) of the Act defines the term "employer" to
include "any person acting as an agent of an employer,
directly or indirectly." Thus, where necessary to safeguard
statutory rights and to effectuate the purposes of the Act,
the Board may disregard technical considerations and
"may view separate legal entities as a single employing
enterprise." 8
A variety of factors normally are considered by the Board
in determining whether it should penetrate the separate
guises under which two or more enterprises are conducting
their businesses and find that they constitute a single
employer. Among the more frequent of these are: common
ownership, common management, financial dependence,
integration of operations, and interchange of employees.
' N L R B. v. G,braltor Industries, Inc, 307 F 2d 428, 431 (C A. 4), cert
denied 372 U.S 911
650 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Most significant is the degree of common control of labor
relations .9 In this case there is a predominating presence of
factors pointing to entrepreneurial unity.
The Gerace family effectively owns 70 percent of the
outstanding shares of stock of Gerace Construction and 52
percent of Helger. Half the balance, or 24 percent of the
outstanding shares of Helger, is owned by Wardin who is a
shareholder, director, and full-time employee of Gerace
Construction. Francis Gerace and Wardin, who together
own 76 percent of the shares of Helger, constitute two-
thirds of the Board of Directors of the Company and
therefore between them have the legal right to control and
direct the affairs of Helger. According to Sweebe, Helger
has been using as operating capital only the funds obtained
from the sale of its shares of stock and has not obtained any
loans or other direct financial assistance. However, 76
percent of such capital was contributed by Francis Gerace
and Wardin. In addition, Helger has been using Francis
Gerace's land free of rent. More than half of Helger's power
tools and building equipment as well as its office trailer is
rented from Gerace Construction. The foregoing demon-
strates not only the common ownership and directorship of
the two Companies but also Helger's financial reliance, if
not dependance, upon Francis Gerace and Gerace
Construction.
Of critical significance is the fact that the employment
and labor relations policies of Helger have been determined
jointly by the Company's directors with a two-thirds
majority being lodged in Francis Gerace and Wardin who
between them also establish the industrial relations
practices for Gerace Construction. More than this, Helger
was planned as an extension of the business activities of
Gerace Construction. It was organized by Francis Gerace
to operate nonunion 10 and to capture smaller construction
work which Gerace Construction can no longer perform
profitably. These policies have been pursued by Helger.
The participation of Francis Gerace in determining the job
classifications and wage rates for Helger's employees
insures the "non-union" character of its operations. The
authority Francis Gerace effectively exercises over the kind
of business Helger solicits contains its activities within the
planned design of Francis Gerace. The nexus between the
two Companies is emphasized by Francis Gerace's
testimony that he does not permit Helger to compete with
Gerace Construction in order to minimize dissatisfaction
among the so-called management employees of Gerace
Construction, such as estimators, who are frightened by the
prospect of possible transfer of work opportunity to Helger.
An effort was made by Respondents to portray Helger as
being independent of Gerace Construction principally by
asserting that managerial authority is lodged in Sweebe
who is not connected with Gerace Construction. However,
while Sweebe may direct the day-to-day operations of
Helger he frequently consults with Wardin on such matters.
Neither Sweebe nor Francis Gerace had the temerity to
testify that Sweebe can initiate any important changes in
the operations of Helger without the concurrence of
9 N L.R.B. v Condenser Corporation of America, 128 F 2d, 67, 71 (C.A
3); N L R B v National Shoes, Inc, 208 F 2d 130, 131 (C A 2).
10 1 use the term "non-union" here not to describe or characterize an
unlawful business practice but to refer to the policy of Helger of not
Francis Gerace. Furthermore, Sweebe has worked for
Gerace Construction and for more than half the period of
time (as of the date of the hearing) that he purportedly was
directing the affairs of Helger he was being paid by Gerace
Construction. It would be unrealistic to believe that Sweebe
conducts the activities of Helger independent of Francis
Gerace, particularly as the bookkeeping and clerical work
of Helger is performed free of charge by Helen Gerace who
thus is able to maintain continuous scrutiny over the affairs
of Helger for the benefit of her husband. The elements
adverted to above, including the fact that Helger was
organized by Francis Gerace to extend the business
opportunities of Gerace Construction, the fact that Francis
Gerace controls a majority of the shares of stock of Helger,
and that he and Wardin, who are principals of Gerace
Construction, constitute two of the three directors of Helger
who determine its employee and industrial relations
policies, demonstrate that the relationship between Helger
and Gerace Construction is such that they function, to a
substantial degree, as a single enterprise and therefore
constitute a single employer under the Act.
It does not necessarily follow that because Gerace
Construction and Helger constitute a single employer that
the employees of Helger are accretions to the units of
Gerace Construction's employees represented by the
Charging Parties. As the term is used here accretion refers
to the expansion of an appropriate collective-bargaining
unit. Where the expansion arises from hiring additional
employees to work in the same premises and to do the same
jobs along with the current employees of a particular
employer, the new employees are easily recognized as
accretions . However , there is no simple formula which
mechanically can be applied to determine an accretion
issue where the employer enlarges his operations by
acquiring additional premises which are staffed with newly
hired personnel.
Whether or not a particular operation constitutes an
accretion or a separate unit turns, of course, on the
entire congeries of facts in each case . In determining
that a newly established facility or operation is an
accretion to an existing unit , the Board has given weight
to a variety of factors, such as integration of the
operations ; centralization of managerial and adminis-
trative control; geographic proximity; similarity of
working conditions , skills , and functions; common
control over labor relations; collective-bargaining
history; and interchangeability of employees. Obvious-
ly, cases in which all of these, or only these, positive
accretion factors are present are rare . For, the normal
situation presents a variety of elements , some militating
toward and some against accretion , so that a balancing
of factors is necessary . In addition , in some cases the
Board gives greater weight to some factors than to
others and , indeed , the presence or absence of a
particular factor may be crucial.ii
The application of the foregoing criteria is particularly
difficult in this case because of the nature of Respondents'
entering into prehire agreements such as are permitted by Section 8(1) of
the Act.
it The Great Atlantic and Pacific Tea Company (Family Savings Center),
140 NLRB 1011, 1021.
GERACE CONSTRUCTION, INC. 651
businesses . Each job which a general contractor undertakes
may be distinct and separate from the preceding and
succeeding projects. Except for an office, which is not
essential for a small company, the place of business of a
general contractor changes with the situs of his work.
Material and goods are not stocked but purchased
separately for each project. Even the ownership of tools and
equipment can be dispensed with-as is done by
Helger-by rental arrangements. It is also possible for a
small contractor to operate with minimal capital-as does
Helger. Finally, it is not uncommon for a general
contractor to hire almost an entirely new work force for
each new job. This latter characteristic impelled Congress
to sanction prehire agreements for the construction
industry by adding Section 8(f) to the Act. Also, the
subsisting collective-bargaining agreements to which Ge-
race Construction is a party recognize the itinerant nature
of employment in the industry by, among other things,
having no seniority provisions. Thus, there is no require-
ment under these agreements for the contracting employer
to lay off employees in accordance with seniority or to give
preference to former employees when staffing a new job.
Nothing in the agreements prevents Gerace Construction
from hiring an entirely new complement of employees for
each new project. Yet the intent of the contracts-which
Respondents do not dispute-is that during the term of the
agreements their provisions cover all work performed for
Gerace Construction within the defined appropriate units
of employees. The collective-bargaining agreements with
the Charging Parties are for terms of between 2 and 3 years.
The contracts would be meaningless if they do not apply to
the changing composition of the work forces as the
contractor moves from job to job. Respondents in their
brief acknowledge the continuing applicability of the
agreements to each successive project of Gerace Construc-
tion. Their position in this regard is only that "[t]here is
absolutely no evidence to show that Gerace Construction
Company, Inc. has lost any work due to the formation of
Helger Construction Company, Inc." But this does not
determine the accretion question in this case. Gerace
Construction' s agreements with the Unions are not limited
to a particular volume of work but apply to all its
work-even if the amount should increase substantially.
Likewise, the agreements are not confined to large,
medium, or small projects-they apply to all the construc-
tion jobs obtained by Gerace Construction. The law will
not countenance Gerace Construction avoiding its contrac-
tual obligations to the Charging Parties merely by changing
the name or the style under which it conducts its affairs.
Where necessary to effect justice, Courts will pierce the veil
of business identity and upon finding that "the corporate
forms [are] largely paper arrangements that do not reflect
the business realities," 12 will treat separate corporate
enterprises as one. Helger was organized to do work which
Gerace Construction was equipped to do, had done, and
which its principal, Francis Gerace, wanted to do 13 and in
order that the Employer's obligations under the contracts
between Gerace Construction and the Charging Parties
could be circumvented.
I have found above that Helger and Gerace Construction
constitute a single employer. During the first 5 months of its
business activity, except for name, Helger was indistin-
guishable from Gerace Construction. The management of
Helger worked for and was paid by Gerace Construction.
Helger's first job, which it obtained in May 1970 before its
formal organization, was solicited on behalf of Gerace
Construction and would have been accepted by Gerace
Construction but for the fact that the Company was unable
to guarantee completion of the job without work interrup-
tion in consequence of the possibility that a strike might
develop if the then pending collective-bargaining negotia-
tions were not resolved by the month's end. Also, Helger
had no separate place of business or observable independ-
ent identity. Unless corporate form is permitted to
overcome business realities all work done by Helger prior to
September 1970 must be deemed to have been the work of
Gerace Construction and the employees of Helger must be
deemed to be covered by the collective-bargaining
agreements between Gerace Construction and the Charging
Parties to the same extent as if the work had been done
under the name and style of Gerace Construction. The few
changes, summarized above, that have taken place since
September 1970 have effected only little alteration in the
relationships between the two Companies. As the opera-
tions of Helger effectively are extensions of the operations
of Gerace Construction, contrary to Respondents, I find
that the employees of Helger are accretions to the
bargaining units of Gerace Construction and that Respon-
dents have violated Section 8(a)(5) and (1) of the Act by
refusing to recognize the Charging Parties as such
representatives and by failing to apply the terms of the
subsisting collective-bargaining agreements to the employ-
ees of Helger.
The Respondents are also accused in the complaint of
having violated Section 8(a)(3) of the Act as well as Section
8(a)(5) and (1). Presumably the theory of the General
Counsel in support of the alleged violations of Section
8(a)(3) is that the conduct of the Respondents in organizing
Helger to embark upon nonunion construction work was
"to discourage the union activities and adherence of their
employees" (par. 24 of the complaint). There is no evidence
that Respondents were motivated by such purpose or that
Helger in hiring employees discriminated against members
of the Charging Parties. There is no direct evidence in the
record that Respondents sought "to destroy and dissipate
the majority status of the Charging Parties in relation to the
[described] bargaining units" (par. 24 of the complaint).
Whatever evidence there is in the record would tend to
indicate the contrary. The testimony of Francis Gerace is
that the organization of Helger has resulted in no
diminution of work for Gerace Construction. No attempt
was made to prove that the formation of Helger deprived
any employees of Gerace Construction of any work they
otherwise would have had. The uncontradicted testimony
12 N L R B v Deena Arrware, Inc, 361 U S 398, 403 longer compete due to the competitive structure of the construction
13 Thus, in their brief Respondents state industry in the Saginaw Valley area. In effect, Helger Construction
Helger Construction Company, inc was conceived and molded Company, inc. is an attempt to recapture a competitive position that
into a viable organization to penetrate the area of light, general Gerace Construction Company, Inc. no longer held
construction where Gerace Construction Company, Inc could no
652 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
of Francis Gerace is that the only construction work which
Helger has obtained were jobs that were foreclosed to
Gerace Construction because of its high labor costs or for
other reasons unrelated to the existence of Helger. In two
specific instances, described in the record, namely, the Dow
Chemical remodeling job and the Ford Press job, Gerace
either had been rejected as a bidder or was unable to meet
the conditions imposed by the owner. As none of the
employees of Gerace Construction were prejudiced either
as to their earnings or work opportunities they certainly
were not the objects of Respondents' discrimination.
Helger offered employment to applicants at rates less than
those called for by the contracts between Gerace Construc-
tion and the Charging Parties. I do not see that this
constitutes discrimination against the persons who applied
for employment with Helger. At most, it constitutes a
breach of contract on the part of the Respondents.
Furthermore, apart from whether or not any employees
were the objects of discrimination, I find no adequate proof
that the Respondents' activities here complained of were
motivated by a desire "to discourage the union activities
and adherence of their employees" (par. 24 of the
complaint).14 Accordingly, I find no violation of Section
8(a)(3) of the Act has been established.
The complaint also alleges a violation of Section 8(a)(5)
of the Act by reason of the fact that the Charging Parties
requested the names, addresses, social security numbers,
dates of hire, and rates of pay for the employees within the
classifications represented by them of both Gerace
Construction and Helger and that Respondents furnished
such information with respect to Gerace Construction but
not with respect to Helger. As the employees of Helger
constitute accretions to the bargaining units of Gerace
Construction employees represented by the Charging
Parties, the refusals of Respondents to furnish the
requested information, which patently is material and
necessary in order for the Charging Parties to discharge
their representative obligations, were further failures on the
part of Respondents to bargain collectively with the
representatives of their employees and constituted addi-
tional violations of Section 8(a)(5) and (1) of the Act.15
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES
UPON COMMERCE
The activities of the Respondents set forth in section III,
above, occurring in connection with Respondents' opera-
tions described in section I, above, have a close, intimate,
and substantial relationship to trade, traffic, and commerce
among the several States and tend to lead to labor disputes
burdening and obstructing commerce and the free flow of
commerce.
14 Specific evidence of antiunion motivation is not always required to
establish a violation of Section 8 (a)(3) of the Act See N L R B v Great
Dane Trailers, Inc, 388 U S. 26, The Radio Officers' Union of the
Commercial Telegraphers Union, AFL v N L R B, 347 U S 17, 45; Republic
Aviation Corp v. N L R B, 324 U S 793, Crown Petroleum Corporation v
N L R B, 430 F 2d 724, 727-728 (C A 5) Such cases, however , present
exceptional circumstances as where the employer 's conduct is inherently
destructive of important employee rights There are no extraordinary
circumstances here which impell abrogation of the normal requirement of
proof of animus in order to sustain an alleged violation of Section 8(a)(3)
V. THE REMEDY
Having found that the Respondents have engaged in
certain unfair labor practices, I shall recommend that they
cease and desist therefrom and that they take certain action
designed to effectuate the policies of the Act.
I have found that Respondents unlawfully have refused
to recognize the Charging Parties as the representatives of
the employees on the payroll of Helger who are included, as
accretions thereto, in the units of employees covered by the
respective collective-bargaining agreements between the
Charging Parties and Gerace Construction and also
unlawfully have failed to apply the terms of said collective-
bargaining agreements to such employees. Accordingly, I
shall recommend that, upon the requests of the Charging
Parties, Respondents shall recognize them as the respective
representatives of the employees on the payroll of Helger
who fall within the job classifications described by the
respective collective-bargaining agreements between the
Charging Parties and Gerace Construction. I shall further
recommend that Respondents, upon the request of the
Charging Parties, shall apply the terms of their respective
collective-bargaining agreements to the employees within
the appropriate job classifications of Helger. It is my
recommendation that the effect of this Recommended
Order shall operate prospectively from the date of the
issuance of my decision herein insofar as it may require
Respondents to make any monetary adjustments to or on
behalf of employees on the payroll of Helger. The purpose
of the remedial provisions of the Act is to correct and
rectify unfair labor practices and to restore the "situation,
as nearly as possible, to that which would have obtained
but for the illegal [conduct ]" 16 but not to punish the
Respondents.17 So far as the record shows no employee of
Gerace Construction was in any way, directly or indirectly,
injured by reason of the formation and operations of
Helger. There is no evidence that any employee of Gerace
Construction either lost wages or other earnings or the
opportunity for work. The record shows that Helger paid its
employees at rates less than those paid by Gerace
Construction. According to Francis Gerace, because of this
and because Helger was not required to observe the
jurisdictional lines of the various crafts, Helger was in a
position to bid for and to obtain work in categories and
areas foreclosed to Gerace Construction. It would be
foolish for the Board to close its eyes to the realities of the
operations of the construction industry. The employees
who accepted work with Helger knew that they were
accepting work with a firm which was operating nonunion
(in the sense described above). To give them backpay
would be to award to them a windfall and at the same time
to punish the Respondents. "Certainly, employees are not
entitled by way of a Board remedy to payments of which
15 See NLRB v Acme Industrial Co, 385 U.S. 432, 435-436,
Prudential Insurance Company of America v N.L R.B, 412 F.2d 77 (C A 2),
cert denied 396 U S 928, Standard Oil Company of California, Western
Operations Inc v N L R B, 399 F.2d 639 (C.A 9).
16 Phelps Dodge Corp v N.L R B, 313 U S. 177, 194.
17 Local 60, United Brotherhood of Carpenters and Joiners of America,
AFL-CIO [Mechanical Handling Systems] v N LR.B., 365 U.S 651, 657;
Consolidated Edison Company of New York, Inc v N.LR B, 305 U.S. 197,
235-236
GERACE CONSTRUCTION, INC.
they were not deprived or which they would not reasonably
have received absent the unfair labor practice." 18 In my
opinion the purposes of the Act will be satisfied by the
direction that the Respondents hereafter shall recognize the
Charging Parties as the representatives of Helger's
employees and, upon request of the Charging Parties, apply
the terms of the collective-bargaining agreements between
themselves and Gerace Construction to the employees of
Helger. I shall also recommend that, upon request of the
Charging Parties, Respondents furnish them with all
information relevant and useful to the discharge by the
Charging Parties of their representative obligations.
Upon the basis of the foregoing findings of fact and upon
the entire record in the case, I make the following:
CONCLUSIONS OF LAW
1. By failing and refusing to recognize the Charging
Parties as the lawful representatives of the employees of
Helger falling within the job classifications described in
their respective contracts with Gerace Construction and by
failing and refusing to apply the terms of such contracts to
such employees, Respondents unlawfully have refused to
18 New Orleans Board of Trade, Lid, 152 NLRB 1258, 1265
19 In the event no exceptions are filed as provided by Section 102 46 of
the Rules and Regulations of the National Labor Relations Board, the
findings, conclusions , and recommended Order herein shall, as provided in
653
bargain collectively with the Charging Parties as the
representatives of their employees and thereby have
engaged in and are engaging in unfair labor practices
within the meaning of Section 8(a)(5) and (1) of the Act.
2. By failing and refusing to furnish the Charging
Parties with information relevant and useful to the
discharge by the Charging Parties of their obligations as the
representatives of employees of Respondents, Respondents
further have engaged in and are engaging in unfair labor
practices within the meaning of Section 8(a)(5) and (1) of
the Act.
3. The aforesaid unfair labor practices are unfair labor
practices affecting commerce within the meaning of Section
2(6) and (7) of the Act.
4. Respondents have not engaged in any violations of
Section 8(a)(3) of the Act as alleged in the consolidated
complaint herein.
Upon the foregoing findings of fact, conclusions of law,
and the entire record, and pursuant to Section 10(c) of the
Act, I hereby issue the following recommended: 19
[Recommended Order omitted from publication.]
Section 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