Elec/Mech Svcs Inc v. NLRB

CourtCourt of Appeals for the Fourth Circuit
DecidedMay 30, 1997
Docket96-1783
StatusPublished

This text of Elec/Mech Svcs Inc v. NLRB (Elec/Mech Svcs Inc v. NLRB) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Elec/Mech Svcs Inc v. NLRB, (4th Cir. 1997).

Opinion

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

INDUSTRIAL TURNAROUND CORPORATION; ELECTRICAL/MECHANICAL SERVICES, INCORPORATED, No. 96-1783 Petitioners,

v.

NATIONAL LABOR RELATIONS BOARD, Respondent.

NATIONAL LABOR RELATIONS BOARD, Petitioner,

INDUSTRIAL TURNAROUND No. 96-1926 CORPORATION; ELECTRICAL/MECHANICAL SERVICE, INCORPORATED, Respondents.

On Petition for Review and Cross-Application for Enforcement of an Order of the National Labor Relations Board. (5-CA-23392, 5-CA-23915)

Argued: January 30, 1997

Decided: May 30, 1997

Before LUTTIG and WILLIAMS, Circuit Judges, and CLARKE, Senior United States District Judge for the Eastern District of Virginia, sitting by designation.

_________________________________________________________________ Petition for review granted in part and denied in part. Petition for enforcement granted in part and denied in part, and remanded by pub- lished opinion. Judge Williams wrote the opinion, in which Judge Luttig and Senior Judge Clarke joined.

_________________________________________________________________

COUNSEL

ARGUED: David Raymond Simonsen, Jr., Richmond, Virginia, for Petitioners. Linda S. Neighborgall, NATIONAL LABOR RELA- TIONS BOARD, Washington, D.C., for Respondent. ON BRIEF: Frederick L. Feinstein, General Counsel, Linda Sher, Associate Gen- eral Counsel, Aileen A. Armstrong, Deputy Associate General Coun- sel, Linda Dreeben, Supervisory Attorney, NATIONAL LABOR RELATIONS BOARD, Washington, D.C., for Respondent.

_________________________________________________________________

OPINION

WILLIAMS, Circuit Judge:

Industrial TurnAround Corporation (ITAC), an electrical construc- tion firm, petitions for review of a decision and order of the National Labor Relations Board (NLRB) finding that ITAC and its alter ego, Electrical/Mechanical Services, Inc. (EMSI), violated § 8(a)(1), (a)(3), and (a)(5) of the National Labor Relations Act (the Act), see 29 U.S.C.A. § 158(a)(1), (a)(3), & (a)(5) (West 1973 & Supp. 1997), by refusing to abide by a collective-bargaining agreement negotiated on ITAC's behalf by the Virginia Chapter of the National Electrical Contractors Association (NECA). The NLRB cross-petitions for enforcement of its decision and order. For the reasons that follow, we conclude that ITAC and EMSI were alter egos, and that the compa- nies violated § 8(a)(1), (a)(3), and (a)(5) of the Act. We also con- clude, however, that the NLRB abused its discretion in ordering the remedy in this case. Accordingly, we grant in part and deny in part ITAC's petition for review, grant in part and deny in part the NLRB's cross-petition for enforcement, and remand the case to the NLRB for the entry of an appropriate remedial order.

2 I.

On April 2, 1990, ITAC President Sidney Harrison executed a let- ter of assent designating NECA as ITAC's "collective bargaining rep- resentative for all matters contained in or pertaining to the current and any subsequent approved INSIDE CONSTRUCTION labor agree- ment between [NECA] and [the International Brotherhood of Electri- cal Workers, Local 666, AFL-CIO (the Union)]." (J.A. at 316.) By its terms, the letter of assent was to remain in effect until terminated by ITAC's "giving written notice to [NECA] and to the Local Union at least one hundred fifty (150) days prior to the then current anniver- sary date of the applicable approved labor agreement." (J.A. at 316.) At the time the letter of assent was executed, a collective-bargaining agreement between NECA and the Union was in force until August 31, 1992.

On August 31, 1992, when the 1990-92 agreement expired, the par- ties had not completed negotiations for a successor agreement. During the fall of 1992, while negotiations for a new agreement were under- way, ITAC continued to comply with the 1990-92 agreement, paying wages specified in the expired agreement and collecting and remitting to the Union employee-authorized payroll deductions for Union dues and benefit funds.

On November 9, 1992, Harrison incorporated EMSI as a nonunion company performing electrical construction and pipefitting work. Harrison's primary purpose for establishing EMSI was to "get around" ITAC's union contract. Harrison's wife, Glenn, was the sole shareholder of EMSI. Her $100,000 investment in the company was made up of funds supplied to her by Harrison, who withdrew them from ITAC bank accounts and directed their deposit into an EMSI account.

ITAC stopped bidding on electrical construction jobs in November 1992. At that time, the company's outstanding electrical construction work was transferred to EMSI. During 1993, over 70 percent of EMSI's electrical projects were performed either directly for or under subcontract to ITAC, or for ITAC's former customers. ITAC was responsible for over 45 percent of EMSI's total sales during 1993. ITAC and EMSI shared a business address and premises, furnishings,

3 tools, equipment, and trucks. The companies also used the same sup- pliers of accounting, insurance, and banking services. Sidney Harri- son controlled both ITAC and EMSI.

In late 1992, ITAC informed its two remaining employees, John Perkins and David Deane, that ITAC had run out of electrical con- struction work and did not intend to bid for more, and asked them whether they would work at EMSI, a nonunion shop. Both declined. Beginning in November 1992 and continuing through 1993, EMSI hired electrical workers. During this time, EMSI told five employ- ment applicants who wore union insignias or whose applications revealed prior employment with union contractors that it was not hir- ing. At one employment interview, an EMSI representative asked an applicant, "Are you Union?" (J.A. at 54.)

Finally, on January 25, 1993, NECA and the Union reached agree- ment and signed the 1992-94 successor agreement. The 1992-94 agreement, effective retroactively to September 1, 1992, required sig- natories to obtain unit employees from the Union's hiring hall. On May 6, 1993, ITAC notified NECA and the Union that effective immediately it was terminating its letter of assent, revoking its grant of bargaining authority to NECA, and repudiating the 1992-94 agree- ment.

On March 19 and September 20, 1993, the Union filed charges against ITAC, alleging that ITAC and EMSI were alter egos and that the companies had violated § 8(a)(1), (a)(3), and (a)(5) of the Act. The case was heard by an Administrative Law Judge (ALJ) on June 21-24, and August 8-10, 1994. The ALJ concluded that ITAC had violated § 8(a)(5) of the Act by creating EMSI as an alter ego and by repudiating the 1992-94 agreement. Additionally, the ALJ determined that ITAC and EMSI violated § 8(a)(1) and (a)(3) of the Act by inter- rogating a job applicant concerning his Union affiliation, by construc- tively discharging employees John Perkins and David Deane because they balked at working for a nonunion company, and by refusing to hire job applicants Thomas Dagrosa, Dudley Ledford, Robert Burks, George Harris, and Ernest Kelley because of their affiliation with the Union.

The ALJ recommended an extensive remedy, ordering that ITAC cease and desist from engaging in unfair labor practices; make whole

4 applicants, employees, and various employee trust funds; and comply with the 1992-94 collective-bargaining agreement. The remedy was premised on the ALJ's finding that "[f]or the period September 1, 1992 through August 31, 1994, the Union was the exclusive bargain- ing representative of the employees in the appropriate unit within the meaning of Section 9(a) of the Act." (J.A. at 506.) The NLRB adopted the recommended order of the ALJ with no substantial modi- fications. ITAC appeals.

II.

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