Shellmaker, Inc., and Bayside Dredging Company, Inc.

National Labor Relations Board - Board Decisions

Dec 8, 1982

265 N.L.R.B. 749 (N.L.R.B. 1982)

SHELLMAKER, INC.
Shellmaker, Inc., and Bayside Dredging Company,
Inc. and Operating Engineers, Local Union No.
3, International Union of Operating Engineers,
AFL-CIO. Case 20-CA-16188
December 8, 1982
DECISION AND ORDER
BY MEMBERS JENKINS, ZIMMERMAN, AND
HUNTER
On July 16, 1982, Administrative Law Judge Jay
R. Pollack issued the attached Decision in this pro-
ceeding. Thereafter, the General Counsel and the
Charging Party filed exceptions and a supporting
brief, and Respondents filed a brief in answer to ex-
ceptions.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the record and the at-
tached Decision in light of the exceptions and
briefs and has decided to affirm the rulings, find-
ings, and conclusions of the Administrative Law
Judge and to adopt his recommended Order.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Re-
lations Board adopts as its Order the recommended
Order of the Administrative Law Judge and
hereby orders that the complaint be, and it hereby
is, dismissed in its entirety.
DECISION
STATEMENT OF THE CASE
JAY R. POLLACK, Administrative Law Judge: I heard
this case in San Francisco, California, on April I and 6,
1982. Operating Engineers, Local Union No. 3, Interna-
tional Union of Operating Engineers, AFL-CIO (the
Union), filed an original charge on April 22, 1981,1
against Shellmaker, Inc. (Respondent Shellmaker), and
Bayside Dredging Company, Inc. (Respondent Bayside),
herein collectively called Respondents. The charge was
subsequently amended on June 22, July 24, and August
13. On August 27, the Acting Regional Director for
Region 20 of the National Labor Relations Board issued
a complaint and notice of hearing against Respondents.
The complaint alleges in substance that Respondent
Bayside is an alter ego of Respondent Shellmaker and
that Respondents constitute a single business enterprise.
The complaint further alleges that Respondents violated
Section 8(aX)(5) and (1) of the National Labor Relations
Act, as amended (the Act), by failing and refusing to
apply the multiemployer collective-bargaining agreement
between the Union and Respondent Shellmaker to the
I Unless otherwise stated, all dates refer to calendar year 1981.
265 NLRB No. 109
employees of Respondent Bayside. Respondents contend
that Shellmaker and Bayside are entirely separate busi-
nesses. Further, Respondents deny the commission of
any unfair labor practices.
All parties have been afforded full opportuntiy to
appear, to introduce evidence, to examine and cross-ex-
amine witnesses, and to file briefs. Based upon the entire
record, from my observation of the demeanor of the wit-
nesses, and having considered the post-trial briefs submit-
ted on behalf of the parties,2 I make the following:
I. FINDINGS OF FACT AND CONCLUSIONS
A. Background
Respondent Shellmaker has been engaged in the
dredging business in southern California for approximate-
ly 40 years. In 1968, Respondent Shellmaker began oper-
ations in northern California. Respondent Shellmaker's
northern California operations are based at an area now
known as Port Sonoma in Sonoma County, California.
At all times material herein, Respondent Shellmaker has
been a member of the Dredging Contractors Association,
a multiemployer bargaining group. The Dredging Con-
tractors Association and its employer-members have
been party to a series of collective-bargaining agreements
covering the employees of the employer-members of the
Association.s The most recent collective-bargaining
agreement between the Union and the Association is ef-
fective by its terms from July 1, 1980, to June 30, 1983.
The appropriate bargaining unit is all employees em-
ployed by the employer-members of the Association,
performing work within the scope of the agreement and
within the territorial jurisdiction of the agreement. The
agreement excepts from coverage superintendents, assist-
ant superintendents, captains, launch operators, general
foremen, timekeepers, messenger boys, guards, confiden-
tial employees, and office help.
William P. Boland was the president of Respondent
Shellmaker for approximately 22 years until March 2,
1982, when he became its chairman of the board. Re-
spondent Shellmaker's current officers are Dick Mallard,
president; Richard Solari, vice president; William Harris,
southern California vice president; and Georgina Bona-
vitch, secretary-treasurer. William Boland owns 51 per-
cent of Respondent Shellmaker's stock. The other stock-
holders are Granite Construction Company (40 percent)
and Dick Mallard (9 percent). The corporate directors
are William Boland, Mallard, and Solari.
Respondent Bayside was incorporated in California on
December 15, 1980. At its incorporation, Respondent
Bayside's three officers, directors, and stockholders were
William Boland, Dolores Lara Boland, William's wife,
and Bryan Boland, William's nephew. In January 1981,
William Boland sold his stock in equal parts to Dolores
Boland, Bryan Boland, and Magdalena Hickey, Dolores'
I On June 14, 1982, I received a letter from Respondent Bayside in
reply to the briefs submitted by the General Counsel and the Union.
Since there is no provision for reply briefs under the Board's Rules and
Regulations, I have disregarded Bayside's letter.
' The parties stipulated that the employer-members of the Association
collectively meet the Board's direct inflow standard for the assertion of
jurisdiction.
749
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
sister. Since January 1981, Bryan Boland has been presi-
dent, Dolores Boland has been vice president, and
Hickey has been treasurer of Respondent Bayside. Re-
spondent Bayside commenced operations on or about
April 4, 1981. Respondent Bayside operates a dredge en-
titled the "Turnabout" which is specially designed for
dredging in and about marinas. The Turnabout is char-
tered by Respondent Bayside from Lara Enterprises, the
owner of the Turnabout, on a bareboat charter basis; i.e.,
without crew or insurance.
Lara Enterprises, Inc., is a California corporation
formed in July 1979. Dolores Boland is president; Mag-
dalena Hickey is vice president; and Rosemary Overby is
vice president and secretary of Lara Enterprises. The
three officers are also the only three stockholders of the
corporation. Dolores Boland owns 62-1/2 percent; Mag-
dalena Hickey owns 15 percent; and Rosemary Overby
owns 22-1/2 percent of the shares of the corporation.
Lara Enterprises was alleged as a Charged Party in the
second amended charge, filed on July 24. However, Lara
Enterprises was deleted as a party in the third amended
charge, filed on August 12. The complaint does not
allege that Lara Enterprises is an alter ego of, or single
employer wth, either of Respondents herein.
Respondent Shellmaker is located where the Petaluma
River empties into San Pablo Bay at Port Sonoma
Marina. Port Sonoma Marina, Inc., is a wholly owned
subsidiary of Respondent Shellmaker which operates the
port property. Port Sonoma Marina employs its own
staff, which do general carpentry and maintenance work.
Respondent Shellmaker and Respondent Bayside have
separate operating yards at Port Sonoma. Further, Re-
spondent Bayside shares office spare with Lara Enter-
prises at Port Sonoma.
B. The Construction of the Turnabout and the
Formation of Respondent Bayside
In the summer of 1980, William Boland began con-
struction of an 8-inch dredge, later to be named the Tur-
nabout.4 The 8-inch dredge was specifically designed by
William Boland for dredging in small marinas, and, par-
ticularly, for dredging at Port Sonoma in tight quarters
without the necessity of moving the docks. The con-
struction of the Turnabout was performed by employees
of Respondent Shellmaker. However, construction was
financed by the Shellmaker profit-sharing plan,5 which
reimbursed Respondent Shellmaker for the parts and
labor involved.
William Boland testified that he planned the Turna-
bout to operate with a two-man crew. He further testi-
fied that he knew Respondent Shellmaker could not op-
erate the new dredge because the labor agreement with
the Union required a four-man crew. The new dredge
would be too expensive to operate with a four-man
crew. Initially, William Boland intended the Shellmaker
profit-sharing plan to own the dredge and to lease it out
4 The size of a dredge is determined by the diameter of the discharge
pipe used by the dredge. Respondent Shellmaker operates three 16-inch
dredges.
a The Shellmaker profit-sharing plan is a separate corporation. The
trustees of the profit-sharing plan are William Boland and Dolores
Boland.
on a bareboat charter basis. However, the attorney for
the profit-sharing plan advised against the plan going
into business.
In the fall of 1980, Bryan Boland, William's nephew,
moved to northern California and began working on the
construction of the Turnabout.6 Bryan had been working
as a deckhand on dredges operated by Respondent Shell-
maker in southern California. Bryan worked on Re-
spondent Shellmaker's payroll until Respondent Bayside
commenced operations in April. As stated earlier, Re-
spondent Bayside was incorporated in December 1980.
There is no dispute that the purpose of the new corpora-
tion was to operate the new 8-inch dredge upon comple-
tion of the then pending construction.
Respondent Bayside was initially incorporated by Wil-
liam, Dolores, and Bryan Boland. Each contributed $300
for 300 shares of stock. At the time of incorporation
Bryan was president; William was vice president; and
Dolores was secretary-treasurer. As stated earlier, in Jan-
uary 1981, William Boland resigned and sold his stock, in
equal shares, to Bryan, Dolores, and Magdalena Hickey.
During the spring of 1981, Respondent Bayside moved
into office space at Port Sonoma already occupied by
Lara Enterprises. The office space was leased form Port
Sonoma Marina to Dolores Boland who in turn sub-
leased space to Lara Enterprises, Respondent Bayside,
Port Sonoma Marina, and another unrelated business.
The initial capital for Respondent Bayside came from
personal loans from Dolores and Bryan Boland. These
loans were repaid when Respondent Bayside borrowed
$50,000 from the Shellmaker profit-sharing plan. Re-
spondent Bayside had been previously turned down for a
loan by a bank because Dolores Boland had refused to
personally guarantee the loan. The loan from the profit-
sharing plan was unsecured. In early 1982, Respondent
Bayside renegotiated its loan from the profit-sharing
plan.7 The new loan was for $60,000 with an interest
rate equivalent to what the profit-sharing plan was earn-
ing in its money market account, but at a rate lower than
that of the original loan. Respondent Bayside has made
interest payments but has not repaid any of the principal
of these loans.
Upon the completion of construction of the Turna-
bout, Lara Enterprises purchased the dredge from the
Shellmaker profit-sharing plan for $100,000, a profit of
$15,000 for the plan." Upon purchasing the Turnabout,
Lara Enterprises signed a bareboat charter leasing the
Turnabout to Respondent Bayside for $3,500 per month.
The lease was for a term of 3 years and month to month,
thereafter. After I year, the rental fee was raised to
$6,300 per month.9 In April, Respondent Bayside com-
* Bryan Boland moved to Port Sonoma Marina in the fall of 1980. He
rented a trailer there at a favorable price.
I Respondent Bayside did not make a profit during its first year of op-
erations.
' There is testimony from Dolores Boland tending to show that the
dredge was in fact worth $150,000. The lease between Lara Enterprises
and Respondent Bayside initially set the value of the Turnabout at
$150,000 and was subsequently amended to a value of $250,000.
9 The General Counsel and the Charging Party argue that the rental
fee was considerably less than market value. As stated earlier, the Turna-
bout was a new type of dredge. Thus, there is no record evidence to es-
tablish the market value for the lease of the Turnabout.
750
SHELLMAKER, INC.
menced dredging at the Port Sonoma Marina. Respond-
ent Bayside operated under a contractor's license in its
own name with Dolores Boland registered as responsible
managing officer. Bryan Boland, inexperienced and
having not bid a job before, was unable to explain how
Respondent Bayside's price for this work was deter-
mined. According to William Boland, when Respondent
Bayside commenced dredging it was on a cost-plus basis.
After half the job was completed, in the spring of 1981,
an hourly rate was utilized. William Boland's testimony
was corroborated by a letter agreement dated March 22
signed by Bryan Boland and Betty J. Krambs, secretary
for Port Sonoma Marina.
C. The Relationship Between the Companies
1. Interrelation of operations
While both Respondents are in the dredging business,
they do not service the same customers. Respondent
Shellmaker operates three 16-inch dredges in northern
California. Substantially all of Respondent Shellmaker's
business is with the United States Army Corps of Engi-
neers. Respondent Bayside, on the other hand, using the
8-inch dredge, the Turnabout, specializes in dredging
small marinas.
The General Counsel offered evidence that Respond-
ent Bayside performed work for Vista Bahia, a former
customer of Respondent Shellmaker. However, the
credible evidence shows that William Boland attempted
to keep Vista Bahia as a customer for Respondent Shell-
maker. Problems arose regarding the disposal area for
the dredging work. When it finally became apparent that
the disposal area permitted by the governmental authori-
ties was too small for a 16-inch dredge, William Boland
referred Vista Bahia to Dolores Boland. Dolores then
contracted with Vista Bahia for the dredging work to be
done by the Turnabout. During the performance of the
dredging work, certain problems arose between Re-
spondent Bayside and Vista Bahia. Gary Wilson, repre-
sentative of Vista Bahia, attempted to solicit William Bo-
land's aid in resolving these problems. However, Wilson
was told by William Boland that he would have to re-
solve the problems with Dolores and Bryan Boland.
Wilson also asked Dolores if William Boland could be
called in as "a sort of mediator" to help resolve the
problems. Wilson testified that he was turned down in a
"rather heavy fashion."
As stated earlier, upon going into business, Respondent
Bayside commenced dredging operations at Port Sonoma
Marina. Respondent Bayside has billed Port Sonoma for
dredging work on an hourly basis. Dick Amaral, supervi-
sor for Port Sonoma's crew, is responsible for confirming
the work performed by Respondent Bayside. While
Amaral directs Respondent Bayside with regard to the
areas of the marine to be dredged, there is no evidence
that Amaral directs or supervises the employees of Re-
spodent Bayside. The General Counsel offered evidence
that two employees under Amaral's supervision were
working on the Turnabout during April. However, the
work performed by these Port Sonoma employees was
the installation of floorboards. In the rush to get the Tur-
nabout in business, the dredge commenced operations
without the floorboards and the floorboards were in-
stalled while the dredge was in operation at Port
Sonoma.
As stated earlier, the Turnabout was constructed by
employees of Respondent Shellmaker. Respondent Shell-
maker has constructed at least five other dredges. The
sale of the dredge to Lara Enterprises included a written
6-month warranty. The warranty was orally extended for
an additional 6 months. Thus, after the sale of the Turna-
bout, employees of Respondent Shellmaker performed
work on the dredge. However, there is no evidence that
the work performed was other than work covered by the
warranty. ' 0
There is no evidence of employee interchange between
the two companies. As stated earlier, while awaiting the
completion of the construction of the Turnabout, Bryan
Boland worked for Respondent Shellmaker. In the initial
hiring of employees for Respondent Bayside, Bryan
hired one former employee of Port Sonoma Marina.
Thereafter, when an opening arose, Bryan hired a former
employee of Respondent Shellmaker. However, there is
no evidence that employees were transferred between
companies or performed work for one company while on
the payroll of the other.
Respondent Bayside and Lara Enterprises share the
same office space. Magdalena Hickey spends half her
time performing office work for Respondent Bayside and
the other half of her time performing similar work for
Lara Enterprises. Respondent Shellmaker's office, while
also located at Port Sonoma, is in a separate building
from Respondent Bayside. Since November, Respondent
Bayside has maintained an operating yard at Port
Sonoma, separate and apart from Respondent Shell-
maker's yard. When Respondent Bayside first com-
menced operations it had no yard and stored equipment
at Respondent Shellmaker's yard while dredging at Port
Sonoma. However, such jobsite storage is common in
the industry. When the Turnabout was moved to Vista
Bahia, Respondent Bayside stored its equipment in a
trailer at that jobsite. Respondent Bayside, at the time of
the hearing, had made no payments for rent for its yard.
Rather, Respondent Bayside had performed dredging
work in lieu of rent. According to William Boland, Re-
spondent Bayside would begin paying $500-per-month
rent in July 1982.
The General Counsel subpoenaed numerous and var-
ious business records of Respondents Shellmaker and
Bayside, which records were produced at the hearing.
The parties stipulated that Respondents Shellmaker and
Bayside maintain separate books and records. Different
persons perform bookkeeping functions for the two com-
panies. Each company bills the other for services per-
formed. While daily logs were kept for the dredging at
Port Sonoma, daily logs were not kept for the dredging
performed in lieu of rent.
The General Counsel contends that the two Respond-
ents use the same equipment. However, the evidence
does not support this contention. On one occasion when
Bryan Boland used equipment of Respondent Shell-
10 Respondent Shellmaker's employees were told that they were per-
forming warranty work.
751
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
maker, he was instructed by Ed Storey, Respondent
Shellmaker's superintendent, that he was not to use Re-
spondent Shellmaker's equipment without permission. On
other occasions, Bryan Boland used equipment of Re-
spondent Shellmaker and was charged by Storey for
such use. On some occasions, Respondent Bayside used
equipment belonging to Port Sonoma Marina with the
permission of Amaral. These incidents occurred while
Respondent Bayside was performing work for Port
Sonoma Marina and, thus, it was in Amaral's interest to
expedite the work. Bryan Boland testified that other cus-
tomers have similarly lent him use of equipment, without
charge, in order to expedite the work.
2. Common ownership and management
As stated earlier, William Boland, Granite Construc-
tion Company, and Dick Mallard are the three stock-
holders of Respondent Shellmaker. Bryan Boland, Dolo-
res Boland, an Magdalena Hickey are the three stock-
holders of Respondent Bayside. William Boland resigned
from Respondent Bayside and sold his stock in the Cor-
poration, prior to the commencement of business.
During 1981, William Boland, as president of Re-
spondent Shellmaker, was responsible for the manage-
ment decisions of that Company. Dick Mallard is now
president of Respondent Shellmaker. Bryan Boland is
president of Respondent Bayside and apparently runs the
day-to-day business of that Company. The General
Counsel and Charging Party vehemently argue that
Bryan, 20 years' old at the inception of Respondent Bay-
side, has no relevant experience and does not manage the
business. Rather, the General Counsel and the Charging
Party argue that Bryan is simply a figurehead and that
"William and Dolores Boland make the critical manage-
ment decisions and control the labor relations of Bay-
side." However, there is no evidence that William
Boland made any management decisions for Respondent
Bayside. William, on behalf of Port Sonoma Marina, ne-
gotiated with Bryan Boland concerning the payment for
dredging work. In actuality, William set prices which
Bryan Boland accepted without argument. Respondent
Bayside's exchange of services for rent was arranged in
the same manner. While Bryan Boland did not appear
knowledgeable as to the management of the business or
the bidding of contracts, I cannot draw the inference
that William Boland was in fact managing Respondent
Bayside. Dolores Boland negotiated Respondent Bay-
side's agreement with Vista Bahia, including a 10-percent
commission for Lara Enterprises. Further, Dolores set
the charter rate charged to Respondent Bayside by Lara
Enterprises, which charges Bryan Boland accepted with-
out protest. The relationship between Lara Enterprises
and Respondent Bayside does not appear to be arm's
length. However, as noted earlier, Lara Enterprises is
not a party to this case. While Dolores Boland appears
to participate in the management of Respondent Bayside,
she is more knowledgeable as to its operations than
Bryan; there is no evidence that Dolores participates in
the management of Respondent Shellmaker. Dolores
Boland formerly was office manager for Respondent
Shellmaker and once performed as an assistant job super-
intendent but has not worked for Respondent Shellmaker
for 5 years. Dolores Boland was a corporate director of
Respondent Shellmaker for 5 to 7 years, ending in March
1982.
There is no evidence of common supervision of the
employees of Respondents. Dick Amaral's overseeing of
Respondent Bayside's dredging operations is explained
by the interest of his employer, Port Sonoma Marina, in
having the dredging work performed to its satisfaction.
Further, Amaral had the responsibility of approving the
charges for such work. Ed Storey supervises Respondent
Shellmaker's employees and Bryan Boland supervises
Respondent Bayside's employees. Other than Amaral's
involvement with the dredging of Port Sonoma Marina,
there is no evidence of supervision of the employees of
one company by a supervisor of the other.
3. Centralized control of labor relations
The uncontradicted evidence is that Bryan Boland
makes all labor relations decisions for Respondent Bay-
side. He is the one that did all the hiring and firing for
that Company. Bryan Boland makes the job assignments
and supervises the operations of the dredge. Bryan set
the initial wage rates and fringe benefits for Respondent
Bayside's employees and thereafter communicated with
employees about raising those terms of employment.
There is no evidence that William Boland was involved
in the labor relations of Respondent Bayside. The Gener-
al Counsel and the Charging Party argue that William
Boland made the decision that the Turnabout would be
nonunion. The evidence does establish that William de-
cided that Respondent Shellmaker would not operate the
Turnabout but does not establish that William otherwise
took steps to make the Turnabout nonunion.
The labor negotiations of Respondent Shellmaker are
handled by the Association. The bargaining unit employ-
ees' wages and fringe benefits are controlled by the col-
lective-bargaining agreement between the Union and the
Association. The terms and conditions of employment of
the office and management personnel were apparently set
by William Boland and his supervisors. The Port
Sonoma Marina employees have never been covered by
the collective-bargaining agreement between the Union
and the Association. The terms and conditions of em-
ployment apparently were set by William Boland and his
supervisors. There is no evidence that Bryan or Dolores
Boland were involved in the labor relations of Respond-
ent Shellmaker.
4. Other factors
The General Counsel and the Charging Party argue
that the dealing between the Bolands are anything but
arm's length and, therefore, that the establishment of Re-
spondent Bayside was simply a device for Respondent
Shellmaker to avoid the collective-bargaining agreement.
First, Respondent Shellmaker commenced building the
Turnabout knowing that it would not operate the dredge
itself. Thereafter, the Shellmaker profit-sharing plan fi-
nanced the construction of the dredge. The profit-shar-
ing plan sold the dredge to Lara Enterprises, controlled
by Dolores Boland, one of the two profit-sharing plan
trustees. The General Counsel and the Charging Party
752
SHELLMAKER, INC.
argue, based on the contract between Lara Enterprises
and Respondent Bayside, that the value of the Turnabout
was $150,000 rather than the $100,000 paid to the profit-
sharing plan. But, as noted earlier, the Turnabout was a
new piece of equipment and its fair market value was not
established.
Second, Respondent Bayside was capitalized with only
$900. After a bank would not lend money to Respondent
Bayside, the Shellmaker profit-sharing plan granted Re-
spondent Bayside a $50,000 unsecured loan. When Re-
spondent Bayside needed more money, the profit-sharing
plan rewrote the loan for $60,000, at a lower interest
rate.
Third, in December, Respondent Shellmaker paid
$9,500 to Respondent Bayside for certain pump parts.
Respondent Bayside had previously received these pump
parts from William Boland, free of charge. William
Boland testified that he received these pump parts as a
personal gift from Olin Jones, a contractor in the sand
business for whom William had done favors in the past.
Respondent Bayside did not use the parts and, several
months later, William Boland decided to purchase the
parts for Respondent Shellmaker. William testified that
he gave the parts to Respondent Bayside to help Dolores
and Bryan Boland. According to William, Jones had
given the parts to him, personally, rather than to Re-
spondent Shellmaker.
The General Counsel and the Charging Party argue
that the transactions involving the Turnabout were for
less than fair market value. However, the Turnabout is a
new piece of equipment and fair market value has not
been established for its lease or its services. Further, the
sale of the Turnabout was to Lara Enterprises and the
lease from Lara Enterprises to Respondent Bayside.
These significant transactions involved a third company,
not alleged as an alter ego of either Respondent. The
General Counsel and the Charging Party also argue that
the dealings between Respondent Bayside and Lara En-
terprises are less than arm's length. However, these facts
appear to be irrelevant in light of the omission of Lara
Enterprises from the third amended charge and the com-
plaint. Lara Enterprises has dealt with the Union in the
past but only on a project-by-project basis. It has had no
continuing relationship with the Union.
D. The Bargaining Unit
As stated earlier, based on the allegation that Respond-
ents are a single employer, the General Counsel contends
that the multiemployer bargaining agreement must be ex-
tended to the employees of Respondent Bayside. Re-
spondents argue, on the other hand, that, even if Re-
spondents are a single employer, the employees of Re-
spondent Bayside constitute a separate bargaining unit.
As stated earlier, Respondent Shellmaker has a long
history of collective bargaining with the Union through
the Association. Respondent Bayside has never bargained
with the Union either individually or as part of the Asso-
ciation. Lara Enterprises has had a bargaining history
with the Union, separate from Respondent Shellmaker
and the Association. Port Sonoma Marina employees
have not been included in the bargaining unit.
The employees of Respondents work separately for
different customers. There is no evidence that the work
performed by Respondents ever intersects or overlaps.
The work performed by Respondent Bayside's employ-
ees apparently requires less skill and could easily be per-
formed by Respondent Shellmaker's employees. Re-
spondent Bayside's employees most likely could perform
deckhand work for Respondent Shellmaker. The only
evidence of interchange or contact between the employ-
ees of the two companies occurred when an employee of
Shellmaker and two employees of Bayside were sent for
training to Williams & Lane Diesel School. Respondent
Bayside paid for the training of all three employees and
was immediately reimbursed by Respondent Shellmaker
for the cost attributed to its employee. As stated earlier,
there is no evidence of common supervision of the em-
ployees.
Finally, there is no evidence that Respondent Shell-
maker's business decreased or that Respondent Shell-
maker's employees lost any work by reason of Respond-
ent Bayside's entry into business.
II. ANALYSIS
"A company which has not agreed to be bound by the
collective-bargaining contract of another company may
nevertheless be held to that contract if it is an alter ego
of the signing company or if it may be said to constitute
a single employer with that company." Peter Kiewit Sons'
Co. and South Prairie Construction Co., 206 NLRB 562
(1973), vacated on other grounds 518 F.2d 1040 (D.C.
Cir. 1975), affd. in part, vacated in part, and remanded,
425 U.S. 800 (1976). The Board and the courts have
often used the terms alter ego and single employer inter-
changeably. The United States Supreme Court delineated
what it meant by alter ego in Howard Johnson Co., Inc. v.
Detroit Local Joint Executive Board, Hotel & Restaurant
Employees, etc., 417 U.S. 249, 259, fn. 5 (1974):
It is important to emphasize that this is not a case
where the successor corporation is the "alter ego"
of the predecessor, where it is "merely a disguised
continuance of the old employer." Southport Petro-
leum Co. v. N.L.R.B., 315 U.S. 100, 106 (1942).
Such cases involve a mere technical change in the
structure or identity of the employing entity, fre-
quently to avoid the effect of the labor laws, with-
out any substantial change in its ownership or man-
agement.
The legal principles to be applied in determining
whether two factually separate employers are in fact
alter egos are well settled. The Board has found alter ego
status where two enterprises have "'substantially identi-
cal' management, business purpose, operation, equipment,
customers, and supervision, as well as ownership." Denzil
S. Alkire a sole proprietorship; Upshur Enterprises, Inc.;
and Mountaineer Hauling & Rigging; Inc., 259 NLRB
1323 (1982); Crawford Door Sales Company, Inc., 226
NLRB 1144 (1976).
l1 See also Don Burgess Construction Corporation d/b/a Burgess Con-
structrion, 596 F.2d 378 (4th Cir. 1979), enfg 227 NLRB 765 (1977).
753
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Similarly, in determining whether enterprises consti-
tute a single employer the controlling criteria are: (1) in-
terrelation of operations; (2) common management; (3)
centralized control of labor relations; and (4) common
ownership. Bacchus Wine Cooperative, Inc., and Bacchus
Wine International, 251 NLRB 1552 (1980); N.L.R.B. v.
Don Burgess Construction Corp., supra; Radio & Television
Broadcast Technicians Local Union 1264, IBEW v. Broad-
cast Service of Mobil, Inc., 380 U.S. 255 (1965); Sakrete of
Northern California. Inc., 137 NLRB 1220 (1962), enfd.
332 F.2d 902 (9th Cir. 1964), cert. denied 379 U.S. 961
(1965). The Board has stressed the first three factors, as
well as the presence of control of labor relations. Sak-
rete, supra, 332 F.2d at 905, fn. 5. However, no one of
the factors is controlling, nor need all of the "controlling
criteria" be present. Don Burgess, supra at 384; N.L.R.B.
v. Welcome-American Fertilizer Company, 443 F.2d 19, 21
(9th Cir. 1971). Single employer status, for purposes of
the Act, depends upon all of the circumstances of the
case and is characterized as an absence of an "arm's
length relationship found among unintegrated compa-
nies." Bacchus Wine, supra; Blumenfeld Threatres Circuit,
et al., 240 NLRB 206, 215 (1979), enfd. 626 F.2d 865 (9th
Cir. 1980).
In applying the above principles to the facts of this
case, I note that the General Counsel carries an affirma-
tive burden of proof and must show by a preponderance
of the affirmative evidence on the record as a whole that
the allegations of the complaint are in truth supported.
See, e.g., Western Tug and Barge Corporation, 207 NLRB
163, fn. 1 (1973); Service Marine Co., 189 NLRB 741
(1971); L'Eggs Products, Inc. v. N.L.R.B., 619 F.2d 1337
(9th Cir. 1980). Suspicion alone does not suffice to prove
an unfair labor practice. Kings Terrace Nursing Home and
Health Related Facility, 229 NLRB 1180 (1977); Cedar
Rapids Block Co., Inc. and Cedar Sand and Gravel Co. v.
N.L.R.B., 332 F.2d 880, 885 (8th Cir. 1964).
The formation of Respondent Bayside is certainly sus-
picious. The idea to create the business originated with
William Boland. Bryan Boland moved to Port Sonoma
and rented a trailer at a favorable rate, while awaiting
the construction of the Turnabout. Until April 1981,
Bryan Boland, awaiting the construction of the Turna-
bout, was an employee on Respondent Shellmaker's pay-
roll. It is inconceivable that the trustees of an employee
profit-sharing plan would lend $50,000 to a company
with assets of only $900 without any collateral. Still
worse, this undercapitalized company was headed by a
20-year-old inexperienced president. However, this loan
was in fact made and later renegotiated with a more fa-
vorable interest rate to Respondent Bayside. Finally,
William Boland gave certain pump parts to Respondent
Bayside without charge and later purchased these same
parts for Respondent Shellmaker at a cost of $9,500.
However, beyond William Boland's aid in starting his
nephew Bryan in business, there is no evidence that Re-
spondent Bayside was in business to benefit Respondent
Shellmaker rather than itself. William Boland divested
himself of any ownership interest in Respondent Bayside
3 months prior to its commencement of operations. Re-
spondent Bayside is apparently operating in the red but
there is no evidence that it is drawing upon the assets of
Respondent Shellmaker. Thus, it appears that important
elements for the finding of alter ego are missing.
Applying the applicable law to this case, beyond the
suspicions that Bryan Boland is not operating Respond-
ent Bayside, there is not a preponderance of the evidence
that William Boland is operating the Company or that
the two Companies constitute a single employer. As set
forth above, the evidence does not prove interrelation of
the operation of Respondents. Respondents have main-
tained separate books and records. They have separate
customers. In dealing with Vista Bahia, Respondents
clearly held themselves out as separate business entities
and rebuked efforts by Vista Bahia to involve William
Boland in Respondent Bayside's business dispute. Re-
spondent Shellmaker pays Respondent Bayside for
dredging work. While the General Counsel and the
Charging Party argue that such work is performed for
less than market value, no evidence of market value has
been established. Moreover, since the Turnabout is
unique and lacks experience, market value of its services
would be difficult to determine. With the exception of
Respondent Bayside's starting up period, there is little or
no contact between the employees of Respondent Bay-
side and Respondent Shellmaker. The employees are sep-
arately supervised.
I also find that common ownership or management of
Respondents has not been proven. While the General
Counsel and the Charging Party strongly argue that
Bryan Boland could not possibly manage the business of
Respondent Bayside and that, therefore, William Boland
must be managing the business behind the scenes, no
hard evidence of William's participation in Respondent
Bayside's business has been produced. I find it particular-
ly signficant that, although Respondent Bayside had been
operating for a year, no evidence was adduced of any
management or control asserted by William Boland over
Respondent Bayside's business opertions. William Boland
divested himself of an ownership interest in Respondent
Bayside prior to its commencement of operations.
The evidence does not show any common control of
labor relations, the most significant criteria for determin-
ing single employer status. Bryan Boland controls labor
relations for Respondent Bayside. No evidence was ad-
duced to establish that William Boland or any other offi-
cial of Respondent Shellmaker was involved in Respond-
ent Bayside's labor relations. There is also no evidence
that Bryan Boland was involved in Respondent Shell-
maker's labor relations.
The evidence strongly suggests that Respondent Bay-
side would never have started in business without the aid
of William Boland. 2 However, I do not find that fact to
be conclusive of the result herein. Even if William
Boland lent or gave his nephew the funds to go into
business, it would not necessarily determine alter ego or
single employer status. What appears critical in such a
case is whether there were any strings attached to such a
Is Similarly, Respondent Bayside would not be in business but for the
aid of Dolores Boland. If Lara Enterprises had chosen to operate the
Turnabout itself or to lease the dredge to another company, Respondent
Bayside would not be in business. Respondent Bayside's contractor's li-
cense lists Dolores Boland as responsible managing officer.
754
SHELLMAKER, INC.
loan or gift. In other words, there must be some control
retained by William Boland to support a finding of alter
ego or single employer.13 In sum, I find the record evi-
dence insufficient to support a finding that William
Boland retained control over Respondent Bayside. Ac-
cordingly, I find that the General Counsel has failed to
sustain its burden of proof.
Upon the foregoing findings of fact, analysis, and the
entire record, I make the following:
CONCLUSIONS OF LAW
1. The employer-members of Dredging Contractors
Association are employers engaged in commerce and in a
business affecting commerce within the meaning of Sec-
tion 2(6) and (7) of the Act.
2. By virture of its membership in said Association,
Respondent Shellmaker is an employer engaged in com-
merce within the meaning of Section 2(6) and (7) of the
Act.
3. Operating Engineers, Local Union No. 3, Interna-
tional Union of Operating Engineers, AFL-CIO, is a
labor organization within the meaning of Section 2(5) of
the Act.
1 In Freiderich Truck Service. Inc. and FTL. Inc., 259 NLRB 1294
(1982), the Board held that the mere fact that two companies were deal-
ing through family members did not require a finding of alter ego. Absent
evidence that a loan transacted between a father and his two sons was
not conducted in an arm's length atmosphere, the Administrative Law
Judge refused to "speculate" that the father retained financial control
over his sons' business entcrpnse.
4. The employees of the employer-members of the As-
sociation performing work within the scope of the Asso-
ciation-Union contract constitute an appropriate unit
within the meaning of Section 9(b) of the Act.
5. The General Counsel has failed to establish by a
preponderance of the evidence that Respondent Shell-
maker and Bayside, as alleged in the complaint, violated
Section 8(aX)(5) and (1) of the Act by failing or refusing
to apply the collective-bargaining agreement between the
Union and the Association to the employees of Respond-
ent Bayside.
Upon the foregoing findings of fact, conclusions of
law, and the entire record in this case, and pursuant to
Section 10(c) of the Act, I hereby issue the following
recommended:
ORDER 4
The allegations of the complaint that Respondent
Shellmaker, Inc., and Bayside Dredging Co., Inc., have
engaged in unfair labor practices having not been estab-
lished, the complaint is dismissed in its entirety.
'4 All outstanding motions inconsistent with this recommended Order
hereby are denied. In the event no exceptions are filed as provided by
Sec. 102.46 of the Rules and Regulations of the National Labor Relations
Board, the findings, conclusions, and recommended Order herein shall, as
provided in Sec. 102.48 of the Rules and Regulations, be adopted by the
Board and become its findings, conclusions, and Order, and all objections
thereto shall be deemed waived for all purposes.
755