Paint America Services

National Labor Relations Board - Board Decisions

Feb 29, 2008

352 N.L.R.B. 185 (N.L.R.B. 2008)

PAINT AMERICA SERVICES
352 NLRB No. 31
185
Paint America Services, Inc., SRS Group, Inc., Paint
America, Paint America, Inc., and Paint Amer-
ica of Michigan, Inc. and District Council 22, In-
ternational Union of Painters and Allied Trades,
AFL–CIO, CLC. Case 7–CA–47564
February 29, 2008
SUPPLEMENTAL DECISION AND ORDER
BY MEMBERS LIEBMAN AND SCHAUMBER
On September 30, 2004, the National Labor Relations
Board issued a Decision and Order1 that, inter alia, or-
dered Respondent Paint America Services, Inc. (PASI) to
make whole discriminatee George Lancaster for any loss
of earnings and other benefits that he may have suffered
as a result of his discharge by the Respondent in viola-
tion of Section 8(a)(3) and (1) of the Act. On April 28,
2005, the United States Court of Appeals for the Sixth
Circuit entered its judgment enforcing the Board’s Or-
der.2
A controversy having arisen regarding the amounts of
backpay and benefits due under the Order, the Regional
Director for Region 7 issued a compliance specification
and notice of hearing on December 20, 2006, naming as
Respondents not only PASI, but also SRS Group, Inc.
(SRS), Paint America (PA), and Dutchman Waterproof-
ing & Restoration, Inc. (Dutchman) alleging that all four
entities constitute a single employer; alleging the
amounts due under the Board’s Order; and notifying the
Respondents that they should file a timely answer com-
plying with the Board’s Rules and Regulations. On
January 17, 2007,3 PASI, SRS, PA, and Dutchman filed
an answer to the compliance specification. That answer
denied the allegation that PASI, SRS, PA, and Dutchman
constitute a single employer, claimed that Lancaster had
not been the victim of unlawful discrimination, asserted
that it had received no proof that Lancaster had suffered
any loss, denied that the Respondents had any obligation
to contribute to a union vacation fund, and denied the
compliance specification’s allegations regarding the
amounts due.
On May 14, the Regional Director for Region 7 issued
an amended compliance specification, which again
named PASI, SRS, and PA as Respondents. The
amended compliance specification dropped Dutchman as
a Respondent; added Paint America Inc. (PAI) and Paint
America of Michigan, Inc. (PAMI) as Respondents; al-
leged that all five Respondents constitute a single em-
ployer; described Lancaster’s interim earnings, alleged

1 Paint America Services, 343 NLRB No. 41 (2004) (not reported in
Board volumes).
2 No. 05-1241.
3 All dates are in 2007, unless noted otherwise.
that make-whole relief necessitates contributions to a
union vacation fund, and set forth the net backpay alleg-
edly due to the discriminatee and to the vacation fund
through December 31, 2006. The amended compliance
specification notified the Respondents that they must file
a timely answer complying with the Board’s Rules and
Regulations by June 4.
On June 4, SRS and PA filed an answer to the
amended compliance specification. That answer denied,
inter alia, the allegation that PASI, SRS, PA, PAI, and
PAMI constituted a single employer. It also denied that
the Union had a collective-bargaining agreement with
any Respondent during Lancaster’s employment, and
therefore further denied that the remedy should include
contributions to a union vacation fund. By letter dated
June 8, the General Counsel informed SRS and PA that
their answer was deficient under Section 102.56(a) and
(b) of the Board’s Rules and Regulations, and that be-
cause of this deficiency the allegations in the compliance
specification could be deemed to be true under Section
102.56(c). The General Counsel further advised SRS
and PA that, unless they filed an amended answer in
compliance with Section 102.56(b) by June 15, he would
file a motion for summary judgment.
SRS and PA submitted a letter (amended answer) to
the General Counsel on June 15 further responding to the
amended compliance specification. By letter dated July
2, the General Counsel informed SRS and PA that their
amended answer, like their answer, was deficient under
Section 102.56(b) and that, unless they filed a sufficient
answer by July 9, he would file a motion for partial de-
fault judgment. Neither SRS nor PA responded to the
General Counsel’s July 2 letter.
By letter dated June 29, the General Counsel informed
Respondents PAMI and PAI that no answer to the
amended compliance specification had been received
from them and that, unless they filed an answer by July
5, he would file a motion for default judgment. Neither
PAMI nor PAI ever filed an answer to the amended
compliance specification.
By letter dated July 6, the General Counsel informed
Respondent PASI that no answer to the amended compli-
ance specification had been received from it and that,
unless it filed an answer by July 13, he would file a mo-
tion for default judgment. PASI never filed an answer to
the amended compliance specification.
On July 24, the General Counsel filed with the Board a
Motion for Partial Summary Judgment against Respon-
dents SRS and PA and a Motion for Partial Default
Judgment and/or Partial Summary Judgment against Re-
spondents PASI, PAI, and PAMI. On August 6, the
Board issued an order transferring the proceeding to the
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD186
Board and a Notice to Show Cause why the General
Counsel’s motions should not be granted. On August 17,
SRS filed an answer to Notice to Show Cause. PASI,
PA, PAI, and PAMI did not respond to the Notice to
Show Cause. The General Counsel filed an opposition to
SRS’s answer.
On the entire record, the Board4 makes the following
Rulings on Motions for Partial Summary Judgment and
Partial Default Judgment
Section 102.56(a) of the National Labor Relations
Board’s Rules and Regulations provides that a respon-
dent shall file an answer within 21 days from service of a
compliance specification. Sections 102.56(b) and (c) of
the Board’s Rules and Regulations states:
(b) Contents of answer to specification. The an-
swer shall specifically admit, deny, or explain each
and every allegation of the specification, unless the
respondent is without knowledge, in which case the
respondent shall so state, such statement operating as
a denial. Denials shall fairly meet the substance of
the allegations of the specification at issue. When a
respondent intends to deny only a part of an allega-
tion, the respondent shall specify so much of it as is
true and shall deny only the remainder. As to all
matters within the knowledge of the respondent, in-
cluding but not limited to the various factors enter-
ing into the computation of gross backpay, a general
denial shall not suffice. As to such matters, if the re-
spondent disputes either the accuracy of the figures
in the specification or the premises on which they
are based, the answer shall specifically state the ba-
sis for such disagreement, setting forth in detail the
respondent’s position as to the applicable premises
and furnishing the appropriate supporting figures.
(c) Effect of failure to answer or to plead specifi-
cally and in detail to backpay allegations of specifi-
cation. If the respondent fails to file any answer to
the specification within the time prescribed by this
section, the Board may, either with or without taking
evidence in support of the allegations of the specifi-
cation and without further notice to the respondent,
find the specification to be true and enter such order
as may be appropriate. If the respondent files an an-

4 Effective midnight December 28, 2007, Members Liebman,
Schaumber, Kirsanow, and Walsh delegated to Members Liebman,
Schaumber, and Kirsanow, as a three-member group, all of the Board’s
powers in anticipation of the expiration of the terms of Members Kir-
sanow and Walsh on December 31, 2007. Pursuant to this delegation,
Members Liebman and Schaumber constitute a quorum of the three-
member group. As a quorum, they have the authority to issue decisions
and orders in unfair labor practice and representation cases. See Sec.
3(b) of the Act.
swer to the specification but fails to deny any allega-
tion of the specification in the manner required by
paragraph (b) of this section, and the failure so to
deny is not adequately explained, such allegation
shall be deemed to be admitted to be true, and may
be so found by the Board without the taking of evi-
dence supporting such allegation, and the respondent
shall be precluded from introducing any evidence
controverting the allegation.
In his Motion for Partial Summary Judgment against
Respondents SRS and PA, the General Counsel argues
that their answer and amended answer to the amended
compliance specification fail to meet the specificity re-
quirements of Section 102.56(b) and (c) in certain re-
spects discussed below. In his Motion for Partial Default
Judgment and/or Partial Summary Judgment against Re-
spondents PASI, PAI, and PAMI, the General Counsel
claims that they failed to file an answer to the amended
compliance specification, as required by Section
102.56(a). In both motions, the General Counsel seeks
summary judgment and/or default judgment on only
those allegations in the amended compliance specifica-
tion regarding the amount of backpay due to the dis-
criminatee and to the vacation fund. The motions do not
request judgment on the allegation that all five Respon-
dents constitute a single employer.
It is clear that Respondents PAI and PAMI have failed
to file an answer to the amended compliance specifica-
tion, and they have not shown good cause for their fail-
ure to do so. 5 Therefore, we grant the General Counsel’s
Motion for Partial Default Judgment as to PAI and PAMI
and deem all the allegations in the amended compliance
specification to be admitted as true against them, except
for the single-employer allegations—as to which the
General Counsel does not seek judgment—and except as
further set forth below. See Kolin Plumbing Corp., 337
NLRB 234, 235 (2001).
As stated above, Respondent PASI filed an answer to
the original compliance specification but did not file an
answer to the amended compliance specification. A re-
spondent’s failure to file an answer to an amended com-
pliance specification does not negate its timely answer to
the original compliance specification where the allega-
tions of the two specifications are substantially the same.
See id.; MFP Fire Protection, Inc., 337 NLRB 984, 985–
986 (2002). We assume for argument’s sake that the
allegations of the two specifications are substantially the
same and that it is therefore inappropriate to enter default

5 PAI and PAMI were not named as Respondents in the original
compliance specification.
PAINT AMERICA SERVICES 187
judgment against PASI for failing to file an answer to the
amended compliance specification.
However, we shall grant in part the General Counsel’s
alternative Motion for Partial Summary Judgment against
PASI because PASI’s answer to the original compliance
specification fails to satisfy the requirements of Section
102.56(b) and otherwise fails to raise an issue warranting
a hearing. The General Counsel’s amended compliance
specification sets forth a formula for calculating gross
backpay. It alleges the discriminatee’s hourly wage rate,
the hours he would have worked but for his unlawful
discharge, and the backpay period. For each calendar
quarter, the amended compliance specification alleges
specific amounts for gross backpay, net interim earnings,
and net backpay; and it also alleges the specific total
amount owed to the discriminatee as net backpay.
PASI’s responses to the corresponding allegations in
the original compliance specification fail to deny those
allegations with the specificity required by Section
102.56(b). PASI’s answer fails to set forth an alternative
backpay formula, an alternative backpay period, an alter-
native applicable wage rate, or an alternative applicable
number of hours that Lancaster would have worked but
for the unlawful discrimination. Those are matters
within the Respondent’s knowledge, and PASI’s failure
to furnish such alternative supporting figures and prem-
ises renders summary judgment appropriate. Ybarra
Construction Co., 347 NLRB 856, 857 (2006);
Paolicelli, 335 NLRB 881, 883 (2001); Baumgardner
Co., 298 NLRB 26, 27 (1990), enfd. 972 F.2d 1332 (3d
Cir. 1992).
The amended compliance specification also alleges
that, but for the discriminatory discharge, the discrimina-
tee would have received a specific amount of employer
contributions to his union vacation fund. PASI’s answer
denies that allegation, asserting that no collective-
bargaining agreement existed between it and the Charg-
ing Party during Lancaster’s employment. In the under-
lying proceeding, the Board found that PASI discharged
Lancaster on May 20, 2004, during the term of a collec-
tive-bargaining agreement between the parties that was
effective from June 1, 1998 to May 31, 2004. PASI may
not relitigate the Board’s finding. Thus, PASI’s answer
fails to warrant a hearing on this allegation. For those
reasons, we grant the General Counsel’s Motion for Par-
tial Summary Judgment against PASI, except to the ex-
tent that we remand the issue of interim earnings, which
issue was adequately raised by Respondents SRS and
PA, as explained below.
With respect to the General Counsel’s Motion for Par-
tial Summary Judgment against Respondents SRS and
PA, we need not decide the question of the adequacy of
their answer and amended answer to the gross backpay
allegations of the amended compliance specification.
Resolution of the derivative-liability issue on remand
will necessarily resolve that question as well. If SRS and
PA are not found to constitute a single employer together
with PASI, then SRS and PA will not be liable for any
backpay. If, on the other hand, the General Counsel
proves that such a relationship exists, then SRS and PA
will be bound by the failure of PASI to file an adequate
answer here. Kolin Plumbing, supra at 236; Carib Inn
Tennis Club & Casino, 320 NLRB 1113, 1114 fn. 4
(1996), enfd. 114 F.3d 1169 (1st Cir. 1997).
The adequacy of SRS and PA’s response to the allega-
tions regarding interim earnings remains to be addressed.
Kolin Plumbing, supra at 236. The General Counsel
does not seek summary judgment with respect to para-
graphs 4 and 7 of the amended compliance specification
which relate to Lancaster’s interim earnings. Although
the General Counsel does not specifically so state, it
seems that he does not seek to preclude litigation of the
interim earnings issue by SRS and PA. In any event, we
find that the answer of SRS and PA timely placed into
issue the discriminatee’s interim earnings. That answer
generally denies the interim earnings allegations. Be-
cause interim earnings are generally not matters within
the knowledge of a respondent, a general denial is suffi-
cient to defeat a motion for summary judgment. Id. (cit-
ing Dews Construction Corp., 246 NLRB 945, 947
(1979)). For that reason, we shall not grant summary
judgment against SRS and PA on the interim earnings
allegations.
In sum, we grant the General Counsel’s Motion for
Partial Default Judgment against Respondents PAI and
PAMI and his Motion for Partial Summary Judgment
against Respondent PASI, except to the extent that issues
raised by SRS and PA have been remanded for a hear-
ing.6 In all other respects, we deny the General Coun-
sel’s motions. Accordingly, we shall not make a deter-
mination of final backpay liability at this time.7

6 Our ruling does not, however, permit Respondents PASI, PAI, and
PAMI to participate in that hearing. See Kolin Plumbing, supra at 236
fn. 9.
7 Member Schaumber agrees that, under extant Board precedent, the
Board will not decide the question of the adequacy of SRS and PA’s
answers to the backpay allegations of the amended compliance specifi-
cation, and, if a single-employer relationship is found to exist, will bind
SRS and PA by the failure of PASI to file an adequate answer to those
allegations. See Kolin Plumbing, 337 NLRB 234 (2001) (citing Carib
Inn Tennis Club & Casino, 320 NLRB 1113 (1996), enfd. mem. 114
F.3d 1169 (1st Cir. 1997)). In his view, however, Kolin Plumbing
should be revisited. The Board provided no rationale for the rule it
adopted and strict application of the rule can have inequitable results,
such as that here: a pro se respondent that has filed an arguably ade-
quate answer to the gross backpay allegations is automatically deprived
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD188
ORDER
It is ordered that the General Counsel’s Motion for
Partial Default Judgment against Respondents Paint
America Inc. and Paint America of Michigan, Inc. is
granted, except to the extent that the issue of interim
earnings is remanded to be decided at a hearing.
IT IS FURTHER ORDERED that the General Counsel’s
Motion for Partial Summary Judgment against Respon-
dent Paint America Services, Inc. is granted, except to
the extent that the issue of interim earnings is remanded
to be decided at a hearing.

of the potential benefit of that answer. In Kolin Plumbing, there was no
possibility of an inequitable result because the bound entities’ answer
with respect to gross backpay was deemed inadequate. See Kolin
Plumbing, supra at 236 fn. 8 (former Chairman Hurtgen, concurring,
noted that the additional respondents’ answer was independently “in-
sufficient to defeat summary judgment”). However, in the absence of a
three-member majority of the Board willing to revisit Kolin Plumbing,
Member Schaumber applies that precedent in deciding this case.
IT IS FURTHER ORDERED that the General Counsel’s
Motion for Partial Summary Judgment and Motion for
Partial Default Judgment and/or Partial Summary Judg-
ment are denied in all other respects.
IT IS FURTHER ORDERED that this proceeding is re-
manded to the Regional Director for Region 7 for the
purpose of issuing a notice of hearing and scheduling a
hearing before an administrative law judge, which shall
be limited to the determination of derivative liability and
interim earnings.
IT IS FURTHER ORDERED that the administrative law
judge shall prepare and serve on the parties a supplemen-
tal decision containing findings of fact, conclusions of
law, and recommendations based on all the record evi-
dence. Following service of the administrative law
judge’s decision on the parties, the provisions of Section
102.46 of the Board’s Rules shall be applicable.