Rome Electrical Systems Inc.

National Labor Relations Board - Administrative Judge Opinions

Apr 13, 2010

10-CA-035458 (N.L.R.B. Apr. 13, 2010)

JD(ATL)–08–10
Rome, Georgia
UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD
DIVISION OF JUDGES
ATLANTA BRANCH OFFICE
ROME ELECTRICAL SYSTEMS INC.
and
THREE RIVER ELECTRICAL, INC.,
d/b/a THREE RIVERS ELECTRICAL, INC.,
Case 10–CA–35458
and
ROBERT D. BOLLEN, an Individual
and
INTERNATIONAL BROTHERHOOD OF
ELECTRICAL WORKERS, LOCAL 613
Lauren Rich and Kerstin I. Meyers, Esqs., for the General Counsel.
Mark M. J. Webb and John M. Hawkins, Esqs., for the
Respondent.
Norman J. Slawsky, Esq. for the Charging Party.
SUPPLEMENTAL DECISION
Statement of the Case
GEORGE CARSON II, Administrative Law Judge. This compliance case was tried in
Atlanta, Georgia, on February 22 and 23, 2010.1 In the underlying unfair labor practice
proceeding, Rome Electrical Systems, Inc., 349 NLRB 745 (2007), the Board found that Rome
Electrical had not given timely notice of withdrawal from the multiemployer association that
negotiated area collective-bargaining agreements and that it violated Section 8(a)(5) of the
National Labor Relations Act by failing to abide by the terms of the area agreements and by
unilaterally changing the terms and conditions of employment of covered employees. The
Board’s order directed Rome Electrical, inter alia, to make whole bargaining unit employees for
any losses suffered as a result of its failure to adhere to contracts negotiated by the
multiemployer association and to made contributions to various benefit funds as required by
those contracts. The Board’s order was enforced by the Court of Appeals for the Eleventh
Circuit on July 18, 2008. NLRB v Rome Electrical Systems, Inc., 286 F. App. 697 (11th Cir.
2008). On October 6, 2009, the Regional Director for Region 10 issued the compliance
specification herein setting out the backpay due to employees and the payments due to various
funds of the Charging Party Union.

1 All dates herein are in 2007 unless otherwise indicated. The unopposed motion of the General
Counsel to correct the transcript and an exhibit is granted. I have designated the motion as
General Counsel Exhibit 35 and it is hereby received into the record. General Counsel Exhibit 5
is hereby substituted for the incomplete exhibit formerly in the record.
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Rome Electrical Systems, Inc., hereinafter called Rome Electrical, ceased to abide by
the terms of the effective collective-bargaining agreement on September 1, 2004. In early
September 2007, Rome Electrical ceased operations. Robert D. (Danny) Bollen, president and
owner of Rome Electrical, began operating a new company, Three River Electrical, Inc., d/b/a
Three Rivers Electrical, Inc., hereinafter called Three Rivers. The specification alleges that
Rome Electrical, Three Rivers, and Robert D. Bollen individually are liable for the sums set out
in the compliance specification. The timely answers filed by the Respondents deny liability.2
On the entire record, including my observation of the demeanor of the witnesses, and
after considering the briefs filed by the General Counsel and the Respondent, I make the
following
Findings of Fact
I. Preliminary Matters
A. Background
Danny Bollen and a partner, Jackie Warner, incorporated Rome Electrical in 1988. As
found in the underlying proceeding, Rome Electrical signed a letter of assent with the Union and
thereafter operated as a union contractor until September 1, 2004. Bollen became the sole
owner of Rome Electrical in 1997.
Bollen testified that, in the 1990s, the two largest accounts of Rome Electrical were for
electrical work at an Anheuser-Busch plant in Cartersville, Georgia, and at Georgia Power and
Light. It ceased performing that work in 1999. Bollen did not address the reason that work for
Georgia Power and Light ceased. The work at Anheuser-Busch ceased because he lost the bid
for that work. Notwithstanding the loss of those accounts, Rome Electrical continued to operate
under its collective-bargaining agreement with the Union. After attempting unsuccessfully to
withdraw from the multiemployer bargaining association in 2003, Rome Electrical, in 2004,
informed the Union that it was withdrawing from the multiemployer bargaining association
effective August 31, 2004. The Union claimed that the effort of Rome Electrical to withdraw had
been untimely. Notwithstanding that claim, Rome Electrical ceased honoring the collective-
bargaining agreement on September 1, 2004. The charge in the underlying proceeding was
filed. The case was submitted pursuant to a stipulated record, and the Board and Court of
Appeals agreed that the effort to withdraw had been untimely.
Robert Bollen continued to operate the business under the name of Rome Electrical
Systems, Inc., until early September 2007. Bollen bid jobs and supervised the work force which
consisted of about four employees. The adverse Board decision issued on April 12, 2007. As
hereinafter discussed in greater detail, Three Rivers was incorporated on June 20. In July,
Bollen spoke with Layton Roberts, President of Employment Innovations, Inc., d/b/a Etowah
Employment, hereinafter called Etowah, regarding an arrangement whereby the individuals

2 The answers of the Respondents assert several affirmative defenses, including lack of
jurisdiction, insufficiency of service, and laches. None of the asserted defenses were
established at the hearing, nor were they argued in the brief of the Respondents. Each
Respondent filed an answer to the compliance specification and jurisdiction was established in
the underlying proceeding. “[L]aches may not defeat the action of a governmental agency in
enforcing a public right ….” Harding Glass Co., 337 NLRB 1116, 1118 (2002).
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formerly working for Rome Electrical who would be working for Three Rivers would be paid by
Etowah. The forgoing agreement is unwritten.
B. Procedural Matters
Following receipt of the Respondents’ answers, in which the Respondents denied
liability but offered no alternative calculations in support of various general denials, the General
Counsel, on November 2, 2009, filed a motion for partial summary judgment with the Board
citing the failure of the answer to provide alternative calculations relating to the general denials
of the amounts alleged to be due as backpay and to the various union funds. On December 3,
2009, the General Counsel moved to withdraw that motion in order to avoid delaying the
hearing, and on December 11, 2009, the Board granted that motion. On January 5, 2010, the
General Counsel filed the motion for partial summary judgment with the Division of Judges.
That motion was referred to me upon my assignment to this case. In a conference call with all
parties I advised that I would not rule upon the motion until the hearing opened. See Calyer
Architectural Woodworking Corp., 338 NLRB 315 (2002). I urged the parties to meet and
discuss possible stipulations regarding the monetary computations. They did so. A stipulation
was agreed upon at the hearing, which made the motion for partial summary judgment moot.
During the course of the hearing, both the General Counsel and Respondent made
various claims and counter claims regarding cooperation in the compliance investigation. On
September 26, 2008, Morris Newman, the Compliance Officer for Region 10, requested certain
documents from the Respondent by email. At the hearing, Counsel for the Respondent
questioned Newman whether, prior to the email, all requests for documents had been made in
telephone conversations or letters. The Region obtained accounting documents relating to
Rome Electrical and Three Rivers pursuant to subpoenas served upon Read, Martin, and
Slickman, the accounting firm used by both Rome Electrical and Three Rivers.
At one point in the hearing, Counsel for the General Counsel moved to strike testimony
given by Danny Bollen regarding work that had been performed by Three Rivers and whether
that work constituted a continuation of work that had been begun by Rome Electrical. Counsel
argued that there had not been compliance with a subpoena for documents that would arguably
relate to Bollen’s testimony. I stated that I would take the motion under advisement. Counsel for
the Respondent represented that there were no documents responsive to the subpoena, and
Counsel’s failure to introduce any such documents in support of Bollen’s testimony is consistent
with that representation. I do not credit Bollen’s conclusory testimony unsupported by
documentary evidence, and I deny the motion of the General Counsel to strike testimony.
C. Preliminary Findings
Pursuant to the stipulation received as Joint Exhibit 1, the parties agreed to the
computations set out in the compliance specification stating the amounts due to various union
funds, subject to a finding that Three Rivers is an alter ego of Rome Electrical.
The compliance specification seeks backpay for three employees: Steven Kight,
Matthew Owens, and Marvin Cabrera. The specification alleges that Kight should be paid the
journeyman wage rate and that Owens should be paid the unindentured apprentice wage rate.
Rome Electrical, upon ceasing to abide by the terms of the collective-bargaining agreement,
hired a laborer without regard to the referral provisions of the collective-bargaining agreement.
Cabrera is alleged as being the individual who would have been referred if Rome Electrical had
abided by the referral provisions of the collective-bargaining agreement. The specification
alleges that Cabrera’s backpay be calculated at the rate of $10 an hour, the unindentured
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apprentice rate and the lowest rate prescribed in the collective-bargaining agreement.
Respondent Rome Electrical’s answer pleads that Kight was an intermediate journeyman, that
Owens was a laborer, and that Cabrera was a laborer. Notwithstanding the foregoing pleadings,
no alternative calculations relating the backpay were pled.
In Harding Glass Co., 337 NLRB 1116 (2002), the Board held that a simple denial of
employees’ job classifications was insufficient but must be “supported by a counter assertion“
as to what the proper job classifications should be. The decision does not address the effect of
a failure to submit alternative calculations based upon the asserted correct job classifications of
the employees. In view of my findings, alternative calculations in this case are unnecessary.
The General Counsel’s evidence establishes that that Kight was a journeyman
electrician. Kight presented documentary evidence that he had been certified as a journeyman
by the State of Washington, his former residence. His credible and uncontradicted testimony
establishes that, in Georgia, he passed the Union’s journeyman test and continued to be fully
qualified as a journeyman electrician. Rome Electrical, when operating pursuant to the
collective-bargaining agreement, paid Kight the journeyman wireman rate. Rome Electrical
presented no evidence in support of its pleading that Kight was not a fully qualified journeyman.
Compliance Officer Newman testified that the backpay calculations for Kight were based
upon the lowest contractual journeyman wireman rate and that the calculations for Owens and
Cabrera used the lowest rate provided in the contract. The Respondents presented no evidence
contradicting that testimony. I find the pay rates and calculations set out in the compliance
specification to be an appropriate measure of the backpay due the three employees.
The Respondents do not dispute the amounts sought as reimbursement for premiums
for substitute health insurance after Rome Electrical ceased making contractually required
payments in 2004. No reimbursement is sought for employee Owens nor for Cabrera, who was
covered by the union plan. Reimbursement of health insurance premiums are due to Kight and
two employees who are due no backpay, Keith Godfrey and Donnie Luther.
II. Alter Ego and Personal Liability
A. Facts
The central issues in this proceeding are whether the evidence establishes that Three
Rivers is a disguised continuance and alter ego of Rome Electrical and whether the evidence
justifies piercing the corporate veil and finding Robert Bollen individually liable.
Robert Bollen was the owner of Rome Electrical and its only manager and supervisor.
He conducted the business affairs of Rome Electrical and set the wages, hours and working
conditions of the employees. Bollen bid upon jobs for Rome Electrical, and he supervised the
workforce that performed the jobs that he obtained. After 1999, when Rome Electrical ceased
performing work for Georgia Power and Light and Anheuser-Busch, Bollen began bidding for
and obtaining various commercial jobs in Rome, Georgia, and the immediately surrounding
area, including jobs as the electrical subcontractor for Smithson Builders. After the loss of the
work for Georgia Power and Light and Anheuser-Busch in 1999, there is no evidence that the
nature and character of the work performed by Rome Electrical, light commercial work in and
around Rome, Georgia, changed.
Journeyman Steven Kight began working for Rome Electrical in 2000 or 2001. At the
relevant times herein, he was the only journeyman electrician on the payroll. Throughout his
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employment he performed “light commercial work.” He was paid at the contractual wage rate
until September 1, 2004, when Rome Electrical ceased honoring the collective-bargaining
agreement. Bollen was Kight’s only supervisor, telling him which jobs he would be working on.
Kight drove a company vehicle, a GMC van, and was provided a cellular telephone. He had
personal tools that “everybody has to provide as a tradesman.” Larger specialized tools,
including benders and pulling winches that are referred to as “tuggers,” were kept in a
warehouse adjacent to Rome Electrical’s office at 323 East First Avenue in Rome. Bollen
testified that he, not Rome Electrical, owned those specialized tools. After the creation of Three
Rivers, there was no hiatus. Bollen continued to direct the workforce. Kight continued to drive
the same GMC van and use the company provided cellular telephone. The specialized tools
continued to be kept in the same warehouse.
The Board decision finding that Rome Electrical had not timely withdrawn from the
employer association issued on April 12, 2007. On June 6, Bollen reserved the name Three
Rivers Electrical, Inc. On June 20, Three River Electrical, Inc., d/b/a Three Rivers Electrical,
Inc., was incorporated. Bollen testified that his wife, Ruby Bollen, was the owner of Three
Rivers, and the 2007 income tax return of Three Rivers shows her as the only shareholder of
Three Rivers. At the hearing, Bollen was asked, “Does she have any involvement in the
business?” He answered, “Absolutely none.” Notwithstanding Bollen’s testimony regarding
ownership, the answer of Three Rivers to paragraph 4 of the compliance specification states:
“The Respondent admits that Danny Bollen is the sole owner of Three Rivers Electrical, Inc.”
Rome Electrical had operated out of an office located at 323 East First Avenue and an
adjacent warehouse, property leased from Jimmy Smithson, the general contractor who
operated as Smithson Builders and for whom Rome Electrical often, but not exclusively,
performed work as a subcontractor. The lease was unwritten. On an undisclosed date in the
summer of 2007, Three Rivers leased from Smithson an office located at 325 East First Avenue
in the same strip of buildings as 323 East First Avenue. That lease also is unwritten. The lease
of the office at 325 East First Avenue, like the lease of the office at 323 East First Avenue,
includes the warehouse in which equipment is kept. Although Office Manger Nan Langford
testified that Rome Electrical never moved its office from 323 East First Avenue, on August 17,
Rome Electrical filed a change of address form with the Postal Service changing its address to
325 East First Avenue “so Mr. Bollen could get the last Rome Electrical [bank] statements.”
The final paychecks issued to employees by Rome Electrical was for the pay period
ending September 5. Thereafter, employees began receiving paychecks from Etowah. The first
checks from Etowah were for the pay period ending September 13.
Layton Roberts, President of Etowah, recalled that Danny Bollen contacted him a
“couple of months” before Etowah began issuing paychecks to employees who had formerly
worked for Rome Electrical. He recalled that Bollen “wanted to have employees on our payroll.”
In a pretrial deposition Roberts stated that Bollen explained that “the union wanted to sue him
or was in the process of suing him” and that “his employees wanted him to put them on our
payroll.” There is not a scintilla of evidence that Bollen acted pursuant to any request of any
employee, and, even if such a request had been made, there would have been no reason to
change the name of Rome Electrical. Roberts agreed to put the employees who had been
working for Rome Electrical on the payroll of Etowah with a “35 percent mark-up on top of the
pay rate” to cover social security and Medicaid and Medicare, the FICA tax, unemployment
taxes, worker’s compensation, as well as Etowah’s administrative costs and profit. Roberts
acknowledged that Bollen “suggest[ed]” the wage rates. The rates were the same as Rome
Electrical had been paying. He acknowledged that Bollen determined where the employees
would work and the number of hours they would work. Bollen confirmed that he alone made all
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work decisions. The foregoing arrangement between Etowah and Three Rivers is unwritten.
Beginning in September, Bollen or Langford would, on a weekly basis, send a document
by facsimile copy to Etowah reflecting the hours worked by each employee. Etowah would
produce the employee paychecks and invoice Three Rivers for the hours worked by employees
at the wage rates Bollen had set plus 35 per cent of that total.
Etowah does not provide health insurance for the employees who work for Three Rivers.
Rome Electrical employees began paying for substitute health insurance when Rome Electrical
ceased making contributions to the Union contractual health plan. Health insurance coverage is
now provided by Three Rivers under the same group number as that of Rome Electrical.
Office Manager Langford, who thought “for a short span” that Bollen was not going to
have a business, was informed by him that “he was going to be starting another company that
was going to be structured a little bit different as far as jobs.” He told her that if she “was
interested in maintaining a part time job,” she could fill out an application with Etowah. A female
representative of Etowah brought her an application for herself and the employees, who were
not present. Journeyman Kight recalls that Langford called him, telling him to come to the office
to fill out some forms, “that we were going to be a different business name.” Langford did not
deny making the forgoing statement, and I credit Kight.
Kight, at some point, approached Roberts, asking him to “increase my benefits.” Rogers
told him that he would “have to talk to Danny [Bollen].” Kight asked Bollen about a paid
vacation. Bollen replied that he “couldn’t do it right now.”
Prior to opening as Three Rivers, Bollen stated to Langford that he was “trying to get
away from all this union stuff, that it was driving him crazy.” Bollen admitted that, in a pretrial
deposition, when asked why he started Three Rivers that he answered, “I was trying to get
away from this union stuff … trying to get away from the Union and I guess that is probably the
bottom line of why.” At the hearing herein he amended that answer, stating that the foregoing
response “was only part,” that he was overwhelmed with debt and litigation. The only litigation in
which Bollen was involved was the underlying unfair labor practice litigation and a lawsuit
brought by the Union.
Bollen admitted that he alone made all business and work decisions with regard to
Rome Electrical and made all business and work decisions with regard to Three Rivers. He had
the name of Rome Electrical removed from the vehicle driven by Kight. Both Kight and
employee Keith Godfry, who drove a company Ford pickup truck, had, after the creation of
Three Rivers, continued to drive the same vehicles, taking them to their respective residences
at night. Office Manager Langford confirmed that employees performing work for Three Rivers
continued to use the same cellular telephones they had used when working for Rome Electrical.
Journeyman Kight identified eight customers for whom he performed work for Rome
Electrical and for whom he thereafter performed work for Three Rivers, including general
contractor Smithson. The Respondent, at the hearing, argued that, of the forty or so customers
for whom Rome Electrical performed work during the last two years of its existence, Three
Rivers has performed work for only ten of them.
Documentary evidence, the ledgers obtained from the accounting firm that served both
Rome Electrical and Three Rivers, reveals that Smithson Builders, the general contractor from
whom Rome Electrical often subcontracted electrical work, paid Rome Electrical $330,136 in
2006 and $50,953 in 2007. Three Rivers was paid $47,431 in 2007, and $567,077 in 2008 by
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Smithson. The brief of the General Counsel points out that the ledgers establish that, in 2006,
Rome Electrical received over 80 percent of its construction/job income from 8 primary
customers and, in 2007, Rome Electrical received over 90 percent of its income from the same
8 primary customers plus one new primary customer. Three Rivers, in the last three months of
2007 received over 75 percent of its construction/job income from 7 of Rome Electrical’s 9
primary customers and, in 2008, received approximately 80 percent of its income from 8 of
Rome Electrical’s 9 primary customers.
At the end of August, when Rome Electrical ceased operations, it had liabilities in
excess of $200,000. Bollen testified that Rome Electrical’s assets included two computers,
office furniture, a lift, and four vehicles, the GMC van driven by Kight, two pickup trucks, and the
GMC pickup truck driven by Bollen. Bollen did not mention a loan to Rome Electrical
shareholders in the amount of $155,803 which is reported as an asset upon the 2007 income
tax return filed by Rome Electrical. The liabilities of over $200,000 included a September 23,
2005, loan of $116,864.12 from the Greater Rome Bank, the maturity date of which was
September 20, 2007. The loan document reflects that two of Rome Electrical’s four vehicles
were pledged as collateral on that loan as well as a 2003 Nissan coupe, about which there was
no testimony. Bollen, individually, was the guarantor of the loan. The Greater Rome Bank called
for payment on the maturity date. Bollen transferred the titles of all four Rome Electrical
vehicles to his name on December 12 and obtained a $100,000 loan from Citizens First Bank in
order to pay off the Greater Rome Bank loan. There is no bill of sale. When Bollen was asked
whether he paid anything for the vehicles, he answered, “I assumed the debt,” referring to the
Greater Rome Bank note upon which two of the four vehicles had been pledged as collateral.
Bollen then explained:
I had to use the titles of these vehicles as collateral on the $100,000 that Citizens [First
Bank] loaned me to pay the note that was being called in at Greater Rome Bank.
Between September 7 and November 21, checks from Three Rivers totaling over
$40,000.00 were written to Bollen and deposited in his personal checking account. Bollen then
wrote checks to pay debts of Rome Electrical. Counsel for the General Counsel questioned
Bollen with regard to those transactions.
Q [Ms. Rich] You then wrote checks off your personal account to pay the debt of
Rome [Electrical]?
A [Bollen] Yes, Ma’am.
Q Okay. My question is, this was money coming from Three Rivers, is that not
correct?
A Yes, Ma’am.
Q Used to pay down debt of Rome [Electrical], is that correct?
A Yes, Ma’am.
Q Is there any particular reason that Three Rivers could not write a check directly
to Rome [Electrical] creditors to pay down the debt?
A I don’t know.
Q Well, you made the decision to write the checks to yourself personally, is that
correct?
A I did.
Q Why did you make the decision to write the checks to yourself personally?
At that point in the testimony, Counsel for the Respondent objected citing attorney client
privilege.
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The liabilities of Rome Electrical also included approximately $50,000 owned upon a line
of credit from Regions Bank. On September 21, Bollen wrote a check for $777.06 to himself on
the account of Three Rivers, deposited it in his personal account, and then, on the same day,
wrote a check for the identical amount to Regions Bank. In 2008, Three Rivers began writing
checks directly to Regions Bank. Counsel for the General Counsel questioned Bollen as
follows:
Q If you would look at [GC Exh. 24, pages] 107, 108, 109, 110, 111 and 112 and
my question is whether Three Rivers Electrical paid down the debt owed to Regions
Bank by Rome Electrical?
A It looks like it, yes, Ma’am.
Q So that answer is yes?
A Yes.
Q Is there a particular reason why in ’08 you decided that Three River Electrical
pay this debt directly rather than have the funds go through your personal account?
A No Ma’am, no particular reason.
Bollen explained the reason he was having Three Rivers pay off Rome Electrical’s debts
as follows:
I was the personal guarantor on all the bad debts that were out there from Rome
Electric. I was, I could not do business, I could not [get] credit, I could not do anything
without paying these off and I had to make a living.
The 2005 income tax return for Rome Electrical, at page 4 of Form 1120S, reflects loans
to shareholders in the amount of $122,004 at the beginning of the year and in the amount of
$135,685 at the end of the year. See GC Exh 3. Bollen was the only shareholder of Rome
Electrical. Counsel for the General Counsel questioned Bollen with regard to those entries.
Q BY MS. RICH: In the middle of the page, it indicates loans to shareholders. Did
you borrow at any time $122,000.00 from Rome [Electrical]?
A No Ma’am.
Q Did you at any time borrow $135,000.00?
A No Ma’am.
Q Do you have any idea where this is from?
A I do not.
The 2007 income tax return for Rome Electrical, GC Exh. 28, reflects loans to
shareholders in the amount of $155,803. Counsel for the General Counsel questioned Bollen
regarding that entry.
Q BY MS. RICH: Did you ever pay back Rome [Electrical] $155,803.00 as a loan to
shareholder?
A I never borrowed $155,000.
…
THE WITNESS: I never borrowed it, I never paid it back.
Q BY MS. RICH: Okay, but it’s on your tax return.
A Ma’am, like I said, I did not do this document.
JUDGE CARSON: You did sign it though.
THE WITNESS: Yes, sir, I did indeed.
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B. Analysis and Concluding Findings
1. Disguised Continuance and Alter Ego
The compliance specification alleges alternatively that Three Rivers is a disguised
continuance of, an alter ego of, and single employer with Rome Electrical, or a successor. The
evidence establishes the disguised continuance and alter ego allegations.
The Board, in Advance Electric, 268 NLRB 1001 (1984), succinctly summarized the
proper analysis in evaluating the issue of alter ego:
The legal principles to be applied in determining whether two factually separate
employers are in fact alter egos are well settled. Although each case must turn on its
own facts, we generally have found alter ego status where the two enterprises have
“substantially identical” management, business purpose, operation, equipment,
customers, and supervision, as well as ownership. Denzil S. Alkire, 259 NLRB 1323,
1324 (1982). Accord: NLRB v. Campbell-Harris Electric, 719 F.2d 292 (8th Cir. 1983).
Other factors which must be considered in determining whether an alter ego status is
present in a given case include “whether the purpose behind the creation of the alleged
alter ego was legitimate or whether, instead, its purpose was to evade responsibilities
under the Act.” Fugazy Continental Corp., 265 NLRB 1301 (1982).
Bollen’s admission in his deposition that he was “trying to get away from this union
stuff,” an admission confirmed by his statements to President Roberts and Office Manager
Langford, establish that the creation of Three Rivers was directly related to the Board order that
Rome Electrical fulfill its obligations under the contract with the Union. Bollen’s assertion that
the creation of Three Rivers also was motivated by the debt of Rome Electrical lacks veracity
insofar as he admitted that he felt obligated to pay off the debts of Rome Electrical, the most
significant being the loan from the Greater Rome Bank for which he was personally liable as
guarantor. The only litigation in which Rome Electrical was involved related to its failure to meet
its obligations under the Union contract. Bollen had continued to operate Rome Electrical during
that litigation. He ceased to do so soon after the decision of the Board on April 12. I find that the
claim that Three Rivers was created for any reason other than to avoid obligations under the
Union contract, obligations that Rome Electrical had not fulfilled and that had resulted in
litigation because of that failure, is bogus.
In June, Bollen incorporated Three Rivers, and at some point thereafter, he leased an
office on behalf of Three Rivers at 325 East Main Street, which would appear to be one door
down the block from the office of Rome Electrical, at 323 East Main Street, and obtained a new
telephone number. According to Office Manger Langford, the Rome Electrical office was not
moved, but its address with the United States Postal Service was changed on August 14. When
Counsel for the General Counsel sought to question Bollen regarding establishment of the
Three Rivers office, Counsel for the Respondent objected upon grounds of attorney client
privilege. I sustained that objection, thus the record establishes only the foregoing facts.
Bollen testified that his wife owns Three Rivers, but the answer of Three Rivers admits
that “Danny Bollen is the sole owner of Three River Electrical, Inc.” The foregoing contradiction
is immaterial. The Board does not hesitate “to find alter ego status” when the different owners
are in “a close familial relationship.” Fallon-Williams, Inc., 336 NLRB 602 (2001).
Notwithstanding the acquisition of an office at a slightly different address than that of
Rome Electrical, Three Rivers used the same warehouse as Rome Electrical. The former Rome
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Electrical employees continued to drive the same vehicles they had previously driven and
continued to use the same cellular telephones they had utilized when performing work for Rome
Electrical.
Bollen was, as he had been with Rome Electrical, the only supervisor of employees
working for Three Rivers. He set their wages, the checks for which were prepared by Etowah.
Three Rivers, as did Rome Electrical, performed electrical work for various customers including
work pursuant to subcontracts from Smithson. The absence of a total identity of customers, a
repeat clientele, is attributable to the fact that, once the contracted electrical work has been
performed, the customer is not going to need further electrical work absent an expansion or
renovation. The most significant sources of income for Three Rivers have been Rome
Electrical’s major customers. Three Rivers continues to serve the same “market area,” Rome,
Georgia, and the surrounding area as Rome Electrical. See Crossroads Electric, Inc., 343
NLRB 1502, 1506 (2004); Barnard Engineering Co., 295 NLRB 226, 247 (1989). I find that the
ownership, management, business purpose, operation, equipment, customers, and supervision
of Rome Electrical and Three Rivers were and are substantially, if not virtually, identical.
The Respondents’ brief argues that Rome Electrical was unable “to win bid contracts in
[the] face of competing against non-union shops.” There is no evidence whatsoever in support
of that assertion. For three years, September 1, 2004, until early September 2007, Rome
Electrical had operated as a nonunion shop, paying less than union scale to a journeyman and
not making contributions to various union funds.
The Respondent argues the individuals working for Three Rivers are not employees but
“independent contractors.” I disagree. Unlike the situation in Polis Wallcovering, Inc., 323 NLRB
873, 879 (1997), cited in the Respondents’ brief, the individuals working for Three Rivers are
not independent contractors who are hired “as needed” and paid by the job. These employees
work exclusively for Three Rivers, use Three Rivers’ cellular telephones, and take Bollen’s
vehicles, vehicles that were formerly Rome Electrical’s vehicles, to their residences at night.
Their health insurance, for which they now must pay, is through Three Rivers under Rome
Electrical’s former group plan number. Their wages, paid through Etowah, are set by Bollen.
The Board has, in at least two cases, addressed situations in which an entity has, as
does Etowah herein, provide payroll and administrative services to the actual employer. In
neither case was the entity that provided the administrative services found to be a joint
employer insofar as the entity did not “codetermine matters governing significant and essential
terms and conditions of employment” of the employees. See Employee Management Services,
324 NLRB 1051, 1062 (1997); La Gloria Oil & Gas Co., 337 NLRB 1120,1136 (2002).
Etowah determines nothing relating to the “significant and essential terms and
conditions of employment” of the employees of Three Rivers. Bollen sets their wages, tells them
where to work, supervises their work, and permits them to take his personally owned vehicles to
their residences. Etowah, notwithstanding the facade of employment applications, provides
payroll and administrative services to the actual employer, Three Rivers. As Office Manager
Langford told employee Kight, “[W]e were going to be a different business name.”
Three Rivers is a disguised continuance and the alter ego of Rome Electrical.
2. Personal Liability
The compliance specification alleges that Danny Bollen should be held personally,
jointly, and severally liable to remedy the unfair labor practices of Rome Electrical.
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The Board in White Oak Coal Co., 318 NLRB 732 (1995), enfd. 81 F.3d 150 (4th Cir.
1996), set out the following two pronged test for determining whether the corporate veil should
be pierced and personal liability assessed:
Under Federal common law, the corporate veil may be pierced when: (1) there is such
unity of interest, and lack of respect given to the separate identity of the corporation by
its shareholders, that the personalities and assets of the corporation and the individuals
are indistinct, and (2) adherence to the corporate form would sanction a fraud, promote
injustice, or lead to an evasion of legal obligations.
When assessing the first prong to determine whether the shareholders and the corporation
have failed to maintain their separate identities, we will consider generally (a) the degree to
which the corporate legal formalities have been maintained, and (b) the degree to which
individual and corporate funds, other assets, and affairs have been commingled. Among the
specific factors we will consider are: (1) whether the corporation is operated as a separate
entity; (2) the commingling of funds and other assets; (3) the failure to maintain adequate
corporate records; (4) the nature of the corporation's ownership and control; (5) the
availability and use of corporate assets, the absence of [same] or undercapitalization; (6) the
use of the corporate form as a mere shell, instrumentality or conduit of an individual or
another corporation; (7) disregard of corporate legal formalities and the failure to maintain an
arm's-length relationship among related entities; (8) diversion of the corporate funds or
assets to noncorporate purposes, and, in addition, (9) transfer or disposal of corporate
assets without fair consideration.
When assessing the second prong, we must determine whether adhering to the corporate
form and not piercing the corporate veil would permit a fraud, promote injustice, or lead to an
evasion of legal obligations. The showing of inequity necessary to warrant the equitable
remedy of piercing the corporate veil must flow from misuse of the corporate form. Further,
the individuals charged personally with corporate liability must be found to have participated
in the fraud, injustice, or inequity that is found. Id at 935 [Footnotes omitted.]
The testimony of Bollen regarding financial matters was disturbing. I find it incredible
that an individual would sign income tax returns reflecting that the individual had received loans
from his corporation and then deny that he had received any such loans. Bollen was the only
shareholder of Rome Electrical. The 2007 income tax return of Rome Electrical reports loans to
shareholders of $155,803. That entry reflects an increase in loans to shareholders from Rome
Electrical’s 2005 tax return which showed loans totaling $122,004 at the beginning of the year
and $135,685 at the end of the year. Bollen denied taking any loans and gave no further
explanation of the entries stating, with regard to the 2007 tax return, which he admitted signing,
“I did not do this document.”
Bollen’s denial that he received the loans reflected upon Rome Electrical’s income tax
returns defies belief. Subparagraph 13(g) of the compliance specification specifically alleges
“diverting corporate funds … for personal and other non-corporate purposes.” Bollen and his
Counsel were on notice that diversion of corporate assets was an issue of paramount
importance in this proceeding. The tax return of Rome Electrical for 2007 reflects that it was
prepared by “Reid, Martin, and Slickman, CPAs,” the same firm that provided accounting
services for Rome Electrical and Three Rivers. Certified public accountants file income tax
returns upon information in their possession provided by the filer of the tax return. They do not
report loans that were not made as assets of the corporation. I am satisfied that, if no loans
were made to Bollen, the Respondents would have provided either documents or testimony
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from the accounting firm to corroborate Bollen’s incredible denial that he received the loans
reported on Rome Electrical’s tax return. I find that, at the point that Bollen ceased operating
Rome Electrical, he personally owed the corporation $155,803.
The first prong of the White Oak analysis relates to lack of respect given to the
“separate identity of the corporation … [so] that the personalities and assets of the corporation
and the individuals are indistinct. Id. at 935. The decision notes nine factors in that analysis.
Regarding factors 1, 2, 6 and 9, Bollen’s transfer of title to the four vehicles owned by
Rome Electrical, two of which were pledged as collateral on the loan from the Greater Rome
Bank, to himself on December 12 in order to obtain a personal loan of $100,000 from Citizens
First Bank, the proceeds of which he used to satisfy the Greater Rome Bank loan, establishes
that Rome Electrical was not operated as a separate entity and that corporate assets were
commingled with other assets. Bollen admitted making no payment for the vehicles, but
asserted that he “assumed the debt,” ignoring the fact that he was already the personal
guarantor on the Greater Rome Bank loan. Bollen’s writing checks on the account of Three
Rivers, depositing them in his personal account, and then writing checks to pay debts of Rome
Electrical establish that the corporate form was a mere shell through which Bollen operated.
Regarding factors 3, 4, and 7, the record is devoid of current corporate records. There is
no document reflecting the present structure and ownership of either Rome Electrical or Three
Rivers. The only minutes of a corporate meeting relating to Rome Electrical placed into
evidence were the minutes of a 1988 meeting, shortly after Rome Electrical was formed, in
which Ruby Bollen, wife of Danny Bollen, is named as president. When asked about that,
Danny Bollen answered that he “thought that was addressed in 1997 when I bought Jackie
[Warner] out.” Whether it was addressed is unknown because it was not documented. There
are no records of any Three Rivers corporate meeting. The Respondents disregarded legal
formalities. The arrangement between Three Rivers and Etowah is unwritten. The “lease” with
Jimmy Smithson for the former Rome Electrical office and warehouse was unwritten as is the
“lease” of the Three Rivers office and the same warehouse.
Relative to factor 8, Bollen admitted that Rome Electrical had paid his personal
membership fees at a local country club.
Relative to factor 5, the availability and use of corporate assets, I find that Bollen’s
decision in 2008 to use assets of Three Rivers to pay debts of Rome Electrical because he was
“the personal guarantor on all the bad debts” and “I (emphasis added) could not do anything
without paying these off,” confirms that the identity of Bollen, Three Rivers, and Rome Electrical
were indistinct.
I find that the first prong of White Oak has been satisfied. Assets were juggled at
Bollen’s direction. Vehicles belonging to Rome Electrical became vehicles owned by Bollen.
Debts of Rome Electrical were paid by Three Rivers. The boundaries between and among
Rome Electrical, Three Rivers, and Bollen are not only indistinct, they are nonexistent.
The second prong of the White Oak test requires a finding that “adhering to the
corporate form and not piercing the corporate veil would permit a fraud, promote injustice, or
lead to an evasion of legal obligations.” Ibid.
The Board explained that the “showing of inequity necessary to warrant the equitable
remedy of piercing the corporate veil must flow from misuse of the corporate form” and that the
individual must have “participated in the fraud, injustice, or inequity that is found.” Ibid.
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The Respondents argue that Bollen “never took one dime from the company [Rome]”
and “did not treat corporate assets as his own.” The foregoing argument overlooks Bollen’s
payment of his individual, not corporate, country club membership from Rome Electrical assets.
It ignores the transaction in which Bollen transferred the title to Rome Electrical’s four vehicles
to his own name. Although Bollen did not put the proceeds of that transaction into his pocket,
he benefited from that transaction. Bollen pledged those vehicles to Citizens First Bank for a
personal loan that he used to pay off the loan to Greater Rome Bank upon which he was a
personal guarantor. By taking title to the vehicles, Bollen removed those vehicles as assets of
Rome Electrical and relieved himself of personal liability for the Greater Rome Bank loan.
Those corporate assets ceased to be available for any other claims against Rome Electrical,
specifically including any claims resulting from liability assessed pursuant the Order herein.
Although the Respondents argue that Rome Electrical is insolvent, it has not declared
bankruptcy. The loan to shareholders of $155,803, the loan which Bollen denies, is shown on
Rome Electrical’s 2007 tax return as an asset of the corporation. Certified public accountants
do not report assets that do not exist. I find it incomprehensible that a taxpayer would sign a tax
return reflecting nonexistent loans, certainly not loans in excess of $150,000. The loan to Bollen
of $155,803, would have almost covered the note to the Greater Rome Bank and the line of
credit to Regions Bank. As correctly pointed out in the brief of the General Counsel, “Bollen
engaged in substantial financial transactions, juggling thousands of dollars of corporate funds
and assets among Rome Electrical and Three Rivers and himself … so he could pick and
choose which creditors to pay, based on his own financial interests and in derogation of the
government’s rights as a creditor.”
In this case, as in D.L. Baker, Inc., 351 NLRB 515, 525 (2007), Bollen “disregarded the
separateness of the corporate identities, commingled funds, [and] diverted funds.” The solvency
of Rome Electrical is not the issue. As in Bolivar-Tees, Inc., 349 NLRB 720, 730 (2007), with
names of the parties substituted as indicated, “it is not the fact that … [Rome Electrical] is
incapable of paying its debts that matters; it is the fact that … [Bollen] made a mockery out of
separating his personal business interests … from … [Rome Electrical’s] corporate form.” The
consequence of Bollen’s actions was to diminish the ability of Rome Electrical and Three Rivers
as its alter ego, “to satisfy its remedial and backpay obligations.” Id. at 731. I find that the barely
existent corporate veil herein be pierced and that Danny Bollen be held personally liable for
complying with the Board’s order.
Conclusions of Law
Robert D. (Danny) Bollen personally and Three River Electrical, Inc., d/b/a Three Rivers
Electrical, Inc., a disguised continuance and the alter ego of Rome Electrical Systems, Inc., are
jointly and severally liable with Rome Electrical for remedying the unfair labor practices found in
the underling proceeding by complying with the Board’s order of April 14, 2007, as enforced the
Court of Appeals judgment dated July 18, 2008.
On these findings of facts and conclusions of law and on the entire record, I issue the
following recommended3

3 If no exceptions are filed as provided by Sec. 102.46 of the Board’s Rules and Regulations,
the findings, conclusions, and recommended Order shall, as provided in Sec. 102.48 of the
Rules, be adopted by the Board and all objections to them shall be deemed waived for all
purposes.
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ORDER
Rome Electrical Systems, Inc., Three River Electrical, Inc., d/b/a Three Rivers Electrical,
Inc., and Robert D. (Danny) Bollen, an individual, Rome, Georgia, their officers, agents,
successors and assigns, jointly and severally, shall, consistent with the compliance
specification, make whole the employees named in the specification by payment to them of the
amounts set out in the compliance specification and applicable appendices, plus interest
accrued from October 1, 2009, to date of payment, less tax withholding required by Federal and
state law, reimburse the employees named in the compliance specification for substitute health
insurance premium payments, plus interest accrued from October 1, 2009, to date of payment,
and remit to the various union funds the delinquent contributions and liquidated damages set
out in the compliance specification and applicable appendices, plus interest accrued from
October 1, 2009, to date of payment, and liquidated damages accrued from October 1, 2009, to
the date of payment. As set out in the compliance specification, the amounts due as of October
1, 2009, which include interest through October 1, 2009, are:
Steven Kight $ 11,027
Matthew Owens $ 632
Marvin Cabrera $ 1,852
Substitute Health Insurance Premium Payments $ 12,594
National Electrical Benefit Fund $ 21,123
plus liquidated damages $ 11,502
Local Union 613 Health and Welfare Trust Fund $ 94,691
plus liquidated damages $ 48,976
Local Union 613 Pension Trust Fund $ 47,429
plus liquidated damages $ 24,213
National Labor-Management Cooperation Fund $ 438
plus liquidated damages $ 1,200
Administrative Maintenance Fund $ 2,055
Joint Apprenticeship Training Fund $ 7,046
plus liquidated damages $ 3,121
Total $ 287,899
Dated, Washington, D.C., April 13, 2010.
_____________________
George Carson II
Administrative Law Judge