C.E.K. Industrial Mechanical Contractors, Inc. v. National Labor Relations Board

921 F.2d 350
CourtCourt of Appeals for the First Circuit
DecidedDecember 17, 1990
DocketNo. 89-2008
StatusPublished
Cited by14 cases

This text of 921 F.2d 350 (C.E.K. Industrial Mechanical Contractors, Inc. v. National Labor Relations Board) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
C.E.K. Industrial Mechanical Contractors, Inc. v. National Labor Relations Board, 921 F.2d 350 (1st Cir. 1990).

Opinion

TORRUELLA, Circuit Judge.

The petitioners, C.E.K. Industrial Mechanical Contractors, Inc. (“CEK”) and CAM-FUL Industries, Inc. (“Cam-Ful”) (together, the “Companies”) request this court to review the finding of the National Labor Relations Board (“Board”) of unfair labor practices. The Board cross-petitions for enforcement of its order. The major issue presented is whether the Board’s finding that the Companies violated the National Labor Relations Act, 29 U.S.C. §§ 151 et seq. (“NLRA”), by failing to apply the terms of a collective bargaining agreement to unit employees is supported by substantial evidence.1 In order to resolve this point we must address several subsidiary issues: (1) whether CEK and Cam-Ful are alter egos; (2) whether the collective bargaining agreement between CEK (through an employers association) and the Union terminated or was automatically renewed; and (3) whether the Companies should be held retroactively to the Board’s new position regarding the repudiation of § 8(f) prehire construction agreements.2

We also must determine whether substantial evidence supports the Board’s finding that the Companies committed an unfair labor practice in failing to provide the Union with requested relevant information. Upon reviewing the facts and the relevant law, we conclude that although the Board’s findings are supported by substantial evidence, under these circumstances, manifest injustice would result from the retroactive application of the Board’s new § 8(f) repudiation policy. Therefore, for reasons expanded upon below, we decline to enforce the Board’s order.

I. FACTS

Robert Bradley incorporated Cam-Ful in November 1979, to engage in the real estate business. Bradley provided 75% of the [352]*352financing for Cam-Ful and acted as its president; his partner Peter Nowyj provided the balance of the capital and held the title of secretary-treasurer. Both men were employed full-time with other companies. Cam-Ful was a week-end operation. Its primary function was preparing foreclosed-upon properties for resale; its activities included general construction, plumbing and janitorial services. Bradley and Nowyj performed most of the work themselves.

In April 1981, Bradley left his other job and incorporated CEK as a construction contractor specializing in plumbing. Bradley was always the sole owner of CEK, but because of local licensing requirements, CEK issued 51% of its stock to a licensed master plumber. After incorporating CEK, Bradley amended Cam-Ful’s certificate of organization to provide that it had the purpose of performing construction work.

Bradley’s goal in forming CEK was apparently to run it as a double-breasted operation, parallel with Cam-Ful, enabling him to bid on both union (via CEK) and non-union (via Cam-Ful) contracts.3 Pursuant to this plan, in September 1981, Bradley signed, in the name of CEK, the collective bargaining agreement (“Agreement”) between the Master Plumbing Association (“Association”), a multi-employer group, and Plumbers and Gasfitters Local 54 of the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry (“Union”).4 The Agreement was a prehire agreement of the type authorized for the construction industry by § 8(f) of the NLRA, 29 U.S.C. § 158(f). CEK did not become a member of the Association.

The Agreement ran from July 1, 1981, to June 30, 1983, and provided for a one-year automatic renewal unless either party gave 60 days written notice to the other of intent to terminate. Pursuant to this provision, in 1983 the Association gave timely notice of termination and requested renegotiation. In June 1983, the Association and the Union reached a new agreement. In July 1983, the Union invited contractors that had been signatory to the 1981-1983 Agreement, including CEK, to sign a memorandum adopting the new Agreement. In August, CEK replied to the Union, stating that it declined to adopt the new Agreement but was willing to engage in individual bargaining for a separate agreement.

In the meantime, the Union had become aware that Bradley was operating both a union and a non-union construction company. When contacted by the Union, Bradley denied the allegations. He later asserted that he was operating a legitimate double-breasted enterprise. The Union made several efforts to obtain more information from Bradley about the structure of the two companies, but these efforts generated only late and sketchy responses.

In the fall of 1983, Bradley decided to close down CEK. Its two remaining employees, both Union members, were transferred to Cam-Ful’s payroll. CEK's equipment was divided between Bradley and Cam-Ful. Cam-Ful then completed the work which remained on projects begun by CEK. Cam-Ful has continued to operate as a construction contractor, handling some plumbing work.

II. PROCEEDINGS BELOW

The Union filed an unfair labor practice charge based upon the Companies’ failure to apply the terms of the CEK collective bargaining agreement with the Union to the workers performing plumbing work for Cam-Ful and upon Bradley’s failure to provide the Union with the information it requested. The Board issued a complaint.

[353]*353After a hearing, the administrative law judge (“AU”) dismissed the complaint. He refused to find alter ego status as between CEK and Cam-Ful. Although there was no doubt that the Companies shared common ownership, and in fact constituted a single employer under the NLRA, the AU concluded that because of an absence of anti-union motive, and because Cam-Ful had pre-existed CEK, the Companies were not alter egos. These two facts, in his view, precluded a finding that Bradley had structured the Companies so that he could divert work from the union to the non-union operation. The AU also found that the Agreement between CEK and the Union had not been automatically renewed; rather, it had terminated when the Association gave notice to the Union. Finally, he found that no violation had occurred from Bradley’s failure to provide the requested information.

The Board disagreed with the AU, finding that an alter ego relationship existed between Cam-Ful and CEK based on common ownership, financial management, and business purpose. The Board treated Cam-Ful’s prior existence as nondetermina-tive, because after the creation of CEK, Cam-Ful’s incorporation certificate was amended to allow it to perform work similar to that for which CEK was incorporated. Moreover, the nature of Cam-Ful’s operations after the closing of CEK demonstrated the existence of an alter ego relationship. The Board also found that the contract had been automatically renewed because CEK itself had sent no termination notice; as a non-member which had not delegated its bargaining authority, CEK was not entitled to rely upon the notice sent by the Association. Based on these conclusions, the Board found that the Companies had committed unfair labor practices in violation of §§ 8(a)(1) and (5) of the NLRA, 29 U.S.C. §§ 158(a)(1), (5). Finally, the Board held that Bradley’s failure to provide information violated § 8(a)(5) (bargaining in bad faith).

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Bluebook (online)
921 F.2d 350, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cek-industrial-mechanical-contractors-inc-v-national-labor-relations-ca1-1990.