Hill Industries

National Labor Relations Board - Board Decisions

Apr 5, 1996

320 N.L.R.B. 1116 (N.L.R.B. 1996)

1116
320 NLRB No. 142
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 The General Counsel has excepted to the judge’s characterization
of Biotec Systems, Ltd. as a party-respondent in this case. We find
merit to that exception. The General Counsel has the sole authority
to name the party-respondents in his complaint, and whatever ambi-
guity exists in the complaint concerning the status of Biotec Systems
has been resolved by the General Counsel in his exceptions and
brief. Contrary to the General Counsel, however, we find no evi-
dence that the judge’s misperception compromised his other findings.
We adopt the judge’s finding that Respondent BTS New York,
Ltd. is not the alter ego of the other Respondents because of their
materially different respective ownership interests. In so doing, we
note that the Board has found employers to be alter egos despite the
absence of common ownership. On those occasions, however, either
the businesses in question were wholly owned by members of the
same family or nearly entirely owned by the same individual, or the
older business exerted substantial control over the business sup-
posedly sold to the new company. See Hartman Mechanical, Inc.,
316 NLRB 395, 401–402 (1995). None of those conditions exists
here. In adopting the judge’s rejection of the alter ego allegation, we
do not rely on his finding that BTS differed markedly from Precision
in operation and equipment.
We find no merit to the General Counsel’s contention that an ad-
verse inference should be drawn from the Respondents’ failure to
produce work orders in response to the General Counsel’s subpoena.
The subpoena requested, in relevant part, records that would identify
the Respondents’ customers and the amounts of work done for each
customer. There is no indication, and the General Counsel does not
contend, that other relevant documents, such as invoices and pur-
chase orders, were not produced pursuant to the subpoena. In addi-
tion, the record indicates that, with regard to work orders, whether
or not specific documentation would be retained or discarded de-
pended on the job. Under these circumstances, although the work or-
ders should have been produced, it has not been established that, in
failing to do so, the Respondents were attempting to conceal evi-
dence detrimental to their case, and we decline to draw the adverse
inference requested.
2 Golden State Bottling Co. v. NLRB, 414 U.S. 168 (1973).
3 See Golden State Bottling v. NLRB, supra; Perma Vinyl Corp.,
164 NLRB 968 (1967). When we refer to Precision’s unfair labor
practices, we also include those committed by Precision’s prede-
cessor, Hill Industries, Inc.
4 The facility and equipment were owned by Ruth Ochs, the moth-
er of Gerald Ochs, who was the president and sole owner of Hill
Industries and Precision, and who was hired as vice president for
manufacturing by Biotec Systems after Precision ceased operations.
Ruth Ochs had no ownership interest in any of the corporate entities
here; the lease agreement apparently was the product of arm’s-length
negotiations in which she was represented by counsel.
Hill Industries, Inc., Hill Precision, Inc., Hill Preci-
sion, Inc. as Debtor-in-Possession, and BTS
New York, Ltd., a wholly owned subsidiary of
Biotec Systems, Ltd. and United Industry
Workers Local 424, a Division of United Indus-
try Workers District Council 424. Cases 29–
CA–15701, 29–CA–15783, and 29–CA–18515
April 5, 1996
DECISION AND ORDER
BY CHAIRMAN GOULD AND MEMBERS BROWNING
AND COHEN
On August 31, 1995, Administrative Law Judge
James F. Morton issued the attached decision. The
General Counsel filed exceptions and a supporting
brief, and Respondent BTS filed an answering brief.
The National Labor Relations Board has delegated
its authority in this proceeding to a three-member
panel.
The Board has considered the decision and the
record in light of the exceptions and briefs and has de-
cided to affirm the judge’s rulings, findings,1 and con-
clusions as modified herein and to adopt the rec-
ommended Order.
The General Counsel has excepted to the judge’s
failure to find Respondent BTS New York, Ltd. (BTS)
to be a Golden State2 successor to Respondent Hill
Precision, Inc. (Precision). The General Counsel argues
that BTS acquired the business of Precision with
knowledge of Precision’s unfair labor practices, and
operated the business in basically unchanged form, and
therefore should be held responsible for remedying
Precision’s unlawful conduct.3 We find no merit to this
exception.
I. NATURE OF ESTABLISHMENT OF
BTS OPERATIONS
The record shows that BTS did not acquire the busi-
ness of Precision. Although BTS leased the same facil-
ity and much of the heavy equipment formerly leased
and used by Precision,4 the only assets BTS acquired
from Precision were some materials which BTS pur-
chased for about $3500. Precision also agreed to allow
BTS to use certain other Precision equipment in return
for Precision’s being allowed to store the equipment at
the BTS facility. Although the latter equipment appar-
ently has a market value of around $150,000, the
record does not disclose the extent of its actual use by,
and thus its practical value to, BTS. In addition, the
agreement is terminable by either party on 30 days no-
tice to the other.
In Glebe Electric, 307 NLRB 883 (1992), the Board
rejected the General Counsel’s contention that Aneco
Co. was the Golden State successor to Glebe Electric,
even though Aneco had taken over a contract aban-
doned by Glebe, using some of the same facilities. The
Board noted that the rationale stated in Golden State
and Perma Vinyl for imposing liability on a purchaser
for the unfair labor practices of the seller is that the
purchaser can reflect its potential liability in the nego-
tiated purchase price or through indemnification by the
seller. The Board found that there was no business re-
lationship between Glebe and Aneco and that Aneco
had not acquired anything of value from Glebe. Aneco
thus had no opportunity to insulate itself from liability
for Glebe’s violations.
We find that the same considerations apply here.
Even though, in contrast with Glebe Electric, BTS did
purchase some $3500 in materials from Precision, their
1117HILL INDUSTRIES
5 BTS leased the same facility and heavy equipment that had for-
merly been leased by Precision. Biotec also hired Gerald Ochs as
its vice president for manufacturing and assigned him to run the new
manufacturing operation for BTS. Ochs hired a few of Precision’s
former employees and retained many of Precision’s suppliers as well
as a few of its customers.
1 Landy withdrew as counsel after the first hearing day.
2 Coren, having represented that his clients in this case have no
assets, requested and was granted permission to withdraw from this
case.
value was relatively small in comparison with BTS’
potential exposure for Precision’s unfair labor prac-
tices. The full extent of that exposure is not disclosed
in the record. However, the trustees of the welfare and
retirement funds obtained a default judgment against
Precision in March 1993 for more than $53,000, re-
flecting Precision’s failure to make contractually re-
quired contributions to the funds. At the time of the
hearing, that judgment had not been satisfied. More-
over, the Respondents’ failure to make the required
contributions continued well into 1994. Thus, taking
into account the additional liability for the contribu-
tions that were not made following the court judgment
and any interest on the sums due and owing, BTS’ po-
tential liability for the unfair labor practices committed
by Precision and Hill Industries apparently would
greatly exceed $53,000. It would have been impossible
for BTS to offset a potential liability of that size by
negotiating over the purchase price of the materials.
Even assuming arguendo that Precision was willing to
part with the materials for free, BTS’ $3500 aggregate
purchase from Precision would scarcely have made a
dent in BTS’ potential liability for Precision’s unfair
labor practices.
Nor does the agreement by which BTS allowed Pre-
cision to store certain other equipment in BTS’ facility
in return for BTS’ being allowed to use that equipment
constitute a business relationship sufficient to establish
a Golden State successorship. As we have stated, the
record does not disclose the extent to which BTS actu-
ally used this other equipment. And because the agree-
ment allowed either party to terminate the arrangement
on a month’s notice, neither BTS nor Precision could
have known at the time the agreement was reached
how long they could expect to benefit from it. In these
circumstances, it is difficult if not impossible to know
what practical benefit BTS received as a result of the
agreement. Thus, the record fails to show that, in ne-
gotiating over the terms of its equipment-storage-and-
use agreement with Precision, BTS could have effec-
tively insulated itself from potential exposure to liabil-
ity for Precision’s unfair labor practices. Nor does it
show that BTS could have secured indemnification
from Precision as part of this transaction.
Accordingly, we find that the overall nature of the
establishment of BTS operations was ultimately not of
a type under which BTS could have effectively nego-
tiated a method of insulation from liability for
Precision’s unfair labor practices.
II. NATURE OF BTS OPERATIONS
We find that another equally important consideration
militates against holding BTS liable for the unfair
labor practices of the other respondents. Although
similar to Precision in many ways,5 BTS was estab-
lished with one end in mind: to serve as the manufac-
turing arm of its corporate parent, Biotec Systems,
which was engaged in developing a prototype indus-
trial scale garbage composter. BTS thus was not a cus-
tom metal fabricator producing a broad spectrum of
products for a wide variety of customers, as Precision
had been; BTS kept only about six of Precision’s sev-
eral hundred customers while expending the over-
whelming majority of its efforts on behalf of Biotec.
Indeed, so completely was BTS devoted to Biotec’s
operations that, when the prototype had been com-
pleted and Biotec discontinued its funding, BTS shut
down its facility rather than seek business from other
customers. In our view, this significant difference be-
tween the corporate missions of the two entities weighs
heavily against a finding that BTS is the Golden State
successor to Precision.
ORDER
The National Labor Relations Board adopts the rec-
ommended Order of the administrative law judge and
orders that the Respondents, Hill Industries, Inc., Hill
Precision, Inc., and Hill Precision, Inc., Debtor-in-Pos-
session, Deer Park, New York, their officers, agents,
successors, and assigns, shall take the action set forth
in the Order.
Emily DeSa, Esq., for the General Counsel.
Lewis Goldberg, Esq. (Richard M. Greenspan, P.C.), of
Ardsley, New York, for the Charging Party.
Roy H. Landy1 and Francis X. Casale, Esqs., of Melville,
New York, for Respondents BTS New York, Ltd. and
Biotec Systems, Ltd.
Steven M. Coren, Esq. (Steven M. Coren, P.C.), of New
York, New York, for Respondents Hill Industries, Inc.,
Hill Precision, Inc., and Hill Precision, Inc., Debtor-in-
Possession.2
DECISION
JAMES F. MORTON, Administrative Law Judge. The essen-
tial issue is whether BTS New York, Ltd. (BTS), and its par-
ent company, Biotec Systems, Ltd. (Systems), are the alter
ego of, or successor to, Hill Precision Inc. (Precision) and
Hill Precision Inc., Debtor-in-Possession (Precision-DIP).
The complaint alleges that BTS and Systems, in violation of
Section 8(a)(1) and (5) of the National Labor Relations Act
1118 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
3 Precision filed for Bankruptcy under Chapter 11 on August 9,
1993, and was designated as debtor-in-possession until July 11,
1994, when its petition was dismissed. Precision, as debtor-in-pos-
session, is referred to in this decision as Precision-DIP.
4 The pages of the hearing transcript for July 12 and 13, 1995,
have been erroneously numbered as pp. 1 through 183. P. 1 of the
July 12 transcript should have been numbered as p. 97 and the pages
thereafter should be renumbered as 98, 99, etc.
5 At the hearing during discussion of Systems’ status, I mistakenly
remarked that Systems was not a party to this case, a remark to
which the General Counsel indicated assent. The complaint clearly
designates Systems and BTS as respondents. Moreover, the status of
these two corporations has been fully litigated. In that regard, cf.
Gartner-Hoff Co., 308 NLRB 531 at fn. 3 (1992), there.
(the Act), unlawfully withdrew recognition from United In-
dustry Workers Local 424, a Division of United Industry
Workers District Council 424 (Local 424) as the collective-
bargaining representative of its production and maintenance
employees and also failed to honor the collective-bargaining
agreement Precision had signed with the Union covering
those employees.
Precision3 and Precision-DIP are alleged to have been the
successor to Hill Industries, Inc. (Industries). Industries, Pre-
cision, and Precision-DIP (whose status is described in fn. 3)
are alleged to have failed and refused to honor certain terms
of the collective-bargaining agreements they had with Local
424 which required them to make timely dues and trust fund
payments. The General Counsel thus contends that Industries,
Precision, and Precision-DIP have also engaged in unfair
labor practices within the meaning of Section 8(a)(1) and (5)
of the Act.
I heard this case in Brooklyn, New York, on March 22,
July 12, and July 13, 1995. On the entire record,4 including
my observation of the demeanor of the witnesses, and after
considering the briefs filed by counsel for the General Coun-
sel and counsel for Systems and BTS, I make the following
FINDINGS OF FACT
I. JURISDICTION
Industries, a New York corporation, was engaged in the
business of custom metal fabrication at its plant in Deer
Park, New York. In its operations annually, it met the
Board’s nonretail standard for asserting jurisdiction. As dis-
cussed further below, Precision and Precision-DIP took over
the operations of Industries there. Their operations also met
the Board’s nonretail standard.
BTS, a New York corporation, is a wholly owned subsidi-
ary of Systems, a Delaware corporation. Both are nonretail
enterprises and each meets the Board’s standard for asserting
jurisdiction.
II. LABOR ORGANIZATION
The uncontroverted testimony establishes, and I so find,
that Local 424 meets the criteria set out in the Act defining
a labor organization.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. The Relationship of Industries, Precision, and
Precision-DIP with the Union
Industries had a contract, effective July 1, 1990, through
June 30, 1993, with Local 424 which covered its production
and maintenance employees at its Deer Park facility, and
which required it to make periodic payments to the Local
424 Welfare Fund and to the Local 424 Retirement Plan. The
contract also required it to deduct union dues from the wages
of those employees and to remit those dues to Local 424.
Gerald Ochs was the sole stockholder and president of Indus-
tries and was responsible for its day-to-day operations. In
1991, Precision took over Industries’ operations at Deer
Park. Ochs was its president and sole stockholder. Precision
signed a contract with Local 424, similar in format to the In-
dustries’ contract but with several modifications. Precision
signed a renewal agreement, effective March 7, 1994, to
March 7, 1997. Precision went into backruptcy but continued
operations as Precision-DIP until July 11, 1994, when
Precision’s petition for bankruptcy was dismissed. In the lat-
ter part of the preceding month, as discussed further below,
the unit employees had been laid off when the Deep Park fa-
cility was shut down based on Ochs’ decision to go out of
business.
It is undisputed that, since November 1990, Industries,
Precision, and Precision-DIP failed to make, and delayed in
making, payments to the Welfare and Retirement Funds dis-
cussed above and dues remittances to Local 424. By these
failures and delays, these respondents have violated Section
8(a)(1) and (5) of the Act. See Peerless Roofing Co., 247
NLRB 500 (1977), and Detroit Cabinet & Door Co., 247
NLRB 1415 (1980).
B. BTS and Systems as the Alleged Alter Ego5 or
Successor to Precision and Precision-DIP
1. Precision’s operations
As noted above, Gerald Ochs was the sole owner of Preci-
sion and controlled its day-to-day operations. He had estab-
lished Precision in early 1991 while Industries was still oper-
ating. Precision initially had been formed to provide adminis-
tration and engineering services for one customer. Industries
did the fabrication work for that customer and for hundreds
of others. In May 1991, Industries ceased operating and Pre-
cision took over. It operated the Deer Park facility under an
oral lease from Ochs’ father and, on his death, from his
mother. The lease also covered all the equipment there which
included various types of cutting, bending, drilling, and
welding machines. Precision was engaged in custom metal
fabrication. It had about 15 employees who made a large va-
riety of products, ranging across the full spectrum of prod-
ucts manufactured in a metal fabrication shop, including
chairs, drums, kiosks, and steel arches. It had about 600 cus-
tomers and averaged about 200 jobs a month. One of those
jobs was for a drum to be made in the summer of 1993 for
Biowaste Technologies which apparently was intended by
Biowaste to become part of a garbage composting operation,
a business interest for which BTS and Systems was formed,
as discussed further below. That job was not finished. Preci-
sion earned about $30,000 for that work, an amount which
was about 2 percent of its annual gross income.
1119HILL INDUSTRIES
2. The formation and operations of BTS and Systems
Augustin Arrau, an engineer, had been the principal officer
of Biowaste Technologies, referred to above. That company
appears to have experienced some internal discord, resulting
in its demise. In any event, Arrau, in conjunction with ven-
ture capitalists from South America, undertook in early 1994
and at the invitation of the United Nations, to compete with
General Electric and Westinghouse in developing an agricul-
tural composting mechanism. The United Nations hoped to
have available, by October of that year, prototypes to be ex-
hibited to heads of state of various third world countries and
hoped too that they would then place orders for the building
of full-scale mechanisms, ultimately to enhance food produc-
tion in those countries. Arrau and others formed Systems in
early 1994 to develop a prototype mechanism. They also
formed BTS then as the manufacturing arm of Systems.
In late June 1994, Precision stopped operating. About that
same time, Arrau approached Ochs to discuss the use of
Precision’s facilities in conjunction to develop the prototype.
Ochs informed him that Precision was out of business and
that Ochs himself was looking for employment. On July 1,
1994, Ochs signed a 2-year employment contract with Sys-
tems which provided that he would be vice president of man-
ufacturing for its subsidiaries. The contract gave Ochs an op-
tion to purchase a small portion of Systems’ stock, an option
he never exercised.
BTS and Systems began to use the Deer Park facility in
about mid-July 1994. Ochs, as BTS’ vice president for manu-
facturing, had the responsibility of hiring employees to do
the metal fabrication and related work for the prototype. To-
ward the end of that month, Ochs hired two employees, both
of whom had worked for Precision. He set their wage rates
and benefits, after consulting with Arrau. Ochs got Arrau’s
approval for BTS to do a small amount of work for six
former customers of Precision, some of whom were longtime
associates of Ochs. The volume of that work comprised
about 1 percent of BTS’ production. The remaining 99 per-
cent was devoted to the prototype being developed by Arrau.
The prototype was a demonstator test model, 70 feet in
length, of a composting system able to process, over a 3–5-
day period, 15 tons of solid waste into clean humus for use
as agricultural fertilizer. If the test model system proved suc-
cessful, Systems planned to build to order full scale oper-
ational systems, each the length of a football field in size and
capable of processing many thousands of tons of waste in a
3–5-day period.
The prototype that Arrau developed was named Biotech
2120. Arrou held patents on it and valuable proprietary infor-
mation was used in its construction. In addition to the shap-
ing and welding of sheet metal done under Ochs’ super-
vision, Arrau, who was in overall charge and often revised
plans as work progressed, engaged outside contractors and
consultants who worked at the Deer Park facility installing
computerized controls to regulate the use of microbiological
elements in reacting with the waste materials. Laboratory
units were installed in the Deer Park facility for microbio-
logical testing. The entire composting process required con-
tinuous automated adjustments by computerized controls to
ensure that decomposition of the waste would produce clean
humus. The automation was characterized in the testimony
before me as ‘‘a heuristic system that reads and reacts and
thinks and solves problems.’’
Biotech 2120 was completed and was exhibited in Chicago
for various heads of state. Biotech, Arrau, and other investors
continued to supply BTS with capital until May 1995 at
which point it became dormant, to be revived if Systems re-
ceives an order for an operational system.
BTS had signed a lease with Ochs’ mother to use the Deer
Park facility and the equipment there. Ochs, as vice president
of BTS, hired, as its office manager, the same person who
had served in that capacity for Precision. He hired several
more former employees of Precision to work under his super-
vision in performing the metal fabrication aspect of the
composting system as blueprinted by Arrau. Systems set up
a bank account on which Ochs drew to pay employee wages
and some other costs, such as cleaning expenses. As occasion
demanded, Arrau and others supplemented that account with
personal funds.
A former employee of Precision testified for the General
Counsel that, in 1993, Ochs had said that he did not want
Local 424 in his shop, that it was a large burden on his busi-
ness. The circumstances, discussed above, under which BTS
began operations at the Deer Park facility and the remoteness
in time of that remark in relation to the time that BTS began
operating, render that comment by Ochs immaterial to the
issues before me, particularly in view of the discussion
below of the critical factors to be used in resolving the issues
in this case.
3. Analysis
In determining alter ego status, clearly each case must turn
on its own facts, but generally the Board has found alter ego
status where the two enterprises have ‘‘substantially iden-
tical’’ management, business purpose, operation, equipment,
customers, and supervision, as well as ownership. See Johns-
town Corp., 313 NLRB 170 (1993), and cases cited there. In
the instant case, Systems-BTS differ markedly from Precision
in ownership, controlling management, business purpose, op-
eration, equipment, and customers. At best, Ochs and the
several former Precision employees who worked under him
at Systems-BTS constituted a metal fabrication component in
the making of a highly specialized product, a product built
on speculation. This was in sharp contrast to the nature of
the work Precision did which involved producing a myriad
of items for immediate use by numerous customers. To some
extent, the former Precision employees working under Ochs’
immediate supervision appear to have been an identifiable
group while in the employ of BTS-Systems. That consider-
ation and others relied on by the General Counsel (e.g., that
Ochs at one point had an option to buy a small interest in
BTS; that he hired the same person who was Precision’s of-
fice manager as BTS’ office manager; that the same sanita-
tion company was used by Systems-BTS as was used by Pre-
cision; that Ochs was permitted to accept orders from a
handful of Precision’s former customers; and that Systems-
BTS leased the same equipment and plant that Precision had
used) are insufficent to offset the significant differences in
ownership, business purpose, customers, and other matters
noted above. The materially different ownership interests in
this case alone preclude a finding of alter ego. See Hartman
Mechanical, 316 NLRB 395 (1995). I thus find that Systems-
BTS was not the alter ego of Precision.
The General Counsel’s alternatively contends that Sys-
tems-BTS is the successor to Precision. It has long been set-
1120 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
6 If no exceptions are filed as provided by Sec. 102.46 of the
Board’s Rules and Regulations, the findings, conclusions, and rec-
ommended 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 purposes.
tled that an employer succeeds to the collective-bargaining
obligation of another employer if (1) a majority of its em-
ployees had been employed by the predecessor, and if (2)
similarities between those two operations manifest a ‘‘sub-
stantial continuity’’ between those enterprises. See CitiSteel,
USA, Inc., 312 NLRB 815 (1993), and cases cited there. The
Board further noted in that case that the factors to look to
in determining whether there is a substantial continuity are:
[W]hether the business of both employers is essentially
the same; whether the employees of the new company
are doing the same jobs in the same working conditions
under the same supervisors; and whether the new entity
has the same production process, produces the same
products, and has basically the same body of customers.
These factors are set forth in the conjunctive. In the instant
case, it is readily apparent that the business of Systems-BTS
and that of Precision are not the same. The new entity, Sys-
tems-BTS, did not have the same production process as
Precision’s. Precision in 1993 had begun to fabricate a large
drum for Biowaste but that constitued an insignificant por-
tion of Precision’s business. In mid-1994, BTS used several
former employees of Precision under Ochs’ supervision to
fabricate a somewhat similar container but their work was
closely integrated with the installation of sophisticated com-
puterized and microbiological functions at the Deer Park fa-
cility, all under Arrau’s direction. BTS had no customers,
other than 6 former customers of Precision who were serv-
iced kept as an accomodation to Ochs; Precision had about
600.
The Board, in CitiSteel, stated that the ‘‘factors [i.e.—
those noted above] are to be assessed primarily from the per-
spective of the employees as to whether those employees
who have been retained will . . . view their job situations
as essentially unaltered.’’ In that context, the immediate job
functions of the former Precision employees in working for
BTS appear to have been essentially unaltered in that they
worked under Ochs from customer blueprints as they had
done before. Yet, it cannot be said that their job situations,
while in the employ of BTS, were essentially unaltered.
Their work was functionally integrated with the work being
performed by outside technicians and professionals working
alongside them on an experimental project, one which could
prove to be boom or bust. In contrast to their jobs with Pre-
cision where they made a great variety of small items for
many customers, they were, while with BTS, engaged in an
integrated process aimed at developing a unique, experi-
mental prototype. In weighing the evidence bearing on the
cited factors and assessing them from the employees’ per-
spective as to whether their job situations remained
unaltered, I find the evidence insufficient to establish that
Systems-BTS was the successor to Precision.
CONCLUSIONS OF LAW
1. Each Respondent is an employer engaged in commerce
within the meaning of Section 2(2), (6), and (7) of the Act.
2. Local 424 is a labor organization within the meaning
of Section 2(5) of the Act.
3. Industries, Precision, and Precision-DIP have each en-
gaged in unfair labor practices within the meaning of Section
8(a)(1) and (5) of the Act by having failed to remit, and de-
layed in remitting, to Local 424 dues and initiation fees it
was obligated to deduct and transmit to Local 424 in accord-
ance with the terms of their respective collective-bargaining
agreements with Local 424 and by having failed to make
payments, and by having delayed in making payments, to the
Welfare Fund and to the Retirement Plan, as provided for in
those agreements.
4. The unfair labor practices described in the above para-
graph affect commerce within the meaning of Section 2(6)
and (7) of the Act.
5. Systems and BTS did not commit any of the unfair
labor practices alleged in the complaint.
REMEDY
Having found that Industries, Precision, and Precision-DIP
have engaged in unfair labor practices within the meaning of
Section 8(a)(1) and (5) of the Act, I shall recommend that
they be ordered to cease and desist therefrom and to take
certain affirmative action designed to effectuate the policies
of the Act.
They shall be ordered to pay to the Welfare Fund and to
the Retirement Fund referred to above contributions that
have not been paid, with any additional amounts as set forth
in Merryweather Optical Co., 240 NLRB 1213 (1979), and
also to make whole unit employees for any losses attributable
to their failures to make the contractually required payments,
as set forth in Kraft Plumbing & Heating, 252 NLRB 891
fn. 2 (1980), with interest as prescribed in New Horizons for
the Retarded, 283 NLRB 1173 (1987). In addition, they shall
be ordered to reimburse Local 424, with interest as pre-
scribed in New Horizons, supra, for union dues and initiation
fees that they failed and refused to remit to Local 424, as
required by the provisions of their collective-bargaining
agreements. The viability and obligations of Industries, Preci-
sion, and Precision-DIP should be left to compliance. See
Gartner-Hoff Co., 308 NLRB 531 (1992).
On these findings of fact and conclusions of law and on
the entire record, I issue the following recommended6
ORDER
The Respondents, Hill Industries, Inc., Hill Precision, Inc.,
and Hill Precision, Inc., Debtor-in-Possession, Deer Park,
New York, their officers, agents, successors, and assigns,
shall
1. Cease and desist from
(a) Failing and refusing to remit, or delaying in remitting,
union dues and initiation fees which are to be remitted as re-
quired by the terms of a collective-bargaining agreement.
(b) Failing to make payments, or delaying payments, to
benefit funds as required by any such agreement.
(c) In any like or related manner interfering with, restrain-
ing, or coercing employees in the exercise of the rights guar-
anteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to ef-
fectuate the policies of the Act.
1121HILL INDUSTRIES
7 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
National Labor Relations Board’’ shall read ‘‘Posted Pursuant to a
Judgment of the United States Court of Appeals Enforcing an Order
of the National Labor Relations Board.’’
(a) Make the contractually required payments to the Local
424 trust funds, reimburse Local 424 for the dues and initi-
ation payments required to have been withheld, and make the
unit employees whole in the manner as set forth above in the
remedy section.
(b) Preserve and, on request, make available to the Board
or its agents for examination and copying, all payroll records,
social security payment records, timecards, personnel records
and reports, and all other records necessary to analyze the
amount of backpay due under the terms of this Order.
(c) Post at its Deer Park, New York facility copies of the
attached notice marked ‘‘Appendix.’’7 Copies of the notice,
on forms provided by the Regional Director for Region 29,
after being signed by the Respondents’ authorized representa-
tive, shall be posted by the Respondents immediately upon
receipt and maintained for 60 consecutive days in conspicu-
ous places including all places where notices to employees
are customarily posted. Reasonable steps shall be taken by
the Respondents to ensure that the notices are not altered, de-
faced, or covered by any other material.
(d) Notify the Regional Director in writing within 20 days
from the date of this Order what steps the Respondents have
taken to comply.
IT IS FURTHER ORDERED that the complaint against BTS
New York, Ltd., a wholly owned subsidiary of Biotec Sys-
tems, Ltd. is dismissed.
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found that we vio-
lated the National Labor Relations Act and has ordered us
to post and abide by this notice.
Section 7 of the Act gives employees these rights.
To organize
To form, join, or assist any union
To bargain collectively through representatives of
their own choice
To act together for other mutual aid or protection
To choose not to engage in any of these protected
concerted activities.
WE WILL NOT fail or refuse to make, or delay in making,
contractually required payments to trust funds or to remit
union dues and initiation fees as required by a collective-bar-
gaining agreement.
WE WILL NOT in any like or related manner interfere with,
restrain, or coerce you in the exercise of the rights guaran-
teed you by Section 7 of the Act.
WE WILL make payments due the Welfare Fund and the
Retirement Plan as required under the collective-bargaining
agreements we have or have had with United Industry Work-
ers Local 424, a Division of United Industry Workers Dis-
trict Council 424 and WE WILL make Local 424 whole, with
interest, for our failure to pay to it union dues and initiation
fees as we were required to do under our agreements with
it.
WE WILL make whole, with interest, any employee who
suffered a monetary loss by reason of our failure to make
payments to the Welfare Fund or to the Retirement Plan.
WE WILL reimburse the Union, with interest, for dues and
initiation fees that were or should have been deducted from
employee wages under the terms of those collective-bargain-
ing agreements.
HILL INDUSTRIES, INC., HILL PRECISION, INC.,
AND HILL PRECISION, INC., DEBTOR-IN-POS-
SESSION