T.E. Elevator Corp.

National Labor Relations Board - Board Decisions

Feb 29, 1984

268 N.L.R.B. 1461 (N.L.R.B. 1984)

T.E. ELEVATOR CORP.
T.E. Elevator Corp. of Connecticut and Terrence
Euell d/b/a Euell Elevator Co., Inc. and Inter-
national Union of Elevator Constructors, Local
91. Case 39-CA-1374
29 February 1984
DECISION AND ORDER
BY CHAIRMAN DOTSON AND MEMBERS
HUNTER AND DENNIS
On 11 October 1983 Administrative Law Judge
Frank H. Itkin issued the attached decision. The
General Counsel and the Charging Party Union
filed exceptions and supporting briefs, and Re-
spondent filed limited cross-exceptions and a brief
supporting both those cross-exceptions and the
judge's decision.' Respondent later submitted an
answering brief to the General Counsel's and the
Charging Party Union's exceptions.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
The Board has considered the decision and the
record in light of the exceptions 2 and briefs and
has decided to affirm the judge's rulings, findings,3
and conclusions and to adopt the recommended
Order.
The judge found that the Respondent Euell Ele-
vator is not the alter ego of Respondent T.E. Ele-
I On 9 November 1983 the Respondent, relying on Columbia Mfg.
Corp. v. NLRB, 715 F.2d 1409 (9th Cir. 1983), filed an application for
attorneys' fees under the Equal Access to Justice Act. On 21 November
1983 the Respondent's EAJA application was rejected as premature.
Because of the apparent confusion in this and other cases with respect
to when an application for attorneys' fees under the Equal Access to Jus-
tice Act may be filed, we deem it advisable to clarify this matter. Sec.
102.148 of the Board's Rules and Regulations provides that an application
for an award under EAJA shall be filed "no later than 30 days after the
entry of the Board's final Order.... "In cases in which an administra-
tive law judge issues a decision on the merits and exceptions are filed
under Sec. 102.46 of the Rules, the 30-day period for filing an application
under EAJA begins with the date the Board issues its Decision and
Order. If, on the other hand, no exceptions are filed to the judge's deci-
sion, the Board will issue an Order adopting the judge's decision and the
30-day period begins running from the date of the Order adopting.
Columbia Mfg. Corp., supra, relied on by the Respondent to file its
EAJA application, is distinguishable. In Columbia, the judge, pursuant to
the General Counsel's motion, issued an order dismissing the complaint
under Sec. 102.27 of the Rules and Regulations. The judge made no
ruling on the merits, and the case was not transferred to the Board, so
that no order adopting was issued by the Board. Accordingly, under Sec.
102.27 of the Rules and Regulations, the 30-day period for filing an
EAJA application commenced with the date the judge issued his order
dismissing the complaint. See Columbia Mfg. Corp., 265 NLRB 109
(1982).
2 Since we are dismissing the complaint in this case, we find it unnec-
essary to pass on the Respondent's limited cross-exceptions to the judge's
decision.
3 Both the General Counsel and the Charging Party Union have ex-
cepted to some of the judge's credibility findings. The Board's established
policy is not to overrule an administrative law judge's credibility resolu-
tions unless the clear preponderance of all the relevant evidence con-
vinces us that they are incorrect. Standard Dry Wall Products, 91 NLRB
544 (1950), enfd. 188 F.2d 362 (3d Cir. 1951). We have carefully exam-
ined the record and find no basis for reversing the findings.
268 NLRB No. 227
vator Corp. of Connecticut (T.E. Elevator) and
thus did not, as alleged, violate Section 8(a)(5) of
the Act by repudiating T.E. Elevator's collective-
bargaining agreement with the Union. While we
agree with the judge's determination of this issue,
we do so for the further reasons that follow.
It is clear from the record evidence in this case,
as the judge found, that Euell Elevator is not a dis-
guised continuance of T.E. Elevator. Absent a dis-
guised continuance, the Board generally has found
alter ego status only where the two enterprises
have "substantially identical" ownership, business
purpose, management, supervision, customers, op-
eration, and equipment.4
Here, the record shows that Euell Elevator and
T.E. Elevator do not have substantially identical
ownership. Whereas DeWitt Morrill, Eugene Titt-
mann, and Terrence Euell were equal shareholders
of T.E. Elevator, Euell and his wife jointly own
Euell Elevator. Thus, Morrill and Tittmann togeth-
er owned two-thirds of T.E. Elevator, but have no
interest in Euell Elevator. Although the business
purpose of both companies is similar, we note that
T.E. Elevator was engaged in installing elavators
as well as performing elevator repairs. Euell stated
at the hearing that Euell Elevator, by contrast, is
performing only service and maintenance work on
elevators. The record further discloses that Euell
Elevator is managed solely by Terrence Euell.
While Euell was generally responsible for T.E.
Elevator's day-to-day operations, the judge found
that Morrill and Tittmann participated in major de-
cisions affecting the company, including the recog-
nition of the Union, the opening and closing of a
branch office, and the hiring of any new employ-
ees. Moreover, there is evidence that Morrill was
directing T.E. Elevator's operations during the
final month before it was dissolved. When Euell
Elevator thereafter commenced operations, Ter-
rence Euell admittedly solicited business from all
33 customers that T.E. Elevator had served. He
was only successful, however, in acquiring service
and maintenance contracts from 15 of these compa-
nies. He later obtained 13 new customers on his
own. We also emphasize that the new operation
does not use any equipment that T.E. Elevator for-
merly owned.
Thus, despite the fact that there are many simi-
larities between these business enterprises, we con-
clude that Euell Elevator is not the alter ego of
T.E. Elevator because it does not have "substan-
tially identical" ownership, business purpose, man-
agement, customers, and equipment. We therefore
shall adopt the judge's recommended Order.
4See, e.g., Chippewa Motor Freight, 261 NLRB 455. 458 (1982).
1461
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ORDER
The Recommended Order of the administrative
law judge is adopted and the complaint is dis-
missed.
DECISION
FRANK H. ITKIN, Administrative Law Judge: An
unfair labor practice charge was filed in this case on Oc-
tober 15 and a complaint issued on November 26, 1982.
A hearing was conducted in Fairfield and Stratford,
Connecticut, on July 25 and 26, 1983.1 Briefly, the Gen-
eral Counsel alleges that Respondent T.E. Elevator
Corp. of Connecticut (T.E. Elevator) and Respondent
Terrence Euell d/b/a Euell Elevator Co., Inc. (Euell El-
evator) have engaged in "the same business enterprise
with common management and supervision"; have "for-
mulated and administered a common labor policy"; have
used the "same operating license" and "facility"; have
provided "services for the same customers"; have "inter-
changed personnel"; have "held themselves out to the
public as a single integrated business enterprise"; and,
therefore, are "alter egos" or a "single employer" under
the National Labor Relations Act. The General Counsel
also alleges that Respondent Euell Elevator "was estab-
lished" by Respondent T.E. Elevator about January 20,
1982, and "has operated as a disguised continuation of
T.E. Elevator." The General Counsel claims that Re-
spondent Employer, about January 20, 1982, repudiated
and refused to abide by its outstanding collective-bar-
gaining agreement with Charging Party Union, in viola-
tion of Section 8(a)(5) and (1) of the Act. Respondent, in
its answer, generally denies violating the Act as alleged
and, in addition, asserts that the complaint is barred by
Section 10(b) of the Act.
On the entire record, including my observation of the
demeanor of the witnesses, I make the following
FINDINGS OF FACT
Respondent Employer, T.E. Elevator and Euell Eleva-
tor, during the calendar year 1982, admittedly performed
services valued in excess of $50,000 in States other than
Connecticut. Respondent Employer is, on this record, an
employer engaged in commerce as alleged. And Charg-
ing Party Union is admittedly a labor organization as al-
leged.
De Witt Morrill testified that, during early 1978, he
was engaged in the "heating, ventilating and air-condi-
tioning contracting and service business"; that he then
met Terrence Euell who "was in a business that was
analogous or parallel . . . the elevator service business
. ."; and that he, Morrill, and his partner, Eugene Titt-
mann, "put up the equity capital to start Respondent
T.E. Elevator." Euell, at the time, was a stockholder in a
company known as T. E. Elevator Co. of New York.
The initial owners of Respondent T.E. Elevator were,
according to Morrill, Tittmann, Morrill, and T.E. Eleva-
tor Co. of New York. Morrill and Tittmann each invest-
ed $15,000 in Respondent T.E. Elevator and T.E. Eleva-
t The complaint, including the caption, was amended at the hearing.
tor Co. of New York, the Company in which Euell
owned stock, contributed "tools, equipment and exper-
tise." All three persons or entities then became equal
shareholders in Respondent T.E. Elevator. (See G.C.
Exh. 2.)
Later, in 1980, as Morrill further testified, Euell "ac-
quired on his own name the ownership position of the
New York Company" T.E. Elevator Company of New
York. Consequently, the "three individual equal owners"
of Respondent T.E. Elevator were then Morrill, Titt-
mann, and Euell (ibid.). Morrill also recalled that, during
the course of the first year and a half of this operation,
Respondent T.E. Elevator "borrowed" certain sums
from Tittmann and Morrill. In addition, Respondent T.E.
Elevator borrowed funds from a local bank. These loans
were secured by promissory notes signed by "each of the
three stockholders . . . with equal responsibility for re-
payment. .. ."
Morrill explained that Respondent T.E. Elevator was
"to be an elevator maintenance and service company."
Morrill asserted that neither he nor Tittmann had any
"knowledge of the elevator business at that time." Ac-
cordingly, Euell "was the president and chief executive
officer" of Respondent T.E. Elevator. Morrill and Titt-
mann assertedly learned, after the formation of T.E. Ele-
vator, that the Company also "had embarked on the in-
stallation of elevators." According to Morrill, Euell
made this determination and Morrill and Tittmann "were
advised about [it] later." In short, Euell "ran the Compa-
ny" from its creation in 1978 "until late 1980."2
Morrill next testified that he and Tittmann became
aware of "some problem that T.E. Elevator" was having
about late summer or early fall of 1980. Apparently, In-
ternal Revenue Service was not receiving the taxes with-
held from the employees of T.E. Elevator. And, as Mor-
rill explained, "it became obvious that we were not earn-
ing the kind of money that we should be earning ... As
a consequence, a board of directors meeting was held, at-
tended by, inter alia, Euell and Morrill; the financial
"problem" was then discussed; and
Mr. Euell . . . and I [Morrill] proceeded to meet
with the IRS and with the Company's outside audi-
tor to work out an arrangement whereby those
taxes would be paid.
However, later, during December 1980, as Morrill fur-
ther recalled,
It became very much a matter of concern to Mr.
Tittmann and me that the payables of the Company
were running way in front of the receivables; that
the operations were not being conducted at a profit;
and the question had been under consideration for a
' Morrill claimed that Euell signed "all the checks"; performed "all
purchasing"; "dealt with customers"; and neither Morrill nor Tittmann
had any "involvement with any of these matters." Morrill claimed that
Euell handled the "firing and hiring of employees"; set "labor rates"; and
set "fringe benefits for employees." In addition, when Respondent moved
its offices in 1980, Euell handled this transaction and signed the new
lease. Morrill also claimed that he had "no knowledge" when T.E. Ele-
vator "first recognized" the Union.
1462
T.E. ELEVATOR CORP.
month or two as to whether we should attempt to
continue . . . in business or go out of the business.
Morrill further testified that, in January 1981, Morrill
and Tittmann, on behalf of the board of directors of T.E.
Elevator, "asked [Euell] to turn in his stock to us, and in
return . . . we would relieve him of certain obligations."
This request, made in writing on January 20, 1981,
stated, in pertinent part as follows (G.C. Exh. 3):
Accordingly, after long and sober analysis, we have
decided that the best interests of the Company will
be served by immediately terminating your relation-
ship with it in its entirety. Because you are a stock-
holder, we have developed the following plan for
carrying out your severance:
i. The Corporation will redeem your shares in
return for relieving you from any obligation for
its debts to the Union Trust Company, your share
of this indebtedness is in excess of $7,300.00.
2. Your obligation as President of the Compa-
ny for the unpaid withholding taxes due the In-
ternal Revenue Service and past due amounts due
for State Unemployment Compensation and Dis-
ability Insurance will be gradually eliminated by
the Company, relieving you of your personal li-
ability to the IRS in the amount of approximately
$18,000 and $300.00 for the Connecticut obliga-
tions.
3. Severance pay will be provided at the rate
of $450.00 per week through January 30, 1981, a
total of $900.00.
4. The contract presently awaiting activation
for the modernization of elevators at 300 South
Broadway, Tarrytown, N.Y., will be abrogated
immediately by T.E. Elevator Corporation of
Connecticut. You hereby have our permission to
take on this work yourself, totally independent of
and with no liability attaching to T.E. Elevator
Corporation of Connecticut.
5. Any debt owed by the Company to you, as
evidenced by its promissory note, will be repaid
to you at such time as the Company is financially
able to reduce the indebtedness of all three of its
personal lenders, with the amount owed you
being paid from the total amount available for re-
duction of this debt in the proportion that the
amount owed you bears to the total amount
owed to all of the personal lenders.
6. You agree not to compete with T.E. Eleva-
tor Corporation of Connecticut in any way in
Fairfield or New Haven Counties in Connecticut
for a period of two years.
7. You will deliver to the Company your stock
certificate for 50 shares of common stock, all
books, records and commitments of whatever
kind to or from third parties properly belonging
to T.E. Elevator Corporation of Connecticut.
8. You hereby represent and agree that any
such commitments or obligations not specified by
you in making the delivery stated in item (7)
above are your personal responsibility.
9. Your signature on this memorandum will
serve as your acceptance of these terms.
Euell, however, refused to agree to or sign General
Counsel's Exhibit 3, as quoted above. According to Mor-
rill, Euell "threatened that if we put him out of business
today, he would be in business tomorrow."
Thereafter, by letter dated February 2, 1981, Morrill
and Tittmann, on behalf of the board of directors, noti-
fied Euell, in part as follows (G.C. Exh. 4):
There has been no response from you in person,
by telephone or through counsel in this time period,
which has now expired. Accordingly, Mr. Tittmann
and I, on advice of counsel, consider the January
20, 1981 memorandum to be null and void.
Further, because of the manner in which you
have seriously mismanaged the company-absentee-
ism, negligence, failure to follow up on new busi-
ness opportunities and irresponsible behavior with
respect to the company's financial affairs-Mr. Titt-
mann and I have concluded that the only viable
course of action now is to dissolve the corporation.
Consequently, in accordance with the By Laws
and the Connecticut Corporation Statutes, we are
calling special meetings of the Board of Directors
and the Shareholders on Monday, February 9, at'
9:00 a.m. in the office of Mr. George Aretakis, 126
Hoyt Street, Stamford, Connecticut. The sole pur-
pose of this meetinq will be to vote the dissolution
of the T.E. Elevator Corporation of Connecticut.
The dissolution meeting was held as scheduled on Febru-
ary 9, 1981, as recited above. Euell did not appear. And
"by vote of the shareholders which represented a
quorum, the Company was dissolved." As Morrill ob-
served, "for all legal and practical purposes [Respondent
T.E. Elevator] ceased to exist."
Morrill, on cross-examination, acknowledged that be-
tween January 20 and February 9, 1981, the "locks" on
the door to T.E. Elevator's office were changed; this
was a "joint decision" by, inter alia, Tillmann and Mor-
rill; and, after January 20, 1981, Morrill continued to
visit the office on a regular and frequent basis. Morrill, at
the time, instructed the employees "to continue to come
in to work" "for that week or maybe two at the most."
Morrill, on redirect examination, also explained:
There was a substantial amount of accounts receiva-
ble due [during this period].... The Internal Rev-
enue Service requested immediately a list of all ac-
counts receivable and immediately slapped liens on
all those accounts.... The IRS effectively blocked
us out of any further contact with those accounts.
s Morrill noted that, following dissolution, he received "a deficiency
notice from the landlord" of T.E. Elevator; he then "contacted the land-
lord's business agent and advised him that T.E. Elevator ... was not oc-
cupying that space any longer" and "the occupant was Mr. Euell and
that Mr. Euell would have to be responsible for the lease." The landlord
subsequently executed a "release from the lease obligation"; Morrill
Continued
1463
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Thomas Canino, purchasing agent for the city of Stam-
ford, testified that T.E. Elevator had an elevator mainte-
nance contract with the city; that the city received a
notice of levy from Internal Revenue Service pertaining
to T.E. Elevator about February 10, 1981; that Canino
then "instructed the accounts payable department to stop
payment and start in with the IRS"; and that, later, he
also received from Euell a notice, reciting (G.C. Exh.
11):
Euell Elevator Corp.
95 Morgan St.
Stamford, Ct. 06095
324-0823
Effective immediately, Euell Elevator Corp., with
no interruption of service, will fulfill all service
contracts of T.E. Elevator Corp. Please send all
mail to above address.
Canino, however, refused to deal with Euell and his new
Company (see G.C. Exh. 12). Canino explained: "Having
now been notified that there was no more T.E. Elevator
Corp., I advised Mr. Euell that we had no relationship
with any newly formed Company." (Also see R. Exh. 1.)
Werner Valeur-Jensen, owner of Valeur Realty in
Stamford, testified that certain of Realty's properties
were serviced by T.E. Elevator under service contracts
and that he principally dealt with Euell in connection
with these transactions. (see G.C. Exhs. 13-16.) About
January 2, 1981, Euell, on behalf of T.E. Elevator, sent
Valeur-Jensen "new contracts." (See G.C. Exh. 20.)
There was later "some change in the name or ownership
of T.E. Elevator," however, as Valeur-Jensen explained,
[I]t is not quite clear in my mind, but I have a
vague recollection that Mr. Euell called me and
said that there was either a reorganization or a
move or the other....
The "name had changed at some point." See "invoice"
dated 2/19/81, to Werner Jensen from "Euell Elevator
Co. 95 Morgan St., Stamford Connecticut" (G.C. Exh.
17) and "work slip" dated 3/24/81 from "Euell Elevator
Co., Inc." (G.C. Exh. 19). (Cf. G.C. Exh. 18 a "work
slip" dated 3/13/81, which shows the name "T.E. Eleva-
tor Corp.")
John DeRosa, business manager for Charging Party
Union, identified the collective-bargaining contract be-
tween Respondent T.E. Elevator and his Union. (See
G.C. Exh. 21.) This agreement, signed by Euell and
DeRosa on July 19, 1978, was operative at all times per-
tinent to this proceeding. Euell, as recited, signed this
agreement "for the Employer, T.E. Elevator Corp. of
Conn." DeRosa recalled that, during the "existence of
the agreement" G.C. Exh. 21), he principally dealt with
Euell; DeRosa did "not deal with" Morrill or Tittmann.
"signed" the "release"; Euell apparently also "signed"; and "the lease
payments became the responsiblity of Mr. Euell," or Euell Elevator Co.
Thus, the lease of the premises known as 95 Morgan Street, previously
occupied by Respondent T.E. Elevator, "was turned over to Mr. Euell."
The nature of Euell's operation at that facility following T.E. Elevator's
dissolution will be discussed further below.
DeRosa also recalled that, about January 1981, T.E. Ele-
vator "went out of business." DeRosa testified:
The men called me up and said they were having
trouble getting their paychecks. I went down there
and spoke with some of the men . . . and spoke
with Mr. Euell. . . I believe [Euell] told me he
was going out of business.
Respondent Employer T.E. Elevator then "laid off the
employees," "owing us [the Union] some pension and
welfare" moneys, due under the contract.
DeRosa was questioned at length as to when he first
learned that Euell was "still in business." DeRosa testi-
fied, in part as follows:
Q. Did any thing come to your attention with
regard to Mr. Euell's operating in Connecticut?
A. Yes. In May, I believe, of 1982, one of the
members saw Mr. Euell in Stamford, Connecticut
on Summer Street, notified me, followed him to a
job and then called me up and told me that he's in
business and I notified our attorneys.
Q. And did you find out anything more at that
time about Mr. Euell's operations in May of '82?
A. Yeah, I found out he was still in business and
he still had some of the same customers.
Q. Was that the first time you learned that he-
A. That's the first time that I learned that he was
still operating in the State of Connecticut.
Q. You said that you called Mr. Euell back in
early '81; is that right? You were unable to get to
him. Did you make any further efforts?
A. I went down, went down to his building and
could never get in, the door was always locked.
Q. And did you continue to call Mr. Euell
throughout 1981 and 1982?
A. I called Mr. Euell at least a dozen times and
in 1982, I know I called him four or five times.
Q. Did he return any of those calls?
A. Never.
Q. Did you leave messages?
A. With an answering service, I believe, or his
wife-one or the other.
Q. And you said you weren't able to gain access
to his office?
A. No.
Q. Was that at 95 Morgan Street?
A. Right.
Elsewhere, DeRosa testified, in part as follows:
Q. Well, when did you first hear that Mr. Euell,
forgetting the particular name of the corporation,
but that Mr. Euell was still doing business in the el-
evator maintenance and serving industry after Feb-
ruary 1981?
A. May of 1982.
Q. Isn't it a fact that information came to you as
early as May 1981 that Mr. Euell was still in this
business?
1464
T.E. ELEVATOR CORP.
A. I went down and could never get in touch
with him. I called him, went down there.
Q. But this was May 1981 wasn't it, Mr. DeRosa?
A. It could have been.
Q. Well, let me show you your affidavit, perhaps
this will refresh your recollection. It reads, "In May
1981 I learned that Euell, through hearsay, was
back in business and that he was using Mike Ru-
sinak [contractor of record for T.E. with State of
Conn. licensing Department] to do elevator repair.
We filed a grievance on [May] 14, 1981 on this issue
but the real issue was to try to collect our back
contributions."
A. Right.
Q. Now, does that refresh your recollection
about when you learned that Mr. Euell was con-
tinuing to do elevator repair and servicing work?
A. At that time I went down to his office, I
couldn't get in his office, and I checked and
checked and I couldn't-you know, there was no-
where I could establish that he was working.
Q. Now, when you went to his office to what ad-
dress did you go?
A. 95 Morgan Street.
Q. And at that address was there a listing for a
corporation doing elevator service and repair work?
A. Not that I recall, sir.
Q. Is there not a board at the entrance to 95
Morgan Street with wooden signs on it showing of-
fices at that address?
A. There may be but I didn't see any, sir.
Q. Well, when you went to the building did you
ring the bell?
A. I went and I tried to gain access to the same
door that in 1981, the time that I met him there, I
went to that same door and the door was locked. In
fact 90 percent of the time that door is locked.
Q. Did you see any sign on the door?
A. No, I didn't.
Q. Did you check to see if T.E. Elevator Corp.
of Connecticut was still located there?
A. No, I didn't, sir.
Q. Did you go around to the front of the build-
ing?
A. No, I didn't, sir.
Q. Did you speak to anyone at that building? A
superintendent or a janitor?
A. I spoke to a man in the lot once and he
couldn't give me any information whatsoever.
Terrence Euell testified that he is president of Re-
spondent Euell Elevator; that Euell Elevator began oper-
ations during early 1981; and that none of its employees
were "formerly employed" by Respondent T.E. Eleva-
tor. Euell Elevator has the same address and telephone
number as T.E. Elevator, however, "Euell Elevator
Corp." is the named lessee of the 95 Morgan Street of-
fices. (See G.C. Exh. 23.) "Euell Elevator Corp." was in-
corporated by the State of New York about March 11,
1981, and Terrence Euell and his wife Patricia are its
sole or principal officers, directors, and stockholders.
(See G.C. Exhs. 26(a) through 26(h).) Further, Respond-
ent Euell Elevator admittedly continued some 15 service
contracts which, prior to its formation, had been entered
into by Respondent T.E. Elevator. (See G.C. Exhs. 24(a)
through 24(r).) In addition, Respondent Euell Elevator
entered into some 13 new service contracts as "Euell El-
evator Corp." or "Euell Elevator Co., Inc." from "Feb-
ruary 1981 to the present." (See G.C. Exhs. 25(a)
through 25(n).) And, admittedly, some 18 customers of
Respondent T.E. Elevator "did not continue with Euell
Elevator Corp." (See G.C. Exh. 27.)
Euell testified that, while associated with Respondent
T.E. Elevator, Tittmann and Morrill periodically met
with him; "we decided" to sign a contract with the
Union after a discussion; the opening of a new office and
its closing were also a "mutual decision" after a discus-
sion; Morrill even attempted "to make collections" on
overdue accounts; and
. . . before I [Euell] would hire a new employee, I
would have to present to Mr. Tittmann and Mr.
Morrill work programs, signed contracts, stating the
work was in the near future and that the need for
another man was warranted.
Tittmann and Morrill also participated in leasing vehicles
for T.E. Elevator and in making additional financing ar-
rangements. Further, Morrill, at some point, got in-
volved in the T.E. Elevator day-to-day business oper-
ations including "dispatching the men."
Euell recalled how he was "terminated" by Morrill
and Tittmann about January 20, 1981. He was instructed
that his "services were no longer required [and] the key
at the office would be changed." He then sought em-
ployment elsewhere and even applied for state unem-
ployment compensation. He was later informed, during
February 1981, that "T.E. Elevator Corp. of Conn. was
abandoned and they were out of business." Euell then
decided to "go back" and "form a new Company." He
admittedly sent notices to "former customers" of Re-
spondent T.E. Elevator, seeking their bussiness. (See
G.C. Exh. 11.) He also sent the "former customers" no-
tices which, in effect, disclaimed any "business relation-
ship" between Euell Elevator and T.E. Elevator. (See R.
Exh. 1.)
Euell generally claimed that in March or April 1981,
"there would have been a sign in the place," "on the
front door of the office" at 95 Morgan Street, "saying
Euell Elevator," and this "would have been a stencil
sign." Other signs identifying his new Company were ap-
parently placed in front or outside the building; howev-
er, the dates when such signs were installed were un-
clear. (Cf. R. Exhs. 6 and 7.)4
4 On cross-examination, Euell acknowledged that the front door to his
offices, for Euell Elevator, was "locked" "unless" the "secretary .
was there... otherwise, it's locked .... " Euell explained that his wife
and a "partn-time girl" have "been working in the office" from the incep-
tion of his Company. They, however, were not always present. Euell alo
explained that he has had telephone answering service "from the begin-
ning." Euell, in addition, acknowledged that he, in effect, now use the
Contnued
1465
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Discussion
The Supreme Court stated in N.LR.B. v. Burns Securi-
ty Services, 406 U.S. 272, 279, 280, 281 (1972), that, "It
has been consistently held that a mere change of employ-
ers or of ownership in the employing industry is not such
an 'unusual circumstance' as to affect the force of the
Board's certification within the normal operative period
if a majority of employees after the change of ownership
or management were employed by the preceding em-
ployer"; "It would be a wholly different case if the
Board had determined that because [the new employer's]
operational structure and practices differed from those of
[the predecessor], the [particular] bargaining unit was no
longer an appropriate one"; "Likewise, it would be dif-
ferent if [the new employer] had not hired employees al-
ready represented by a union certified as bargaining
agent"; "But where the bargaining unit remains un-
changed and a majority of the employees hired by the
new employer are represented by a recently certified
bargaining agent there is little basis for faulting the
Board's implementation of the express mandate of Sec-
tion 8(a)(5) and Section 9(a) by ordering the employer to
bargain with the incumbent union." The Supreme Court,
however, made it clear that "it does not follow from [the
successor's or new employer's] duty to bargain that it
was bound to observe the substantive terms of the collec-
tive bargaining contract the union had negotiated with"
the predecessor employer "and to which [the successor]
had in no way agreed."
And, in Golden State Bottling Co. v. NLRB, 414 U.S.
168, 171 fn. 2 (1973), the Supreme Court upheld the prin-
ciple and rationale announced earlier by the Board in
Perma Vinyl Corp., 164 NLRB 968 (1967), enfd. sub nom.
United States Pipe & Foundry Co. v. NLRB, 398 F.2d 544
(5th Cir. 1968),
. . . that one who acquires and operates a business
of an employer found guilty of unfair labor prac-
tices in basically unchanged form under circum-
stances which charge him with notice of unfair
labor practice charges against his predecessor
"same" state license or licensing arrangement to perform elevator work;
this license had been used while he was associated with T.E. Elevator.
Apparently, one Michael Rusinak possesses the particular license; Ru-
sinak is now employed by Euell; "but at T.E. he was a partner in the
New York operation." Rusinak holds no "position" in Euell Elevator. He
was initially an officer of T.E. Elevator.
Much of the testimony detailed above is uncontroverted and is substan-
tiated by undisputed documentary evidence. The testimony of Canino
and Valeur-Jensen is thus undisputed and credible. There are, however,
some conflicts between Morrill's recollection of the pertinent sequence of
events and Euell's recollection of these events. I am persuaded here that
Euell has candidly, fully and accurately related the sequence of events.
Insofar as the testimony of Morrill differs with the testimony of Euell, I
credit the testimony of the latter as more complete, detailed and reliable.
In addition, insofar as DeRosa's testimony concerning, in effect, his
knowledge of the existence of Euell Elevator and his efforts to locate
Euell and Euell Elevator differs from the testimony of Euell, I credit the
testimony of Euell. DeRosa's testimony was, at times, vague, contradicto-
ry, and unclear. In short, although I believe that DeRosa in fact made
efforts to locate and speak with Euell, I also believe that Euell and Euell
Elevator did not conceal their location or identity and, had DeRosa been
more diligent, he would not have encountered his claimed difficulties in
finding Euell and Euell's office during the pertinent period.
should be held responsible for remedying his prede-
cessor's unlawful conduct.
The Court sustained the Board's remedial authority to
impose "joint and several liability" in such cases.
Later, in Howard Johnson Co. v. Hotel Employees, 417
U.S. 249, 259 fn. 5 (1974), the Supreme Court explained:
It is important to emphasize that this is not a case
where the successor corporation is the "alter ego"
of the predecessor, where it is "merely a disguised
continuance of the old employer." Southport Petrole-
um Co. v. NLRB, 315 U.S. 100, 106 (1942). Such
cases involve a mere technical change in the struc-
ture 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. See
Southport Petroleum Ca v. NLRB, supra; NLRB v.
Herman Bros Pet Supply, 325 F.2d 68 (CA 6 1963);
NLRB v. Ozark Hardwood Co., 282 F. 2d I (CA 8
1960); NLRB v. Lewis, 246 F.2d 886 (CA 9 1957).
Cf. Cagle's Inc., 218 NLRB 603 (1975); International
Offset Corp., 210 NLRB 854, 865-867 (1974); Fugazy
Continental Corp., 265 NLRB 1301 (1982); and Denzil S.
Alkire v. NLRB, 716 F.2d 1014 (4th Cir. 1983) (pending
petition for rehearing); and cases cited.
In the instant case, the General Counsel does not con-
tend that Respondent Euell Elevator is a successor em-
ployer under Burns or Perma Vinyl. Instead, General
Counsel argues that Respondent Euell Elevator is an
"alter ego" or "disguised continuance" of Respondent
T.E. Elevator and, consequently, has violated Section
8(aX5) and (1) of the Act by not complying with the out-
standing collective-bargaining contract between T.E. El-
evator and the Union. The credible and essentially un-
controverted evidence of record, recited above, does not
support this assertion.
Thus, it is uncontroverted that Morrill and Tittmann
owned two-thirds of the outstanding stock of Respond-
ent T.E. Elevator, from its inception in 1977 or 1978
until its dissolution in early 1981. Euell ultimately ac-
quired only a one-third stock interest in this entity. In
late 1980 and early 1981, Morrill and Tittmann, dis-
pleased with the performance of Euell as "president and
chief executive" of T.E. Elevator, "developed" a "plan"
for "immediately terminating" his "relationship" and
thereby effecting his "severance." This "plan" would re-
quire, inter alia, Euell "not to compete" with T.E. Ele-
vator in the area for a 2-year period. Euell, however, re-
fused to agree to the terms of this "plan." Morrill and
Tittmann promptly changed the "locks" on the door to
T.E. Elevator and, to some limited extent, attempted to
continue operations of T.E. Elevator without Euell.
Euell, as he credibly testified, sought employment else-
where and even applied for and collected state unem-
ployment compensation. Ultimately, Morrill and Titt-
mann dissolved T.E. Elevator. As Morrill acknowl-
1466
T.E. ELEVATOR CORP.
edged, on February 9, 1981, "for all legal and practical
purposes [T.E. Elevator] ceased to exist." About this
same time, Internal Revenue Service, as Morrill further
explained, "slapped liens" on "all accounts receivable"
and "blocked us out of any further contact with those
accounts." Later, Euell, after being apprised that T.E.
Elevator was "abandoned" and "out of business," formed
a new corporation, Euell Elevator; negotiated a new
lease for the premises previously occupied by T.E. Ele-
vator; hired new employees; posted a sign on the door
identifying this new entity; and notified its customers
that it was, in effect, a different and new corporation. As
Stamford city purchasing agent Canino credibly testified,
the city advised Euell that it "had no relationship with
any newly formed Company." The city had previously
dealt with T.E. Elevator. Admittedly, Morrill and Titt-
mann have no economic interest, direct or otherwise, in
Euell Elevator. The formation and creation of Euell Ele-
vator will in no way benefit Morrill or Tittmann or T.E.
Elevator.
The dissolution of T.E. Elevator and the creation of
Euell Elevator, on this record, are clearly not a "mere
technical change in the structure or identity of the em-
ploying entity"; there has been no attempt shown here
"to avoid the effect of labor laws"; there has been, in-
stead, a "substantial change" in the ownership of the two
entities. Cf. Howard Johnson Co. v. Hotel Employees,
above. Morrill and Tittmann, the principal owners of
T.E. Elevator, have no economic interest or benefit in
Euell Elevator. Indeed, Morrill and Tittmann, if success-
ful in getting Euell to agree to their "plan," would have
prevented the formation of this new entity as a potential
competitor of T.E. Elevator. In short, Euell Elevator is
not an "alter ego" or a "disguised continuance" of T.E.
Elevator. It is a new and separate entity.5
' The cases cited by the General Counsel and Charging Party Union,
in support of their contention that Euell Elevator is an "alter ego" or
"disguised continuance," are plainly inapposite here. Thus, for example,
in Superior Sprinkler. Inc., 227 NLRB 204 (1976), the Board found, inter
alia, that "the only change that occurred other than [a] described change
in bidding for new business is the change in the structure of the business
organization." In All Kind Quilting, Inc., 266 NLRB 1186 (1983), the
Board stated, in part: "We agree with the Administrative Law Judge's
In sum, I find and conclude here that Respondent
Euell Elevator is not an "alter ego" or "disguised con-
tinuance" of T.E. Elevator and, therefore, it did not vio-
late Section 8(a)(5) and (1) of the Act as alleged.
CONCLUSIONS OF LAW
1. Respondent is an employer engaged in commerce as
alleged.
2. Charging Party Union is a labor organization as al-
leged.
3. Respondent has not violated Section 8(a)(5) and (1)
of the Act as alleged.
4. The complaint will therefore be dismissed in its en-
tirety.
ORDER6
I recommend that the complaint herein be dismissed in
its entirety.
conclusion that 'All Kind has retained all of the right, title and interest in
the quilting business, that it alone has assumed the risks and derived the
benefits from the quilting business, and that North Side is its alter ego."
The Board then added: "In adopting this conclusion, we note that in
cases of this nature, we have found that an alter ego relationship existed
even though no evidence of actual common ownership was present." In
Crawford Door Sales Co., 226 NLRB 1144 (1976), the Board observed:
In sum, it is apparent that both Respondents at all times material
were wholly owned by members of the Cordes family and never lost
their character as a closed corporation.
And, in American Pac/fic Concrete Pipe Ca, 262 NLRB 1223, 1226 (1982),
the Board noted, inter alia, that "Ampac exercised a degree of control
over Dean so as to obliterate any separation between them." Coun-
sel for Respondent argues in his posthearing brief that the unfair labor
practice "charge in this case was filed more than 16 months after the
Union admits receiving notice of the facts which lit] allege[s] constitute
the violation of the Act," and, consequently, this proceeding is barred by
Sec. 10(b) of the Act. The General Counsel and the Charging Party
argue that the instant charge was filed within the prescribed 6-month
period of "actual or constructive" knowledge that the Employer was en-
gaging in unlawful conduct. In view of my recommended disposition of
this case, as stated above, it is unnecessary to reach this issue. The Gener-
al Counsel's motion to correct the transcript is granted.
6 If no exceptions are filed as provided by Sec. 102.46 of the Board's
Rules and Regulations, the findings, conclusions, and recommended
Order herein shall, as provided in Sec. 102.48 of the Rules, be adopted by
the Board and all objections to them shall be deemed waived for all pur-
poses.
1467