Vallow Floor Coverings

National Labor Relations Board - Board Decisions

Aug 23, 2001

335 N.L.R.B. 20 (N.L.R.B. 2001)

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 20
Vallow Floor Coverings, Inc. and Vallow Carpet In-
stallation, Inc., Alter Egos and Southern Illinois
District Council of Carpenters affiliated with
United Brotherhood of Carpenters and Joiners
of America, AFL–CIO. Case 14–CA–24602
August 23, 2001
DECISION AND ORDER
BY CHAIRMAN HURTGEN AND MEMBERS
LIEBMAN
AND TRUESDALE
On November 2, 1998, Administrative Law Judge Ir-
win H. Socoloff issued the attached decision. The Re-
spondent filed exceptions and a supporting brief.
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the decision and the record
in light of the exceptions and brief and has decided to
affirm the judge’s rulings, findings,1 and conclusions and
to adopt the recommended Order.2
The judge found that Vallow Floor Coverings, Inc.
(VFC), and Vallow Carpet Installation, Inc. (VCI) (to-
gether the Respondent) were alter egos. He also found
that the Respondent violated Section 8(a)(5) of the Act
by refusing, since March 14, 1991, to apply the terms of
its collective-bargaining agreement with the Union to all
bargaining unit employees. We affirm those findings for
the reasons discussed in the judge’s decision.
The Respondent, however, argues that the complaint in
this case is barred by Section 10(b) of the Act, which
provides that “no complaint shall issue based upon any
unfair labor practice occurring more than six months
prior to the filing [and service] of the charge.” The Re-
spondent contends that the Union knew of the alleged
violations as much as 6 years before it filed its charge,
and therefore that the complaint is time-barred. The
judge rejected this contention. We agree with the judge.

1 The Respondent has excepted to some of the judge’s credibility
findings. The Board’s established policy is not to overrule an adminis-
trative law judge’s credibility resolutions unless the clear preponder-
ance of all the relevant evidence convinces us that they are incorrect.
Standard Dry Wall Products, 91 NLRB 544 (1950), enfd. 188 F.2d 362
(3d Cir. 1951 ). We have carefully examined the record and find no
basis for reversing the findings.
Chairman Hurtgen notes that the parties litigated this case on the ba-
sis of alter ego and not single employer. He agrees with the judge that
Vallow Floor Coverings, Inc. (VFC) and Vallow Carpet Installation,
Inc. (VCI) are alter egos. In making this finding, the judge noted that
VCI was created to allow VFC to avoid its collective-bargaining re-
sponsibilities. In view of this, Chairman Hurtgen finds it unnecessary
to reach the issue of whether antiunion motive is the sine qua non of an
alter ego finding.
2 We shall modify the Order to provide for backpay as set forth in
Ogle Protection Service, 183 NLRB 682 (1970), enfd. 444 F.2d 502
(6th Cir. 1971).
Although Section 10(b) bars a complaint based on
unlawful conduct occurring more than 6 months before
the filing and service of the charge, the Board has consis-
tently held that the 10(b) period does not commence until
the charging party has “clear and unequivocal notice” of
the violation. See, e.g., A&L Underground, 302 NLRB
467, 469 (1991). Here, the judge found that the Union
first discovered that there were two Vallow companies
performing installation work, one of which (VFC) was
not complying with the collective-bargaining agreement,
in early 1997. He therefore found that the original
charge, which was filed June 4, 1997, was timely.
Central to our assessment of the judge’s findings is the
distinction the Board drew in A&L Underground be-
tween a simple failure to abide by the terms of a collec-
tive-bargaining agreement and an outright repudiation of
the agreement itself. The Board held that when an em-
ployer completely repudiates the contract, the unfair la-
bor practice is committed at the moment of the repudia-
tion, and the 10(b) period begins to run when the union
has clear and unequivocal notice of the repudiation. Any
subsequent failures or refusals to honor the terms of the
contract do not constitute unfair labor practices them-
selves, but are simply the effect or result of the repudia-
tion.3 Accordingly, the union must file its charge within
6 months after receiving clear and unequivocal notice of
the repudiation or a complaint based on that conduct will
be time-barred, even with regard to contract violations
within the 10(b) period. Id.
By contrast, the Board in A&L Underground held that
if the employer does not repudiate the contract, but only
breaches its provisions, each successive breach consti-
tutes a separate unfair labor practice unrelated to previ-
ous breaches. Consequently, the fact that one or more of
the breaches occurred outside the 10(b) period does not
bar a complaint alleging contract violations within the
10(b) period. Id.
Under A&L Underground, then, if the Union had clear
and unequivocal notice, outside the 10(b) period, that the
Respondent was repudiating the contract, the complaint
would be time-barred. If, on the other hand, the Union
had clear and unequivocal notice, outside the 10(b) pe-
riod, that the Respondent was simply failing to observe
certain terms of the contract, the complaint would not be
time-barred, but the only relief that could be provided
would be for the contract violations that occurred during
the 10(b) period. Of course, if the Union first received
clear and unequivocal notice of the Respondent’s unfair
labor practices within the 10(b) period, as the judge
3 See Machinists Local 1424 (Bryan Mfg. Co.) v. NLRB, 362 U.S.
411 (1960).
335 NLRB No. 7
VALLOW FLOOR COVERINGS 21
found, the complaint would not be time-barred with re-
spect to any of the alleged violations.
Applying the foregoing principles to the facts of this
case, we agree with the judge that the Respondent’s
10(b) defense lacks merit. As stated, the original charge
was filed on June 4, 1997. The Respondent argues that,
as early as March 1991 and again in 1996, it informed
the Union of its dual operation, one entity in compliance
with the collective-bargaining agreement and one entity
not in compliance, and gained the Union’s approval of
this double-breasted operation. However, this argument
is based on the testimony of the Respondent’s witnesses
concerning two conversations, which the judge specifi-
cally discredited. Accordingly, that testimony does not
establish that, as a result of those conversations, the Un-
ion had clear and unequivocal notice of either a complete
contract repudiation or even a simple breach of contract.
The Respondent also relies on an incident that took
place in December 1995. The Respondent’s witness,
VFC installer-employee Corey Carroll testified that
while he was on a VFC job, union organizer John Wy-
rostek visited the jobsite and asked about “union guys on
the job.” Carroll said that there were none and that he
was not a member of the Union. Wyrostek asked for his
name and address and said that Carroll would hear from
him, but Carroll heard nothing. Wyrostek admitted that
he visited the site and spoke to Carroll, but he denied
asking if the workers were union members. The judge
did not resolve the testimonial discrepancy. Instead, he
found that, even under Carroll’s version, the Union was
not put on notice that VCI and VFC were alter egos and
that Vallow was operating on a double-breasted basis.
Thus, the judge found that the Union did not have clear
and unequivocal notice of the Respondent’s unlawful
actions outside the 10(b) period.
Again, we agree with the judge. Accepting Carroll’s
testimony as true, all that he told Wyrostek was that he
and other employees were not union members. This is a
far cry from an employer’s clearly and unequivocally
telling a union that it is repudiating, or even not abiding
by, a collective-bargaining agreement.
Accordingly, we agree with the judge that the Respon-
dent failed to show that the Union, more than 6 months
before it filed its charge in this case, had “clear and un-
equivocal notice” of the Respondent’s unlawful actions.
We also agree with the judge that the correct remedy
here is to require the Respondent to comply retroactively
with its contracts commencing March 14, 1991, and to
make employees whole from that date.4

4 March 14, 1991, marks the date when the Respondent and the Un-
ion signed a successor master agreement and its residential addenda.
The Respondent, relying on Burgess Construction, 227
NLRB 765 (1977), argues in exceptions that even assum-
ing that it violated the Act as alleged, it did not fraudu-
lently conceal its alleged unlawful conduct and, there-
fore, the judge erred by failing to restrict the remedy to 6
months before the charge was filed. We disagree. As the
Board explained in Pullman Building Co., 251 NLRB
1048 (1980), notwithstanding the absence of fraudulent
concealment of conduct in violation of the Act:

There is no logical reason to restrict the remedy to 6
months before the charge was filed, where, as in Bur-
gess, the Union did not immediately become aware of
unfair labor practices through no fault of its own. Once
the 10(b) period has been tolled for the purpose of fil-
ing the charge, the case is before us on the same basis
as is any other case, and hence the usual make-whole
remedy is the appropriate one.

In accord with Pullman, the appropriate remedy in this case
is the one that the judge recommended.
The Respondent also cites American Thoro-Clean, 283
NLRB 1107, 1109 fn. 11 (1987) and Al Bryant, Inc., 260
NLRB 128, fn. 3 (1982), enfd. 711 F.2d 543 (3d Cir.
1983), as support for limiting the remedy to the 10(b)
period. Again, we disagree. Both cases are distinguish-
able on the basis of union knowledge of actionable unfair
labor practices. Unlike the instant case, the union in
American Thoro-Clean and the “Keystone” union in Al
Bryant knew or had reason to know that the respondents
therein were violating the Act well before commence-
ment of the 10(b) period.5 Under these circumstances, as
explained by the judge in American Thoro-Clean (283
NLRB at 1118–1119), equitable estoppel principles war-
rant limiting a remedy to the 10(b) period.6 By contrast,
where, as here, the Union neither knew or had reason to
know until 1997 that the Respondent had been violating
the Act since 1991, extension of the remedy beyond the
10(b) date to 1991 is appropriate.7
5 The Board found no 10(b) bar to the finding of a violation in these
two cases. The cases were decided prior to A&L Underground, supra.
Since the union in these cases had notice outside the 10(b) period, it is
questionable whether the Board, under A&L Underground, would find
no 10(b) bar to the finding of a violation in these cases. See fn. 7 of
A&L Underground.
6 Although the Board in fn. 3 of Al Bryant did limit the remedy to
the 10(b) date of April 3, 1979, with respect to the “Western” union, it
did so not because that union knew or should have known that viola-
tions were occurring before that date, but because, as found by the
judge (at 134), there was no evidence that an unfair labor practice had,
in fact, been committed before then.
7 Chairman Hurtgen agrees that VFC and VCI are alter egos. An al-
ter ego is the “disguised continuance” of the other entity and, as here, is
created with an antiunion motive. Accordingly, although this case may
not meet the standards of “fraudulent concealment,” it is sufficiently
DECISIONS OF NATIONAL LABOR RELATIONS BOARD 22
ORDER
The National Labor Relations Board adopts the rec-
ommended Order of the administrative law judge as
modified below and orders that the Respondent, Vallow
Floor Coverings, Inc., and Vallow Installation, Inc., alter
egos, Edwardsville, Illinois, its officers, agents, succes-
sors, and assigns, shall take the action as set forth in the
Order.

CHAIRMAN HURTGEN, concurring.
I agree with the conclusion reached by my colleagues.
However, I do not agree that “an outright repudiation” of
the agreement is the only event that will trigger the 10(b)
period. Rather, a failure to apply the contract terms can
amount to a de facto repudiation, provided that the union
has actual or constructive knowledge of that failure.1 In
the instant case, Respondent failed to adduce sufficient
evidence that the Union had actual or constructive
knowledge of such a repudiation or failure to apply the
contract.

Kathy J. Talbott-Schehl, Esq, for the General Counsel.
Vance D. Miller, Esq., of St. Louis, Missouri, for the Respon-
dent
Gerald Kretmar, Esq., of St. Louis, Missouri, for the Charging
Party.
DECISION
STATEMENT OF THE CASE
IRWIN H. SOCOLOFF, Administrative Law Judge. Upon a
charge filed on June 4, 1997, and amended on August 27, 1997,
by Southern Illinois District Council of Carpenters affiliated
with United Brotherhood of Carpenters and Joiners of America,
AFL–CIO, herein referred to as the Union, against Vallow
Floor Coverings, Inc., and its alleged alter ego, Vallow Carpet
Installation, Inc., herein called the Respondent, the General
Counsel of the National Labor Relations Board, by the Re-
gional Director for Region 14, issued a Complaint dated August
28, 1997, alleging violations by Respondent of Section 8(a)(5)
and (1) and Section 2(6) and (7) of the National Labor Rela-
tions Act, as amended, herein called the Act. Respondent, by
its Answers, denied the commission of any unfair labor prac-
tices.
Pursuant to notice, trial was held before me in St. Louis,
Missouri, on November 18, and 19, 1997, at which all parties
were represented by counsel and were afforded full opportunity
to be heard, to examine and cross-examine witnesses and to
introduce evidence. Thereafter, the parties filed briefs which
have been duly considered.
Upon the entire record in this case, and from my observa-
tions of the witnesses, I make the following:

close to warrant the application of the remedial principles of that doc-
trine. Thus, as in “fraudulent concealment” cases, Chairman Hurtgen
agrees to extend the remedy here back to 1991.
1 By contrast, specific contract breaches (which amount to unlawful
unilateral changes or modifications) are not repudiations.
FINDINGS OF FACT
I. JURISDICTION
Respondent, Vallow Floor Coverings, Inc. (VFC), an Illinois
corporation, operates a retail facility at 500 East Vandalia, Ed-
wardsville, Illinois, and is engaged in the retail sale and instal-
lation of floor coverings and related products. Respondent,
Vallow Carpet Installation, Inc. (VCI), an Illinois corporation,
has its office at the same location and is engaged in the installa-
tion of floor coverings. During the year ending May 31, 1997,
Respondent VFC, and Respondent VCI, individually and col-
lectively, in conducting their business operations, purchased
and received at the Edwardsville, facility, goods valued in ex-
cess of $50,000, sent directly from points located outside the
State of Illinois. Having concluded, infra, that VFC and VCI
are, as alleged in the Complaint, alter ego companys, I find that,
together, they constitute an employer engaged in commerce
within the meaning of Section 2(2), (6) and (7) of the Act.
II. LABOR ORGANIZATION
The Union is a labor organization within the meaning of Sec-
tion 2(5) of the Act.
III. THE UNFAIR LABOR PRACTICES
A. Background
Respondent, VFC, was incorporated on April 13, 1983, with
a capital investment of $39,000. The officers and directors of
the company are Richard Vallow, president, his wife, Beverly
Vallow, corporate secretary and their son, Mark Vallow, treas-
urer. Richard Vallow and Beverly Vallow each own 26 percent
shares of VFC, and the remaining corporate shares are owned,
equally, by Mark Vallow and his brother-in-law, Seth Renken.
In 1988, Richard Vallow, on behalf of VFC, signed the 1987, to
1990, master agreement between the Union and the Southern
Illinois Builders Association, governing the wages, hours and
working conditions of, inter alia, residential and commercial
floor covering installers employed by signatory employers in
the building and construction industry in Southern Illinois.
VFC also signed residential addenda to that agreement, provid-
ing for lower wage rates on residential projects. During the
term of the contract, VFC made contributions to the contractual
fringe benefit funds, based upon reported work hours, on behalf
of Mark Vallow, Seth Renken and employee Don Smith. Smith
was terminated in March, 1991.
After the July 31, 1990, expiration of the 1987, to 1990,
agreement, Richard Vallow voiced objection to the negotiated
successor contract covering the 1990, to 1993, period. How-
ever, and following discussions with Tom Eversmann, then the
Union’s business representative for Local 295, which serviced
the VFC unit on behalf of the District Council, Richard Vallow
agreed, in 1991, to sign the successor. He did so, on or before
March 14, 1991, on behalf of Respondent, VCI. Concurrently,
he also so signed the new residential addendum. Eversmann,
for the Union, signed those documents on March 14. Thereaf-
ter, on March 20, 1991, VCI was incorporated with a capital
investment of $1000. Beverly Vallow, president, Richard Val-
low, treasurer, and Seth Renken, secretary, are the corporate
officers and they, along with Mark Vallow, are the Company

VALLOW FLOOR COVERINGS 23
directors. The owners, or shareholders, are Richard (24 per-
cent), Beverly (24 percent) and Mark Vallow (26 percent), and
Seth Renken (26 percent). In 1994, Richard Vallow, as repre-
sentative of VCI, signed the 1993, to 1998, contract and its
addendum. Since March, 1991, VCI has made fringe benefit
contributions, in its name, in accordance with reported hours,
on behalf of Mark Vallow and Seth Renken and, occasionally,
for very brief periods of time, a third or fourth installer.
In the instant case, the General Counsel contends that VFC
and VCI are alter egos, and violated Section 8(a)(5) of the Act
by refusing, since March 14, 1991, to apply the terms of its
contracts with the Union to the VFC floor covering installers.
Respondent urges that the two entities may not be viewed as
alter ego employers and that, in any event, as the Union knew,
or should have known, for years before it filed charges with the
Board, that VCI was operated as a “union company,” while
VFC was not, and that both engaged in floor covering installa-
tion, the Complaint is time barred under Section 10(b) of the
Act.
B. Facts1
As noted, following expiration of the 1987, to 1990, contract,
Richard Vallow did not immediately sign its successor. In
October and November, he told Business Representative
Eversmann that he, Vallow, would not execute the new agree-
ment, for competitive reasons. Nonetheless, and despite the
provision contained in the expired contract that it “will continue
in full force and effect from year-to-year beyond July 31,
1990,” unless, during the 60 to 90-day period prior to expira-
tion, by “written notice,” either party informs the other “of its
desire to terminate or modify” the agreement, Vallow did not
provide the requisite written notice. To the contrary, VFC con-
tinued to report fringe benefit hours for Mark Vallow, Renken
and Smith, and made contributions to the funds on their behalf.
By letter dated February 22, 1991, Eversmann advised the
employee fringe benefit funds office that, as VFC “has termi-
nated its collective-bargaining agreement and has refused to
sign a new agreement with the Southern Illinois District Coun-
cil of Carpenters,” it could not continue, legally, to make fringe
benefit contributions for its employees. Eversmann sent cour-
tesy copies of the letter to VFC and to Mark Vallow, Renken
and Smith. At trial, Eversmann testified that the sending of
such notices was tactical, designed to encourage reluctant con-
tractors to sign successor collective-bargaining agreements.
Five days later, Richard Vallow met with Eversmann at the
union hall and, as indicated, by March 14, he had signed the

1 The fact-findings contained herein are based upon a composite of
the documentary and testimonial evidence introduced at trial. Where
necessary to do so, in order to resolve significant testimonial conflict,
credibility resolutions have been set forth, infra. In general, I have
relied upon the testimony of Tom Eversmann, executive secre-
tary/treasurer of the Southern Illinois District Council of Carpenters
and, formerly, business representative for Carpenters Local 295, who
impressed me as an honest and forthright witness. On the other hand, I
have viewed with great suspicion the disputed portions of the testimony
of Richard Vallow, and that of Mark Vallow, owners, officers and
directors of VFC and VCI, in light of their demeanor as witnesses and
the evasive and, at times, internally inconsistent manner in which they
related events.
1990, to 1993, contract and its addendum. When Eversmann
signed those documents, on March 14, he noted that Vallow
had executed them on behalf of VCI, leading Eversmann to
assume, he testified, that Vallow was separating his retail busi-
ness from his installation business. In any event, and for the
reasons noted at footnote 1, I reject entirely the disputed testi-
mony of Richard Vallow and Mark Vallow that, in the period
preceding contract execution, Eversmann had suggested to
them that they form a second company to perform “union
work,” allowing Mark Vallow and Renken to maintain fringe
benefit fund coverage, while utilizing VFC for jobs not requir-
ing “union labor.”
Following its March 20, 1991, incorporation, VCI has
worked out of the same business address as VFC, without
charge, and has utilized VFC’s telephone number and fax num-
ber. While VFC is engaged in the retail sale of floor coverings,
as well as its installation, in the Edwardsville, Glen Carbon,
Collinsville and Bellesville, Illinois, areas, VCI engages, only,
in the installation of floor products, in the same areas. Since
inception, VCI has performed work solely for VFC, and has no
other customers. Indeed, all work performed by VCI is ob-
tained and bid on by VFC, and VCI’s only source of funds is
from VFC. VFC owns the equipment, trucks and covering
materials used by both companies, while VCI owns no floor
covering products, supplies, materials, equipment, vehicles or
tools but, rather, uses those of VFC, without charge. All vehi-
cles are marked, “Vallow Floor Coverings.”
VCI does not bid on jobs, nor does it submit invoices or bills
to VFC for its installation work. Customers are billed by VFC,
and submit payments to VFC, for work performed by VCI.
Neither estimates nor bills indicate to the customer which com-
pany will perform the work. When VFC makes payment to the
separate VCI bank checking account, it is not for services ren-
dered, but, rather, an amount sufficient to cover the wages,
fringe benefit contributions and payroll taxes for its installers,
Mark Vallow and Renken, and the corporate and other taxes.
Indeed, when work is performed for a customer, records are not
maintained showing whether, and to what extent, one company
or the other has handled the job. Rather, Richard Vallow testi-
fied, he estimates the amount of work performed by each Val-
low entity by “What is in my mind. That is the only mecha-
nism I use.”
Mark Vallow and Renken receive a set salary each week
from VCI, regardless of the number of hours they work. On the
other hand, they receive no wages from VFC for the installation
and other work they perform for that Company but, instead, are
paid bonuses based upon the profits of the business. Vallow
and Renken monitor and insure the proper installation of floor
covering products by both VFC and VCI, and order the materi-
als and supplies that they use.
Richard and Mark Vallow, and Seth Renken, manage the
day-to-day affairs of both VFC and VCI and they, and Beverly
Vallow, participate in the hiring, disciplining, instruction and
assignment of all employees of both companies. Beverly Val-
low supervises the clericals and secretaries of VFC, who per-
form administrative duties.
Prior to March, 1991, VFC performed floor installation work
on residential and commercial “union projects.” Since that
DECISIONS OF NATIONAL LABOR RELATIONS BOARD 24
time, VCI has performed the work when “union labor” is re-
quired. Although Richard Vallow initially testified that VCI
was created to perform the commercial work as a “union con-
tractor,” while VFC was to do the residential work “non-
union,” the record evidence shows that both companies have
performed commercial and residential work.
Eversmann credibly testified that he first learned that there
were two Vallow entities performing installation work, one in
compliance with the collective-bargaining agreement with the
Union, and one not in compliance, early in 1997, when a non-
signatory contractor asked one of the Union’s business agents
for a similar arrangement. Thereafter, Eversmann asked Local
295 business representative Lee Wallace to investigate, and to
watch the Vallow jobs and check on who was working on them.
As a result, Eversmann learned of floor covering installation
jobs performed by Vallow, in the Spring of 1997, involving
employees in addition to Mark Vallow and Renken, not re-
ferred by the Union, although Respondent generally reported
fringe benefit hours for Mark Vallow and Renken, only. An
ensuing audit of Respondent’s books, conducted by the fringe
benefit funds, showed that the only transactions on VCI’s
books were the transfers of money from VFC for payment of
wages, fringe benefit contributions and taxes. The charges in
the instant case were then filed.
In support of its claim that the Union knew, long before
1997, of the dual Vallow floor covering installation operation,
Respondent offered the testimony of VFC installer Corey Car-
roll, concerning an incident which occurred on December 26,
1995. On that date, he testified, as he and fellow installer Tim
Sullivan lay carpet at a new house in Edwardsville, Illinois,
Union organizer John Wyrostek appeared on the site and asked
if there were “any union guys on the job.” Carroll further testi-
fied that he told Wyrostek, no, and that he, Carroll, was not a
member of the Union . Although, according to Carroll, Wy-
rostek asked for, and wrote down, Carroll’s name and address,
and told Carroll that he would hear from him, Carroll, in fact,
never heard from Wyrostek again. Sullivan was not called to
testify. Wyrostek, in his testimony, admitted to stopping at the
jobsite and speaking to Carroll and another worker. He claimed
that his purpose was to introduce himself and, as he knew that
Vallow was a signatory contractor, he did not ask the workers if
they were union members, or write down their names and ad-
dresses.
Mark Vallow testified that in February, 1996, at a jobsite, he
told Business Representative Wallace about the dual operation,
and that it had been approved by Eversmann. Wallace, in his
testimony, while confirming that a conversation occurred, de-
nied that Mark Vallow, or anyone else, so advised him. As I
found Wallace a forthright and believable witness, while, as
noted at footnote 1, I was not similarly impressed by Mark
Vallow, I credit Wallace’s testimony concerning the conversa-
tion in question, and find that it occurred as he testified.
C. Conclusions
Formal termination requirements of the 1987, to 1900, col-
lective-bargaining agreement aside, the record evidence estab-
lishes that, at least by the time of the Union’s February 22,
1991, letter to the benefit funds office, with a courtesy copy
sent to VFC, both the Union and VFC regarded their contrac-
tual relationship as ended. However, unwilling to accept lapse
in the fringe benefit coverage for Mark Vallow and Seth Ren-
ken, Richard Vallow, on or before March 14, 1991, renewed a
collective-bargaining relationship with the District Council.
While, formally, he signed the new contract on behalf of VCI, a
Company unknown as such to the Union, VCI was not yet in
existence and was not created until later. In the circumstances,
Richard Vallow’s action must be seen as one on behalf of the
Vallow entity which, at the time, included VFC, only. It is in
this light, and against this background, that the alter ego ques-
tion must be considered.
The Board will find an alter ego relationship to exist be-
tween two nominally separate entities if the two employers
concerned have substantially identical management, business
purpose, operations, equipment, customers and supervision, as
well as ownership.2 In the absence of an identity of ownership,
or an ownership interest demonstrated by the holdings of one
company in the other, the Board will examine whether the de-
gree of control exercised by the first entity in the affairs of the
second is such “as to obliterate any separation between them.”3
Additionally, the Board assesses whether the new or second
company was created so as to allow the old employer to evade
responsibilities under the Act, and whether the two entities deal
with each other, if at all, at arm’s length, with due regard for
separateness.4 However, unlawful motivation is not a neces-
sary element of an alter ego finding.5 Indeed, the Board has
consistently held that no one factor, taken alone, is determina-
tive, a substance-over-form approach approved by the courts.
Thus, in Omnitest Inspection Services,6 the Court, in enforcing
the Board’s order, stated:

[The Employer’s] challenge to the Board’s reliance on actual
control suggests that an alter ego finding should turn upon
formal ownership alone. This argument ignores the Board’s
decisions that the substantial identity of formal ownership is
not the sine qua non of an alter ego relation-ship . . . . We are
satisfied that the Board’s multi-factor test is a reasonable con-
struction of the Act, and that depending on the facts of the
case, actual control can be more significant than formal own-
ership.

Once a finding of alter ego relationship is made, it follows that
the collective-bargaining agreement of the one employer is
binding upon the second entity.7
In applying the above criteria, Board case law also instructs
that, in the absence of common ownership, the older company
must exercise very substantial control over the new one, in
order to support an alter ego finding. Further, the lack of anti-
union motivation in the creation of the second entity generally

2 Advance Electric, Inc., 268 NLRB 1001 (1984).
3 American Pacific Concrete Pipe Co., 262 NLRB 1223 (1982).
4 Fugazy Continental Corp., 265 NLRB 1301 (1982), enfd. 725 F.2d
1416 (D.C. Cir. 1984).
5 Johnstown Corp., 313 NLRB 170 (1993), enf. denied and re-
manded 41 F. 3d 141 (3rd Cir. 1994), supp. dec. 322 NLRB 818
(1997).
6 297 NLRB 752 (1990), enfd. 937 F. 2d 112 (3rd Cir. 1991).
7 Watt Electric Co., 273 NLRB 655 (1984).

VALLOW FLOOR COVERINGS 25
millitates against finding a “disguised continuance” of the
original organization.
In this case, VFC and VCI are owned and controlled by the
same four individual shareholders, in similar percentages, and
those persons are the corporate directors and officers of both
companies. As shown in the Statement of Facts, management
and supervision of the two companies are identical. They are
engaged in the exact same residential and commercial floor
covering installation business, in the same geographic area,
operate out of the same facility and use the same equipment,
tools, trucks, materials and supplies to service the same cus-
tomers. Nor do the two companies deal with each other at
arm’s length, or with regard for separateness. Rather, VCI
utilizes the VFC facility without charge and, similarly, it enjoys
use of the VFC materials and equipment at no cost to it. In-
deed, VCI’s only source of funds is the money deposited to its
account by VFC, not for services rendered to VFC, but in suffi-
cient amount, only, to allow VCI to pay wages, fringe benefit
contributions and taxes. The only mechanism used to separate
the work performed by one company, from the work done by
the other, as explained by Richard Vallow, is “what is in my
mind.” All work, by either entity, is bid on and obtained by
VFC, without indication as to which company will do the job.
All completed work is billed by VFC, for payment into a VFC
bank account. No records are maintained showing work per-
formed by VCI, or expenses generated by it.
In addition to the above, the record evidence shows that VCI
was created immediately after the signing of the 1990, to 1993,
collective-bargaining contract, without significant capitaliza-
tion, demonstrably for the purpose of allowing for the contin-
ued contractual fringe benefit coverage of two of the VFC in-
stallers, while allowing VFC otherwise to avoid its collective-
bargaining responsibilities. Indeed there is not a scintilla of
evidence in the record to suggest any other reason why VCI
was formed and, thereafter, was operated, essentially as an
empty shell, without real seperation from VFC.
All of the critical factors traditionally relied upon by the
Board to support alter ego findings are present here. I thus
conclude that VFC and VCI are alter ego companies, bound to
the terms of the collective-bargaining agreements with the Dis-
trict Council signed by Richard Vallow.
In reaching the above conclusion, I reject Respondent’s con-
tention that the late 1995, casual conversation between Union
representative Wyrostek and VFC installer Carroll, during
which Carroll allegedly told Wyrostek that he was not a mem-
ber of the Union, alerted, or should have alerted, the Union to
the fact that VCI existed, as an alter ego of VFC, and that the
Vallow entity was operating a double-breasted operation. Even
accepting Carroll’s version of this very brief conversation, Re-
spondent utterly has failed to meet its burden, in support of its
defense under Section 10(b) of the Act, to show that the Union,
more than 6 months before it filed its charges in this case, had
“clear and unequivocal notice” of Respondent’s unlawful ac-
tions.8

8 See Chinese American Planning Council, 307 NLRB 410 (1992).
IV. THE EFFECTS OF THE UNFAIR LABOR PRACTICES
UPON COMMERCE
The activities of Respondent set forth in Section III, above,
occurring in connection with its operations described in Section
I, above, have a close, intimate and substantial relation to trade,
traffic and commerce among the several states and tend to lead
to labor disputes burdening and obstructing commerce and the
free flow of commerce.
CONCLUSIONS OF LAW
1. Vallow Floor Coverings, Inc., and Vallow Carpet Installa-
tion, Inc., alter egos, constitute an employer engaged in com-
merce, and in operations affecting commerce, within the mean-
ing of Section 2(2), (6) and (7) of the Act.
2. Southern Illinois District Council of Carpenters affiliated
with United Brotherhood of Carpenters and Joiners of America,
AFL-CIO, is a labor organization within the meaning of Sec-
tion 2(5) of the Act.
3. All residential and commercial floor covering installers
employed by Respondent at its Edwardsville, Illinois, facility,
constitute a unit appropriate for the purposes of collective-
bargaining within the meaning of Section 9(b) of the Act.
4. At all times material herein the Union has been the exclu-
sive representative of all employees in the aforesaid bargaining
unit for the purposes of collective bargaining within the mean-
ing of Section 9(a) of the Act.
5. By refusing, since March 14, 1991, to apply the terms of
its collective-bargaining agreements with the Union to all unit
employees, including payment to them of contractual wages
and payment on their behalf of fringe benefit contributions,
Respondent has engaged in unfair labor practice conduct within
the meaning of Section 8(a)(5) of the Act.
6. The aforesaid unfair labor practices affect commerce
within the meaning of Section 2(6) and (7) of the Act.
THE REMEDY
Having found that Respondent has engaged in certain unfair
labor practice conduct in violation of Section 8(a)(5) of the Act,
I shall recommend that it be ordered to cease and desist there-
from and to take certain affirmative action designed to effectu-
ate the policies of the Act.
On these findings of fact, and conclusions of law and on the
entire record, I hereby issue the following recommended9
ORDER
Respondent, Vallow Floor Coverings, Inc., and Vallow Car-
pet Installation, Inc., alter egos, Edwardsville, Illinois, its offi-
cers, agents, successors and assigns shall
1. Cease and desist from:
(a) Refusing to bargain collectively with the Union, in an
appropriate unit, by refusing to apply the terms of its collective-
bargaining agreements, including wage rates and fringe benefits
9 In the event no exceptions are filed as provided by Section 102.46
of the Rules and Regulations of the National Labor Relations Board,
the findings, conclusions and recommended Order herein shall, as
proided in Section 102.48 of the Rules and Regulations, be adopted by
the Board and become its findings, conclusions and Order, and all
objections thereto shall be deemed waived for all purposes.
DECISIONS OF NATIONAL LABOR RELATIONS BOARD 26
fund contributions, to the employees of Vallow Floor Cover-
ings, Inc.
(b) In any like or related manner, interfering with, restrain-
ing or coercing employees in the exercise of the rights guaran-
teed them in Section 7 of the Act.
2. Take the following affirmative action necessary to effec-
tuate the policies of the Act.
(a) Honor and abide by the terms and conditions of its exe-
cuted contracts with the Union since March 14, 1991, and make
whole its employees represented by the Union for any loss of
pay and other benefits suffered as a result of Respondent’s
refusal to apply those contracts to all unit employees. Backpay
shall be computed as set forth in F. W. Woolworth Co., 90
NLRB 289 (1950), with interest as computed in New Horizons
for the Retarded, 283 NLRB 1173 (1987).
(b) Pay all contractually required fringe benefit fund contri-
butions not previously paid, in accordance with Merryweather
Optical Co., 240 NLRB 1213, 1216 (1979). In addition, make
unit employees whole for any expenses resulting from the fail-
ure to make such contributions, with interest, 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.
(c) Preserve and, on request, make available to the Board or
its agents, for examination and copying, all payroll records,
social security payment records, timecards, personnel records
and reports, and all other records necessary to analyze the
amount of money due under the terms of this Order.
(d) Within 14 days after service by the Region, post at its
facility in Edwardsville, Illinois, copies of the attached notice
marked “Appendix.”10 Copies of the notice, on forms provided
by the Regional Director for Region 14, after being signed by
Respondent’s authorized representative, shall be posted by
Respondent and maintained for 60 consecutive days, in con-
spicuous places, including all places where notices to employ-
ees are customarily posted. Reasonable steps shall be taken by
Respondent to ensure that the notices are not altered, defaced or
covered by any other material. In the event that Respondent
has gone out of business or closed the facility involved in this
proceeding, it shall duplicate and mail, at its own expense, a
copy of the notice to all current and former employees em-
ployed by Respondent at any time since March 14, 1991.

10 If this Order is enforced by a judgment of a United States court of
appeals, the words in the notice reading “Posted by Order of the Na-
tional Labor Relations Board” shall be changed to read “Posted Pursu-
ant to a Judgement of The United States Court of Appeals enforcing an
Order of The National Labor Relations Board.”
(e) 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
Respondent has taken to comply herewith.
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government

The National Labor Relations Board has found that we violated
the National Labor Relations Act and has ordered us to post and
abide by this notice.

WE WILL NOT refuse to bargain collectively with Southern
Illinois District Council of Carpenters affiliated with United
Brotherhood of Carpenters and Joiners of America, AFL–CIO,
in an appropriate bargaining unit of residential and commercial
floor covering installers, by refusing to apply the terms of col-
lective-bargaining agreements entered into with the Union to all
unit employees.
WE WILL NOT in any like or related manner, interfere with,
restrain or coerce employees in the exercise of their rights guar-
anteed in Section 7 of the Act.
WE WILL honor and abide by the terms and conditions of
our contracts with the Union, since March 14, 1991, and make
whole our employees represented by the Union for any loss of
pay and other benefits suffered as a result of our refusal to ap-
ply those contracts to all unit employees, plus interest.
WE WILL pay all contractually required fringe benefit fund
contributions not previously paid and make unit employees
whole for any expenses resulting from our failure to make such
contributions, plus interest.

VALLOW FLOOR COVERINGS, INC. AND
VALLOW CARPET INSTALLATION, INC.