SRC Painting, LLC

National Labor Relations Board - Administrative Judge Opinions

Sep 14, 2005

30-CA-016577 (N.L.R.B. Sep. 14, 2005)

JD(SF)-62-05
Pleasant Prairie, WI

UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD
DIVISION OF JUDGES

SRC PAINTING, LLC, PBN, LLC, and
LIQUID SYSTEMS, and JAMES
WIERZBICKI, KAREN WIERZBICKI, EDMUND
WIERZBICKI, ERIC WIERZBICKI, CONSTANCE
WIERZBICKI, and ERIN WIERZBICKI,
INDIVIDUALLY

and Cases 30–CA–16577–1
30–CA–16813–1
INTERNATIONAL UNION OF PAINTERS AND
ALLIED TRADES, DISTRICT COUNCIL NO. 7,
AFL–CIO

Miann B. Navarre, Esq. and Brent E.
Childerhose, Esq., for the General Counsel.
Franklin M. Gimbel, Esq. and Oliver Kaufman, Esq.
(Gimbel, Reilly, Guerin & Brown), of Milwaukee,
Wisconsin for Respondents, James, Eric, Karen,
and Constance Wierzbicki.
Frederick L. Zievers, Esq. (Zievers, Marry &
Dowse, S.C.), of Kenosha, Wisconsin for
Respondent, Erin Wierzbicki.
Piermario Bertolotto, Esq. and William Nickolai, Esq.
(Rizzo & Diersen, S.C.), of Kenosha, Wisconsin for
Respondents, Edmund Wierzbicki and Liquid
Systems, LLC.
Donald H. Cardinali, Business Representative,
for the Charging Party.

DECISION

Statement of the Case

JOSEPH GONTRAM, Administrative Law Judge. This case was heard in Milwaukee,
Wisconsin, on December 6–9, 2004 and March 6–8, 2005. The International Union of Painters
and Allied Trades, District No. 7, AFL–CIO (the Union or Charging Party) filed charge 30–CA–
16577 against SRC, LLC1 on September 3, 2003. The charge was amended four times, most
recently on August 19, 2004.2 A complaint was issued on March 30. The Union filed charge 30–
1 In the hearing, this company was called SRC, Inc. Accordingly, that designation will be
used in this decision.
2 All dates are in 2004 unless otherwise indicated.
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CA–16813 against Liquid Systems on April 28. The charge was amended twice, most recently
on August 19. On September 24, an amended and consolidated complaint was issued in both
cases.

The complaint alleges that PBN, LLC (PBN) was started as a disguised continuation or
alter ego of SRC Painting, LLC, (SRC Painting), and that Liquid Systems, in turn, was started as
a disguised continuation or alter ego of SRC Painting and PBN. The complaint alternatively
alleges that PBN is a successor to SRC Painting, and Liquid Systems is a successor to SRC
Painting and PBN. The complaint alternatively alleges that SRC Painting, PBN, and Liquid
Systems constitute a single employer.

The complaint also alleges that James Wierzbicki, his wife Karen, his son Eric and Eric’s
wife Constance, his son Edmund, and his daughter Erin (collectively, the Wierzbickis) acted as
alter egos of PBN, SRC Painting, and Liquid Systems, and are personally liable for remedying
the unfair labor practices of those companies.

The unfair labor practices alleged in the complaint are that the Respondents (1) violated
Section 8(a)(1) and (5) of the National Labor Relations Act (the Act) by failing and refusing to
transmit dues to the Union and contributions to the Union’s health, welfare, vacation,
apprenticeship, and pension funds, by refusing to honor the terms of the collective-bargaining
agreement with the Union, and by refusing to recognize and bargain with the Union; (2) violated
Section 8(a)(1) by threatening an employee with discharge if the employee did not relinquish his
union apprenticeship; and (3) violated Section 8(a)(1), (3), and (4) by laying off an employee
and by eliminating unit employees in order to reduce the Respondents’ obligations under the
Act.

James, Eric, and Erin admit that they are supervisors and agents of SRC Painting and
PBN; that they have controlled the day-to-day management, labor relations policies, business
operations, and financial resources of SRC Painting and PBN; that they have failed to maintain
the legal identities of SRC Painting and PBN distinct from themselves; that they have
commingled their personal assets with the corporate assets of SRC Painting and PBN; and that,
by failing to maintain the separate corporate identities of SRC Painting and PBN, they have
engaged in fraud, injustice, and evasion of their legal obligations under the Act. (Amended and
consolidated complaint, pars. 7, 8, 10, and 12; Tr. 746–749). They also admit that PBN is an
alter ego of SRC Painting. Edmund admits that he is a supervisor and agent of Liquid Systems
pursuant to Section 2(11) and (13) of the Act.

With respect to identifying the party or parties who would be liable for the alleged unfair
labor practices, the remaining issue for decision is whether Liquid Systems is the alter ego of or
successor to or single employer with SRC Painting or PBN. Nevertheless, in order to appreciate
and understand the relationship of Liquid Systems to SRC Painting and PBN, it is necessary to
describe those companies and the Wierzbickis’ involvement with SRC Painting and PBN.
Moreover, while the Respondents do not concede the unfair labor practice charges, they have
not seriously disputed the facts underlying the charges and have not addressed these charges
in their posthearing briefs.

On the entire record, including my observation of the demeanor of the witnesses, and
after considering the briefs filed by the General Counsel, the Wierzbickis, and Liquid Systems, I
make the following

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Findings of Fact

I. Jurisdiction

SRC Painting and PBN were engaged in the painting subcontracting business and had
an office and place of business at the residence of Eric Wierzbicki at 3020 94th Place, Pleasant
Prairie, Wisconsin. Liquid Systems is engaged in the painting subcontracting business and has
a place of business at the residence of Edmund Wierzbicki at 3142 94th Place, Pleasant Prairie,
Wisconsin. Liquid Systems admits and I find that it is an employer engaged in commerce within
the meaning of Section 2(2), (6), and (7) of the Act. Moreover, SRC Painting and PBN engaged
in the same business as Liquid Systems, although SRC Painting and PBN had more business
and a larger work force than Liquid Systems. Accordingly, I find that SRC Painting and PBN are
employers engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act.3
The Union has represented the following unit employees of SRC Painting, and has entered into
a series of collective-bargaining agreements with SRC Painting: “All painters, drywall finishers,
wall coverers, and similar or related classifications, excluding guards and supervisors as defined
in the Act.” I find that the Union is a labor organization within the meaning of Section 2(5) of the
Act.

II. Alleged Unfair Labor Practices

A. Background

James Wierzbicki is 55 years old, and he has been married to Karen Wierzbicki for 37
years. James and Karen have three children, Edmund (31 years old), Eric (28 years old), and
Erin (26 years old). The last time James reported any income from working was approximately
1985, when he was about 35 years old. Prior to 1985, James was in the painting business. He
was injured in a car accident in approximately 1985. He claims to be disabled as a result of that
car accident, and has collected social security disability benefits since that time. Despite his
claim to the Social Security Administration that he is disabled, James refers to his working
status as “retired.” (Tr. 32.)4

Since approximately 1985, James has owned no real property. Nor has he owned or
held any liquid personal property, such as bank accounts, although, curiously, when he was
asked if he held any bank accounts, he replied, “None. None in my name.” (Tr. 33.) He later
corrected that statement by denying he held bank accounts in anyone else’s name. Since
approximately 1985, James has not owned any vehicles or any other item of personal property
that has value or could be converted to cash. James has not filed Federal income tax returns for
at least the past 4–5 years

3 The amount and extent of Liquid Systems’ business is equal to or less than SRC Painting
and PBN because the business of Liquid Systems appears to be limited to its subcontracting
work for New England Builders at the Harbor Park project, while SRC Painting and PBN had
work in addition to the Harbor Park project. SRC Painting and PBN filed no answer to the
present complaint and were not represented at the hearing. However, in light of the admissions
of James, Eric, and Erin, who were present and represented at the hearing, regarding their
control of and fraudulent use of SRC Painting and PBN, all parties had notice of the
jurisdictional allegations and sufficient opportunity to oppose or litigate these jurisdictional
allegations.
4 References to the transcript of the hearing are designated as Tr.
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James claims to be disabled and unable to work. James has made this claim to the
Social Security Administration, and as a result, he receives approximately $1400 per month
from the Social Security Administration for his claimed disability. Karen works part-time as a gift
shop clerk. She works 20 hours a week and earns approximately $9 per hour. Despite this
limited income, James and Karen reside in a single-family house, and they drive and have
unrestricted access to at least three vehicles. Their sons, Eric and Edmund, own James and
Karen’s residence; their daughter, Erin, owns the cars they drive. James spends much of his
time at a house in Trego, Wisconsin. Edmund owns the Trego property. The ownership and
location of the Wierzibickis’ residences are:

Name Residence Owner
James, Karen, and Erin 6801 22nd Avenue, Kenosha, WI Eric and Edmund
James and Karen Ridge Road, Trego, WI Edmund
Eric and Constance 3020 94th Place, Pleasant Prairie, WI Constance
Edmund 3142 94th Place, Pleasant Prairie, WI Erin

James Wierzbicki is a forceful, intelligent, self-confident individual who is devoted to his
family and to the painting business he has built around his family. And while his demeanor
displayed these characteristics, his demeanor just as clearly displayed an uninhibited mendacity
when testifying about his and his family’s business affairs. His family members followed his
lead.

B. The Wierzbicki businesses

1. SRC, Inc.

Southport Remodeling and Construction, Inc. (SRC, Inc.) was started in 1994.5
Throughout SRC, Inc.’s existence, its offices were located at James Wierzbicki’s residence,
6801 22nd Avenue, Kenosha, Wisconsin. SRC, Inc.’s business was primarily painting, although
it also did some remodeling. Eric Wierzbicki testified that he started SRC, Inc. when he was
approximately 17 years old, and that he was the president and 100 percent owner. Eric testified
that the only help his father provided to the business was assistance on some bids. That
testimony is not credible.6 SRC, Inc. did work similar to the work James did before he began

5 Eric testified that he obtained the company, which was inactive, from a friend, and that he
did not pay any money for the transfer. In this decision, the start of SRC is deemed to have
occurred on the date of this transfer.
6 All facts found here are based on the record as a whole and on my observation of the
witnesses. The credibility resolutions have been made from a review of the entire testimonial
record and exhibits with due regard for logic and probability, the demeanor of the witnesses,
and the teaching of NLRB v. Walton Mfg. Co., 369 U.S. 404 (1962). As to those witnesses
testifying in contradiction of the findings, their testimony has been discredited, either as having
been in conflict with the testimony of reliable witnesses or because it was incredible and
unworthy of belief or as more fully explained in the text. With respect to the testimony regarding
what occurred at meetings or discussions with members of the Wierzbicki family, I have also
taken into account the economic dependence of employees on employers, with awareness of
an employee’s attentiveness to intended implications of his employer’s statements which might
be more readily dismissed by a disinterested party. See NLRB v. Gissel Packing Co., 395 U.S.
575, 617 (1969).
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collecting social security disability benefits. He had no previous experience starting or operating
a business, bidding for or obtaining jobs, handling financial and administrative matters, or
managing employees.

Eric testified that he does not “think” his father was paid for his work on behalf of SRC,
Inc. (Tr. 241.) That testimony is not credible. Eric hedged his testimony because he undoubtedly
knew that his father could not work and get paid for it while he was collecting social security
disability benefits. The only reason Eric would hedge on the answer is if James was paid
because there would be no need to qualify the answer if James was not paid. Moreover,
whether his father received compensation from SRC, Inc. is something Eric would likely
remember without regard to Eric’s ownership of the company. Eric’s testimony that he does not
think his father was paid is not credible.

Eric Wierzbicki manages his personal affairs much like his father. Eric is married to
Constance and has one child. Eric claims that he has no income. He has not filed a Federal
income tax return since at least 2000. He does not have a bank account, and he has not had
one since at least 2000. Eric owns no vehicles, but like his father, he currently drives any one of
three vehicles. When asked if he currently has any assets, Eric replied, “Nope.” (Tr. 233.) Eric’s
wife, Constance, like his mother, is employed. Constance has been employed as a medical
technologist for approximately 5 years. She claims to work about 48 to 56 hours per week and
earns $21.60 per hour. Constance drives either of two vehicles.

There were two supervisors/managers at SRC, Inc.—James and Eric Wierzbicki. Eric
did painting work and he acted as the foreman. James supervised SRC, Inc.’s operations, he
supervised the completion of the contracts, and he supervised the work force. One of the
workers James hired was Andrew Kellerman. James set Kellerman’s wage at between $8–10
per hour. Kellerman was about 18 years old when James hired him. Kellerman was a high
school friend of Eric and had become friends with the Wierzbicki family.

2. SRC Painting, LLC

SRC, Inc. ceased operating in the summer of 2000, and the business was taken over by
SRC Painting. In July or August 2000, James Wierzbicki told Kellerman that he wanted to close
SRC, Inc. because the Painter’s Union District Council 30, a union from Chicago, was suing it.
James said he wanted to form a new company, which would be called SRC Painting, LLC.
James told Kellerman that he (James) needed help, and he wanted Kellerman to be the
figurehead president and nominal owner of SRC Painting. James would be the real owner as
well as “the brains of the operation.” (Tr. 623.) In return, James promised Kellerman a car, the
use of a gas card, and an increase in pay.

SRC Painting was essentially a continuation of SRC, Inc. The same people were in
control of both companies, many of the employees were the same, and the same job that
comprised approximately 90 per cent of SRC, Inc.’s work, viz., the contract with New England
Builders at Harbor Park, comprised a similar percentage of SRC Painting’s work. SRC, Inc.
transferred equipment to SRC Painting, but there is no evidence that any consideration was
paid by SRC Painting for the transfer.

James used his personal attorney, Frank Parise, who is related to James, to draw up the
documents making Kellerman the figurehead president and owner of SRC Painting. Included in
those documents was a hold-harmless agreement signed by James and Kellerman, which
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provided that Kellerman had no control over SRC Painting, that Kellerman could not make any
business decisions for the company without the written permission of James, and that
Kellerman was not responsible for SRC Painting’s debts.

The General Counsel called Parise as a witness and subpoenaed the hold-harmless
agreement, but Parise refused to produce the agreement because of James and Erin’s
assertion of the attorney-client privilege. Moreover, Parise refused to produce the agreement,
either to Kellerman or the General Counsel, in spite of his testimony that Kellerman was his
client. Kellerman believes that Parise never represented him. Kellerman never sought
representation from Parise, he never paid Parise any money, and he never signed a fee
agreement. He had never met Parise until the day James drove him to Parise’s offices. Several
times, Kellerman asked Parise to provide him with a copy of the hold-harmless agreement and
any other documents Kellerman may have signed, his most recent request being at the hearing.
Parise refused every request.

Parise either represented Kellerman, in which event he was obligated to provide his
client with a copy of whatever documents his client signed and requested, or Parise did not
represent Kellerman, in which event the attorney-client privilege would not shield such
documents from disclosure because confidentiality would be waived by James, Erin, and
Parise’s initial disclosure of the document to Kellerman. Nevertheless, Parise refused to
produce the documents. Parise either failed to appreciate the conflict of interest he faced, or he
did appreciate it and elected to disobey the Board’s subpoena at the urging of his family
members, James and Erin. Without regard to the impropriety of Parise’s actions, Kellerman
generally described the provisions of the hold-harmless agreement. Moreover, Kellerman was a
credible witness, and his description of the hold-harmless agreement is consistent with his
testimony describing James’ conception and formation of SRC Painting.

As noted, it is not necessary to consider the impropriety of Parise’s actions in accepting
the credible testimony of Kellerman regarding the hold-harmless agreement. Nevertheless,
Parise’s actions tend to corroborate the complete control exercised by James Wierzbicki in all
matters pertaining to James’ and his family’s businesses. Moreover, since Kellerman had
already testified, before Parise testified, about some of the provisions of the hold-harmless
agreement, and since James, Eric, and Erin would concede that they controlled the
management, policies, and operations of SRC Painting and PBN, there was no apparent reason
for the Wierzbickis to refuse to produce the agreement unless it contained provisions in further
contravention of their final position in this case, viz., that James, Eric, and Erin had no authority
in or involvement with Liquid Systems and that Liquid Systems was not an alter ego of or
successor of SRC Painting or PBN.

Throughout its existence, the offices of SRC Painting were located at Eric’s residence,
3020 94th Place, Pleasant Prairie, Wisconsin, in a separate room in the back of the residence.
Kellerman was only allowed in SRC Painting’s offices when another member of the Wierzbicki
family was there. Kellerman’s actual position at SRC Painting was the lead painter and
occasional foreman, and he would sometimes run errands for James. Erin was the office
manager of SRC Painting. She kept the books, she distributed paychecks, and she paid union
benefits. Edmund worked mostly as a painter. Eric supervised all the jobs except for the Harbor
Park job. And, as James had done for SRC, Inc., James oversaw all operations of SRC
Painting.

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Erin is currently a full-time student, and she is collecting State unemployment
compensation from her employment at SRC Painting.7 Erin worked at SRC Painting from 2000
to 2003, and during this time she claims that she was paid $1000 a week. However, she
testified in a deposition before the hearing that she was paid only $15 an hour at SRC Painting,
but this is just one of many instances where her testimony does not appear to be accurate.

Although Erin kept SRC Painting’s books, she professed ignorance about many of the
entries she made in those books. Her entries reflect frequent payments from SRC Painting to
the Wierzbickis, many labeled as rent and loan repayments, but also including Erin’s salary of
more than $1000 per week. (In salary alone, Erin made more than twice as much as Kellerman.)
Included in these payments was $2000 per month paid to Constance for the use of the back
room in her residence and $2500 per month to Edmund for allegedly storing paint supplies in his
garage. Edmund also received payments from SRC Painting labeled as interest income, rent,
general, accounts payable, payroll, and split. Constance received payments labeled as
reimbursed expenses, rent, accounts payable, and general. Erin received payments labeled as
note payable Erin, note payable of[ficer], split, payroll, general, misc., and accounts payable.
Karen Wierzbicki received at least one payment labeled as accounts payable, she received a
$1000 payment that she could not explain, and she received a $4000 payment labeled as note
payable Erin. Some of the payments to Edmund, Constance, and Erin were made without
corresponding check numbers (e.g., G.C. Exh. 23, p. 52), indicating that such payments were
simply a means of generating cash for Edmund, Constance, and Erin. (See below).

Erin acknowledged that SRC Painting’s books show that she loaned over $240,000 to
the company in 2002, for which she received many corresponding “repayments,” but she offered
no credible explanation of where she allegedly obtained $240,000 to lend to SRC Painting.
Moreover, there are no rental or loan documents that would tend to corroborate the validity or
accuracy of any such payments or loans to or from Erin or the Wierzbickis. At times, Erin
claimed to have borrowed money from SRC Painting, but she could not explain why or what she
did with the money. (Tr. 176.) Erin also claimed that she borrowed $30,000 from SRC Painting
to build her house, but there was no documentation of or terms to the alleged loan, such as
interest rate or due date. Other times, the books show that payments were made directly to a
Wierzbicki, such as Edmund, but Erin, who maintained these books, had no explanation for the
payments. (Tr. 166.)

In spite of Erin’s position as the office manager and the person who kept the books,
there were many entries in SRC Painting’s financial records, including payments to Erin and
other members of the Wierzbicki family, which she would not or could not explain. On the other
hand, and thanks to the explanation by Andrea Rogowski, the office manager of PBN who had
been instructed by Erin, Erin did have a method for obtaining cash from SRC Painting. This
cash was used, at least in part, to pay employees’ wages, thus enabling the Wierzbickis to
further evade the company’s obligations to other governmental authorities. Erin generated cash
by designating such cash withdrawals as fictitious expenses of and payments to SRC Painting’s
supplier, ICI.8 These fictitious expenses are noted in SRC Painting’s books by the absence of a
check number.
7 Notwithstanding Erin’s application to the State of Wisconsin for unemployment
compensation benefits, there is no evidence that she was ever discharged or involuntarily laid
off by SRC Painting. Indeed, the evidence shows that she left her employment with SRC
Painting and PBN voluntarily in order to attend school.
8 Using fictitious payments to ICI was the way Erin instructed Andrea Rogowski to generate
cash when Erin trained Rogowski on keeping the books for PBN.
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Erin, James, Eric, and Edmund were not credible witnesses. They have frequent contact
with one another; for example, James speaks with Edmund every day, they all live near each
other and in each other’s houses, they are closely involved in the operation of the family’s
businesses, and they receive all their income from those businesses. From the similarity of their
testimony, it seemed as if James, Eric, Erin, and Edmund met before the hearing and discussed
what they should say and not say at the hearing. For example, James, Eric, and Erin
consistently maintained throughout their testimonies that Kellerman was the owner and
president of SRC Painting and the person who ran the company and negotiated their pay and
the rent they received from SRC Painting. However, after the General Counsel presented
evidence showing that the Wierzibickis controlled the operations of SRC Painting and PBN,
James, Eric, and Erin admitted that they did control the day-to-day management, labor-relations
policies, business operations, and financial resources of SRC Painting and PBN. The
Wierzbickis’ contrary testimony was consistent, but misleading, and was designed to give a
false impression of the persons—the Wierzbickis—who actually controlled and manipulated the
corporations.

Erin exhibited a good recollection of matters when she was asked questions by the
Respondents’ attorneys, but a poor recollection when she was asked questions by the General
Counsel. She was evasive, as were James, Eric, and Edmund. And, the Wierzbicki family, led
by James, was present throughout her testimony. Indeed, the family members, including James,
were present when each of the Wierzbickis testified. Moreover, Edmund was noticeably hostile
to the General Counsel throughout his testimony. He seemed to take offense that the
government, through the present complaint, should be involved in his family’s businesses, and
especially this proceeding involving a charge brought by a union.9
Continued
9 An example of Edmund’s incredible testimony, which also, perhaps, shows the attitude he
exhibited on the witness stand is the following:
Q. Now, did you ever loan PBN any money?
A. I believe so.
Q. Okay. When did that occur?
A. Probably when PBN was a company.
Q. Okay, so—you said that they ended in November of 2003 and they
operated for about a year—so roughly some time in 2003, how much money did
you loan PBN?
A. I don’t remember.
Q. Could you give us a ballpark?
A. I don’t remember.
Q. Who did you loan the money to.
A. PBN.
Q. And what kind of documents do you have to memorialize the loan?
A. Whatever you have probably got there. I don’t have any.
Q. Who did you negotiate the loan with—what person?
A. I don’t remember
Q. What interest rate was given to the loan?
A. Don’t remember.
Q. So there was no written documentation to accompany any loan that you
provided to PBN, is that correct?
A. I didn’t say that. I said I don’t remember.
Q. What kind of work did you perform for PBN?
A. I didn’t work for PBN.
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_________________________

Another example of the Wierzbickis’ consistency while advocating a misrepresentation is
that each of the Wierzbickis concealed the fact that Kellerman was merely the nominal president
of SRC Painting, and that he had no real ownership or authority in the corporation. Erin claimed,
for example, that she negotiated her salary with Kellerman and that she conferred with
Kellerman on the company’s financial matters. This testimony was false and was intended to
convey the false impression that Kellerman controlled SRC Painting and that the Wierzbickis did
not. The Wierzbickis testified similarly with respect to PBN and Scott Maurer. (See below.)
However, after other witnesses testified and revealed that the Wierzbickis controlled SRC
Painting and PBN, James, Eric, and Erin conceded their actual control of SRC Painting and
PBN. However, these concessions were not made until after James, Eric, and Erin testified and
knowingly gave false impressions about their roles and Kellerman’s role in SRC Painting, as
well as their roles and Maurer’s role in PBN.

Although James, Eric, and Erin conveyed false impressions about their authority and
control over SRC Painting and PBN, their testimonies concerned an issue they had not yet
conceded. Edmund, on the other hand, testified in a similar false and misleading fashion
concerning his family’s involvement with SRC Painting and PBN, but his testimony was given
after the concessions were made. Thus, after James, Eric, and Erin conceded that they
controlled the day-to-day management, labor relations policies, business operations, and
financial resources of SRC Painting and PBN, Edmund testified that he can only guess that his
brother Eric owned SRC, Inc., but he knows that Kellerman owned SRC Painting and Maurer
owned PBN (Tr. 757–763).

Many other portions of Edmund’s testimony are not credible. For example, Edmund
claims he does not remember if he ever received any money from SRC Painting except wages
for painting, despite SRC Painting’s records, prepared by his sister, Erin, showing that he
received substantial payments under different labels such as Interest Income, Rent, General,
and Accounts Payable. Edmund also states that he does not remember whether he ever loaned
money to SRC Painting. This statement is not plausible. Moreover, it is not credible, especially
in view of Edmund’s attempt throughout his testimony to dissociate himself from SRC Painting
and PBN. Also, if Edmund truly had no ownership interests in these companies, there is little
likelihood he would lend money to either of them because (1) there is no evidence he
possessed or had earned sufficient money to lend money to the corporations and (2) Edmund is
unaware of any terms to the loans, including interest. The unlikelihood that Edmund would lend
money to the corporations is also increased by the hundreds of thousands of dollars that
already had been allegedly loaned to the companies by his sister, Erin.

Q. Okay, so you were never employed by PBN?
A. Nope.
Q. Other than rent that you described, you received no other compensation
from PBN?
A. Don’t remember.
Q. You never worked on a PBN job site?
A. Can you rephrase that question again?
Q. Sure. Did you ever work on a PBN job site?
A. Yes, I have.
(Tr. 765–766.) Edmund then explained that he had worked for PBN at the Harbor Park
jobsite, contradicting his preceding statement that he had not worked for PBN. The foregoing is
just an example of the type of testimony given by Edmund.
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Edmund admits receiving $2500 a month in rent from PBN, allegedly to store paint in his
garage, but he denies knowing how that rental amount was determined. Moreover, he claims
that he does not remember whether he ever actually stored paint in his garage. He claims to
know that he loaned money to PBN, but he claims not to remember how much money he lent,
when it was lent, who he negotiated the loans with, what the interest rates were, or whether
there was any documentation of such loans. On balance, and in consideration of his failure to
remember much of what he did for SRC Painting and PBN; his vague testimony regarding any
involvement by himself or members of his family in either of those companies; and his
demeanor, especially his apparent hostility toward the Government, the Union, and the process;
Edmund was not a credible witness.

SRC Painting continued in operation from approximately 2000 until the summer of 2003.
Edmund testified that he worked as a painter for SRC Painting throughout its existence, and he
was paid union scale. It is curious, therefore, that on Edmund’s 2002 federal income tax return
he reported no income from wages or salaries. (GC Exh. 56.)

SRC Painting’s books reflect many payments by the company to satisfy the personal
expenses of the Wierzbickis, including James, Karen, Eric, Constance, Edmund, and Erin.
These personal expenses include car payments, mortgage payments, personal credit cards,
home appliances, house repairs, home utilities, payments for the construction of the house Erin
owns and in which Edmund lives, union dues for Eric and Edmund, and school payments for
Erin. In conclusion, and consistent with the concessions of James, Eric, and Erin, the
Wierzbickis commingled their funds with the funds of SRC Painting and used SRC Painting to
overtly and covertly extract money from the company in disregard of the corporate form.

SRC Painting’s books also reflect payments to and from SRC, Inc. (E.g., GC Exh. 23, p.
51; GC Exh. 22, pp. 5, 6, 7, 10, 12, 13, 18.) However, these “payments” lack a corresponding
check number in SRC Painting’s books. Accordingly, although these payments may have been
used to generate cash for the Wierzbickis, similar to the cash payments to Edmund, Constance,
and Erin, the use of SRC, Inc. to conceal such cash payments by SRC Painting demonstrates
the Wierzbickis’ control over and the intermingling of accounts between these companies.

After Kellerman left SRC Painting, Erin contacted him and told him she wanted him to
sign a document acknowledging that he had resigned and that he was transferring ownership to
her. Kellerman did as he was told.

3. PBN, LLC

SRC Painting operated from the summer of 2000 until approximately the summer of
2003. SRC, Inc. and SRC Painting were signatories to collective-bargaining agreements with
the Union. The term of the most recent collective-bargaining agreement between SRC Painting
and the Union was from June 1, 2002 to May 31, 2004. Nevertheless, by the spring of 2003
James wanted to oust the Union and to operate a nonunion company. Accordingly, SRC
Painting made its last monthly contribution to the Union’s health, welfare, pension, and other
funds in March 2003. As of April 30, 2003, SRC Painting has failed and refused to comply with
the provisions of its collective-bargaining agreement with the Union.

In July 2003, James held a meeting with SRC Painting’s employees in a restaurant in
Kenosha. Present at the meeting were James Wierzbicki and painters Justin Lois, Scott
Christianson, and Brent George. At the meeting, James Wierzbicki told the employees that SRC
Painting was going to change to a new company, and that the new company would be a
nonunion company. Lois and George said that they wanted to remain a union shop. George
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asked James if George would be allowed to continue his apprenticeship program with the
Union. James replied that George had the choice of either continuing with the apprenticeship
program or quitting the program, and that if George quit the Union’s apprenticeship program,
James would increase his pay to the full-scale journeyman wage.

James Wierzbicki also told the employees that they would keep their jobs in the new
company and that everything would stay the same. He explained that the workers would lose
their union benefits, such as pension and health care benefits, but he promised that he would
provide a new health care plan for the workers. James explained that if the new company did
not have to pay the workers as much money in benefits, it would be able to pay the workers
more money in wages.

The changeover from SRC Painting to PBN was seamless. Both companies had the
same employees (with some exceptions), the same managers and supervisors, the same
bookkeeping (although not the same bookkeeper), the same accountants, the same owners, the
same operation, and the same work. The major differences were (1) James Wierzbicki disposed
of Kellerman and replaced him with Maurer, and (2) as dictated by James, the new company
was nonunion.

James Wierzbicki signed and sent a letter to Joel Spaulding advising him that the
contract with New England Builders would not be completed by SRC Painting, but rather, would
be completed by PBN. (GC Exh. 4.) There is no evidence that James sent this letter on
anyone’s authority other than his own. This letter supports a determination that James
controlled SRC Painting and PBN.

Approximately three weeks after the meeting in the Kenosha restaurant, a meeting was
held at SRC Painting’s office in Eric’s residence. Present were James, Eric, Edmund, and Erin
Wierzbicki, together with painters Donald Hall, Scott Maurer, Justin Lois, and Brent George, and
foreman Scott Christianson. Paychecks in the name of the new, nonunion company, PBN, were
distributed. James said that the name of the new company was PBN, which stood for “paint by
numbers.” James told the workers that their new health insurance, which would replace the
insurance they formerly had through the Union, would be effective September 1. George asked
James about his apprenticeship program. James replied that George had not had a lot of time in
the Union and not a lot of money in the pension fund, so George would not lose a lot of money if
he dropped out of the Union. James repeated that he would increase George’s wage to
compensate for his loss of union benefits.

About two weeks later, George telephoned Eric about the apprenticeship program. Eric
did not return George’s call, but James responded by meeting with George at Harbor Park.
James told George that if he wanted to attend school to complete the apprenticeship program,
he would have to work for someone else. However, George told James that he found a school
not affiliated with the Union, which was open to all applicants, union and nonunion. James then
agreed to allow George to attend the school.

After this conversation between James Wierzbicki and Brent George, James met with
Christianson and told him to fire George. Christianson did not want to fire George so he did not
immediately carry out James’ directive. However, shortly before Thanksgiving 2003,
Christianson laid off George. Except for a two-week period in January 2004 when George was
recalled, George was not rehired.

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As noted above, PBN was essentially a continuation of SRC Painting, except it was a
nonunion company. PBN took over and completed the same work that SRC Painting had begun
and was doing—the Harbor Park project. (GC Exh. 55, p. 2.) The same person operated and
controlled the business, James Wierzbicki. James Wierzbicki again used a childhood friend of
his son to install as the nominal, but fictitious, owner of the company. Edmund continued to work
as a painter for PBN as he had for SRC Painting. PBN used the same painters as had worked
for SRC Painting, and these painters did not need to apply for work at PBN. They simply
continued working as if there had been no change. And, James, Edmund, Eric, and Erin
continued to extract money from PBN, as they had from SRC Painting, through rent
payments,10 undocumented loans, unexplained payments on account, and payment of personal
expenses. In addition, PBN used the same offices as SRC Painting—the back room of Eric’s
residence.

However, Erin stopped being the office manager because she had returned to school in
2002. To replace Erin as the office manager, James hired Andrea Rogowski, who had been a
friend of Erin and the Wierzbicki family. When James hired Rogowski, he also told her that PBN
was going to be nonunion. Otherwise, as James told Brent George, “Everything would stay the
same. The same employees would still perform the same work.” (Tr. 393.)

As noted above, James Wierzbicki found a friend of his youngest son, Eric, to install as
the nominal owner of his newest company. This person was Scott Maurer, a childhood friend of
Eric’s who was also a friend of the Wierzbicki family. Maurer was 28 years old, the same age as
Eric, at the time Maurer was made the president and owner of PBN. Maurer had been employed
as a laborer and a painter with SRC, Inc. and SRC Painting. James told Maurer that he, James,
wanted to be a partner with Maurer, and that Maurer would be paid a percentage of each job
performed by PBN. These statements were not true. James also told Maurer that PBN would be
nonunion and that James would obtain the business for PBN and handle the money. These
statements were true.

James Wierzbicki installed Maurer as the nominal owner and president of PBN, but
Maurer never became an actual owner of or partner in PBN, and he was not paid a percentage
of the work undertaken by PBN. Maurer had no access to PBN’s records or financial
documents, and, like Kellerman was treated, he had no access to PBN’s offices unless a
member of the Wierzbicki family was present. Indeed, Maurer had as little authority in PBN as
Kellerman had in SRC Painting, which is to say, none.

As he had done for SRC Painting, James retained Frank Parise to handle the legal work
in forming PBN. James also contacted New England builders to advise them that PBN would
take over SRC Painting’s obligations under the contract. The accountant for PBN was the same
as it was for SRC Painting. This accountant, Scott Olson, is also the accountant for other
members of the Wierzbicki family.

PBN continued to operate until the next Wierzbicki company, Liquid Systems, was
started. However, the record is not clear exactly when PBN stopped operating and Liquid
Systems began. In November, Rogowski told Maurer that PBN had no money in its bank
account and that employee withholding taxes were not being paid. Accordingly, Maurer sought
legal assistance. Maurer resigned from his position at PBN, and he closed the PBN checking
10 The rent payments to Edmund were allegedly for the storage of paint in Edmund’s
garage, although Edmund could not remember whether paint was stored in his garage. (Tr.
760.)
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account after using personal funds to replenish the overdrawn account. The Internal Revenue
Service subsequently contacted Maurer and advised him of his potential liability for PBN’s
failure to pay withheld taxes of approximately $30,000. Nevertheless, PBN/Liquid Systems
painters continued working throughout this period with no apparent break in service, change in
duties, or location of work.

After Maurer left PBN in November, the Wierzbickis continued to work at Harbor Park
and fulfill PBN’s contract. However, when New England Builders put out new contracts for bid,
the Wierzbickis decided to make their bids through a new corporation.

4. Liquid Systems, LLC

Liquid Systems, LLC formally came into existence on March 5, 2004 with Edmund
Wierzbicki as the only owner and member of that company. (GC Exh. 57.) Besides its
incorporation, there is no evidence that Liquid Systems engaged in any other formal corporate
activity, such as the adoption of bylaws. Liquid Systems’ place of business is either at Edmund’s
residence or his automobile. Notwithstanding its later date of formation, Liquid Systems
submitted proposals dated February 27, 2004 to paint buildings 11, 12, and 15 at Harbor Park.
Thus, Liquid Systems was operating and bidding on projects before it was formally organized or
authorized to operate.

Edmund Wierzbicki testified that he submitted the February 27, 2004 proposals to Joel
Spalding of New England Builders. Edmund testified he spoke to Spalding before Liquid
Systems was organized, but he could not remember any details about the alleged conversation.
Spalding is the senior project manager and secretary-treasurer for New England Builders, which
is the general contractor at Harbor Park. On April 1, 2004, New England Builders, in a
subcontract signed on its behalf by Joel Spalding, awarded Liquid Systems the painting contract
for buildings 11, 12, and 15 at Harbor Park. Under this contract, Liquid Systems would receive
in excess of $270,000 from New England Builders for painting work at the three buildings. (GC
Exh. 62).

Like his brother Eric, who claims to have started SRC, Inc. with no previous experience
starting or operating a business, or bidding for or obtaining jobs, or handling financial or
administrative matters, or managing employees, Edmund claims to have started Liquid Systems
with a similar lack of qualifications. Since his graduation from college in 1999, Edmund worked
exclusively as a painter or laborer. He worked for SRC, Inc. where he did painting and
wallpapering and was paid less than $10 an hour.11 Edmund could only guess that he worked 4
or 5 years for SRC, Inc. He next worked for SRC Painting from 2000 to 2003, where he did
painting and was paid union scale.

Edmund does not dispute that he had no or virtually no qualifications to operate Liquid
Systems, much less to obtain a $270,000 painting contract from New England Builders before
his company had ever done a single painting job. For example, in his attempt to divorce himself
from any meaningful involvement with SRC Painting and PBN, he states in his posthearing brief
that he had no managerial or supervisory role in SRC Painting, and that no evidence was
introduced showing that Edmund was anything more than a painter employed by SRC Painting.
(Posthearing br., p. 6.) Edmund also argues that the General Counsel produced no evidence
showing that he played any part in the management of PBN. Id. at 7.
11 Further detracting from Edmund’s credibility, he testified that he did not know who owned
SRC, and could only guess that his brother, Eric, owned SRC.
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Liquid Systems employs only three painters: Edmund, Christianson, and Casey Grams,
although Eric occasionally does painting work in addition to his managerial responsibilities. All of
these painters had been employed by PBN; Edmund, Eric, and Christianson also had worked
for SRC Painting. Edmund’s role and duties stayed the same at Liquid Systems as his role and
duties had been for SRC Painting and PBN. For all of the companies, Edmund did spray outs,
rerolls, and touch ups at the Harbor Park project. Every painter employed by Liquid Systems
had previously worked for SRC Painting or PBN. Some of the equipment used by Liquid
Systems had been used by SRC Painting and PBN. The work Liquid Systems performs at the
Harbor Park project is the same work that PBN performed, the only difference being the
buildings being painted.

Moreover, Eric maintains a managerial position with Liquid Systems, and his
responsibilities are essentially the same at Liquid Systems as they were at PBN. New England
Builders’ superintendent, Dennis Kamps, primarily deals with Eric in matters involving Liquid
Systems’ work at Harbor Park. Eric also attends the weekly meetings at the construction site for
foremen. Kamps believes that Eric is the owner of Liquid Systems, and he describes Edmund’s
role in Liquid Systems as a painter.

New England Builders, through Spalding, awarded Liquid Systems the $270,000
contract to paint buildings 11, 12 and 15 at Harbor Park. Edmund testified that he had
previously painted Spalding’s house, and there was no evidence whether Spalding paid for the
painting of his house, or if so, how much. This personal interest affects Spalding’s credibility, but
it does not necessarily explain why Spalding would have awarded such substantial contracts to
a company allegedly owned, managed, and operated by a person so devoid of qualifications.
Unless, of course, it is inferred that Edmund’s painting of Spalding’s house was a quid pro quo
for the grant of the contracts by New England Builders to Liquid Systems. No such inference is
made. Moreover, that rather harsh alternative enhances and increases the probability of the
findings and inferences that are made, viz., that Spalding primarily granted Liquid Systems
these contracts because he knew that James Wierzbicki, the person with whom he had dealt in
matters involving SRC Painting and PBN, and who controlled those corporations, was also the
person who was behind and controlled Liquid Systems.

Edmund’s alleged earnings under Liquid Systems could hardly be more different than his
alleged earnings, or lack of earnings, under SRC Painting. Edmund testified that, at Liquid
Systems, he simply takes money out of the company whenever he needs it. However, Edmund
did not fully describe why he “needed” the unusually large amounts of money he withdrew from
the company. Liquid Systems’ records disclose that for the first 9 months of its existence,
Edmund withdrew approximately $121,000 from the Liquid Systems account, all for his personal
use. Edmund denies that any of this money went to his father, his mother, his sister, his brother,
or his brother’s wife. These denials are not credible.

In 2002, Edmund reported on his Federal income tax return total income of
approximately $14,000, none of which was wages. Yet, for 2004, Edmund claims to have
received at least $121,000 (not counting any earnings he had during the period January to
March 2004), all for his personal use and without any apparent change in his standard of living.
Moreover, and in addition to Edmund’s cash income, Liquid Systems paid his personal
expenses, such as his student loans, his home utilities, his home cable, his truck, and his
telephone.

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In view of Edmund’s lack of credibility, considering his father’s control of SRC Painting
and PBN, and considering his, his father’s, and his siblings’ use of those corporations to extract
money and pay personal expenses, I believe the opposite of Edmund’s testimony is more likely
the truth, and that much of the cash Edmund withdrew from Liquid Systems was withdrawn for
the benefit not only of himself, but for the benefit of his father and mother, James and Karen,
and his siblings, Eric and Erin. See NLRB v. Walton Mfg. Co., supra at 408; Reigel Electric, 342
NLRB No. 83, slip op., at 3 (2004).

During the 5 years before Liquid Systems was formed, James Wierzbicki employed
Edmund as a laborer and painter in the family’s painting businesses. During those years,
Edmund’s father, and his younger brother and sister admitted that they controlled the day-to-day
management, labor relations policies, business operations, and financial resources of SRC
Painting and PBN; that they failed to maintain the legal identities of SRC Painting and PBN
distinct from themselves; that they commingled their personal assets with the corporate assets
of SRC Painting and PBN; and that, by failing to maintain the separate corporate identities of
SRC Painting and PBN, they engaged in fraud, injustice, and evasion of their legal obligations
under the Act. During the years Edmund was employed by SRC Painting and PBN, he and his
family members used various devices to siphon money from the businesses. It is not plausible
that in 2004 Edmund would suddenly become the only member of this Wierzbicki group (i.e.,
James, Eric, Erin, and Edmund) to earn money. Nor is it plausible that in 2004 Edmund would
suddenly become the only member of the Wierzbicki family to receive money from the family’s
painting business. James had long operated and controlled the family businesses. Liquid
Systems was another family business employing the same painters, using the same equipment,
and working the same job. Observing the Wierzbickis on the witness stand and testifying in front
of one another, it is apparent that James is the leader, the initiator, and the person in charge of
the family businesses, and that Eric, Erin, and Edmund follow in step.

When Edmund was asked about whether his family members were involved in Liquid
Systems or whether they received any money from that business, Edmund exhibited none of the
uncertainty, vagueness, and forgetfulness that he displayed when answering all other questions
about his and his family members’ involvement with SRC Painting and PBN. Edmund adamantly
denied that his family members received money from Liquid Systems. This change in demeanor
further detracts from Edmund’s credibility. Moreover, Edmund’s testimony that his family
members were not involved in Liquid Systems contradicts James’ statement to New England
Builders that “they,” the Wierzbickis, had started Liquid Systems. (Tr. 297.)

Edmund’s assured testimony denying that his family members received money from
Liquid Systems was not candid. For example, Liquid Systems pays the mortgage on the
property in Trego, which is where James spends approximately 90 percent of his time. Liquid
Systems also pays for the utilities and television at the Trego residence. There is no evidence
that James pays rent to Edmund for living at the Trego property. Moreover, Edmund’s tax return
fails to report rental income from the Trego property. Thus, James directly benefits from Liquid
Systems’ mortgage, utilities, and television payments for the house in which he lives. In
addition, Liquid Systems makes the monthly payments for one of the vehicles owned by Erin,
although Edmund tried to nullify the effect of such payments by claiming that he borrows that
vehicle from Erin.

Edmund was unable to explain who prepared approximately 33 Liquid Systems’ checks
that had been stamped with his signature. Edmund was unable to explain what he did with the
money he withdrew from Liquid Systems. He could not explain what he did with any of his cash
withdrawals from Liquid Systems, including a $7003 withdrawal on April 5, 2004. And, he could
only guess that a withdrawal of $11,500 on October 25, 2004 was used to pay “for lawyers or
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something.” (Tr. 817.) Such testimony, from the person who is allegedly the only owner and
officer of Liquid Systems, is not credible. However, the credibility of such testimony increases
with the realization that Edmund did not control or truly own Liquid Systems. James owned and
controlled Liquid Systems, as he had owned and controlled SRC Painting and PBN. Moreover,
Edmund’s inability to explain who had prepared 33 Liquid Systems’ checks also contradicts his
own testimony that he was the only person who writes Liquid Systems’ checks. Edmund had
little control over Liquid Systems’ handling of, and accounting for, financial matters.

Moreover, the limited records of Liquid Systems, pertaining to Edmund’s supposition that
Liquid Systems’ $11,500 payment to him in October was for attorney fees, support the finding
that James, not Edmund, was the true owner of Liquid Systems. These records disclose that on
October 12, 2004, check number 1107 was issued to the attorney who represented James,
Karen, Eric, and Constance during the present proceeding. Liquid Systems lists this check as
“Professional Fees.” (GC Exh. 68, p. 23.) However, the $11,500, unnumbered “check,”
supposedly dated October 25, 2004, that Edmund believed was for attorney fees, was not listed
under professional fees. Rather, the payment was simply listed as one of the many withdrawals
by Edmund. (GC Exh. 68, pp. 4 and 14.) Thus, Liquid Systems identifies the legal expenses of
James and Eric, and their wives, as professional fee expenses. However, the supposed legal
expenses of Edmund are not listed as an expense, much less a professional fee expense. This
accounting by Liquid Systems supports the finding that James is the owner of Liquid Systems,
not Edmund.

In addition, Edmund’s certainty with regard to such implausible and incredible matters as
James and Eric’s alleged noninvolvement in the affairs of Liquid Systems, in conjunction with
his demeanor, his hostility and his resentment toward the General Counsel, the Union, and the
process, which was noted above, leads me to believe that the opposite of his testimony is the
truth. See NLRB v. Walton Mfg. Co., supra at 408 (noting that certain testimony may be uttered
with such arrogance or defiance as to give the assurance that the testimony is a fabrication);
Mar-Kay Cartage, 277 NLRB 1335, 1340 (1985). Accordingly, Edmund’s testimony confirms my
finding that James controls Liquid Systems, and that Liquid Systems is operated by and for the
benefit of James, Karen, Eric, Constance, Erin, and Edmund, just as SRC Painting and PBN
were.

III. Analysis

a. Alter ego

SRC Painting recognized the Union as the exclusive representative of its painters, and it
was a party to collective-bargaining agreements with the Union. The most recent collective-
bargaining agreement expired on May 31, 2004. PBN began operating in approximately the
summer of 2003, and Liquid Systems began operating approximately in the winter or spring of
2004. PBN and Liquid Systems did not recognize the Union as the exclusive representative of
its painters, they did not comply with the provisions of SRC Painting’s collective-bargaining
agreement with the Union, and they did not bargain with the Union regarding any employment
conditions of their painters.

PBN did not have a duty to recognize the Union as the exclusive representative of its
painters, to comply with the provisions of the collective-bargaining agreement, and to bargain
collectively with the Union unless it was the alter ego of, or was a single employer with, or was a
successor to, SRC Painting or PBN. Similarly, Liquid Systems did not have a duty to recognize
the Union, to comply with the collective-bargaining agreement, or bargain with the Union unless
it was the alter ego of, or was a single employer with, or was a successor to, SRC Painting or
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PBN. The single employer doctrine generally applies to companies that concurrently perform the
same or similar function, and where one company recognizes the Union and the other does not.
Stardyne, Inc. v. NLRB, 41 F.3d 141, 152 (3d Cir. 1994); NLRB v. Hospital San Rafael, 42 F.3d
45 (1994). The alter ego doctrine generally applies where a nonunion company replaces a union
company. Id.

In the present case, PBN replaced SRC Painting by taking over the work SRC Painting
had been doing at the Harbor Park project. Upon being replaced by PBN, SRC Painting ceased
operating. Similarly, Liquid Systems replaced PBN by taking over the painting work at the
Harbor Park project. Upon being replaced by Liquid Systems, PBN ceased operating.
Accordingly, the alter ego doctrine will be examined to determine if PBN is the alter ego of SRC
Painting and if Liquid Systems is the alter ego of PBN.12

A corporation will be deemed the alter ego of a predecessor corporation if there was not
“a bona fide discontinuance and a true change of ownership” or if there was “merely a disguised
continuance of the old employer.” Southport Petroleum Co. v. NLRB, 315 U.S. 100, 106 (1942).
Alter ego cases

involve a mere technical change in the structure or identity of the
employing entity, frequently to avoid the effect of the labor laws, without
any substantial change in its ownership or management. In these
circumstances, the courts have had little difficulty holding that the
successor is in reality the same employer and is subject to all the legal and
contractual obligations of the predecessor.

Howard Johnson Co. v. Hotel & Restaurant Employees, 417 U.S. 249, 259 (1974). The
determination of alter ego status is a question of fact for the Board. Southport Petroleum Co.,
supra.

The factors that are considered in determining alter ego status include whether “the two
enterprises have ‘substantially identical’ management and supervision, business purpose,
operations, equipment, customers, as well as ownership.” Midwest Precision Heating & Cooling,
341 NLRB No. 52 (2004); Crawford Door Sales Co., 226 NLRB 1144 (1976). Intent to evade
responsibilities under the Act is an additional factor that must be considered, but a finding of
antiunion animus is not required in order to find an alter ego relationship. Fugazy Continental
Corp., 265 NLRB 1301 (1982), enfd. 725 F.2d 1416 (DC Cir. 1984). No single factor is
determinative and not all the indicia need be present for the Board to conclude that one entity is
the alter ego of another. Standard Commercial Cartage, Inc., 330 NLRB 11, 13 (1999).

12 The record is unclear regarding the precise dates that SCR Painting, PBN, and Liquid
Systems started and stopped operating. During these changeover periods, it is possible that
SRC Painting and PBN, on the one hand, and PBN and Liquid Systems, on the other, were
ongoing businesses coordinated by a common master. NLRB v. Hospital San Rafael, Inc., 42
F.3d 45, 50 (1st Cir. 1994). Accordingly, the single employer doctrine could be examined to
determine if SRC Painting or PBN and Liquid Systems are single employers. This examination
will not be undertaken in this decision because of the uncertainty of the factual predicate for
applying the doctrine, viz., the concurrent operation of the relevant corporations, and because
the remedy would not be affected under the single employer doctrine if the alter ego doctrine
were found to be applicable.
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James, Eric, and Erin admit that PBN is the alter ego of SRC Painting. Although Edmund
has made no such admission, neither does he dispute PBN’s alter ego status. The admission by
James, Eric, and Erin was made in conjunction with their admission that they are supervisors
and agents of SRC Painting and PBN, and that they have controlled the day-to-day
management, labor relations policies, business operations, and financial resources of SRC
Painting and PBN. Moreover, and without detailing the facts set forth herein, the evidence is
more than sufficient to support the concessions of PBN’s alter ego status. The next question is
whether Liquid Systems is the alter ego of PBN or SRC Painting. Liquid Systems’ alter ego
status is opposed by Edmund, but is not disputed by James, Eric, or Erin.

At Liquid Systems, Eric continued the supervisory and managerial duties he had at PBN
and SRC Painting.13 Eric was the primary Liquid Systems’ representative who interacted with
New England Builders during Liquid Systems’ performance of its contract. Eric attended the
weekly construction meetings at Harbor Park on behalf of Liquid Systems. Indeed, Dennis
Kamps, the site superintendent for New England Builders, believed that Eric was the owner of
Liquid Systems and that Edmund worked for Liquid Systems as a painter.

The business purpose and operation of Liquid Systems is identical to the business
purpose and operation of PBN and SRC Painting. Moreover, all the employees who worked for
Liquid Systems had previously worked for PBN. Liquid Systems is the same operation as PBN,
and essentially the same as SRC Painting except on a smaller scale. See Marquis Printing
Corp., 213 NLRB 394, 401 (1974).

It is unclear whether the equipment used by Liquid Systems is the same equipment used
by PBN and SRC Painting. Edmund identified four pieces of equipment used by Liquid Systems.
He testified that he purchased a Graco 1000 pump from Eric in 1998 or 1999. Edmund does not
claim to have had a painting business in 1998 or 1999, and he did not explain why he would
have purchased this pump in this time period. Edmund produced no receipt for the purchase of
this pump. Edmund claimed that he purchased another Graco 1000 pump in 2001 or 2002 from
a person by the name of Barry Brown. Again, Edmund did not explain why he had originally
purchased this equipment nor did he produce a receipt.

Edmund claimed to have purchased two additional pieces of equipment after Liquid
Systems was formed. However, he produced no receipts for these alleged purchases.
Moreover, SRC Painting and PBN had simply stopped operating when the Wierzbickis decided
to form successor corporations. But, there is no evidence relating to the disposal of the
equipment owned and used by those corporations. On balance, it is likely that PBN and SRC
Painting had previously used some, and possibly all, equipment used by Liquid Systems.
However, the evidence is unclear. Accordingly, this factor neither adds to nor detracts from an
alter ego finding.

The customer of Liquid Systems was the same customer of PBN and SRC Painting, viz.,
New England Builders. Indeed, Liquid Systems, PBN, and SRC Painting worked on the same
project for New England Builders—the Harbor Park project. Thus, SRC Painting, PBN, and
Liquid Systems constitute “’the same business in the same market.’” Fugazy Continental Corp.,
supra at 1301–1302, quoting International Harvester Co., 247 NLRB 791 (1980).

13 Edmund claims that Eric was not paid for his work at Liquid Systems. Without regard to
the incredibility of this claim, the fact remains that Eric worked for Liquid Systems.
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Liquid Systems employed Christianson, who had been a foreman at SRC Painting and
PBN. Although Edmund also claimed to be a supervisor for Liquid Systems, there is no
corroborating evidence of his supervisory actions or duties. Edmund was not a credible witness,
and this bald claim is not accepted. Except for Eric and Christianson, there is no credible
evidence of any other supervisor for Liquid Systems, and both Eric and Christianson had been
supervisors for SRC Painting and PBN.

James Wierzbicki owned SRC Painting and PBN despite his installation of Kellerman
and Maurer as the nominal owners. Edmund is the owner of Liquid Systems. In spite of this
apparent difference in ownership between James and his son, Edmund, the common ownership
factor is not defeated. As the Board stated in Kenmore Contracting Co., 289 NLRB 336, 337
(1988), enfd. 888 F.2d 125 (2d Cir. 1989), “a finding of common ownership may be made
where, although the same individuals are not shown to be owners of each corporation, the
corporations are solely owned by members of the same family.” Ownership by members of the
same family does not compel a finding of substantially identical ownership. “However, it
‘militates in favor of an alter ego finding’ where, as here, other relevant factors are shown.”
Midwest Precision Heating & Cooling, supra (quoting Cofab, Inc., 322 NLRB 162, 163 (1996),
enfd. 159 F.3d 1352 (3d. Cir. 1998). James Wierzbicki and his three children owned and
controlled SRC Painting, PBN, and Liquid Systems. James told New England Builders that the
Wierzbickis had started Liquid Systems. Accordingly, common ownership is established and
militates in favor of an alter ego finding.

There is also a significant lack of an arm’s-length relationship between these
corporations and the Wierzbickis. For example, there is no documentary evidence of the
purchase or sale of painting equipment by the corporations or the Wierzbickis. This absence of
bills of sale and receipts is irregular and indicates a lack of arm’s-length relationship. See
Fugazy Continental Corp., supra at 1302. Moreover, SRC Painting paid rent to Constance, and
SRC Painting and PBN paid rent to Edmund, but there are no lease documents or terms to
those lease relationships. Erin allegedly made loans to SRC Painting and PBN, but there are no
documents establishing such loans. Thus, Erin received substantial payments from SRC
Painting and PBN, allegedly for repayment of loans, but since the loans cannot be documented,
there is no support or corroboration to disclose when such alleged loans would be paid back.
Erin could continue to siphon money from the corporation, supposedly tax-free as loan
repayments, until the corporation was drained of assets. These transactions are without
documentation, are irregular, and indicate a lack of arm’s-length relationship. The lack of arm’s-
length relationships between the Wierzbickis and the corporations suggest alter ego status.
Valley Electric, 336 NLRB 1272, 1275 (2001); Reigel Electric, supra.

The temporal proximity between PBN’s cessation of business and Liquid Systems’
creation, together with Liquid Systems’ takeover of the Harbor Park project that PBN had been
doing, are additional factors suggesting the alter ego status of Liquid Systems. Twin Cities
Electric, 296 NLRB 1014, 1020 (1989); Cofab, Inc., 322 NLRB 162, 163 (1996).

With respect to motivation, the question is “whether the purpose behind the creation of
the alleged alter ego was legitimate or whether, instead, its purpose was to evade
responsibilities under the Act.” Fugazy Continental Corp., supra at 1302. James Wierzbicki
created PBN for the purpose of evading SRC Painting’s responsibilities under its collective-
bargaining agreement with the Union. However, there is no direct evidence of antiunion animus
in the creation of Liquid Systems.

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On the other hand, there was no evidence showing that Liquid Systems was created for
legitimate reasons. Moreover, there is the curious circumstance that Liquid Systems is 100
percent owned by Edmund. Of his siblings and his father, the one person least qualified to own
and operate a painting company is Edmund. There is no apparent reason why Edmund would
start, own, and operate a painting company as opposed to any one of his siblings or his father.
The single reason that comes to mind is that Edmund had no involvement in the management
or control of SRC Painting and PBN. Thus, if any one of the Wierzbickis who did control those
companies were to be found liable for SRC Painting or PBN’s violations of law (and, James,
Eric, and Erin conceded during the hearing their individual liability for any unfair labor practices
committed by SRC Painting and PBN), then Liquid Systems might be protected if it were owned
by the one sibling, Edmund, who did not exercise such control over SRC Painting and PBN.

Moreover, Edmund did not explain why Liquid Systems was formed or why he decided,
or someone decided for him, to be its owner. In these circumstances, an adverse inference
regarding motive might be appropriate. See Custom Mfg Co., 259 NLRB 614, 615 fn. 7 (1981)
(where the Board noted that the absence of a credible explanation for changes in the corporate
entity, coupled with other factors, undermined the Respondent’s contention that it was not an
alter ego); cf. Liberty Source W, 344 NLRB No. 137 (2005) (where the judge made an adverse
inference, but the Board did not rely on the adverse inference in affirming the judge’s decision).
Nevertheless, no adverse inference is applied herein. Accordingly, the evidence does not show
that the purpose behind the creation of Liquid Systems was legitimate or was to evade
responsibilities under the Act. However, as with other indicia, a showing of improper motive is
not necessary to a finding of alter ego status. Fugazy Continental Corp., supra; Johnstown
Corp., 313 NLRB 170, 171 (1993), remanded sub nom. Stardyne, Inc. v. NLRB, 41 F.3d 141 (3d
Cir. 1994), on remand 322 NLRB 818 (1997).

Considering all of the circumstances in the creation, formation, and operation of Liquid
Systems; in view of Liquid Systems, SRC Painting, and PBN’s substantially identical
management, business purpose, operation, customer, supervision, and ownership; considering
all of the other circumstances, such as the Wierzbickis disregard of corporate formalities and
blurring of the corporations’ structures in their operation of SRC Painting, PBN, and Liquid
Systems; I find that Liquid Systems is a disguised continuance of and the alter ego of SRC
Painting and PBN.

b. Individual liability

The corporate veil may be pierced when: “(1) the shareholder and corporation have
failed to maintain separate identities, and (2) adherence to the corporate structure would
sanction a fraud, promote injustice, or lead to an evasion of legal obligations.” White Oak Coal
Co., 318 NLRB 732 (1995). In assessing the first prong, the Board considers “(a) the degree to
which the corporate legal formalities have been maintained, and (b) the degree to which
individual and corporate funds, other assets, and affairs have been commingled.” Id at 735.
Factors to consider in making these determinations are:

(1) whether the corporation is operated as a separate entity; (2) the
commingling of funds and other assets; (3) the failure to maintain adequate
corporate records; (4) the nature of the corporation’s ownership and
control; (5) the availability and use of corporate assets, the absence of
same, or under capitalization; (6) the use of the corporate form as a mere
shell, instrumentality or conduit of an individual or another corporation;
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(7) disregard of corporate legal formalities and the failure to maintain an
arm’s-length relationship among related entities; (8) diversion of the
corporate funds or assets to noncorporate purposes; and, in addition,
(9) transfer or disposal of corporate assets without fair consideration.

Id. James, Eric, and Erin have conceded their personal liability for the actions of SRC Painting
and PBN. In any event, the evidence amply demonstrates that the corporate veil of SRC
Painting and PBN should be pierced to hold James, Eric, and Erin personally liable. With
respect to Liquid Systems, the majority of the foregoing nine factors has been established, and
the evidence demonstrates that Edmund and Liquid Systems have failed to maintain separate
identities.

If an individual freely withdraws funds from a corporation, without supporting
documentation or other indicia of an arm’s-length relationship, then the corporation’s separate
identity is blurred. Reliable Electric Co., 330 NLRB 111 (2000). Edmund withdrew money at will
from Liquid Systems. Indeed, he testified that he withdrew money whenever he needed it.

Edmund commingled his own funds with Liquid Systems’ funds, which is shown by
Liquid Systems’ payment of Edmund’s personal expenses, such as his telephone bill, his
student loans, his home mortgage, his Direct TV and cable bill, his home utilities, and the
purchase of a $1000 camera for Edmund’s trip to Fiji. Moreover, there was a disregard of
corporate legal formalities and there was a diversion of the corporate funds or assets to
noncorporate purposes to the extent that Liquid Systems’ funds were commingled with personal
funds.

Liquid Systems failed to maintain adequate corporate records. For example, Edmund
withdrew approximately $121,000 during the first 9 months of Liquid Systems’ existence. These
withdrawals were made on approximately 42 separate occasions. (GC Exh. 68.) However, there
is no check number listed for any of the 42 withdrawals by Edmund, leading to the inference that
all of Edmund’s withdrawals were in cash. The use of cash, especially by a corporation and the
owner of the corporation, demonstrates a failure to maintain adequate corporate records. In
addition, the effect of this failure to maintain adequate corporate records is reflected in
Edmund’s ignorance of the purpose(s) for any of his withdrawals.

The formal documents show that Edmund is the owner and operator of Liquid Systems,
but the facts show that Eric manages the company while Edmund’s real status is a painter.
Moreover, James had previously installed nominal, figurehead owners in Liquid Systems’ two
predecessor corporations while he maintained actual ownership and control of those
corporations. Thus, James had established a pattern that was consistent with the creation of
Liquid Systems—installing persons, without qualifications and without consideration, to
ownership and management positions, while retaining actual control for himself. The evidence,
together with all reasonable inferences from the evidence, shows that James repeated this
pattern with Liquid Systems, except that here he installed his son as the figurehead rather than
a non-family member.

Liquid Systems was also used as a conduit to benefit James and Karen, as well as
Edmund. This is demonstrated by Liquid Systems’ payment of the mortgage for Edmund’s
Trego property where James resided for 90 percent of his time and Karen resided part-time.
Liquid Systems also paid the utilities’ bills for the Trego property. Liquid Systems was also used
as a conduit to benefit Erin or Constance. This is shown by Liquid Systems’ monthly payments
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for a vehicle owned by Erin and a Jeep owned by either Erin or Constance. Edmund did not
know whether the payment was for Erin’s or Constance’s Jeep, but this uncertainty did not
appear to concern him.

The second prong of the test for piercing the corporate veil is whether adherence to the
corporate structure would sanction a fraud, promote injustice, or lead to an evasion of legal
obligations. White Oak Coal Co., supra. Moreover, the second prong must have some causal
relationship to the first prong. “In other words, the fraud, injustice, or evasion of legal obligations
must flow from the misuse of the corporate form.” AAA Fire Sprinkler, 322 NLRB 69, 74 (1996),
citing White Oak Coal, supra at 735.

Liquid Systems’ corporate documents fail to reflect any property or money contributed by
Edmund when Liquid Systems was formed. (GC Exh. 57.) Edmund testified, from a handwritten
note he prepared in connection with the present litigation, that he contributed certain equipment.
However, neither Edmund nor Liquid Systems produced records to corroborate the purchase of
this equipment by Liquid Systems or its value. There was no credible evidence of any
capitalization of Liquid Systems when it was formed or subsequent corporate ownership of
assets. A corporation’s under-capitalization adversely affects its ability to satisfy remedial and
backpay obligations. Accordingly, under-capitalization, one of the factors demonstrating Liquid
Systems’ (and the Wierzbickis’) misuse of the corporate form, would cause Liquid Systems to
evade its legal obligations.

Liquid Systems’ payment of Edmund’s mortgage, utilities, telephone bills, and personal
expenses, its payment of James and Karen’s living expenses, and its payment of Erin or
Constance’s automobile expenses show that the corporation is dissipating its assets for non-
corporate purposes. Thus, Liquid Systems is less likely to be able to fulfill and comply with any
adverse order or judgment, especially one requiring the payment of back wages. Accordingly, all
of this evidence relating to capitalization, ownership of assets, and dissipation of funds support
the second prong of the White Oak Coal standard because respecting the corporate form would
likely lead to Liquid Systems’ evasion of legal obligations.

The Wierzbickis’ actions in rendering Liquid Systems unable to satisfy a judgment
against it apply equally to their operation of SRC Painting and PBN. Those corporations were
started and shut down for no apparent legitimate purpose. SRC Painting was started to enable
SRC, Inc. to evade payment of an obligation to a union in Chicago. And, James Wierzbicki
made clear that the purpose of PBN was to get rid of the Union. SRC Painting and PBN paid
money to, and paid the personal expenses of, James and Karen, Eric and Constance, Erin, and
Edmund. There is no evidence that those companies have any remaining assets. Thus, the
evidence relating to SRC Painting and PBN, the companies for which Liquid Systems is an alter
ego, also supports the second prong of the standard.

The Board has also applied the second prong’s “promote injustice” factor affirmatively by
stating that the corporate veil will be pierced when “justice so requires, ’where the individual’s
personal affairs and the company’s affairs have been so intermingled that corporate boundaries
have been effectively blurred.’” Best Roofing Co., 311 NLRB 224, 226 (1993) (quoting Greater
Kansas City Roofing, 305 NLRB 720 fn. 3 (1991)). Although this particular example appears to
be similar to one or more of the factors used in determining the first prong, it is not the same as
any of those factors. The credible evidence in this case demonstrates that the personal affairs of
the Wierzbickis and their corporations’ affairs have been so intermingled that the boundaries of
those corporations have been effectively blurred. Accordingly, justice requires that the corporate
veil be pierced.

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“[I]ndividuals charged personally with corporate liability must be found to have
participated in the fraud, injustice, or inequity that is found.” White Oak Coal Co., supra at 735.
James, Eric, Erin, and Edmund participated in the injustice and inequity. They participated
through their creation, ownership, operation, use, and receipt of funds and benefits from SRC
Painting, PBN, and Liquid Systems. Karen and Constance also participated in the injustice and
inequity found herein through their receipt of funds and benefits from these corporations. Karen
received cash payments from SRC Painting, as well as car payments. Karen also benefited
from Liquid Systems’ payment of the mortgage and expenses on the Trego property where
Karen lived part-time. Constance received rent and home expense payments from SRC
Painting. She possibly received payments for her Jeep from Liquid Systems. Edmund’s
uncertainty on this matter demonstrates the fluidity of the Wierzbickis’ relationships with the
corporations.

Karen and Constance received money and payments of personal expenses from the
corporations. These benefits were, at least in part, for non-corporate purposes. As a result of
these payments, the legal obligations of the corporations, including Liquid Systems, would be
evaded if the corporate structure were recognized. Accordingly, Karen and Constance are
liable, together with their spouses and Erin and Edmund, for the unfair labor practices found
herein.

c. Section 8(a)(1)14

Employers violate Section 8(a)(1) of the Act when they threaten employees with job loss
or loss of work as a result of their union activities. Golden State Foods Corp., 340 NLRB No. 56
(2003). The complaint charges that about mid-September 2003, PBN, acting through James
Wierzbicki, threatened an employee with discharge if the employee did not voluntarily give up
his Union apprenticeship.

In approximately September 2003,15 after George had called Eric to speak about his
Union apprenticeship program, James met with George at Harbor Park and told him that if he
wanted to attend school to complete the apprenticeship program, he would have to work for
someone else. Thus, James threatened George with discharge if he did not give up his union
apprenticeship program. This threat violates Section 8(a)(1).

d. Section 8(a)(3) and (1) – Discharge of Brent George

When an employer is alleged to have violated Section 8(a)(3) in discharging an
employee, the General Counsel has the burden of proving by a preponderance of the evidence
that antiunion sentiment was a motivating factor in the discharge. To meet this burden, the
General Counsel must offer credible evidence of union or other protected activity, employer
knowledge of this activity, and the existence of antiunion animus. Once such unlawful motivation
is shown, the burden shifts to the employer to prove its affirmative defense that the alleged
discriminatory discharge would have taken place even in the absence of the protected activity.
14 During the course of the hearing, including posthearing briefs, the Respondents have not
opposed or addressed the unfair labor practice allegations in the complaint.
15 James’ initial meeting with SRC Painting’s employees at the Kenosha restaurant occurred
in July. About 3 weeks later, the Wierzbickis held a meeting at SRC Painting’s offices in Eric’s
residence. About 2 weeks later, James met with George. Accordingly, the meeting occurred in
approximately September, and this is substantially consistent with the complaint allegations.
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The ultimate burden of proving discrimination always remains with the General Counsel. Wright
Line, 251 NLRB 1083, enfd. 662 F.2d 899 (1st Cir. 1981), cert. denied 455 U.S. 989 (1982),
approved in NLRB v. Transportation Management Corp., 462 U.S. 393 (1983).

George engaged in protected activity by asking James Wierzbicki on several occasions
to allow George to complete the Union’s apprenticeship program. Animus is demonstrated by
James’ various reactions to George’s requests, including James’ statement that if George
wanted to complete the apprenticeship program, he would have to work for someone else. After
James’ last conversation with George about the apprenticeship program, James went to
Christianson and told him to fire George. Christianson did not immediately discharge George,
but he did discharge George shortly before Thanksgiving. George was not recalled except for a
two-week period in January 2004. Accordingly, the General Counsel has established a prima
facie case of unlawful discrimination.

The Respondents did not attempt to disprove any of the facts constituting this charge.
James testified, but he did not address George’s discharge. In addition, and like the other unfair
labor practices set forth in the complaint, the Respondents have not addressed this charge in
their posthearing briefs. The unopposed evidence establishes that PBN discharged George, and
has failed to recall him, because of his protected union activity. Accordingly, PBN violated
Section 8(a)(3) and (1) of the Act.

e. Section 8(a)(5) and (1) – Contributions to the Union’s welfare and other funds

An employer violates Section 8(a)(5) and (1) of the Act by failing to contribute to the
appropriate union funds as required by its collective-bargaining agreement. Alexander Painting,
344 NLRB No. 157 (2005). The Respondents do not dispute that the last payment to the Union’s
health, welfare, vacation, apprenticeship, pension, and other funds, as required by the
collective-bargaining agreement between SRC Painting and the Union, was in March 2003, and
that no further payments were made. SRC Painting, as well as its respective alter egos, PBN
and Liquid Systems, was obligated to make those payments on April 30, 2003 and thereafter
pursuant to its collective-bargaining agreement. Accordingly, the Respondents, SRC Painting,
PBN, and Liquid Systems, violated Section 8(a)(5) and (1) of the Act.

f. Section 8(a)(5) and (1) – Failing to honor the collective-bargaining agreement

An employer violates Section 8(a)(5) and (1) of the Act by failing to honor the terms of its
collective-bargaining agreement. Alexander Painting, supra. The Respondents do not dispute
the failure of PBN and Liquid Systems to comply with the terms of the collective-bargaining
agreement between SRC Painting and the Union. Indeed, PBN was created for the specific
purpose of taking over SRC Painting’s business without the Union. And, Liquid Systems simply
took over PBN’s business when PBN’s figurehead owner departed. The Respondents also do
not dispute that SRC Painting stopped complying with its collective-bargaining agreement as of
April 30, 2003. Accordingly, the Respondents, SRC Painting, and its alter egos, PBN and Liquid
Systems, violated Section 8(a)(5) and (1) of the Act by failing to honor the terms of the
collective-bargaining agreement between SRC Painting and the Union, which was effective from
June 1, 2002 to May 31, 2004.

g. Section 8(a)(5) and (1) – Bypassing the Union and dealing directly with employees

An employer violates Section 8(a)(5) and (1) by bypassing its employees’ exclusive
representative and dealing directly with the employees regarding terms and conditions of
employment. Midwest Precision Heating & Cooling, supra. When James Wierzbicki was forming
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PBN, he met twice with SRC Painting’s employees without a union official. He told the
employees that they would lose the health care and pension benefits they received from the
Union, but that he would provide a new health care plan for them. He also told them he would
increase their wages because of the money he would save by not making payments to the
Union’s funds. James offered Brent George a raise if George would quit the Union’s
apprenticeship program. The dishonesty of these statements and promises is not relevant to the
violation, which was complete when James dealt directly with the employees concerning these
terms and conditions of employment. Accordingly, PBN, and its alter ego, Liquid Systems,
violated Section 8(a)(5) and (1).

h. Intentionally and unlawfully reducing the number of unit employees

The complaint charges that Liquid Systems intentionally reduced the number of unit
employees in an effort to reduce its obligations under the Act. Although the evidence indicates
that Liquid Systems employed fewer than all of PBN’s employees, the record was not fully
developed for this charge. In particular, there is insufficient evidence to establish that the
reduced number of employees was for the unlawful purpose alleged in the charge. Accordingly,
I will recommend that this charge be dismissed.

Conclusions of Law

1. Respondents SRC Painting, PBN, and Liquid Systems are employers engaged in
commerce within the meaning of Section 2(2), (6), and (7) of the Act.

2. The International Union of Painters and Allied Trades, District No. 7, AFL–CIO (the
Union) is a labor organization within the meaning of Section 2(5) of the Act.

3. Respondent Liquid Systems is the alter ego of SRC Painting and PBN. Respondent
PBN is the alter ego of SRC Painting.

4. Respondents SRC Painting, PBN, and Liquid Systems are jointly and severally liable
for the unfair labor practices found in this proceeding.

5. Respondents James, Karen, Eric, Constance, Erin, and Edmund Wierzbicki are
personally liable for the unfair labor practices committed by the corporate Respondents as found
in these proceedings.

6. At all material times, the Union has been the designated exclusive collective-
bargaining representative of the employees of SRC Painting, and its alter egos, PBN, and Liquid
Systems, in the following appropriate bargaining unit within the meaning of Section 9(b) of the
Act:

All painters, drywall finishers, wall coverers, and similar or related
classifications, excluding guards and supervisors as defined in the Act.

7. Respondents PBN and James Wierzbicki violated Section 8(a)(1) of the Act by
threatening an employee that he would have to work for someone else if he did not refrain from
protected, union activities.

8. Respondent PBN violated Section 8(a)(3) and (1) of the Act by unlawfully discharging
Brent George.
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9. Respondents SRC Painting, PBN, and Liquid Systems violated Section 8(a)(5) and (1)
of the Act by:

(a) Failing and refusing to recognize and bargain with the Union;

(b) Failing to make payments for or to the Union’s health, welfare, vacation,
apprenticeship, pension, and other funds as required by the collective-bargaining agreement
between the Union and SRC Painting for the period June 1, 2002 through May 31, 2004
(Agreement);

(c) Failing to continue in full force and effect the terms and conditions of the
Agreement by failing to apply the Agreement to the unit employees;

(d) Bypassing the Union as the exclusive representative of employees in the
bargaining unit and dealing directly with employees over terms and conditions of employment.

10. The unfair labor practices set forth above affect commerce within the meaning of
Section 2(6) and (7) of the Act.

Remedy

Having found that the Respondent has engaged in certain unfair labor practices, I find
that it must be ordered to cease and desist and to take certain affirmative action designed to
effectuate the policies of the Act.

Having found that the Respondent violated Section 8(a)(3) and (1) of the Act in its
discriminatory discharge of Brent George, it must offer him reinstatement and make him whole
for any loss of earnings and other benefits, computed on a quarterly basis from date of
discharge to date of proper offer of reinstatement, less any net interim earnings, as prescribed
in F. W. Woolworth Co., 90 NLRB 289 (1950), plus interest as computed in New Horizons for
the Retarded, 283 NLRB 1173 (1987).

Having found that the Respondents violated Section 8(a)(5) and (1) of the Act by failing
and refusing to recognize and bargain with the Union, the Respondents will be ordered to
recognize the Union as the exclusive representative of its unit employees and, on request, to
meet and bargain in good faith with the Union. The Respondents also shall abide by and give
full force and effect to the Agreement, and any automatic renewals or extensions of it, unless
and until an agreement is reached or there is an impasse on all mandatory subjects of
bargaining.

Having found that the Respondents violated Section 8(a)(5) and (1) of the Act by failing
to make payments for or to the Union’s various welfare funds as required by the Agreement, the
Respondents must make all contractually-required payments that they have failed to make,
including any additional amounts due to the funds on behalf of the unit employees in
accordance with Merryweather Optical Co., 240 NLRB 1213 (1979). The Respondents shall
reimburse unit employees for any expenses resulting from their failure to make the required
contributions, as set forth in Kraft Plumbing & Heating, 252 NLRB 891 fn. 2 (1980), enfd. 661
F.2d 940 (9th Cir. 1981), such amounts to be computed in the manner set forth in Ogle
Protection Service, 183 NLRB 682 (1970), enfd. 444 F.2d 502 (6th Cir. 1971), with interest as
prescribed in New Horizons for the Retarded, supra.

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Having found that the Respondents violated Section 8(a)(5) and (1) of the Act by failing
and refusing to apply the terms and condition of the Agreement, the Respondents shall be
required to make whole the unit employees for any loss of earnings and other benefits they may
have suffered as a result of the Respondents’ failure to comply with the Agreement since
April 30, 2003, in the manner set forth in Ogle Protection Service, with interest as prescribed in
New Horizons for the Retarded, supra.

Additionally, and in view of the nature of employment in the painting/construction
industry, and in view of the purported location of Liquid Systems’ place of business, which is at
Edmund Wierzbicki’s residence or his automobile, and of SRC Painting’s and PBN’s places of
business at Eric Wierzbicki’s residence, I find that posting notices at the Respondents’ place of
business is inadequate to inform the Respondents’ present and former employees of their rights
under this Decision and Order. Therefore, I shall order that in addition to posting the attached
notice at their place of business, the Respondents will post copies of the notice at their jobsites,
and furnish signed copies of the notice to the Union for posting at the Union’s office and meeting
places. See Kenmore Contracting Co., 289 NLRB 336, 339–340 (1988), enfd. 888 F.2d 125 (2d
Cir. 1989).

On these findings of fact and conclusions of law and on the entire record, I issue the
following recommended16

ORDER

The Respondents, SRC Painting, PBN, Liquid Systems, their owners, alter egos, and
representatives, including James, Eric, Erin, and Edmund Wierzbicki, shall

1. Cease and desist from

a. Failing and refusing to recognize the Union and to bargain collectively with the
Union as the exclusive bargaining representative of employees in the following unit, unless and
until a new agreement is reached or there is an impasse on all mandatory subjects of
bargaining:

All painters, drywall finishers, wall coverers, and similar or related
classifications, excluding guards and supervisors as defined in the Act.

b. Failing and refusing to apply the terms and conditions of the collective-
bargaining agreement between the Union and SRC Painting for the period May 31, 2002 to
June 1, 2004 (the Agreement), and any automatic renewals or extensions of it, including the
failure to make payments for or to the Union’s various welfare funds as required by the
Agreement.

c. Bypassing the Union as the exclusive representative of the employees in the
bargaining unit and dealing directly with those employees over their terms and conditions of
employment.

16 If no exceptions are filed as provided by Sec. 102.46 of the Board’s Rules and
Regulations, the findings, conclusions, and recommended Order shall, as provided in Sec.
102.48 of the Rules, be adopted by the Board and all objections to them shall be deemed
waived for all purposes.
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d. Discharging or otherwise discriminating against any employee for supporting
the Union or engaging in protected activities.

e. Threatening employees with adverse employment actions, including
discharge, for engaging in union activities.

f. In any like or related manner interfering with, restraining, or coercing
employees in the exercise of the rights guaranteed them by Section 7 of the Act.

2. Take the following affirmative action necessary to effectuate the policies of the Act.

a. On request, recognize and bargain with the Union as the exclusive
representative of the employees in the following appropriate unit concerning terms and
conditions of employment and, if an understanding is reached, embody the understanding in a
signed agreement:

All painters, drywall finishers, wall coverers, and similar or related
classifications, excluding guards and supervisors as defined in the Act.

b. Continue in full force and effect the Agreement, and any automatic renewals or
extensions of it, unless and until an agreement is reached or there is an impasse on all
mandatory subjects of bargaining.

c. Make whole the unit employees by paying contributions to the Union’s health,
welfare, vacation, apprenticeship, pension, and other funds as required by the collective-
bargaining Agreement, monies which have not been paid and which would have been paid in
the absence of the Respondents’ unlawful unilateral discontinuance of such payments on and
after April 30, 2003.

d. Reimburse and make whole the unit employees for any expenses, plus
interest, they have incurred as the result of the Respondents’ failures to apply the Agreement to
them and failures to make the fringe benefit payments described above.

e. Make whole the unit employees for any loss of earnings and other benefits
they may have suffered as a result of the Respondents’ failure to comply with the Agreement
since April 30, 2003,

f. Within 14 days from the date of this Order, offer Brent George full
reinstatement to his former job or, if that job no longer exists, to a substantially equivalent
position, without prejudice to his seniority or any other rights or privileges previously enjoyed.

g. Make Brent George whole for any loss of earnings and other benefits suffered
as a result of the discrimination against him in the manner set forth in the remedy section of the
decision.

h. Within 14 days from the date of this Order, remove from their files any
reference to the unlawful discharge, and within 3 days thereafter notify Brent George in writing
that this has been done and that the discharge will not be used against him in any way.

i. Preserve and, within 14 days of a request, or such additional time as the
Regional Director may allow for good cause shown, provide at a reasonable place designated
by the Board or its agents, all payroll records, social security payment records, timecards,
JD(SF)-62-05

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29

personnel records and reports, and all other records, including an electronic copy of such
records if stored in electronic form, necessary to analyze the amount of backpay due under the
terms of this Order.

j. Within 14 days after service by the Region, post at their places of business and
at each of their jobsites, copies of the attached notice marked “Appendix.”17 Copies of the
notice, on forms provided by the Regional Director for Region 30, after being signed by the
Respondents’ authorized representative(s), shall be posted by the Respondents immediately
upon receipt and maintained for 60 consecutive days in conspicuous places including all places
where notices to employees are customarily posted. Reasonable steps shall be taken by the
Respondents to ensure that the notices are not altered, defaced, or covered by any other
material. In the event that, during the pendency of these proceedings, Liquid Systems has gone
out of business or closed its place of business at 3142 94th Place, Pleasant Prairie, Wisconsin,
the Respondent shall duplicate and mail, at its own expense, a copy of the notice to all current
employees and former employees employed by the Respondent at any time since April 30,
2003.

k. Sign and return to the Regional director sufficient copies of the notice for
posting by the Union, if it is willing, at its office and meeting halls, including all places where
notices to members are customarily posted.

l. Within 21 days after service by the Region, file with the Regional Director a
sworn certification of a responsible official on a form provided by the Region attesting to the
steps that the Respondents have taken to comply.

IT IS FURTHER ORDERED that the complaint is dismissed insofar as it alleges violations of
the Act not specifically found.

Dated: September 14, 2005 at San Francisco, California

_______________________
Joseph Gontram
Administrative Law Judge

17 If this Order is enforced by a Judgment of the United States Court of Appeals, the words
in the notice reading “POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD”
shall read “POSTED PURSUANT TO A JUDGMENT OF THE UNITED STATES COURT OF
APPEALS ENFORCING AN ORDER OF THE NATIONAL LABOR RELATIONS BOARD.”

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 Federal labor law and has
ordered us to post and obey this notice.

FEDERAL LAW GIVES YOU THE RIGHT TO

Form, join, or assist a union
Choose representatives to bargain with us on your behalf
Act together with other employees for your benefit and protection
Choose not to engage in any of these protected activities

WE WILL NOT fail or refuse to recognize and bargain with the International Union of Painters and
Allied Trades, District Council No. 7, AFL–CIO (Union) as the exclusive bargaining
representative of employees in the following unit:

All painters, drywall finishers, wall coverers, and similar or related
classifications, excluding guards and supervisors as defined in the Act.

WE WILL NOT fail or refuse to apply the terms and conditions of the collective-bargaining
agreement between the Union and SRC Painting for the period May 31, 2002 to June 1, 2004
(the Agreement), and any automatic renewals or extensions of it.

WE WILL NOT fail or refuse to make contributions to the Union’s welfare funds as required by the
Agreement.

WE WILL NOT bypass the Union as the exclusive representative of the employees in the
bargaining unit, and wE WILL NOT deal directly with those employees over their terms and
conditions of employment.

WE WILL NOT discharge or otherwise discriminate against any of you for supporting the Union or
any other union.

WE WILL NOT threaten employees with adverse employment actions, including discharge, for
engaging in union activities.

WE WILL, on request, bargain with the Union as the exclusive representative of the employees in
the following bargaining unit concerning terms and conditions of employment, and if an
agreement is reached, embody the understanding in a signed agreement:

All painters, drywall finishers, wall coverers, and similar or related
classifications, excluding guards and supervisors as defined in the Act.

WE WILL continue in full force and effect the Agreement, and any automatic renewals or
extensions of it, unless and until an agreement is reached or there is an impasse on all
mandatory subjects of bargaining.

WE WILL make whole the unit employees by contributing to the Union’s health, welfare, vacation,
apprenticeship, pension, and other funds, as required by the Agreement, monies which have not
been paid and which would have been paid in the absence of our unlawful discontinuance of
such payments on and after April 30, 2003.

WE WILL reimburse and make whole the unit employees for any expenses, plus interest, they
have incurred as the result of our failures to apply the Agreement to them and our failures to
make the fringe benefit payments described above

WE WILL, within 14 days from the date of the Board’s Order, offer Brent George full
reinstatement to his former job or, if that job no longer exists, to a substantially equivalent
position, without prejudice to his seniority or any other rights or privileges previously enjoyed.

WE WILL make Brent George whole for any loss of earnings and other benefits suffered as a
result of his unlawful discharge, plus interest.

WE WILL, within 14 days from the date of the Board’s Order, remove from our files any reference
to the unlawful discharge of Brent George, and WE WILL, within 3 days thereafter, notify him in
writing that this has been done and that the discharge will not be used against him in any way.

SRC PAINTING, LLC,PBM,LLC, and LIQUID
SYSTEMS, and JAMESWIERZBICKI, KAREN
WIERZBICKI, EDMUND WIERZBICKI, ERIC
WIERZBICKI, CONSTANCE WIERZBICKI,
and ERIN WIERZBICKI, INDIVIDUALLY
(Employer)

Dated:________________________________ By___________________________________
(Representative) (Title)

The National Labor Relations Board is an independent Federal agency created in 1935 to enforce the National Labor
Relations Act. It conducts secret ballot elections to determine whether employees want union representation and it
investigates and remedies unfair labor practices by employers and unions. To find out more about your rights under
the Act and how to file a charge or election petition, you may speak confidentially to any agent with the Board’s
Regional Office set forth below.You may also obtain information from the Board’s website: www.nlrb.gov.

310 West Wisconsin Avenue, Suite 700, Milwaukee, WI 53203-2211
(414) 297-3861, Hours: 8:00 a.m. to 4:30 p.m.

THIS IS AN OFFICIAL NOTICE AND MUST NOT BE DEFACED BY ANYONE
THIS NOTICE MUST REMAIN POSTED FOR 60 CONSECUTIVE DAYS FROM THE DATE OF
POSTING AND MUST NOT BE ALTERED, DEFACED, OR COVERED BY ANY OTHER MATERIAL.
ANY QUESTIONS CONCERNING THIS NOTICE OR COMPLIANCE WITH ITS PROVISIONS MAY BE
DIRECTED TO THE ABOVE REGIONAL OFFICE’S COMPLIANCE OFFICER, (414) 297-3819.