Samuel Kosoff & Sons

National Labor Relations Board - Board Decisions

Mar 27, 1984

269 N.L.R.B. 424 (N.L.R.B. 1984)

DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Samuel Kosoff & Sons, Inc., and its alter ego Facts
Construction Company, Inc. and United Broth-
erhood of Carpenters & Joiners of America,
AFL-CIO, Local Union No. 12. Case 3-CA-
11142
27 March 1984
DECISION AND ORDER
BY CHAIRMAN DOTSON AND MEMBERS
ZIMMERMAN AND HUNTER
On 2 February 1983 Administrative Law Judge
Walter H. Maloney Jr. issued the attached decision.
The Respondents, Samuel Kosoff & Sons, Inc. and
Facts Construction Company, Inc., filed separate
exceptions and supporting briefs. The General
Counsel filed a brief in support of the judge's deci-
sion.' The Charging Party filed an answering brief
to the Respondents' exceptions and supporting
briefs. The Respondents filed answering briefs to
the Charging Party's brief.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
The Board has considered the decision and the
record in light of the exceptions and briefs and has
decided to affirm the judge's rulings, findings, and
conclusions and to adopt the recommended
Order. 2
ORDER
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge and orders that the Respondents, Samuel
Kosoff & Sons, Inc., and its alter ego Facts Con-
struction Company, Inc., Syracuse, New York, its
officers, agents, successors, and assigns, shall take
the action set forth in the Order.
t The General Counsel also filed an exception to the judge's finding
that Respondent Samuel Kosoff & Sons, Inc. purchases and delivers to
jobsites within the State of New York supplies, goods, and materials
valued in excess of $20,000 which were purchased from businesses which
in turn purchased such materials directly from points and places located
outside the State of New York. The General Counsel contends that the
$20,000 figure should read $50,000. The Respondents stipulated and the
record shows that the correct figure is $50,000. Accordingly, we correct
this error in fn. 2 of the judge's decision.
' The Charging Party filed with the Board a motion for special permis-
sion to appeal from the Order of the administrative law judge denying its
motion to reopen the record. In light of our decision to affirm the judge's
rulings, findings, and conclusions, we deny this motion.
269 NLRB No. 82
DECISION
FINDINGS OF FACT
STATEMENT OF THE CASE
WALTER H. MALONEY JR., Administrative Law Judge.
This case came on for hearing before me in Syracuse,
New York, upon a consolidated unfair labor practice
complaint,' issued by the Regional Director for Region
3, which alleges that Respondents Samuel Kosoff &
Sons, Inc. (Kosoff), and its alter ego, Facts Construction
Company, Inc.2 (Facts) violated Section 8(a)(1) and (5)
of the Act. More particularly, the remaining portion of
the consolidated complaint, which is now being severed,
alleges that the Respondents Kosoff and Facts are either
a single employer which employs carpenters in a single
bargaining unit or that Facts is an alter ego of Kosoff.
From this premise, the General Counsel argues that
Facts, a nonunion company, is obligated to observe the
terms and conditions of a union contract which the Car-
penters entered into with Kosoff. The complaint also al-
leges that Kosoff violated Section 8(a)(1) and (5) of the
Act by refusing to supply the Union with requested in-
formation bearing upon its contention that Kosoff and
Facts are one and the same business enterprise. Kosoff
and Facts contend that they are totally separate business-
es and that Facts has no obligation to adopt and observe
the Carpenters' contract. Kosoff further asserts that the
information requested by the Union is not relevant to the
Union's responsibility in representing carpenters who are
employed by Kosoff. Upon these contentions, the issues
herein were joined. 3
' The principal docket entries in this case are as follows:
The charge in Case 3-CA- 11142 filed by United Brotherhood of Car-
penters & Joiners of America, AFL-CIO, Local Union No. 12 (herein
called the Union or Carpenters), against both Respondents on July 27,
1982; original consolidated amended complaint issued on September 9,
1982; Respondent Kosoffs answer filed September 13, 1982; Respondent
Facts' answer filed at the hearing; hearing held in Syracuse, New York,
November 8-10, 1982; briefs filed by all parties on or before January 3,
1983.
This case was originally consolidated with the complaint in Case 3-
CA-11004, which arose out of a charge filed against Respondent Kosoff
by the International Union of Bricklayers and Allied Craftsmen, Local
28, AFL-CIO-CLC. Case 3-CA-11004 became the subject of an all-
party informal settlement agreement, which was approved at the hearing
by me. Accordingly, Case 3-CA-11004 is hereby severed from Case 3-
CA- 11142. In light of the General Counsel's motion, dated January 18,
1983, advising that compliance with the agreement has taken place and
requesting leave to withdraw the complaint, leave is hereby granted.
I The Respondents admit, and I find, that Respondent Kosoff is a New
York corporation which maintains its office and principal place of busi-
ness in Syracuse, New York. It is engaged as a general contractor in the
construction industry. In the course of its business, Respondent Kosoff
annually derives gross revenues in excess of $500,000 and purchases and
delivers to jobsites within the State of New York supplies, goods, and
materials valued in excess of $20,000 which were purchased from busi-
nesses which in turn purchased such materials directly from points and
places located outside the State of New York. Accordingly, Respondent
Kosoff is an employer within the meaning of Sec. 2(2), (6), and (7) of the
Act. The Union is a labor organization within the meaning of Sec. 2(5) of
the Act.
3 Certain errors in the transcript are noted and corrected.
424
SAMUEL KOSOFF & SONS
I. THE UNFAIR LABOR PRACTICES ALLEGED
Respondent Samuel Kosoff & Sons, Inc. has operated
a medium-sized general contracting firm in Syracuse,
New York, since about 1949. Since its foundation by
Samuel Kosoff, now deceased, the firm has operated as a
union contractor and has, either directly or through a
trade association, maintained contracts with various labor
organizations, including Carpenters Local 12. The most
recent contract with Local 12 was concluded on behalf
of Kosoff and other contractors by Building Trades Em-
ployers Association of Central New York, Inc. (now
called the Construction Employers Association of Cen-
tral'New York, Inc.). It became effective June 1, 1981,
and expires on May 31, 1984. This contract contains 9-
1/2 pages setting forth, in the most minute detail, the
extent of its coverage in terms of the type of work
claimed by the Carpenters.
Depending on the season of the year, Kosoff has em-
ployed anywhere from 15 to 50 journeymen who are
covered by this agreement or predecessor agreements.
Kosoff does not employ electricians, plumbers, or roof-
ers, but subcontracts such work to firms having contracts
with unions representing those trades. The Carpenters'
contract contains a conventional jobsite no-subcontract-
ing provision.4 Kosoff operates not only in the Syracuse
area (Onondaga County) but throughout central New
York State. The territorial jurisdiction of Local 12 ex-
tends only to Onondaga County. However, the Respond-
ent feels obliged to hire union carpenters from other
locals when operating elsewhere and occasionally em-
ploys members of Local 12 on jobs located outside On-
ondaga County. Its contract with Local 12 provides for
travel pay to cover such eventualities.
The Respondent Kosoff is a corporation which is
owned by three individuals-Allen S. Kosoff, the grand-
son of the founder, Claude W. Powell, and Frederick T.
DeLany Jr. Kosoff currently serves as president, Powell
as vice president, and DeLany as secretary-treasurer.
Allen Kosoff is a registered architect and maintains an
office for the practice of architecture in the same build-
ing which houses the Kosoff office. He devotes only a
fraction of his working time to the operation of the
Kosoff corporation. Powell and DeLany are its principal
operating chiefs, with DeLany handling most of the
labor relations matters. He has served as the corpora-
tion's representative to the association which negotiates
labor contracts on behalf of the firm. Powell has been
Art. 27 provides, inter alia:
Both parties hereto agree that all work sublet on the job site shall
be performed by the subcontractor under the terms of this Agree-
ment. Said subcontractor shall be in contractual relation with the
Union. A subcontractor is defined as any person, firm, partnership,
self-employed person or corporation who agrees, under contract,
oral or written, with the general contractor or his subcontractor to
perform on the job site any part or portion of the work covered by
this Agreement, including the operation of equipment, performance
of labor, and installation of materials. Job site shall mean the area of
the job and surrounding the job generally accepted as being under
control of the prime contractor during construction.
Forms which can be fabricated on or adjacent to the job site shall
not be sublet for fabrication off the job site, patent forms are ex-
cluded from this clause.
the firm's representative as trustee on certain jointly ad-
ministered fringe benefit trust funds.
John D. Schmidt was first employed by Kosoff in
1970 as a laborer. Between that date and February 1981,
Schmidt continued to work for Kosoff in progressively
more responsible positions, serving as labor foreman, esti-
mator, and then field superintendent. When business
became slow in the fall of 1980 and the early winter of
1981, Allen Kosoff hit upon the idea of establishing an-
other company and operating it under the direct supervi-
sion and control of Schmidt. On February 19, 1981, Re-
spondent Facts Construction Company, Inc. filed a cer-
tificate of incorporation in the State of New York. It had
four shareholders who held an equal interest in the cor-
poration-Allen Kosoff, DeLany, Powell, and Schmidt.
They were all elected to be directors of the firm. The
record is silent as to whether the first three made a cash
contribution to establish Facts; Schmidt did not. He was
elected president and Allen Kosoff was elected secre-
tary-treasurer. At the same point in time, Allen Kosoff,
DeLany, and Powell signed an indemnification agree-
ment with the Lincoln First Bank-Central, the institution
with which Kosoff does its banking, which enabled the
bank to extend to Facts a $10,000 line of credit for start-
up and operating expenses. About $6000 or $7000 of that
credit was utilized.
Allen Kosoff testified that the reasons for establishing
Facts were two-fold. He and his coprincipals wanted to
retain the services of Schmidt in the face of an economic
downturn which might have resulted in a decision by
Kosoff to terminate his services. Moreover, Kosoff had
been losing business, especially residential and commer-
cial renovation work, to nonunion firms with whom they
could not compete. Most of its current jobs were ob-
tained on a bid basis. Its owners felt they had been
priced out of a market they used to serve. This limitation
became particularly acute as new construction work in
the area diminished. The principals felt that, by the use
of a firm that was not required to pay union wages and
fringe benefits and to observe union craft lines, they
could obtain additional business which they were then
passing up. The four principals of Facts agreed from the
outset to operate Facts as a nonunion firm. Indeed, this
was their admitted motivation in establishing it.
As discussed more fully hereinafter, Facts began its
operation in the early spring of 1981 with Schmidt in
charge. It established many of the accoutrements of a
separate organization. Facts rented an office from Ko-
soffs accountant, established a separate telephone listing,
and set up its own books and accounts. With the help of
Allen Kosoff, Schmidt sent out an advertising circular to
prospective customers on a letterhead which he and A.
Kosoff designed. The letter was sent to people whom
Schmidt had met during his tenure as a Kosoff superin-
tendent and to others in the construction industry whose
names were secured in various ways. It read:
I would like to bring to your attention the avail-
ability of a full service, reliable construction firm.
FACTS offers a complete range of services from
budget and detailed estimates to complete
design/build packages.
425
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
FACTS is one of the most progressive SOLAR
AND ENERGY CONSERVATION oriented firms
in this area. We have extensive experience in energy
rehabilitation and commercial renovation, ranging
from modular passive solar additions to million
dollar renovation projects. A prime on-going
project is the 650 James Street Office Building.
As president of FACTS, I have more than a
decade of construction experience, having filled
both estimating and project manager positions with
Samuel Kosoff & Sons, Inc.
Allen Kosoff, a registered architect, is one of the
owners and an active adviser to FACTS. He is
highly qualified in the field of passive solar archi-
tecture, cost estimating, and remodeling design.
We stress reliability, quality, and value in all of
our work and, as FACTS is an open shop firm, our
prices are most competitive.
Please contact us for your energy conservation,
renovation, and new construction needs.
For your cost estimates, technical service and ad-
ditional information, contact FACTS at 478-5377.
Schmidt was and is the sole supervisor for Facts. He
performs the estimating, enters into contracts with cus-
tomers, hires and fires employees, directs work at the
jobsite, administers its small office, and has borrowed
money for vehicle purchases by Facts. Depending on the
season, Facts has hired as many as 12 construction em-
ployees who are termed utilitymen. While Facts acts as
general contractor on its various jobs, these jobs often in-
clude plumbing, electrical work, painting, and work
other than carpentry. A utilityman is expected to do
whatever work is assigned and is paid at various rates,
even within the same week, depending upon the job he
does and Schmidt's evaluation of how well he does it.
While Kosoff has handled jobs in excess of $1 million
and frequently handles jobs in the range of $300,000-
S500,000, Facts normally does not seek or perform a job
in excess of $70,000.
Bonding has recently become a problem in the con-
struction industry in the central New York area. In order
to bid a job of any size, various bonds are required and
contractors have been experiencing difficulty in obtain-
ing necessary bonding. Even an established firm like
Kosoff could not obtain bonding until its principals and
their wives pledged their personal assets to indemnify
Kosoff's bonding company. Facts is not a bondable com-
pany and is thus precluded from bidding on many
projects. As discussed infra, Facts has performed work
on bonded jobs but only as a subcontractor for Kosoff,
taking advantage of Kosoff's capacity as a bonded bidder
as an umbrella for its own performance.
In the fall of 1981, the Charging Party began hearing
rumors that Kosoff, one of its signatory employers, was
setting up a "double-breasted" operation. As part of an
effort to track down these rumors, Charles D. Dennis,
the Local's financial secretary, and Kevin Thompson, an
organizer from the Carpenters International, visited a job
on James Street in the city of Syracuse which they had
heard was being performed by Facts. While they were
there, they ran into DeLany, who had come to the
James Street building to visit the office of an architect.
DeLany asked them what they were doing at the James
Street location, stating that "this is my non-organizing
outfit."5 Some months later, in June 1982, Dennis visited
a job in progress at the Agway Building at Widewaters.
There he saw Facts putting up divider walls in an empty
building and doing other carpentry work. He learned
that the job was being performed for the New York
Telephone Company, which lets contracting work only
to firms.that are on its qualified bid list. In the summer
of 1982, William E. Bronson, general representative of
the Carpenters International, visited a post office at Sa-
vannah, New York, and found that Facts was performing
a job which had been let to Kosoff by the U.S. Postal
Service and then subcontracted to Facts. He also learned
that Facts was performing other jobs at post offices
under subcontract from Kosoff.
The Union had previously complained to Powell that
Kosoff was violating the subcontracting clause in its col-
lective-bargaining agreement by subcontracting carpen-
try work to a nonunion subcontractor but to no avail.
On June 23, 1982, Union President Leon Ilnitzki wrote a
letter to Allen Kosoff, in the latter's capacity as presi-
dent of Kosoff, and requested certain information. The
letter read:
It has come to this Union's attention that you
have an ownership interest in Facts Construction
Co., Inc. and that that Company is performing
work of the type within the bargaining unit covered
by the collective bargaining agreement between this
Union and Samuel Kosoff & Sons, Inc. In order for
this Local to police the existing collective bargain-
ing agreement, it is necessary for us to have the fol-
lowing information from you:
1. Identify the officers of Facts Construction Co.,
Inc. ("Facts").
2. Identify the shareholders of Facts and the per-
centage ownership interest of each shareholder.
3. Identify any persons formerly employed by
Samuel Kosoff & Sons, Inc. ("Kosoff") who have
been or are now employed by Facts; and identify
the capacity of their employment for each entity.
4. Set forth when Facts was incorporated, and
identify the work (i.e., by job or project) that has
been performed by Facts within the jurisdiction that
would be covered by the collective bargaining
agreement between this Local and Kosoff.
5. Identify for each of the jobs or projects, the
number of employees utilized by Facts in the per-
formance of work that is of the same type as that
covered by the above-referred to collective bargain-
ing agreement. For each employee, identify the
length and hours of employment.
6. Identify any equipment owned by either
Kosoff and/or Facts which is leased to or utilized
by the other. Set forth the financial arrangement, if
s Later in his testimony Dennis said that perhaps DeLany had said that
"this is my non-union outift." What is of significance is not whether
DeLany used the word "non-organizing" or "non-union" but that he
used the word "my."
426
SAMUEL KOSOFF & SONS
any, governing the use of equipment, and state
whether the arrangement is in writing.
7. Identify the jobs which have been bid by
Facts, and state with respect to each job whether or
not Kosoff also bid the job.
8. Identify any work that has been let from one
corporation to the other.
9. Identify any work performed by one of the
companies and which was estimated or bid by the
other.
10. With respect to any job or project performed
by Facts, state whether or not Kosoff performed
work or was present on the same job.
11. State whether any employees of either com-
pany are sometimes employed by the other compa-
ny or receive remuneration from the other compa-
ny, and, if so, describe the circumstances under
which that occurs.
Would you please provide this information within
two weeks of receipt of this letter. Thank you very
much for your anticipated cooperation.
On July 12, 1982, DeLany replied to Local 12 on
behalf of Kosoff. His letter stated:
This letter is to serve as our reply to your request
dated June 23, 1982. It has come to our attention
that several Unions in the Up-State New York area
have been sending the same letter to several differ-
ent companies. Apparently there is nothing unique
or different about your inquiry which, we believe, is
but one in a general or blanket solicitation of the
building trades. Consequently, we must reject your
assertion that your inquiry is necessary "to police
the existing collective bargaining agreement."
While we are advised that an employer has an
obligation to provide information needed by a bar-
gaining representative, we are also advised that
where the scope of the inquiry is outside the recog-
nized bargaining unit, the Union must indicate the
probable relevance of the inquiry. Thus, your in-
quiry does not list any contractual provisions of our
labor agreement which are or may have been ger-
mane to the requested information. In other words,
you must disclose the intent and purpose of your re-
quest. Finally, we point out that Samuel Kosoff &
Sons, Inc., has no ownership interest in the subject
of Facts Construction Co., Inc., and therefore your
request must be denied. Moreover, we question the
bona fides of your information which, frankly, we
believe is a matter of pure speculation.
The charge in the instant case was filed by the Union
within 2 weeks after receiving the above-quoted letter.
II. ANALYSIS AND CONCLUSIONS
A. The Relationship of Kosoff to Facts
The principal issues litigated in this case are whether
Facts and Kosoff are a single employer, with or without
separate bargaining units, whether Facts is an alter ego
of Kosoff, or none of the above. Toward a resolution of
these issues, the parties have cited numerous contrasting
and conflicting Board cases, many of which simply "turn
on their facts." One of the clearest expositions of the law
in this area can be found in a recent Fifth Circuit case,
Carpenters Local 1846 v. Pratt-Farnsworth, 690 F.2d 489
(5th Cir. 1982), which arose in the context of a suit filed
under Section 301 of the Act. In its decision in Pratt.
Farnsworth, the court (690 F.2d at 504-505) stated:
The single employer doctrine is a creation of the
Board which allows it to treat two or more related
enterprises as one employer within the meaning of
section 2(2) of the NLRA .... Often the doctrine
is invoked to combine the amount of business of
two or more employers so that the whole will
exceed the Board's self-imposed jurisdictional mini-
mum. . . . The doctrine is not, however, limited to
use only as a jurisdictional tool. The finding that
two entities are a single employer may have the
consequences of treating them as one for purposes
of considering the existence of an unfair labor prac-
tice in a proceeding before the Board. E.g., Hage-
man Underground Construction, 253 NLRB 60
(1980) (certain respondents constituted a single em-
ployer for purposes of NLRA; backhoe operators
employed by such respondents constituted a single
appropriate unit; such respondents violated sections
8(a)(5) and (1) of the NLRA . . . by refusing to
recognize and bargain with the union as the exclu-
sive representative of the employees in such unit
and by failing to abide by the terms of the collec-
tive bargaining agreement covering such employ-
ees). The factors which the Board uses to determine
. . .single employer status are (I) interrelation of
operations, (2) common management, (3) centralized
control of labor relations, and (4) common owner-
ship. [Citations omitted.] As the court noted in Don
Burgess [596 F.2d 378, 384 (9th Cir.), cert. denied
444 U.S. 940 (1979)]:
The Board has stressed the first three of these
factors, as well as the presence of control of
labor relations .... However, no one of the fac-
tors is controlling . . . nor need all criteria be
present. Single employer status ultimately de-
pends on "all the circumstances of the case" and
is characterized as an absence of an "arm's length
relationship found among unintegrated compa-
nies." Local 627, International Union of Operating
Engineers v. NLRB, 171 U.S. App.D.C. 102, 107-
108, 518 F.2d 1040, 1045-46 (1975), aff'd on this
issue sub nom. South Prairie Construction Co. v.
Local 627, International Union of Operating Engi-
neers, 425 U.S. 800. . . (1976).
A finding of single employer status does not by
itself mean that all the subentities comprising the
single employer will be held bound by a contract
signed only by one. Instead, having found that two
employers constitute a single employer for purposes
of the NLRA, the Board then goes on to make a
further determination whether the employees of
both constitute an appropriate bargaining unit. As
427
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the Ninth Circuit stated in Don Burgess, 596 F.2d at
386, even if two firms are a single employer, a
union contract signed by one would not bind both
unless the employees of both constituted a single
bargaining unit. The Ninth Circuit then explained
the difference between an inquiry into single em-
ployer status and an inquiry into the appropriateness
of the bargaining unit:
In determining the appropriateness of a bar-
gaining unit the focus differs from that employed
in deciding whether there is a single employer.
"In determining whether a single employer exists
we are concerned with the common ownership,
structure, and integrated control of the separate
corporations; in determining the scope of the
unit, we are concerned with the community of
interests of the employees involved." Peter Kiewit
Sons' Co., 231 NLRB 76, 77 (1977).
In discussing this distinction, the Fifth Circuit went on to
say:
It is clear that the primary motivation of the
Board in making an independent unit determination
in a single employer case is to protect the rights
under section 7 of the NLRA . . . of the employees
of each of the subentities constituting the single em-
ployer to bargain collectively with representatives
of their own choosing. [690 F.2d at 507.]
Further in its explication of the law in this area, the
Fifth Circuit had occasion to discuss the doctrine of alter
ego, commenting that it is often more difficult to prove
the existence of this status than it is to establish the exist-
ence of a single employer within the meaning of the Act.
The court stated:
This rationale, broadly read, echoes another Board-
created doctrine, that of the alter ego employer.
Alter ego issues commonly arise in successorship
situations, when ownership of a signatory company
changes hands. Although a bona fide successor is
not in general bound by prior collective bargaining
agreement, an alter ego will be so bound. NLRB v.
Tricor Products, Inc., 636 F.2d 266, 269-70 (10th Cir.
1980). This is because an employer will not be per-
mitted to evade its obligations under the NLRA by
setting up what appears to be a new company, but
is in reality a "disguised continuance" of the old
one. Southport Petroleum Co. v. NLRB, 315 U.S.
100, 106 [other citations omitted]. [690 F.2d at 507.]
In deciding whether a company is an alter ego,
the Board will often look to factors which bear
some similarity to those involved in a single em-
ployer question; in particular, whether the two en-
terprises have substantially identical management,
business purpose operation, equipment customers,
supervision and ownership. Hageman Underground
Construction, 253 NLRB 60 (1980); Crawford Door
Sales Co., 226 NLRB 1144 (1976). However, the
focus of the alter ego doctrine, unlike that of the
single employer doctrine, is on the existence of a
disguised continuance or an attempt to avoid the
obligations of a collective bargaining agreement
through a sham transaction or a technical change in
operations. [Citations omitted.] [Id. at 507-508.]
. . . when the Board makes a finding that a non-sig-
natory employer is the alter ego of a signatory em-
ployer which has voluntarily agreed to recognize
the union's representative status in a unit stipulated
in the collective bargaining agreement, the Board
generally will not reconsider the unit under the
community of interests test, but will simply make a
far more limited determination whether the stipulat-
ed unit is repugnant to any policy embodied in the
NLRA. [Id. at 508-509.]
In my estimation, Respondent Facts Construction
Company, Inc., when judged by the standards enunci-
ated above, should be deemed to be an alter ego of Re-
spondent Samuel Kosoff & Sons, Inc. Both firms have,
with one exception, the same individual owners and
Schmidt's 25-percent share of Facts is, from all we can
derive from the record, a gift for which he contributed
no capital. Allen Kosoff is an officer of both corpora-
tions. Ultimate, as distinguished from immediate, control
of labor relations remains in the same hands.6 At Kosoff,
DeLany and, to some extent, Powell handle labor rela-
tions for the firm. Neither does hiring or firing of indi-
vidual carpenters. Whenever Kosoff takes on a new job,
DeLany or Powell designates the job foreman and it is
the foreman who hires the complement of employees
who are used to man the job. The foremen then obtain
journeyman carpenters from their own following, i.e.,
men who have worked for them before, or from the Car-
penters hiring hall. By ancient if unwritten agreement
among all of the principals, Kosoff has always operated
as a union contractor. On the other hand, it is the same
three Kosoff principals, plus Schmidt, acting as the
board of directors of Facts, who hired Schmidt, invest-
ing in him the power to hire and fire for the firm much
as he had done when he was a job superintendent for
Kosoff. The only differences were that Schmidt had a
new title-president-and was not bound by any limita-
tions contained in a union contract. There is little doubt
that the three Kosoff principals who serve on the Facts
board of directors could terminate Schmidt as company
president (and superintendent of all jobs) as quickly and
as easily as Kosoff could have terminated Schmidt when
he was on their payroll as a job superintendent. More-
over, the ultimate control of labor relations for Facts re-
mains with the three Kosoff principals plus Schmidt. It
was they, and not merely Schmidt, who agreed that the
firm should operate on a nonunion basis and this was
done before Schmidt sent out the circular letter to cus-
tomers, informing them, among other things, that Facts
would operate nonunion.
6 The Board has held that an effort to avoid compliance with a union
contract bears heavily upon a finding that there is control of the labor
relations of a subsidiary by its parent. Naccarato Construction Co., 233
NLRB 1394 (1977).
428
SAMUEL KOSOFF & SONS
Citing NLRB v. Tricor Products, supra, the Fifth Cir-
cuit in Pratt-Farnsworth, supra, pointed out that antiunion
motivation or sentiment was a relevant factor in analyz-
ing the existence of alter ego status. 7 In this case, such
sentiment or motivation is admitted. Allen Kosoff took
the stand and flatly stated that Facts was established in
order to permit the acquisition of work which had disap-
peared because Kosoff was no longer competitive in cer-
tain contracting fields. The Kosoff principals sought to
achieve a competitive position in doing smaller contract-
ing by operating a nonunion firm which would not have
to pay union scale, union fringes, and be subject to union
craft limitations. This element in the determination of
alter ego status is well established in the record.
The operations of Kosoff and Facts do not present a
situation in which two firms operate in totally different
economic climates. To a large extent they share the same
market. Both do general contracting in central New
York State. Kosoff bids larger jobs which Facts is unable
or unwilling to undertake. However, Facts does handle
general contracts up to about $70,000. The record indi-
cates that, in Kosoff's fiscal year ending September 30,
1981, Kosoff paid costs amounting to $9,222,647.81 on 47
different jobs. Of those jobs, 30 were under $70,000 and
thus well within the range of work performed by Facts.
Five of those jobs were for customers who had also
hired Facts on other occasions.
It is abundantly clear that Kosoff and Facts do not op-
erate at arm's length, a requirement for separate employ-
er status, and that Kosoff does not treat Facts as it treats
its other competitors in the general contracting business. s
Kosoff enjoys bondable status and Facts does not. Kosoff
obtained two jobs-one from the New York Telephone
Company worth $54,000 and one from the United States
Postal Service worth $200,000-and promptly subcon-
tracted the major portion of the work in each contract to
Facts without even requiring the submission of competi-
tive bids.° Because of bonding requirements, Facts could
not have obtained either job directly but did obtain the
bulk of the work on these jobs through the paternal aus-
pices of Kosoff. The amount of work funneled in this
manner to Facts amounted to a substantial, if not major,
part of its revenues and served the Kosoff purpose of
getting Facts in operation and permitting the work it bid
to be done more cheaply under nonunion conditions and
at a nonunion wage scale. As a result of having success-
fully performed a subcontract under Kosoff for the New
York Telephone Company, Facts was able to demon-
strate its reliability to the satisfaction of the phone com-
pany and has now been admitted to the phone company's
list of approved contractors for jobs under $20,000.
Kosoff has not been so accommodating to other general
contractors whom it regards as competitors. In subcon-
tracting these jobs to Facts, Kosoff violated the provi-
7 See also P. A. Hayes, Inc., 226 NLRB 230 (1976), and DMR Corp.,
258 NLRB 1063 (1981).
a It is interesting to note that Facts acquired its name by being an acro-
nym composed of the first letters of the first names of Kosofi's principals
and its office clerical employee.
9 Subcontracting to a closely held subsidiary without using competitive
bids has been held to be strong evidence of alter ego or single employer
status. Sossamon Electric Co., 241 NLRB 324 (1979).
sions of its contract with Local 12 which forbids the sub-
contracting of carpentry work to nonunion employers,
but this breach of contract appears to have given it scant
pause.
It is true that Kosoff and Facts use different comple-
ments of employees. Some Facts employees have been
the sons of Kosoff principals or superintendents who
have worked for Schmidt during summer vacations from
school. I do not regard this as the typical employee
interchange which is discussed in unit determination
cases. It is also true that Facts' employees observe no
craft lines and are paid varying wages at different inter-
vals, depending on the type of work they are assigned to
perform. Kosoff carpenters do nothing but carpentry
work and are paid in accordance with the terms and
conditions of the union contract. However, these factors
do not militate against a finding of alter ego status, since,
as the Board pointed out in Angelus Block Co., 250
NLRB 868 (1980), such factors are the products of a
status designed and implemented by the parties and result
from the failure of the parties to apply the union con-
tract to Facts' employees. Accordingly, they do not evi-
dence the existence of a separate status. It should also be
noted that, on the New York Telephone Company job at
Widewaters, which Facts performed as one of the Kosoff
subcontractors alongside other Kosoff subcontractors,
Schmidt in effect acted as job superintendent on Kosoff's
behalf in overseeing the performance of Kosoff's other
subcontractors, in addition to supervising his own em-
ployees. The wearing of two hats on this occasion
amount to single, integrated management of the job by a
parent and its clone.
As the Respondents are wont to point out, Facts has a
separate office, separate books, separate equipment, sepa-
rate telephone listing, separate insurance policies, and a
separate storage area in which to keep its materials.
These matters are incidental when compared with the
manner in which Facts originated and how it currently
obtains a significant portion of the dollar volume of its
business.' 0 Moreover, Facts holds itself out as being
closely associated with Kosoff. Allen Kosoff is an officer
of both companies and is active in both. This fact was
made known to the trade in the Syracuse area when
Facts sent out an announcement advertising that it was
open for business. Facts was not only trading on the
name of Allen Kosoff personally but on the name of the
Kosoff firm, as well, in soliciting business from prospec-
tive customers.
In light of these factors, I conclude that Facts was and
is a disguised continuance, or at least a disguised exten-
sion, of Kosoff and is in fact and law its alter ego. There
is nothing in the Act which is repugnant to the existence
of a bargaining unit which includes both Kosoff's car-
penters and Fact's utilitymen, most of whom perform the
same kind of work much of the time. Accordingly, I
conclude that Facts is bound by the terms and conditions
'o On occasion, Kosoff has accommodated Facts by making available
to it, at cost or less than cost, the services of a Kosoff truck and driver to
perform hauling that Facts had no capacity to do. The fact that these
services were billed to Facts and later paid for still illustrates the less
than arm's- length relationship between these two entities.
429
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
of the collective-bargaining agreement between Kosoff
and Local 12 and that by failing and refusing to extend
the provisions of that agreement to include the utility-
men employed by Facts both Respondents violated Sec-
tion 8(a)(l) and (5) of the Act.
2. The refusal of Kosoff to supply the Union with
requested information
The Board and the courts have enunciated a liberal
discovery-type standard in determining the potential rel-
evance of information which has been sought in aid of a
bargaining agent's responsibility. See Hiney Printing Co.,
262 NLRB 157 (1982), and cases cited therein. In resist-
ing the General Counsel's claim that it violated the Act
by not providing the Union with the information request-
ed in the Union's June 23 letter, Kosoff cites Ohio Power
Co., 216 NLRB 987 (1975), for the proposition that the
standard of relevance of requested information is very
broad and no specific showing is necessary when the in-
formation sought covers the terms and conditions of em-
ployment within the bargaining unit. However, with re-
spect to information sought which is outside the unit, the
standard is narrower and the relevance which is required
must be somewhat more precise. Applying this dichoto-
my to the evidence in this case is somewhat difficult,
since the thrust of the Union's request for information
was to permit it to determine whether Facts' employees
should or should not be included in the Kosoff bargain-
ing unit. Such information has been determined to be rel-
evant to a union's bargaining obligation in such cases as
Leonard B. Herbert, Jr. & Co., 259 NLRB 881 (1981), and
Doubarn Sheet Metal, 243 NLRB 821 (1979), and I
regard it as relevant here to the performance by the
Union of its duties as the bargaining agent of Kosoff's
employees.I' Much of the information sought by the
Union in its June 23 letter was placed into evidence in
the course of this litigation as bearing upon the relation-
ship between Kosoff and Facts, a fact which, in and of
itself, tends to support a finding that the information was
and is relevant and produceable. That much of the infor-
mation sought by the Union is already in evidence is no
defense to a Board order which is directed not only to
the totality of the contents of the Union's June 23 letter
but to Kosoff's prospective conduct as well. Kroger Co.,
226 NLRB 512 (1976); Bel-Air Bowl, Inc., 247 NLRB 6
(1980). Accordingly, I conclude that, by failing and re-
fusing to supply the Union with information requested in
its letter of June 23, Respondent Kosoff violated Section
8(a)(1) and (5) of the Act.
On these findings of fact and on the entire record
herein considered as a whole, I make the following
CONCLUSIONS OF LAW
1. Respondent Samuel Kosoff & Sons, Inc. is now, and
at all times material herein has been, an employer en-
" I Kosoff also argues that the Union acquiesced in the existence of the
Kosoff-Facts relationship. However, this argument has a hollow ring in
light of the fact that Kosoff was deliberately withholding from the Union
the information it requested to ascertain the nature of the Kosoff-Facts
relationship.
gaged in commerce within the meaning of Section 2(2),
(6), and (7) of the Act.
2. Respondent Facts Construction Company, Inc. is
the alter ego of Respondent Samuel Kosoff & Sons, Inc.
3. United Brotherhood of Carpenters & Joiners of
America, AFL-CIO, Local Union No. 12 (the Union), is
a labor organization within the meaning of Section 2(5)
of the Act.
4. All carpenters and joiners, as defined in the collec-
tive-bargaining agreement between the Union and the
Building Trades Employers Association of Central New
York, Inc., including those employed by Respondents
Samuel Kosoff & Sons, Inc. and Facts Construction
Company, Inc., but excluding supervisors as defined in
the Act, constitute a unit appropriate for collective bar-
gaining within the meaning of Section 9(b) of the Act.
5. At all times material herein the Union has been the
exclusive collective-bargaining representative of all of
the employees in the unit found appropriate in Conclu-
sion of Law 4 for the purpose of collective bargaining
within the meaning of Section 9(a) of the Act.
6. By failing and refusing to supply the Union with re-
quested information relating to its relationship with its
alter ego, Facts Construction Company, Inc., Respond-
ent Samuel Kosoff & Sons, Inc. violated Section 8(a)(5)
of the Act.
7. By failing and refusing to apply the terms and con-
ditions of the collective-bargaining agreement entered
into by the Union and the Building Trades Employers
Association of Central New York, Inc. to all employees
employed in the bargaining unit found appropriate in
Conclusion of Law 4, both Respondents violated Section
8(a)(5) of the Act.
8. The unfair labor practices set forth above in Con-
clusions of Law 6 and 7 violate Section 8(a)(l) of the
Act and have a close, intimate, and adverse effect on the
free flow of commerce within the meaning of Section
2(6) and (7) of the Act.
REMEDY
Having found that the Respondents herein have com-
mitted certain unfair labor practices, I will recommend
that they be required to cease and desist therefrom and
to take other affirmative actions designed to effectuate
the purposes and policies of the Act. The recommended
Order will provide that both Respondents be required to
bargain collectively in good faith with the Union as the
exclusive collective-bargaining representative of their
nonsupervisory carpenter and joiner employees, that
they be required to apply to all of these employees the
terms and conditions of the current collective-bargaining
agreement between the Union and the Building Trades
Employers Association of Central New York, Inc., and
that Kosoff be required to supply the Union with the in-
formation concerning its relationship with Facts which
was requested by the Union in its letter to Kosoff dated
June 23, 1982. The Order will require both Respondents,
jointly and severally, to make whole the employees of
Facts for any loss of wages and benefits they may have
suffered by reason of the unfair labor practices found
herein, including holiday and vacation pay, travel pay,
430
SAMUEL KOSOFF & SONS
overtime, and payments of contributions to health, wel-
fare, vacation, and pension funds required under the
terms of the above-recited collective-bargaining agree-
ment, together with any liquidated or other damages re-
quired by contract to be paid to benefit fund trustees be-
cause of delinquencies in making contributions. F.M.L.
Supply, Inc., 258 NLRB 604 (1981). The amounts due for
loss of wages, overtime, travel pay, holiday and vacation
pay, and any other amounts of money which are easily
determined will be paid with interest thereon computed
at the adjusted prime rate used by the Internal Revenue
Service for the computation of tax payments. Olympic
Medical Corp., 250 NLRB 146 (1980); Isis Plumbing Co.,
138 NLRB 716 (1962). Inasmuch as a determination of
the amounts due to fringe benefit funds, both in contribu-
tions and penalties, may be more difficult to compute, I
will leave the determination of interest due on such pay-
ments to the compliance stage of this proceeding.
Merryweather Optical Co., 240 NLRB 1213 (1979). I will
also recommend that both Respondents be required to
post the usual notice advising their employees of their
rights and of the results in this case.
On the basis of these findings of fact and conclusions
of law and on the entire record, I make the following
recommended l 2
ORDER
I. Respondent Samuel Kosoff & Sons, Inc., Syracuse,
New York, its officers, supervisors, attorneys, successors,
and assigns, shall supply the Union with information re-
quested in the Union's letter to Kosoff, dated June 23,
1982, relating to Kosoff's relationship to Facts and any
other information requested by the Union which is rele-
vant to its responsibility as bargaining agent.
II. Respondents Samuel Kosoff & Sons, Inc. and its
alter ego Facts Construction Company, Inc., Syracuse,
New York, their officers, supervisors, attorneys, succes-
sors, and assigns, shall, jointly and severally
1. Cease and desist from
(a) Refusing to recognize and bargain with United
Brotherhood of Carpenters & Joiners of America, AFL-
CIO, Local Union No. 12, as the exclusive collective-
bargaining representative of all of its carpenters and join-
ers, as defined in the collective-bargaining agreement be-
tween the Union and the Building Trades Employers As-
sociation of Central New York, Inc., including those em-
ployed by Respondents Samuel Kosoff & Sons, Inc. and
its alter ego Facts Construction Company, Inc., but ex-
cluding supervisors as defined in the Act.
(b) Refusing to apply the terms and conditions of the
collective-bargaining agreement concluded by the Union
with the Building Trades Employers Association of Cen-
tral New York, Inc. to all nonsupervisory employees em-
ployed by Facts Construction Company, Inc. who do
carpentry and joining work, as defined in that contract.
12 If no exceptions are filed as provided by Sec. 102.46 of the Board's
Rules and Regulations, the findings, conclusions, and recommended
Order shall, as provided in Sec. 102.48 of the Rules, be adopted by the
Board and all objections to them shall be deemed waived for all pur-
poses.
(c) By any like or related means interfering with, re-
straining, or coercing employees in the exercise of rights
guaranteed to them by Section 7 of the Act.
2. Take the following affirmative action designed to ef-
fectuate the purposes and policies of the Act.
(a) Recognize and, upon request, bargain collectively
with United Brotherhood of Carpenters & Joiners of
America, AFL-CIO, Local Union No. 12, as the exclu-
sive collective-bargaining representative of all of its car-
penters and joiners, as defined in the collective-bargain-
ing agreement between the Union and the Building
Trades Employers Association of Central New York,
Inc., including those employed by Respondents Samuel
Kosoff & Sons, Inc. and Facts Construction Company,
Inc., but excluding supervisors as defined in the Act.
(b) Applying to all of the nonsupervisory employees
employed by Facts Construction Company, Inc., who do
carpentry and joining work, as defined in the collective-
bargaining agreement between the Union and the Build-
ing Trades Employers Association of Central New York,
Inc., the terms and conditions of that contract.
(c) Make whole all of the employees of Respondent
Facts Construction Company, Inc., for any loss of pay or
benefits which they have suffered by reason of the unfair
labor practices found herein, and make whole all of the
jointly administered benefit trust funds established by the
contract between the Union and the Building Trades
Employers Association of Central New York, Inc., for
any contributions which have not been paid for the bene-
fit of employees of Respondent Facts Construction Com-
pany, Inc., in the manner described above in the section
entitled "Remedy."
(d) Preserve and, on request, make available to the
Board or its agents for examination and copying, all pay-
roll and other records necessary to analyze the amounts
of backpay and benefit fund contributions due under the
terms of this Order.
(e) Post at the offices and jobsites of the respective Re-
spondents in and about Syracuse, New York, copies of
the attached notice marked "Appendix."'3 Copies of the
notice, on forms provided by the Regional Director for
Region 3, after being signed by the Respondents' author-
ized representative, shall be posted by the Respondents
immediately upon receipt and maintained for 60 consecu-
tive days in conspicuous places including all places
where notices to employees are customarily posted. Rea-
sonable steps shall be taken by the Respondents to ensure
that the notices are not altered, defaced, or covered by
any other material.
(f) Notify the Regional Director in writing within 20
days from the date of this Order what steps the Re-
spondents have taken to comply.
i' 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 Na-
tional Labor Relations Board" shall read "Posted Pursuant to a Judgment
of the United States Court of Appeals Enforcing an Order of the Nation-
al Labor Relations Board."
431
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
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
violated the National Labor Relations Act and has or-
dered us to post and abide by this notice.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce employees in the exercise of the
rights guaranteed them by Section 7 of the Act.
Samuel Kosoff & Sons, Inc. will provide United
Brotherhood of Carpenters & Joiners of America, AFL-
CIO, Local Union No. 12, the information requested by
the Union concerning its relationship to Facts Construc-
tion Company, Inc., in its letter of June 23, 1982, and
will provide the Union with any other requested infor-
mation which is relevant to the Union's responsibility as
bargaining agent.
WE WILL recognize and bargain collectively, upon re-
quest, with the Union as the exclusive collective-bargain-
ing agent of all of the carpenters and joiners, as defined
in a contract between the Union and the Building Trades
Employers Association of Central New York, Inc., ex-
clusive of supervisors, who are employed either by
Samuel Kosoff & Sons, Inc. or Facts Construction Com-
pany, Inc., and WE WILL apply the terms and conditions
of that contract to the carpenter-joiner employees of
Facts Construction Company, Inc.
WE WILL, jointly and severally, make whole all of the
nonsupervisory carpenter and joiner employees of Facts
Construction Company, Inc., for any loss of pay or bene-
fits, including wages, overtime, holiday, and vacation
pay, which they have lost by virtue of our failure to
apply the terms and conditions of the union agreement to
them, with interest, and WE WILL jointly and severally,
make whole any jointly administered benefit trust funds
for any contributions covering employees of Facts Con-
struction Company, Inc., which were not paid because of
our failure to apply to these employees the terms and
conditions of the union agreement, together with any de-
linquency penalties which may be due, and with interest.
SAMUEL KOSOFF & SONS, INC., AND FACTS
CONSTRUCTION COMPANY, INC.
432