Union Builders, Inc. v. NLRB

• Court: Court of Appeals for the First Circuit
• Decided: October 20, 1995
• Docket: 95-1294
• Status: Published

Opinion

USCA1 Opinion

UNITED STATES COURT OF APPEALS

                                FOR THE FIRST CIRCUIT

                                 ____________________



          No. 95-1294



                                UNION BUILDERS, INC.,

                                     Petitioner,



                                          v.



                           NATIONAL LABOR RELATIONS BOARD,

                                     Respondent.



                                 ____________________



                      DISTRICT COUNCIL 94, UNITED BROTHERHOOD OF

                     CARPENTERS AND JOINERS OF AMERICA, AFL-CIO,

                                     Intervenor.



                                 ____________________



                     ON PETITION FOR REVIEW AND CROSS-APPLICATION

                            FOR ENFORCEMENT OF AN ORDER OF

                          THE NATIONAL LABOR RELATIONS BOARD



                                 ____________________



                                        Before



                               Torruella, Chief Judge,
                                          ___________

                      Aldrich and Coffin, Senior Circuit Judges.
                                          _____________________



                                _____________________



               Andrew  B.  Prescott, with  whom  Donald  P. Rothschild  and
               ____________________              _____________________

          Tillinghast Collins & Graham were on brief for petitioner.
          ____________________________

               Joseph A. Oertel, Senior Litigation Attorney, National Labor
               ________________

          Relations  Board,  with  whom  Frederick  L.  Feinstein,  General
                                         ________________________

          Counsel, Linda Sher, Acting  Associate General Counsel, Aileen A.
                   __________                                     _________

          Armstrong,   Deputy  Associate   General  Counsel,   and  Charles
          _________                                                 _______

          Donnelly, Supervisory  Attorney, National Labor  Relations Board,
          ________

          were on brief for respondent.


____________________



                                   October 20, 1995

                                 ____________________



TORRUELLA,   Chief  Judge.     The   petitioner,  Union
                    TORRUELLA,   Chief  Judge.
                                 ____________



          Builders,  Inc.  ("UBI") seeks  review  of  the decision  of  the



          respondent, the  National Labor  Relations Board ("the  Board" or



          "the  NLRB"), ordering  UBI  to supply  requested information  to



          District Council 94, United Brotherhood of Carpenters and Joiners



          of America, AFL-CIO (the "Union").  The NLRB cross-applies, under



             10(e)  of the  National Labor  Relations  Act ("the  Act"), 29



          U.S.C.   160(e),  for enforcement of its order against  UBI.  The



          Board  has ordered  UBI  to cease  and  desist from  violating   



          8(a)(5) and (1)  of the Act, 29  U.S.C.    158(a)(1)  and (a)(5),



          furnish the  Union with  the information  it requested,  and post



          appropriate notices.   For the  following reasons, we  affirm the



          Board's Decision and Order.



                                    I.  BACKGROUND
                                    I.  BACKGROUND



                    In  1989, a  Rhode Island  company called O.  Ahlborg &



          Sons ("O.  Ahlborg") executed a three-year  collective bargaining



          agreement ("CBA")  with the Union.   On or about  March 24, 1992,



          O. Ahlborg notified  the Union that  it planned to  terminate the



          agreement as of  May 31,  1992, as was  O. Ahlborg's  contractual



          right.  As  a result  of collective bargaining  with the  Union's



          then business manager (Herbert F. Holmes), O. Ahlborg  reached an



          agreement  (the  "Holmes-Ahlborg   Agreement")  with  the   Union



          (confirmed by a letter dated May 29, 1992) whereby a new employer



          entity,  UBI,   would  be  formed.     Under  the  Holmes-Ahlborg



          Agreement, UBI would enter into a collective bargaining agreement



          (the  "new  CBA") with  the Union  and  would continue  all union


-2-



bargaining unit work  performed at that time by  O. Ahlborg.  The



          Board found that the Holmes-Ahlborg Agreement also provided that,



          as  between UBI  and  O.  Ahlborg,  UBI  would  be  allotted  all



          prevailing rate jobs.



                    Additionally, under the  Holmes-Ahlborg Agreement,  UBI



          would  assume all employees currently performing union bargaining



          unit work for O. Ahlborg,  and there would be no  interruption in



          production,  employment or  wages  of union  members despite  the



          termination of the O. Ahlborg-Union CBA.  Shortly thereafter, UBI



          and the Union entered into the new CBA, which provided that



                      [UBI]  will  not  subcontract   any  work

                      covered  by the  terms of  this agreement

                      which is  to be performed  at the jobsite

                      except  to  a  contractor  who  holds  an

                      agreement with the United  Brotherhood of

                      Carpenters and Joiners of America, or one

                      of  its  subordinate   bodies,  or,   who

                      agrees,  in writing, prior  to or  at the

                      time  of   the  execution  of   the  sub-

                      contract,  to be  bound  by the  terms of

                      this agreement.



          The new CBA covered the period from June 1, 1992 to June 4, 1995.



                    On  December 8,  1993,  David F.  Palmisciano, who  had



          replaced Holmes  as union business representative,  sent a letter



          to UBI's  chief executive  Eric Ahlborg, expressing  concern that



          UBI  was "operating  a second  company" as  "an alter ego."   The



          letter  also requested that Eric  Ahlborg fill out  and return an



          enclosed  questionnaire.  Eric  Ahlborg refused  to reply  to the



          questionnaire.



                    Subsequently,  the matter came before an administrative



          law  judge  ("ALJ")  on  the  NLRB  General  Counsel's  complaint


-3-



alleging that UBI  violated    8(a)(5) and 8(a)(1)  of the Act by



          refusing  to  furnish  information  that the  Union  alleged  was



          necessary  for, and relevant to, the performance of its duties as



          the  exclusive  collective-bargaining   representative  of   unit



          employees.   Palmisciano  testified  before an  ALJ that,  during



          three previous onsite inspections,  he saw evidence that UBI  had



          violated his interpretation of the Holmes-Ahlborg Agreement: that



          as  between O.  Ahlborg  and UBI,  UBI  would garner  all  state,



          Federal  and  other  work  with  high  wage  rates,  particularly



          "prevailing  rates," and  that such  work would  all go  to union



          carpenters.



                     The ALJ  concluded that the  Union reasonably believed



          that  UBI  was  operating  O.  Ahlborg  as  an  "alter  ego"  and



          subcontracting  in a  manner  that  violated  the  Holmes-Ahlborg



          Agreement's  award of prevailing rate  jobs to UBI  and its union



          member  employees  only.1    Thus,  the ALJ  concluded  that  the



          Union's reasonable belief justified the  request for information,



          and ordered UBI to comply.  The Board affirmed the ALJ's rulings,



          findings and conclusions, and adopted his recommended Order.  UBI



          seeks review of the Board's decision, and the Board cross-applies



          for enforcement of its order against UBI.

                              
          ____________________



          1   UBI was organized  as a Rhode  Island corporation on  June 1,

          1992, to  engage  in the  business of  building construction  and

          related activities.   UBI's officers are related  to, and overlap

          substantially with,  those of  O. Ahlborg.    For example,  UBI's

          chief executive, Eric Ahlborg,  is the son of O.  Ahlborg's chief

          executive; UBI's vice president  is the daughter of  O. Ahlborg's

          chief executive; and UBI's chief financial officer, who holds the

          same position at O. Ahlborg, is another son of O. Ahlborg's chief

          executive.



                                         -4-



II.  STANDARD OF REVIEW
                               II.  STANDARD OF REVIEW



                    We will  enforce a Board  order if the  Board correctly



          applied  the  law  and  if  substantial  evidence  on the  record



          supports the Board's  factual findings.  Penntech Papers, Inc. v.
                                                   _____________________



          NLRB, 706 F.2d 18, 22-23  (1st Cir. 1983), cited in NLRB  v. Acme
          ____                                       ________ ____     ____



          Tile and  Terrazo, Co., 984  F.2d 555, 556  (1st Cir. 1993).   We
          ______________________



          uphold the Board's findings of a violation as long as substantial



          evidence on the record as a whole supports them, even if we would



          have reached a  different conclusion.   29 U.S.C.     160(e)  and



          (f);  3-E  Co.,  Inc.  v.  NLRB, 26  F.3d  1,3  (1st  Cir. 1994);
                _______________      ____



          Cumberland  Farms,  Inc. v.  NLRB, 984  F.2d  556, 559  (1st Cir.
          ________________________     ____



          1993).



                                   III.  DISCUSSION
                                   III.  DISCUSSION



                    As part of the    8(a)(5) duty to bargain,  an employer



          must  furnish all  information  requested  by  a  union  that  is



          necessary  to the  union in  order to  fulfill its  obligation as



          representative  of  bargaining  unit  employees.   NLRB  v.  Acme
                                                             ____      ____



          Industrial  Co., 385 U.S. 432, 435-36 (1967); NLRB v. New England
          _______________                               ____    ___________



          Newspapers, Inc.,  856 F.2d 409, 413  (1st Cir. 1988).   Thus, an
          ________________



          employer  must  produce information  that  is  "relevant to  [the



          bargaining   representative's]  duties,"   including  information



          necessary to police the  CBA.  New England Newspapers,  Inc., 856
                                         _____________________________



          F.2d at 413.  Because the duty to bargain "unquestionably extends



          beyond the  period of contract negotiations and applies to labor-



          management relations during  the term of  an agreement," NLRB  v.
                                                                   ____



          Acme  Industrial Co.,  385  U.S. at  436,  the Union  could  have
          ____________________


-5-



requested the information simply because of its relevance to  its



          ongoing agreement with  UBI.   In this regard,  we note that  the



          Board  may  determine that  the employer  has  a duty  to provide



          information if it  finds even "a probability that the information
                                           ___________



          is relevant  and that it will be of  use to the union in carrying



          out  its statutory duties."  NLRB  v. Pfizer, Inc., 763 F.2d 887,
                                       ____     ____________



          889  (7th Cir. 1985) (emphasis added).  See also General Electric
                                                  ________ ________________



          Co. v.  NLRB, 916 F.2d 1163,  1168 (7th Cir. 1990)  (relevance is
          ___     ____



          most  often viewed  liberally to  allow for  broad disclosure  of



          information).



                    As an  initial matter,  we reject UBI's  argument that,



          via  the   Holmes-Ahlborg  Agreement,  the   Union  approved  the



          coexistence of O. Ahlborg  and UBI, and thereby waived  its right



          to challenge  O.  Ahlborg as  UBI's  alter ego.   UBI  has  cited



          neither legal authority nor requisite factual evidence to support



          its waiver argument.   Furthermore, nothing in the Holmes-Ahlborg



          Agreement shows an unequivocal  waiver by the Union of  its right



          to investigate the alleged diversion  to O. Ahlborg of prevailing



          rate jobs.  Communication Workers of America AFL-CIO, Local  1051
                      _____________________________________________________



          v.  NLRB,  644 F.2d  923,  927 (1st  Cir.  1981) ("the  union may
              ____



          relinquish  a statutory  right only  by 'clear  and unmistakable'



          waiver")  (quoting NLRB v. Perkins Machine Co., 326 F.2d 488, 489
                             ____    ___________________



          (1st Cir. 1964)).  Finally,  the ALJ specifically rejected  UBI's



          waiver argument based on the facts presented.



                    The  ALJ correctly distinguished  the issue  of whether



          UBI must  supply  the requested  information  from the  issue  of


-6-



whether O. Ahlborg and  UBI are in  fact intertwined in an  alter



          ego relationship.  We agree that only the information issue bears



          on this case.  With respect  to this issue, we are persuaded that



          we should apply a "discovery-type" standard so that the Union may



          gather  "'a broad range of  potentially useful information  . . .



          for the purpose of  effectuating the bargaining process'."   NLRB
                                                                       ____



          v. Illinois-American Water  Co., 933  F.2d 1368,  1378 (7th  Cir.
             ____________________________



          1991)  (quoting Procter &  Gamble Manufacturing Co.  v. NLRB, 603
                          ___________________________________     ____



          F.2d 1310, 1315  (8th Cir.  1979)).  In  particular, the  Supreme



          Court has stressed  that the  Board should apply  a more  liberal



          standard of relevance  to information requests under  the duty to



          bargain in good  faith than would be appropriate  at trial.  NLRB
                                                                       ____



          v. Acme  Industrial Co., 385 U.S.  432, 437 & n.6  (1967).  Thus,
             ____________________



          the Union  cannot be required to  prove that UBI is  in breach of



          its CBA  or that O. Ahlborg  is UBI's alter ego  before the Union



          can receive  information that could help  prove such allegations.



          In deciding to  apply such  a standard, the  ALJ correctly  noted



          that such information  does not  only benefit unions.   In  fact,



          requiring  employers  to  divulge  information  of  even   merely



          potential  relevance improves  the efficiency of  the arbitration



          system  as a whole, since  otherwise, unions might  be forced "to



          take grievances all the way through to arbitration without [] the



          opportunity to evaluate the  merits of the  claim."  Id. at  438.
                                                               __



          As a policy matter,  employers as a whole may also benefit, since



          the information they supply may generally aid unions in filtering



          out meritless cases.  Id.
                                __


-7-



Substantial evidence  on the record supports  the ALJ's



          conclusion,  adopted  by  the   NLRB,  that  the  Union  supplied



          sufficient  objective  evidence  to   show  that  its  belief  in



          requesting the  information was reasonable.   The record supports



          the finding that Palmisciano reasonably believed that the purpose



          of the Holmes-Ahlborg Agreement  was to permit O. Ahlborg  to bid



          nonunion work and  to award  all "prevailing rate"  jobs to  UBI.



          Furthermore, the Union  had entered the new CBA with  UBI.  Thus,



          the ALJ and the Board correctly concluded that the questionnaire,



          with  its  inquiries into  UBI's ownership,  corporate directors,



          suppliers  and  relationship  to  an  alleged nonunion  employer,



          sought   information   necessary   to  Palmisciano's   collective



          bargaining duties.



                    The ALJ  heard testimony from Palmisciano regarding the



          latter's observations at three  different job sites.  Palmisciano



          testified that at the three sites, all with O. Ahlborg as general



          contractor  and paying prevailing rates, he had seen Union member



          UBI employees supervising nonunion employees doing unit work, and



          he  had seen both Union member UBI employees and nonunion workers



          doing  unit  work  for  subcontractors.   Additionally,  the  ALJ



          questioned  Palmisciano regarding  the  meaning  of  the  Holmes-



          Ahlborg Agreement,  especially with  respect to the  allotment of



          work between O. Ahlborg and UBI.  Furthermore, the ALJ questioned



          Palmisciano  regarding O.  Ahlborg's  responses to  Palmisciano's



          demands  that O.  Ahlborg use  union subcontractors  on carpentry



          work at the three job sites.


-8-



While UBI takes  offense at the  ALJ's refusal to  hear



          Eric Ahlborg's testimony to  show that UBI and  O. Ahlborg had  a



          different  understanding  of  the Holmes-Ahlborg  Agreement,  the



          issue  before  the  ALJ  was  whether  Palmisciano  could  supply



          objective evidence  supporting a reasonable belief  that made his



          information request relevant to his collective bargaining duties.



          Naturally,  the  ALJ  drew  his conclusions  primarily  from  the



          testimony  of Palmisciano, since  the chief issue  was whether or



          not Palmisciano's beliefs were reasonable given objective facts.



                    UBI also argues that  because objective facts show that



          it is not operating an alter ego,  Palmisciano could not have had



          a reasonable  belief that would render  the requested information



          relevant.  The proposition that a union's information request may



          be  denied if  the company  in question  can show  that objective



          facts  render the  union's  concerns  untenable appears  logical.



          See, e.g., San  Diego Newspaper Guild v. NLRB, 548  F.2d 863, 867
          ___  ____  __________________________    ____



          (9th Cir. 1977)  ("If the information requested has  no relevance



          to any legitimate union collective  bargaining need, a refusal to



          furnish it could not be an unfair labor practice.").  However, in



          the  instant  case,  the  issue  is  moot,  since  even  if  this



          proposition were  settled law applicable  here, UBI has  not made



          the required showing.



                    In  the course of this argument, UBI relies on the fact



          that  the relationship  between  it and  O.  Ahlborg is  not  the



          classic alter ego  situation of "a  disguised continuance of  the



          old  employer."  Therefore, runs the argument, because O. Ahlborg


-9-



is not  UBI's alter ego, the Union  cannot demonstrate reasonable



          belief  necessary   to  support  its  request   for  information.



          However, this argument must fail for two reasons.



                    First, UBI  argues that this Court  has previously used



          the  existence of a motive to evade labor law responsibilities in



          corporate organization as a  factor in identifying an alter  ego,



          NLRB  v. Hospital  San Rafael,  Inc., 42  F.3d  45, 50  (1st Cir.
          ____     ___________________________



          1994), and that no  "disguise" or motive existed here,  since the



          Union knew and  agreed to the  creation of UBI  from O.  Ahlborg.



          However, in Hospital San Rafael, the Court also called cases that
                      ___________________



          involve formation  of new entities with  direct evasionary intent



          only "the easiest  example[s]" of  alter egos.   Id.   Presumably
                                                           __



          there are also harder examples, as the Union may show here.



                    Additionally,  even if  the issue  before us  here were



          whether  O. Ahlborg  constituted  UBI's   alter  ego,  the  paper



          relationship   between  the   two  corporations   would  not   be



          dispositive,  since  the  alter  ego doctrine  looks  behind  the



          corporate   form   to   determine  whether   nominally   distinct



          corporations are "in truth . . . but divisions or departments  of



          a 'single enterprise.'"  NLRB v. Deena Artware, Inc., 361 US 398,
                                   ____    ___________________



          402  (1960).   Note  that this  Court  has previously  upheld the



          Board's finding of  an alter  ego "where the  companies were  not



          successors but  rather parallel  operations."   C.E.K. Industrial
                                                          _________________



          Mechanical Contractors, Inc. v.  NLRB, 921 F.2d 350, 354-55  (1st
          ____________________________     ____



          Cir. 1990) (denying  enforcement of  the Board's  order on  other



          grounds).   Thus, the fact  that O. Ahlborg  did not succeed  UBI


-10-



does not,  by itself, render the alter  ego doctrine inapplicable



          and Palmisciano's belief unreasonable.



                    Thus,  the  ALJ correctly  avoided turning  the hearing



          into an inquiry into the agreement's ultimate meaning, since such



          a decision  was beyond the  scope of  the only issue  before him:



          whether or not to compel information disclosure.  With respect to



          testimony  directed   at  this  question,  an  ALJ's  credibility



          determinations are entitled  to great weight because the  ALJ saw



          and heard the  witnesses testify.  Holyoke  Visiting Nurses Ass'n
                                             ______________________________



          v. NLRB, 11 F.3d 302, 308 (1st Cir. 1993), cited in 3-E Co., Inc.
             ____                                    ________ _____________



          v.  NLRB,  26 F.3d  1, 3  (1st  Cir. 1994).   We  will  set aside
              ____



          findings only if  we believe  the ALJ overstepped  the bounds  of



          reason.  Id.  Here, we find no such transgression.
                   __



                                   IV.  CONCLUSION
                                   IV.  CONCLUSION



                    The ALJ's findings, adopted by the Board, are supported



          by  substantial evidence  on  the record  as  a whole  and  stand



          without  error.   UBI's  request for  review  is denied,  and the



          Board's request for enforcement  of its order is granted.   Costs



          to respondent.


-11-