J. M. Tanaka Contruction, Inc.

238 DECISIONS OF NATIONAL LABOR RELATIONS BOARD J. M. Tanaka, Construction, Inc. and Operating En- gineers Local Union No. 3, International Union of Operating Engineers, AFL-CIO R. M. Tanaka Construction, Inc. and Operating En- gineers Local Union No. 3, International Union of Operating Engineers, AFL-CIO Prime Electric, Inc. and Operating Engineers Local Union No. 3, International Union of Operating Engineers, AFL-CIO.' Cases 37-CA-1519, 37- CA-1520, and 37-CA-1521 May 2, 1980 DECISION AND ORDER BY MEMBERS JENKINS, PENELLO, AND TRUESDALE On November 13, 1979, Administrative Law Judge Bernard J. Seff issued the attached Decision in this proceeding. Thereafter, Respondents J. M. Tanaka Construction, Inc., 2 and R. M. Tanaka Construction, Inc.,3 and the General Counsel filed exceptions with supporting briefs; and Respondent Prime Electric, Inc.,4 filed a brief in answer to the General Counsel's supporting brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has considered the record and the at- tached Decision in light of the exceptions and briefs and has decided to affirm the rulings,5 find- ' The Administrative Law Judge inadvertently failed to set out the full name of the Charging Party herein, and the caption is therefore modified to include the appropriate corrections. ' Hereinafter referred to as JM . 3 Hereinafter referred to as RMT. 4 Hereinafter referred to as Prime. 5 Respondents RMT and Prime have excepted to the Administrative Law Judge's ruling denying them a continuance based upon the General Counsel's amendment to the consolidated complaint. At the start of the second day of the hearing, the General Counsel proposed an amendment to the consolidated complaint alleging that Respondents RMT and Prime, as joint employers, conditioned the employment of certain employees upon their signing an "open-shop" agreement; and further alleging that Respondents RMT and Prime required these employees to assume re- sponsibility for reimbursing Operating Engineers Local Union No. 3, In- ternational Union of Operating Engineers, AFL-CIO, hereinafter re- ferred to as the Union, for benefit fund payments accruing to the Union pursuant to the contract in effect between that Union and RMT as alter ego of JMT. The Administrative Law Judge granted this amendment, denying Respondents' 10(b) argument, and further denying Respondents' request for a continuance. We are of the opinion that the Administrative Law Judge acted correctly in granting the amendment for the reasons set out in fn. I of his Decision. We are also of the opinion that the Adminis- trative Law Judge did not abuse his discretion by denying Respondents' request for a continuance in order to defend against the General Coun- sel's amendment. It is clear from a review of the record that the factual basis for the General Counsel's amendment arose only after Respondents complied with the General Counsel's subpoena duces tecum. Thus, the documents at issue having been in Respondents' possession, and having been requested by General Counsel pursuant to a subpena issued on June 4, 1979, approximately 3 weeks prior to the instant hearing, Respondents cannot now be heard to claim surprise. To assume, as Respondents would have us do, that they were unaware of the legal implication of the re- 249 NLRB No. 28 ings,6 and conclusions of the Administrative Law Judge, as modified herein, but not to adopt his rec- ommended Order. The issues considered by the Administrative Law Judge are as follows: 1. Whether Respondent JMT and Respondent RMT are alter egos; and/or whether Respondent RMT is a successor to Respondent JMT with re- spect to its paving and asphalt business. 7 2. Whether Respondent Prime and Respondent RMT are joint employers. 8 3. Whether Respondents JMT, RMT, and Prime have refused to recognize and bargain collectively with the Union; whether Respondents JMT, RMT, and Prime have withdrawn recognition from the Union; and whether Respondents JMT, RMT, and Prime have repudiated the collective-bargaining agreement in violation of Section 8(a)(5) of the Act. 9 4. Whether Respondents RMT and Prime, as joint employers, conditioned the employment of certain employees upon their signing an "open- shop" agreement; and whether Respondents' re- quirement that employees assume responsibility for reimbursing the Union for fringe benefit fund pay- quested documents only serves to invite scrutiny of the manner in which Respondents prepared their case for hearing. In addition to the request for the continuance already discussed, Re- spondent RMT requested a continuance based, inter alia, upon counsers representation that RMT's original counsel had withdrawn on June 12, 1979, only 14 days prior to the start of the hearing A review of the ex- hibits herein reveals that Kinji Kanazawa, Respondent JMT's representa- tive up to and including the hearing, also represented Respondent RMT until it became clear to all parties that settlement prior to the hearing was not a realistic possibility. Thus, Respondent RMT's original counsel was not a stranger to these proceedings, but was, or should have been, well aware of the possibile pitfalls involved in representing two Respond- ents-one of which was charged with being the alter ego of the other. While the Board attempts to balance the needs of individual parties against its statutory mandate to speedily resolve industrial strife, it will not accommodate the requests of individual parties who have been placed in untenable positions of their own making. Accordingly, we affirm the Administrative Law Judge's ruling denying Respondent RMT's request for a continuance. We also find that the Administrative Law Judge in no way prejudged the case, made prejudicial rulings, or demonstrated bias against any party in his analysis or discussion of the evidence, or in his conduct of the hearing. It is clear from the record that all parties were afforded and fully availed themselves of the opportunity to present evi- dence and arguments concerning their respective positions. The parties have excepted to certain credibility findings made by the Administrative Law Judge. It is the Board's established policy not to overrule an administrative law judge's resolutions with respect to credi- bility unless the clear preponderance of all of the relevant evidence con- vinces us that the resolutions are incorrect. Standard Dry Wall Products, Inc., 91 NLRB 544 (1950), enfd. 188 F.2d 362 (3d Cir. 1951). We have carefully examined the record and find no basis for reversing his findings. 7 The Administrative Law Judge found, and we agree for the reasons set fort hinfra, that Respondents JMT and RMT are alter egos. 8 The Adminstrative Law Judge found, and we agree for the reasons set forth in his Decision, that Respondents RMT and Prime are not joint employers. 9 Becasue we have found, in accordance with the Administrative Law Judge, that Respondents RMT and Prime are not joint employers, we also hold that Prime was under nor obligation to recognize and bargain with the Union, no was Prime required to assume the collective-bargain- ing agreement in effect between the Union, JMT, and RMT (as JMT's alter ego) J. M. TANAKA, CONSTRUCTION, INC. 239 ments accruing under the collective-bargaining agreement between the Union and Respondents violated Section 8(a)(5) and (1) of the Act. ° 5. Whether Respondents RMT, JMT, and as alter egos, through Takeo Wakida, superintendent of JMT and director and vice president of RMT, interrogated employees concerning their union ac- tivity. 1 The Administrative Law Judge found, and we agree for the reasons set out infra, that JMT, and its alter ego, RMT, violated Section 8(a)(5) and (1) of the Act by refusing to recognize and bargain with the Union, by withdrawing recognition from the Union, and by repudiating the collective-bar- gaining agreement entered into by JMT and the Union. The Board has held that alter ego status is con- ferred where two enterprises have substantially identical management, business purpose, operation, equipment, customers, and supervision, as well as ownership. 2 JMT, incorporated in 1957, has been engaged in excavation and construction work, including the paving of roads and streets, '3 and was, until re- cently, located in Kona, on the "big island" of Hawaii.' 4 JMT can be characterized as a "family" corporation, with Raymond Tanaka-who serves as president "-owning 8 percent of the stock, Martha Tanaka (Raymond's mother) owning 40 percent, Thomas Tanaka (Raymond's uncle) owning 30 percent, George Tanaka (Raymond's brother) owning 8 percent, and 18 other relatives owning the remaining 14 percent. Thomas Tanaka serves as vice president and director, and Walter Tanaka serves as secretary-treasurer and director of JMT. The record also reveals that Takeo Wakida (another of Raymond's uncles) held the position of superintendent, and Joseph Yoshishige held the po- sition of office manager of JMT. o The Administrative Law Judge found, and we agree for the reasons set forth in his Decision, that only Respondents JMT and RMT violated Sec. (aX5) of the Act as alleged, since RMT and Prime are not joint employers. In addition, Prime did not violate Sec. 8(aXI) of the Act, as there is no evidence that Prime either prepared these agreements, caused RMT's employees to execute them, or was in any way involved in their implementation. i The Administrative Law Judge found, and we agree, that Takeo Wakida interrogated employees as to whether they had signed union au. thorization cards, and that such interrogation violated Sec. 8(aXl) of the Act. See, e.g., G. A. Dress Co., Inc., 225 NLRB 60 (1976). '' See Crawford Door Soles Company, Inc. and Cordes Door Company, Inc., 226 NLRB 1144 (1976); Marquis Printing Corporation and Mutual Lithograph Company, 213 NLRB 394 (1974), and cases cited herein. ' There was also testimony that JMT, at one time, had handled more complicated projects, such as construction of tunnels, reservoirs, bridges, and channel linings. 14 JMT now only maintains its Honolulu offices, where Raymond Tanaka conducts whatever business JMT now carries out. 1s The record also reflects that Mitsuichi Tanaka, Raymond's uncle. apparently held a controlling interest in, and managed the affairs of, JMT until his death in 1974. RMT, incorporated on August 3, 1978, is solely owned by Raymond Tanaka, who also serves as president. Takeo Wakida serves as RMT's vice president and director, while Joseph Yoshishige is secretary-treasurer and director of RMT. RMT is currently located in Kona, on the "big island," where it leases the office space owned by JMT, which had itself used that property for its own op- erations. RMT, like JMT, is engaged in excavation projects, including asphalt paving and subdivision work. ' RMT uses heavy equipment7 for its excavation work, most of which it obtained from JMT. The record reflects that in October 1978 Raymond Tanaka, president of both JMT and RMT, offered to buy equipment owned by JMT. He then asked his uncle, Thomas Tanaka, vice president of JMT, to appraise each piece of equipment.' s Raymond and Thomas Tanaka then met, representing RMT and JMT respectively, and agreed upon a purchase price for each of the items in question. In January 1979, Raymond Tanaka met with the shareholders of JMT,'9 who approved the sale of equipment to RMT, 20 as well as the agreement to rent the of- fices of JMT to RMT. 2' With respect to management and supervision, Takeo Wakida, as superintendent for JMT, was in charge of all the jobs being performed including supervison of manpower, equipment, and supplies. Wakida performs this same function for RMT in addition to estimating and bidding on future pro- jects. Raymond Tanaka and Wakida formulate labor relations policy for RMT, while Tanaka alone now handles any labor relations for JMT. 22 As noted supra, Wakida supervised manpower for JMT in his capacity as superintendent and thus had some role in carrying out, if not formulating, labor relations policy for JMT. The record reflects that JMT began phasing out its operations in 1978, and that, in August, Ray- mond Tanaka informed Wakida that the JMT em- ployees would have to be "let go" because JMT I' RMT's subdivision work includes laying of water lines, sewage lines, drainage systems, and the construction of curbs, gutters, and sidewalks. i? The equipment used includes bulldozers, loaders, dump trucks, roll- ers, pavers, track drills, and busters. I' The price placed on each piece of equipment was based, at least in part, on an appraisal done in 1975 by a Mr. Avani. 19 Raymond Tanaka's mother was not in attendance. 20 The "sale" of equipment was actually carried out via an "agreement for sale." Thus, when RMT pays for all the equipment, title will pass I1 The offices are located at a quarry area which supplies rock to be crushed for paving. There is also an asphalt plant on the premises. The quarry and asphalt plant were included in the rental agreement, and RMT currently uses these facilities in carrying out its excavating activi- ties 22 There is an individual, Yoshiji Onuma, who holds the position of foreman at RMT, the same position he held at JMT. It is not clear, how- ever, whether Onuma is a supervisor within the meaning of the Act. ._ 240 DECISIONS OF NATIONAL LABOR RELATIONS BOARD was unable to make the fringe benefit fund pay- ments required by the collective-bargaining agree- ment with the Union which was in effect. 2 3 At the time the employees were terminated in September 1978, Wakida told them of JMT's inability to make the fringe benefit fund payments, and further told them that they would be "called back" to work for another company which would be nonunion. 2 4 Ap- proximately 3 to 4 weeks later, several JMT em- ployees were called to work by Wakida and Ray- 2S Takeo Wakida testified that JMT at that time owed the Union ap- proximately $100,000. :2 Indeed, in a November 1978 meeting between Wakida and William Crozier, the Union's business representative, Wakida (according to his own testimony) declined to recognize the Union because RMT could not compete with nonunion contractors, and JMT had been phased out be- cause it could not make the fringe benefit payments required by the col- lective-bargaining agreement. The Administrative Law Judge inadvertently failed to set out the cor- rect unit in his Decision. The record reflects that the Union and JMT had been party to several collective-bargaining agreements, the latest en- tered into on May 3, 1978. The contract covered a unit of employees as follows: SECTION NO. I-DEFINITIONS, COVERAGE, RECOGNI- TION (1) Union. The term "Union" as used herein shall mean Operating Engineers Local Union No. 3 of the International Union of Operat- ing Engineers, AFL-CIO. (2) Employee. The term "Employee" as used herein shall mean any person, without regard to race, color, religion, age, sex, national origin or handicap: (a) whose work for an Individual Employer in the area covered by this Agreement falls within the recognized jurisdiction of the Union, or (b) who operates, monitors and controls, maintains, repairs, modi- fies, assembles, erects, services or each or all of them, power-operat- ed equipment, of the type or kind of equipment used in the perform- ance of work referred to in (a) above, including helicopters used in the performance of work covered by this Agreement, regardless of whether such equipment is mechanically, electrically or electronical- ly, hydraulically, automatically or remotely controlled, and (c) who assists or helps in the operation, maintenance, repairing or assembling, erecting or servicing of such power-operated equipment of the type or kind of equipment used in the performance of work referred to in (a) above, and who qualifies to register in a Job Place- ment Center, provided that the foregoing shall not apply to superin- tendents, assistant superintendents, general foremen and other super- visors as defined in the National Labor Relations Act, professional or office engineering personnel, draftsmen, estimators, field office- help, timekeepers, messenger boys, guards, confidential employees, office help, inspectors and persons specifically excluded elsewhere in this Agreement. Any individual who owns his own equipment and/ or vehicles who performs on-site-work for the Individual Employer in those classifications named in 01.00.00 and any appendices at- tached hereto shall be on the payroll of the Individual Employer or shall otherwise be an Employee covered by the terms and conditions of this Agreement, except as provided in 02.07.02, 5.00.00, 07.09.00 and 07.09.03 of the Master Agreement. (4) Coverage. This Agreement shall cover and apply to the State of Hawaii, the waters between its component islands and all waters ad- jacent to each component island over which it or the Federal Gov- ernment claims jurisdiction. If the Individual Employer secures work in an area within the Union's territorial jurisidiction in which the Union has an existing collective bargaining Agreement, said Individ- ual Employer agrees to pay the wage rates and abide with the Working Rules section of said Agreement on all new jobs or pro- jects (jobs or projects which are bid, negotiated, or contracted for after the execution date of this Agreement) which it may secure in said area. mond Tanaka at the RMT premises; 25 the employ- ees were, however, paid by a third corporation, Prime Electric, which is headed by Sonny Okada. 2 s During the period of time that Prime car- ried RMT's payroll, the employees were supervised by Wakida and, apparently, by Onuma, performing the same type of excavating work that had been performed by JMT, and using the same equipment that JMT had agreed to sell to RMT.2 7 When the employees were recalled to RMT (but paid with Prime checks), they, at the direction of Raymond Tanaka and Wakida, filled out Prime applications and were asked to sign "open-shop" agreements which were typed on Prime letterhead, and which were also addressed to Prime. The language of these agreements was as follows: We the undersigned do hereby agree to the following terms during our employment with Prime Electric Inc. which is an "Open-Shop" company. (1) If working on a City, County, State, or Federally-funded contract, all fringes shall be paid wholly and directly to me [employee] and not the Union which I may be affiliated with. (2) Should a problem arise with the Union, I will be responsible for all reimbursements of fringe benefits given. Wakida testified that he and Tanaka agreed that the employees should complete an identical agree- ment when officially recalled to RMT. The em- ployees did, in fact, sign such agreements with re- spect to RMT when that Company assumed its own payroll in Feburary 1979.28 As is patently obvious from a review of the facts, JMT and RMT meet the legal requirements establishing their alter ego status. Thus, Raymond 25 The offices, quarry, and asphalt plant were, as noted supra, leased from JMT. 26 The evidence showed that Prime acted like a bank, carrying RMT's payroll at wage rates set by Tanaka and Wakida, until RMT could gener- ate sufficient cash flow. The payroll checks were issued by Prime and sent to RMT for distribution. The record also reflects that Prime paid for any bonds that would normally have been posted by RMT. 27 At the time JMT ceased operations in September 1978, there were some outstanding contracts for work which had not been completed. Raymond Tanaka testified that JMT had bid on a project (the McCoy project) which involved, inter alia, building subdivision roads. The proj- ect, not having been completed at the time JMT terminated its employ- ees, lay idle until the employees returned to work on Prime's payroll, and was eventually completed by RMT. RMT did not sign any agreements with the general contractor on the McCoy project, but completed the work holding to the bid submitted by JMT, and was paid at the time the job was completed (approximately $189,000). A similar situation arose with the Lanihau project, for which JMT had submitted a quotation. RMT, however, performed the work and received payment for the job (approximately $192,000). The record also reflects that RMT continued to use the material sup- pliers used by JMT. 28 RMT continued to use the same office staff which had been em- ployed by JMT. J. M. TANAKA, CONSTRUCTION, INC. 241 Tanaka continued to manage his construction busi- ness with hardly more than a change in name; he finished at least two projects, as RMT, which had been bid on and started by him as JMT; he signed an agreement for sale, as RMT, for substantially all of JMT's equipment; and he brought the JMT em- ployees back to RMT once RMT became oper- ational. Although Raymond Tanaka owned only 8 percent of JMT, as opposed to 100 percent of RMT, JMT's other shareholders were Raymond Tanaka's close relatives; and it is clear that Ray- mond Tanaka dominated the management of both corporate entities. 29 Moreover, the record is clear that Takeo Wakida openly admitted that RMT was formed for the specific purpose of avoiding its obli- gations under the collective-bargaining agreement entered into between JMT and the Union, and that Respondent RMT thereafter refused to recognize the Union as the representative of its employees. Thus, Respondents' attempt to justify their action by claiming financial inability to meet those con- tractual obligations is no defense. As the Adminis- trative Law Judge stated, with Board approval, in Fimbel Door Co., Inc., 224 NLRB 703, 706 (1976): Somehow the Respondent believes that in America today the question whether employ- ees wish to be represented by a union-the old q.c.r. with now [over] 40 years of history-is to be answered by the employer, and to be de- termined by his wishes. To quote a recent de- cision approved by the Board: "it is too late a day in history to attempt to defeat a refusal to bargain complaint under this statute on the ground that collective bargaining trenches upon the proper interest of management in making money." Flav-O-Rich, Inc., 212 NLRB 930 (1974). Thus, having determined that JMT and RMT are alter ego corporations, we find, in agreement with the Administrative Law Judge, that Respondent RMT was not only required to recognize and bar- gain with the Union, but was also obligated to assume the collective-bargaining agreement entered into by JMT and the Union. Mackie's Roofing and Sheet Metal Co., Inc., and Mackie's Roofing and Sheet Metal Works, 221 NLRB 277 (1975); Helrose Bindery, Inc. and Graphic Arts Finishing, Inc., 204 29 The Board noted in Bryar Construction Company and M d C Coal Company and Edwin B. Armitage, Jr., 240 NLRB No. 9 (1979), that own- ership by other family members is often treated as personal ownership. See MP Building Corporation, M P Manufacturing Corporation, Wood- ville Construction Corporation, Specialty Contractors, Inc., Dan Kent d/b/a Kent Construction Company, 165 NLRB 829, 831, enfd 411 F.2d 567 (5th Cir. 1969). NLRB 499 (1973); Edward E. Schultz d/b/a Schultz Painting & Decorating Co., 202 NLRB 111 (1973).30 CONCLUSIONS OF LAW 1. J. M. Tanaka Construction, Inc., and its alter ego, R. M. Tanaka Construction, Inc., hereinafter referred to as Respondents, and Prime Electric, Inc., are employers within the meaning of Section 2(2) of the Act, engaged in commerce within the meaning of Section 2(6) and (7) of the the Act. 2. Operating Engineers Local Union No. 3, In- ternational Union of Operating Engineers, AFL- CIO, is a labor organization within the meaning of Section 2(5) of the Act. 3. The appropriate unit for purposes of collectivebargaining within the meaning of Section 9(b) of the Act is set out in the collective-bargain- ing agreement in effect between Respondents and the Union, which unit is set forth in footnote 24, supra. 4. At all times material herein, and continuing to date, the Union has been and is now the repre- sentative for purposes of collective bargaining of the employees in the above appropriate unit by virtue of Section 9(a) of the Act and a subsisting collective-bargaining agreement, and is the exclu- sive representative of all employees in said unit for purposes of collective bargaining with Respond- ents, with respect to rates of pay, wages, hours of employment, and other terms and conditions of em- ployment. 5. At all times material herein, and continuing to date, Respondents and the Union have been, and continue to be, bound by the terms and conditions of the collective-bargaining agreement which em- bodies rates of pay, wages, hours of employment, and other terms and conditions of employment of all employees of Respondents in the unit referred to in paragraph 3, above. 6. On or about October 3, 1978, and continuing to date, Respondents unilaterally withdrew recog- nition from the Union, and have repudiated the collective-bargaining agreement existing between them, thereby violating Section 8(a)(5) and (1) of the Act. 7. By unilaterally imposing unlawful conditions of employment on the unit employees, on and after October 3, 1978, by requiring them to sign individ- ual agreements that they could only work as non- union employees, and thereafter enforcing those conditions by requiring them to assume responsibil- ity for making benefit fund payments to the Union-which responsibility attaches to Respond- 30 Thus, the Administrative Law Judge's discussion of whether the Union attained majority status vis-a.vis RMT is inapposite. 242 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ents-Respondents have violated and are violating Section 8(a)(5) and (1) of the Act. 8. By failing to make fringe benefit fund and other payments required by the collective-bargain- ing agreement, Respondents have violated and are violating Section 8(a)(5) and (1) of the Act. 9. By unlawfully interrogating certain employees concerning their union sympathies and activities, Respondents violated Section 8(a)(l) of the Act. 10. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2(6) and (7) of the Act. 11. It has not been established that Respondent Prime Electric, Inc., violated Section 8(a)(5) and (1) of the Act by unilaterally imposing conditions of employment on the unit employees by requiring them to sign individual agreements that they could only work as nonunion employees, and thereafter enforcing those conditions by requiring employees to assume responsibility for making benefit fund payments to the Union, by failing to make benefit fund payments to the Union, and by refusing to recognize and bargain with the Union. AMENDED REMEDY We agree with the provisions of paragraph I of "The Remedy" section in the Administrative Law Judge's Decision and shall order Respondents to comply therewith. The Administrative Law Judge provided in para- graph 2 of his recommended remedy that "All em- ployees who may have suffered any loss of pay for the period from October 3, 1978, through mid-Feb- ruary 1979 and to date, shall receive backpay, with interest. ." 31 Because the record is not clear with respect to the particular employees who were called back to work or rehired, or when they were recalled or rehired, we will defer such a determina- tion to the compliance stage of this proceeding. 3 2 ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Re- lations Board hereby orders that the Respondents, J. M. Tanaka Construction, Inc., and its alter ego, R. M. Tanaka Construction, Inc., Honolulu and 3' The Administrative Law Judge, in providing for reimbursement for loss of pay, inadvertently failed to include the words "and benefits." Fur- ther, F. W. Woolworth Company, 90 NLRB 289 (1950), cited by the Ad- ministrative Law Judge, is inapplicable in the circumstances of this case. See Ogle Protection Service, Inc., and James L. Ogle, an Individual, 183 NLRB 682 (1970). 32 Since Respondents . M. Tanaka Construction, Inc., and its alter ego, R. M. Tanaka Construction, Inc., have engaged in unfair labor prac- tices of a sufficiently egregious nature as to demonstrate a disregard for their employees' fundamental statutory rights, we shall include in our Order a provision requiring Respondents to cease and desist from in any other manner infringing upon the rights guaranteed to its employees by Sec. 7 of the Act. See Hickmott Foods, Inc., 242 NLRB No. 177 (1979). Kailua-Kona, Hawaii, their officers, agents, succes- sors, and assigns, shall: 1. Cease and desist from: (a) Refusing to recognize and bargain with Oper- ating Engineers Local Union No. 3, International Union of Operating Engineers, AFL-CIO, as the exclusive bargaining representative of the employ- ees in the appropriate unit described in the collec- tive-bargaining agreement, and which unit is set forth at footnote 24, supra. (b) Refusing to honor and implement the collec- tive-bargaining agreement in effect between Re- spondents and the Union. (c) Coercively soliciting employees to sign writ- ten relinquishments of the Union's authority to rep- resent them as their exclusive bargaining repre- sentative in order to avoid Respondents' obligation to continue to recognize and bargain with the Union. (d) Bypassing the Union as the exclusive collec- tive-bargaining representative of Respondents' em- ployees by negotiating directly with employees as to rates of pay and contributions to the fringe bene- fit fund required by the collective-bargaining agreement. (e) Refusing to make all necessary contributions to the Union's benefit fund as required by the col- lective-bargaining agreement. (f) Interrogating employees in the above-de- scribed unit concerning their union activities and sympathies. (g) In any other manner interfering with, re- straining, or coercing employees in the exercise of the rights guaranteed them in Section 7 of the Act. 2. Take the following affirmative action to effec- tuate the policies of the Act: (a) Recognize and bargain collectively with the Union by acknowledging that they are bound by the existing collective-bargaining agreement. (b) Honor, implement, and apply the collective- bargaining agreement referred to above. (c) Make whole the Union for any and all benefit fund and other payments due and owing pursuant to the collective-bargaining agreement referred to above in the manner set forth in the section of this Decision entitled "Amended Remedy." (d) Make whole their employees for any loss of wages and benefits incurred as a result of the unfair labor practices found herein in the manner set forth in the section of this Decision entitled "Amended Remedy." (e) Preserve and, upon request, make available to the Board or its agents, for examination and copy- ing, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary to analyze the J. M. TANAKA, CONSTRUCTION, INC. 243 amount of backpay and other sums and benefits due under, and the extent of compliance with, the terms of this Order. (f) Post at its facilities located in Honolulu and Kailua-Kona, Hawaii, copies of the attached notice marked "Appendix." 3 3 Copies of said notice, on forms provided by the Regional Director for Region 20, after being duly signed by Respondents' authorized representatives, shall be posted by Re- spondents immediately upon receipt thereof, and be maintained by them for 60 consecutive days there- after, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by Respondents to insure that said notices are not altered, defaced, or covered by any other material. (g) Notify the Regional Director for Region 20, in writing, within 20 days from the date of this Order, what steps the Respondents have taken to comply herewith. IT IS FURTHER ORDERED that the allegations of the amended consolidated complaint that Prime Electric, Inc., violated Section 8(a)(5) and (1) of the Act be, and they hereby are, dismissed. 3a In the event that 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 National Labor Relations Board" shall read "Posted Pursu- ant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government After a hearing at which all sides had an opportu- nity to present evidence and state their positions, the National Labor Relations Board found that we have violated the National Labor Relations Act, as amended, and has ordered us to post this notice. WE WILL NOT refuse to recognize and bar- gain with Operating Engineers Local Union No. 3, International Union of Operating Engi- neers, AFL-CIO, as the exclusive bargaining representative of our employees in the appro- priate unit set forth in the collective-bargain- ing agreement in effect between ourselves and the Union. WE WILL NOT refuse to honor and imple- ment the collective-bargaining agreement re- ferred to above. WE WILL NOT coercively solicit our em- ployees to sign written relinquishments of the Union's authority to represent them as their exclusive bargaining representative in order to avoid our obligation to continue to recognize and bargain with the Union. WE WILL NOT bypass the Union as the ex- clusive collective-bargaining representative of our employees by negotiating directly with our employees with respect to rates of pay and contributions to the fringe benefit fund re- quired by the collective-bargaining agreement referred to above. WE WILL NOT refuse to make all necessary contributions to the Union's benefit fund as re- quired by the collective-bargaining agreement referred to above. WE WILL NOT interrogate our employees concerning their union sympathies and activi- ties. WE WILL NOT in any other manner interfere with, restrain, or coerce our employees in the exercise of the rights guaranteed them in Sec- tion 7 of the Act. WE WILL recognize and bargain collectively with the Union by acknowledging that we are bound to the collective-bargaining agreement referred to above. WE WILL honor, implement, and apply the existing collective-bargaining agreement re- ferred to above. WE WILL make the Union whole for any and all benefit fund and other payments due and owing pursuant to the collective-bargain- ing agreement referred to above. WE WILL make our employees whole for any loss of wages and benefits they may have suffered as a result of our unfair labor prac- tices, with interest. J. M. TANAKA CONSTRUCTION, INC. R. M. TANAKA CONSTRUCTION, INC. DECISION STATEMENT OF THE CASE BERNARD J. SEFF, Adminstrative Law Judge: This case was heard at Kailua-Kona, Hawaii, on June 26, 27, and 28, based on a consolidated complaint issued on March 30, 1979, and two amendments, the first made on April 2, 1979, and the last made at the hearing on June 27, 1979.' The complaint alleges that Respondents J. M. I Respondents, Raymond M. Tanaka and Prime Electric both objected to the amendment on the ground that it was barred by Sec. 10(b) of the National Labor Relations Act, as amended. The initial charge was filed on February 5, 1979, which was well within the 6-month limitation period. The amended allegation of the violation of Sec. 8(a)(l) and (5) of the Act revolves around similar facts concerning certain employees having signed open-shop agreements which it separately alleges violated Sec 8(aX5). It is established that, if additional allegations are closely re- Continued A.' 244 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Tanaka and R. M. Tanaka were a single integrated busi- ness and that they were alter egos; alternatively that R. M. Tanaka was a successor to J. M. Tanaka; that Prime Electric exercised joint supervision and joint control over labor relations, and thus it was a joint employer with R. M. Tanaka; and further that Respondent J. M. Tanaka interrogated an employee in violation of Section 8(a)(1) of the Act. Respondent denied the commission of any unfair labor practices. Upon the entire record, and my observation of the de- meanor of the witnesses, and consideration of post-hear- ing briefs, I make the following: FINDINGS OF FACT I. JURISDICTION Respondent J. M. Tanaka (JMT) is a Hawaii corpora- tion with a place of business in Honolulu, Hawaii, where it is engaged in business as a construction subcontractor which provides excavation, asphalt, and paving services. During calendar year 1978, Respondent J. M. Tanaka purchased and received directly from suppliers located outside the State of Hawaii goods and materials valued in excess of $50,000. Respondent R. M. Tanaka (RMT) is a Hawaii corpora- tion with a place of business in Kailua-Kona, Hawaii, where it is engaged in business as a construction subcon- tractor providing excavation, asphalt, and paving serv- ices. During the past 12-month period, Respondent J. M. Tanaka received directly from suppliers located outside the State of Hawaii goods and materials valued in excess of $50,000. Respondent Prime Electric (Prime) is a Hawaii corpo- ration with a place of business in Honolulu, Hawaii, where it is engaged in the general construction and con- tracting business. During the past 12-month period, Re- spondent Prime purchased and received directly from suppliers located outside the State of Hawaii goods and materials valued in excess of $50,000. Respondents stipu- lated and I find that R. M. Tanaka, J. M. Tanaka, and Prime are employers within the meaning of Section 2(6) and (7) of the Act. I also find that Operating Engineers Local Union No. 3 is a labor organization within the meaning of Section 2(5) of the Act. II. THE ALLEGED UNFAIR L.ABOR PRACTICES A. Background and General Survey J. M. Tanaka is a large statewide corporation which began its operations in the State of Hawaii in 1939. It was incorporated in 1957 and since approximately 1967, as a result of a Board-conducted election which took place in 1964, has recognized and signed successive master contracts with Operating Engineers Local Union No. 3 as the representative of its operating engineers in the following unit: lated or sufficiently related to allegations contained in the charge or original complaints, Sec. 0I(b) will not be violated by allowing the com- plaint to be amended to include such additional allegations. N.L.R.B. v. Jack La Lanne Management Corporation, 539 F.2d 292, 294-295 (2d Cir. 1976). All employees employed by Respondents J. M. Tanaka and R. M. Tanaka and all employees jointly employed by Respondents R. M. Tanaka and Prime Electric, excluding office clerical employees, profes- sional employees, guards and supervisors as defined in the Act. The most recent contract among the parties covers a period from 1977 to 1980 (G.C. Exh. 3). J. M. Tanaka found itself in extreme and mounting financial difficulties as is evidenced by statements from its accountant, Shigeji Sato (Resp. Exhs. 2,3,4,5,6, and 7). It was unable to pay its creditors, among which was the Operating Engineers, to whom it was in arrears on the payment of fringe bene- fits due under trust agreements in the underlying con- tract of approximately $61,000. This came to a head in the summer and fall of 1978 at which time J. M. Tanaka decided to phase out its operations. This process was still in progress at the time the hearing in the instant case took place. Raymond Tanaka is presently president of both J. M. Tanaka and R. M. Tanaka. Local 3 made numerous demands for payment of the arrears. Union Representatives Ken Kahoonei and Harold Lewis, Jr., visited the office of J. M. Tanaka in June and July 1978, and told J. M. Tanaka that, because the arrears to the Union had not been paid, the Union would have to pull J. M. Tanaka's employees off the jobs. This related to the employees on the Island of Hawaii in the Kona location, at which time all J. M. Tanaka employees were laid off on September 14, 1978. This word from the Union created an acute emergen- cy as a result of which Raymond Tanaka established a separate corporation on August 3, 1978, known as R. M. Tanaka Construction, Inc., which began to function in approximately January 1978. J. M. Tanaka had agreed to repay the balance due to the Operating Engineers of ap- proximately $61,000 in quarterly payments. The record shows that back fringe contributions to the Laborers Union, the Carpenters Union, the Masons Union, and the Teamsters Union were all paid off by J. M. Tanaka. Faced with the threat of a strike, Raymond Tanaka in- structed Takeo Wakida, Raymond Tanaka's uncle and the general superintendent of both J. M. Tanaka and Raymond Tanaka, to lay off all its operating engineers. These men, about 25 in number, ostensibly employees of Prime, were each required to sign a letter dated October 20, 1978. All the letters were identical except for the names of the employees which are signed at the end of each letter. All the letters are on Prime's stationery. They state as follows: We the undersigned do hereby agree to the follow- ing terms during our employment with Prime Elec- tric, Inc., which is an "Open-Shop" company. i. If working on a City, County, State or Feder- ally-funded contract all fringes shall be paid wholly and directly to me and not the Union which I may be affiliated with. 2. Should a problem arise with Union I will be responsible for all reimbursements of fringe benefits given. J. M. TANAKA, CONSTRUCTION, INC. 245 These letters, approximately 22 of which appear in the file, are General Counsel's Exhibits 6(a)-6(v). It is not disputed that the words used in these letters were all supplied by Raymond Tanaka and that Prime had noth- ing to do with phrasing these letters. William Crozier, Local 3's business manager, testified that he, together with another union representative, Nago, had a conversation with Takeo Wakida, general superintendent of Raymond Tanaka at the asphalt plant in Kona. Crozier had come to the facility to demand rec- ognition from Raymond Tanaka for Local 3. Wakida re- fused to recognize the Union. He explained his refusal to recognize the Union as follows: According to the testimony of Crozier, Wakida men- tioned the unfairness to the nonunion contractors, the fact that nonunion contractors did not have periodic wage increases required of union contractors, and the problem he had with the Union's training program. Wakida allegedly also said he wanted to get away from the Union because of the hiring hall. Crozier asked Wakida if he was in charge of Prime. He answered he had nothing to do with it. Crozier asked him who owned the equipment, to which the answer given to Crozier was, "I think he said J. M. Tanaka and that they were negotiating the purchase at that time." Crozier continued his testimony: "[W]hen I asked for recognition, Mr. Wakida said it's up to the men, they would have to vote in an election if we want to repre- sent them." So I told Wakida it was not necessary for us to vote at that time because they were an alter ego com- pany, and he asked what is an alter ego company. Crozier explained to Wakida that an alter ego company is a com- pany that is formed specifically to get away from a union contract. Wakida said, "Yes, we did that, but I'm still not going to recognize you." This testimony was not rebut- ted. Earlier in his direct testimony as an adverse witness, the General Counsel asked Wakida: Q. Now sir, isn't it a fact that in August of 1978 you were informed by Raymond Tanaka that all employees of J. M. Tanaka had to be let go because J. M. Tanaka could not pay the fringes and the Union was going to shut the Company down? A. Yes. In his testimony Wakida said he informed the employ- ees they were going to be let go "because we couldn't pay the fringes." Further testimony by Wakida was that, although the employees were going to be let go, they would eventual- ly be called back to a nonunion company. It is to be noted that none of the testimony given by Wakida, a credible witness, was controverted, and it stands unre- butted in the record. B. The Question Concerning Alter Ego The Board in the Crawford Door Sales Company. Inc. and Cordes Door Company, Inc., 226 NLRB 1144 (1976), set out certain criteria for an alter ego finding-viz: "[A]lter ego status [exists] where the two enterprises have 'substantially identical' management, business purpose, operation, equipment, customers, and supervision, as well as ownership." The Supreme Court in Radio and Television Broadcast Technicians Local Union 1264 v. Broadcast Service of Mobile Inc., 380 U.S. 255, 256 (1965), cites with approv- al that the Board considers several nominally separate business entities to be a single employer when they com- prise an integrated enterprise. The controlling criteria as set out and elaborated in Board decisions are interrela- tion of operation, common management, centralized con- trol of labor relations, and common ownership. See Sak- rete of Northern California, Inc., 137 NLRB 1220 (1962), affd. 332 F.2d 902 (9th Cir 1964), cert. denied 379 U.S. 961. These indicia were further amplified in Gerace Con- struction, Inc. and Helger Construction Company, 193 NLRB 645 (1971), emphasizing "the degree of common control of labor relations policies "is a critical factor in such determination and "that such common control must be actual or active, as distinguished from potential con- trol." It should be noted in this connection that Wakida was the general superintendent of J. M. Tanaka and occupies the identical position in Raymond Tanaka's business; in this capacity he has the authority to hire and fire em- ployees, schedule jobs, determine wage rates, hear griev- ances, and handle manpower, equipment, and supplies. He also has control over the day-to-day operations at Kona for Raymond Tanaka just as he had for J. M. Tanaka. Raymond Tanaka has the responsibility to set policy concerning labor relations. He also negotiates con- tracts with labor unions. Thus, according to the credible testimony of Raymond Tanaka, he and Wakida together have ultimate authority to control the labor relations of Raymond Tanaka. This represents actual control within the meaning of Gerace Construction. 1. Business operations Raymond Tanaka is a construction company engaged in the business of excavation, asphalt paving of roads and streets, and subdivision work which was explained as in- volving waterlines, sewerlines, drainage systems, curbs, gutters, and sidewalks Respondent points out in its brief that in addition to, and different from the above types of construction JMT engaged in other highly specialized bridge construction, tunnel building, and reservoir construction. This last ac- tivity involves massive excavation followed by large concrete pouring. However, the large construction cov- ered by the items mentioned above represents work which was done by JMT at the peak of its activities in 1974-78, and there is no evidence in the record to show that just prior to the phasing out of its business JMT was engaged in this type of work. The General Counsel adduced testimony from Ray- mond Tanaka that his Company also performed similar work. For example, RMT took over the completion of at least two jobs which had been started by JMT. The McCoy Project, valued at $189,000, was taken over when JMT began to phase out its operations and was completed by RMT. The General Counsel states that RMT stepped into the shoes of JMT and thus provides a 246 DECISIONS OF NATIONAL LABOR RELATIONS BOARD continuity of operation of its predecessor JMT on this job. Similarly, JMT submitted a $192,000 bid on the Lani- hau Project where grading was begun in May 1978. This project too was completed by RMT without the necessi- ty of making an independent valuation of the bid price, nor was a new bond required on this job. It appears from the above that both McCoy and Lani- hau dealt with RMT as though RMT and JMT were the same company. Respondent argues that its business is dis- tinguishable from that previously done by JMT because 50 percent of its projects are Government jobs. Howev- er, Raymond Tanaka testified that RMT would continue to bid on Government jobs as it is presently doing. 2. Operation and equipment RMT is engaged in many of the same operations as JMT but on an admittedly smaller scale. For example, Respondent calls attention to a $3 million highway proj- ect in Honolulu that was completed by JMT in May 1979. Also, JMT constructed the largest reservoir in the State, a 6-million gallon installation which was complet- ed in 1976. Respondent Raymond Tanaka concedes that approximately 90 percent of its work was performed for private developers. The asphalt paving subdivision work involves installation of waterlines, sewerlines, drainage systems, curbs, gutters, and sidewalks. This is precisely the type of work which was performed by both RMT and JMT. JMT also constructed tunnels which required specialized equipment-viz: tunnel forms, concrete pumps, jacks, air ventilation systems, and earthmoving equipment. Concerning equipment, the evidence shows that RMT acquired its operating equipment in large part by virtue of a lease-purchase agreement between it and JMT. The purchase price was $471,000 and was negotiated on behalf of JMT by Thomas Tanaka. In reaching agree- ment on the purchase price, Thomas Tanaka made use of an independent professional appraisal which was made in 1975. In addition, he made a direct physical inspection of the equipment. The fixed price was approved by a ma- jority of the stockholders, and the holder of a lien on the equipment, American Security Bank, while it did not ap- prove of an outright purchase, did agree on a rental pur- chase plan (Resp. Exh. 16). The note, security agree- ment, and disclosure agreement are included in Respond- ent's Exhibit 17. Respondent's Exhibit 9 lists more than 80 pieces of equipment which were acquired by RMT for $471,000. The General Counsel states in his brief that Respondent made no effort to advertise this machinery, and that no offers or counteroffers were made regarding the sale of the asphalt plant. This is not correct because the record shows that E. Cheeley and R. Wright of Hawaiian Bitu- lims had rejected a price of $591,000 as being too high for the plant and equipment. A Joe Smith of Nanakuli Paving inspected the plant and equipment and offered to purchase it for $100,000, which offer was rejected as being too low. I have no way of knowing from the record evidence what the fair market value would be. Despite this, it is certainly clear that about two-thirds of the equipment was in fact purchased by Respondent Raymond Tanaka from JMT. It is also true that RMT bought two additional bulldozers from JMT for approxi- mately $62,000, plus additional equipment from other sources: a paver for $27,318, a loader for $9,432, a loader backhoe for $31,600, and a fuel tanker and tractor for $11,000. While the record shows that, in addition to what was secured from JMT, Respondent RMT did make purchases of additional equipment, that does not negate the fact that the equipment used by RMT was, in fairly large part, the same as that which was being used by JMT. 3. Management J. M. Tanaka operated its business from an office on the Island of Oahu. Its asphalt business on the Big Island of Hawaii was operated from a shed in a quarry located at Kona. These identical facilities were and are used by RMT. Kona is 165 miles from Oahu. The officers and directors of RMT are as follows: president/director-Raymond Tanaka, vice president/di- rector-Takeo Wakida, and secretary-treasurer/direc- tor-Joseph Yoshishige. Raymond Tanaka owns 100 percent of the stock of RMT. He is also still president of JMT, in which he holds 8 percent of the stock. The balance of 92 percent is divided among 22 other stockholders, all of whom are members of the Tanaka family, either as Tanakas or as having married into the family. Both corporations are closed corporations. Wakida has been a director of JMT for a time, but the record is not clear as to the periods when he served in this capacity. It is clear, however, that he was the gener- al superintendent of JMT. It is to be noted that he func- tions as general superintendent for RMT. He has authori- ty over labor relations on a day-to-day basis. In this role he directly supervises the men and has firsthand knowl- edge of their experience and ability. He assigns individu- al wage rates. All of RMT's employees receive the equivalent of union wages. He directs job activity, dis- tributes equipment, hires and fires employees, implements safety programs, establishes work schedules and work rules, authorizes overtime, and handles grievances. Wakida's duties at RMT have been enlarged and now include the authorization to execute job contracts, per- formance bonds, legal documents, and payroll checks. He also now does estimating on jobs and has authority to close bids. Raymond Tanaka has continued for RMT to establish labor policies and negotiate labor contracts with labor unions. Wakida, who is an uncle of Raymond Tanaka, has been clothed with the major responsibilities of handling RMT's labor matters on a day-to-day basis just as he had done as the general superintendent of JMT, except for the additional duties enumerated above. Respondent points out that Wakida also establishes the amount of downpayment on jobs to be performed for RMT. This requirement for the making of downpayments is a new credit policy inaugurated by RMT. JMT had a policy of working on jobs at which payment was not required until 30 days after the work commenced on the projects undertaken. J. M. TANAKA, CONSTRUCTION, INC. 247 With respect to facilities at the Kona plant, they con- sist of a shop, field office, and asphalt plant, each under separate roofs and all located in the Keauhou Quarry area in Kona. Respondent's brief provides a comparison of the oper- ations of RMT and JMT. Among the differences listed between the two Companies there is an overlap in sup- pliers in that RMT uses Shell Oil and Union Oil. JMT used both of these suppliers plus Chevron, Arco, and Standard Oil. However, there is no breakdown which shows how much of the supplies were provided by each supplier. Included in this listing there are other differ- ences such as: tires, credit policy, accountant, insurance carrier, and estimators. None of these items are con- cerned with labor relations, and they are irrelevant to the question of establishing alter ego indicia. What is cru- cial to a determination of the question concerning alter ego is the matter of day-to-day control of labor relations. Contrary to what Respondent's brief states to the effect that Raymond Tanaka was in control of day-to-day labor relations at JMT, there is convincing evidence in the record that Wakida was in charge of day-to-day labor re- lations at both RMT and JMT. In both Companies he was the general superintendent. In addition, Respond- ent's brief points out that there is a significant difference in the type of projects performed by J. M. Tanaka and those performed by R. M. Tanaka. JMT was a statewide company which performed sophisticated work which is beyond the capabilities of RMT. It is also stated that RMT, which operates only in Kona, does not have the capability to perform tunnel work, construction of bridges, reservoirs, or stream channel work. Respondent R. M. Tanaka is also incapable of performing concrete barrier work on highways because the Company does not have employees knowledgeable about building those barriers. However, the record does not show to what extent JMT devoted its time and facilities to the large projects listed above. It is to be expected that when RMT began its operations it was underfinanced and did not have sufficient financial muscle to perform the large projects which JMT allegedly performed. With respect to customers, RMT estimated that approximately 90 per- cent of its work was done for private developers and 10 percent for the Government, while JMT performed 50 percent of its work for private developers and 50 percent on Government projects. There are other overlaps with respect to certain materials such as aggregate, asphalt, concrete, etc. 4. Discussion Respondent appears to make a persuasive argument about the differences between RMT and JMT. However, when viewed against the fact that RMT was limited in its operations to the Kona area and had little financial muscle because it had only recently begun its operations, it is understandable that it was functioning on a smaller scale. So far as the kind of work RMT was engaged in, largely paving and subdivision work, it was established in the record that 90 percent of this work was done for private developers and 10 percent for the Government. JMT, for its part, performed 50 percent of its work for private parties and 50 percent for the Government. Inso- far as both Companies performed subdivision and paving work, RMT not only used the same materials and equip- ment used by JMT, but it should be borne in mind that RMT secured two-thirds of its operating equipment from JMT. As to supervision, Wakida was the general superin- tendent for both Companies. In this capacity he took care of day-to-day labor relations and handled a wide spectrum of labor matters including, but not limited to, hiring and firing, setting wage rates, hearing grievances, and other labor matters set forth in greater detail supra. The functions discharged by Wakida are critical to my determination in the instant case. This is so because the Board stated in H. S. Brooks Electric, Inc., et al., 233 NLRB 889, 893 (1977), as follows: It is well established that the tests for determin- ing whether two or more business entities constitute a single integrated employer within the meaning of the Act are: (1) interrelation of operations [this does not apply to the instant case because JMT was no longer operating]; (2) common management; (3) common ownership; and (4) centralized control of labor relations.... The Board elaborated upon these criteria in Gerace Construction, Inc., et al., 193 NLRB 645 (1971), emphasizing the degree of common control of labor relations policies is a criti- cal factor in such determinations, and that such common control must be "actual or active, as distin- guished from potential control." As has been stated above, Wakida exercised actual con- trol over day-to-day labor matters as the general superin- tendent in JMT, and he carried such duties over to RMT. Herbert Onuna's duties were minor and were car- ried out under the supervision of Wakida. While it is true that Wakida exercised certain additional duties, such as making bids and estimating on jobs, the additional duties do not diminish his supervisory functions or authority. It is not necessary that the new business entity be exactly the same as its predecessor, but rather that a continuity of operations and a similarity of business purpose be es- tablished. In fact, the work done differed in degree but much of it was not too different in kind since one-half of JMT's jobs were also performed for private parties. It is signifi- cant that at least in two instances, the McCoy and the Lanihau Projects, jobs began by JMT were not complet- ed by JMT. RMT completed these jobs without being required to rebid on them. In other words, RMT stepped into the shoes of JMT, and it would appear that it was treated by McCoy and Lanihau as the same Company as JMT. Thus, I find that the two enterprises involved, RMT and JMT, existed in an alter ego relationship in that the two Companies had substantially similar management, business purpose, operation, much of the same equip- ment, some of the same customers, and identical supervi- sion. Certainly Wakida was the general superintendent of both JMT and RMT, and in this capacity he exercised direct control over the day-to-day operations of both 248 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Companies.2 Also, RMT had the same office staff as JMT, consisting of two employees, an office manager and one clerk. Respondent in its brief argues that the Companies, RMT and JMT, have different suppliers, a different ac- countant, certain different corporate offices, a different credit policy, different office locations, and different in- surance carriers. However, on balance, it appears that significant similarities outweigh the differences. RMT op- erates only in Kona from the identical facilities out of which JMT conducted its Kona business, viz: a shop, field office, and asphalt plant, each under separate roofs and all situated in the Keauhou Quarry area. There was no interchange of employees between JMT and RMT for the simple reason that JMT laid off all of its employees as a group. With few exceptions this group turned up first as alleged employees of Prime and 5 months later openly as employees of RMT. I attach special consideration to the motive for the changeover in personnel. Incidentally, there were ap- proximately 25 employees who were laid off by JMT and who appeared on the payroll of Prime Electric while it was operating for the benefit of RMT. This work force was subsequently enlarged until there were approximately 55 employees working for RMT, 35 of whom were previously employed by JMT. The reason for the establishment of RMT is significantly explained by the credible testimony of Wakida set forth in detail supra. Because of the extreme financial condition of JMT, which is not disputed, JMT was unable to pay the Operating Engineers fringe benefits of approximately $61,000. JMT determined to escape the burden of paying such benefits, and this was one of the major consider- ations which motivated the establishment of RMT. In furtherance of this purpose, JMT canceled its collective- bargaining agreement with the Operating Engineers which included the representation of those of its employ- ees who were members of the Operating Engineers Union. Wakida also credibly testified that JMT wanted to escape from the financial burden of granting periodic in- creases to its employees required under the terms of the contract with Local 3. JMT complained that its non- union competitors, not having to meet this problem and other problems inherent in operating under a union con- tract, were able to underbid JMT on construction pro- jects. 5. The Union's majority status Crozier, the Union's business representative, testified that Wakida refused to continue recognizing the Union and told it that RMT questioned the Union's majority status unless they successfully underwent a new election. Except for the addition of a small number of new em- ployees, the complement of the operating engineers re- mained essentially unchanged from what it was when the same group of employees were working for JMT. 2 See Crawford Door Sales Company, Inc., 226 NLRH 1144 (1976). See also Marquis Printing Corporation and Mutual Lithograph Company, 213 NLRB 394 (1974). It is clear from the testimony of Wakida, whom I credit, that RMT was formed to escape the collective- bargaining agreements existing between JMT, Local 3, and other unions. This is manifested by the open-shop letters which the employees were required to sign when they came to work ostensibly for Prime Electric and were later transferred to RMT. (See G.C. Exh. 6(a)-(v).) The letters also set forth that the employees agreed that, while working on certain Government jobs which neces- sitated the payment of fringe benefits required by the State of Hawaii, these benefits would be paid directly to the employees and not to any union to which the em- ployees might belong. If a union problem developed from the payment of fringe benefits to the employees, the employees would be responsible for reimbursement to the Union. In sum, I am persuaded that the establish- ment of RMT was accomplished and was intended as a vehicle for unlawfully disposing of the Union. The ac- tions taken by RMT were in effect a disguised continu- ance of operations previously performed by JMT. This constitutes a clear violation of Section 8(a)(1), and I so find. With respect to the Union's majority status, Wakida also testified that, when the Union, both in writing and orally, demanded recognition, he told its representatives that he would not deal with it unless it established its majority status by a new election. Moreover, the record shows that Raymond Tanaka admitted he knew that Local 3 represented a majority of the employees laid off in September 1978. This evidence was not rebutted. Thus, RMT's withdrawal from the bargaining relation- ship with Local 3 was not based on a good-faith doubt of the Union's majority status. Moreover, the withdrawal violated Section 8(a)(5) and (1) as alleged. The general rule as set forth in Walter E. Heyman d/b/a Standwood Thriftmart, 216 NLRB 852, 853 (1975), and in many other cases, is to this effect: A contract, lawful on its face, raises a presumption that the contracting union was the majority repre- sentative at the time the contract was executed, during the life of the contract, and thereafter. In the instant case the Master Agreement for Hawaii (G.C. Exh. 3) was and is in effect from 1977 to 1980. Re- spondent JMT has had an uninterrupted series of succe- sive contracts with Local 3 of the Operating Engineers from 1964 to date. In order to rebut the presumption, the case of Terrell Machine Company, 173 NLRB 1480, 1480- 81 (1969), states: [O]nce the presumption is shown to be operative, a prima facie case is established that an employer is obligated to bargain and that its refusal to do so would be unlawful. The prima facie case may be re- butted if the employer affirmatively establishes either () that at the time of the refusal the union in fact no longer enjoyed majority representative status; or (2) that the employer's refusal was based on a good-faith and reasonably grounded doubt of the union's continued majority status. J. M. TANAKA, CONSTRUCTION, INC. 249 In the instant case there is not an iota of evidence that Respondent doubted the majority status of Local 3. To the contrary, Raymond Tanaka explicitly admitted he knew that Local 3 represented a majority of the employ- ees laid off in September 1978. Based on the uncontro- verted testimony in the record, when Wakida stated to the union business agent, Crozier, that RMT would not deal with Local 3 without a new election, this contention was not advanced in good faith and is a further violation of Section 8(a)(5) and (1) of the Act. 6. Further discussion R. M. Tanaka was incorporated on August 3, 1978, at which time it had approximately 35 employees. JMT had 33-35 operating engineers. Reverting for a moment to the ownership of J. M. Tanaka, the record shows that Raymond Tanaka's mother, Martha Tanaka, owns 40 percent of the stock in JMT; his uncle, Thomas Tanaka, owns 30 percent of the stock; and Raymond and his brother, George Tanaka, each own 8 percent of the stock. Thus, 86 percent of the ownership of JMT is owned by the individuals named above, and 18 members of the Tanaka family own 14 percent of the stock. Wakida is the uncle of Raymond Tanaka. Members of the bargaining unit had been supervised by Wakida, assisted by Herbert Onuma, who was de- scribed in the record as being a foreman, but there is no indication to show the exact authority that he exercised. Nor is it clear who paid Onuma. On the other hand, Wakida supervised employees on Prime's payroll but was paid by RMT. Prime paid 25 operating engineers for the period from October 15, 1978, until February 1979. 7. The status of Prime Electric The complaint alleges that Prime was a joint employer with RMT. It is not denied that during the period of 5 months from October 1978 to February 1979 the operat- ing engineers were paid with checks drawn on Prime's account. Respondent argues that Prime's connection with R. M. Tanaka was "strictly financial." Prime bid for a job which was then subcontracted to RMT. Prime pro- vided the bond and paid the payroll and retained from the job receipts 4 percent of the former as its fee and its actual expenses for the latter, and paid the balance to RMT. Prime acted solely as a job broker and financier. Prime exercised no authority in day-to-day control over the jobsite or the employees who performed the work. Sinclair & Valentine Co., Inc., a Division of Wheelabrator- Frye, Inc., 238 NLRB 754 (1978). All work performed by RMT took place in Kona. Prime has no office on the Island of Hawaii. Its office is located in Honolulu, which is approximately 165 miles from Kona. Neither the supervisory status of Onuma nor the fact that he was on the payroll of Prime was proven by a preponderance of evidence on the record. It is clear and it is not denied that Wakida, as general superintendent of both JMT and RMT, was in charge of day-to-day con- trol over the jobsite and the employees who performed the work of RMT, and he was paid not by Prime but by RMT. The record is barren of evidence to show that Prime established control over the labor relations poli- cies of RMT. In sum, the authority to hire, fire, disci- pline, and handle the total spectrum (the wages, hours, and working conditions) of labor relations was reposed in Wakida, who had no employment relationship what- ever with Prime but was employed and paid by RMT. In fact, there is no showing on the record that Prime had any role in relation to RMT's labor matters. There is no common ownership. Both Prime and RMT are separate and distinct corporate entities. According to Prime's brief, Prime has a contractor's license to perform engineering work. Prime advanced payroll funds for RMT. This was done because RMT was initially unable to handle the payroll because of its cash flow position. Prime agreed to advance funds until RMT was able to establish both a continuity of business and a regularity of receipts. The agreement between Prime and RMT was of limited duration until RMT had sufficient funds to main- tain its payroll. Prime served this function for a period of 5 months, from October 15, 1978, to February 1979, which covered approximately 25 employees who were actually employed by RMT. In addition, Prime paid for the health benefits for the 25 employees as required by the State of Hawaii. Respondent Prime's brief points out that Prime provided no field supervision over the em- ployees of R. M. Tanaka during the 5 months in issue. In addition, no individual on behalf of Prime went from jobsite to jobsite to provide supervision. In fact, no rep- resentative, agent, or officer of Prime supervised the em- ployees who were ostensibly on Prime's payroll but actu- ally were selected, hired, supervised, and terminated by R. M. Tanaka management. The General Counsel argues that Herbert Onuma was a supervisor employed by Prime. He was merely a fore- man which is a bargaining unit position under the Local 3 agreement. Even if he did possess some minor authori- ty, it was never established that Onuma was on the Prime payroll. Raymond Tanaka testified that, "My rec- ollection, I think Mr. Onuma was on [Prime's payroll]." Later Tanaka stated as follows: I really don't remember if he was employed by Prime Electric or R. M. Tanaka. I have to check the employment record for that purpose. No such check was ever made, and the General Counsel had in his possession, as a result of a subpoena duces tecum, the Prime Electric Company records. However, he did not adduce testimony from the record information in his possession, nor did he interrogate Raymond Tanaka further on this point. The essential ingredient from which a determination of joint employer status can be determined depends on whether Prime and RMT jointly codetermine wages, working conditions, and supervision of employees. This information is conspicuous by its absence. From all the above I conclude and find that Prime was not a joint em- ployer of R. M. Tanaka. In view of this finding I recom- mend that the allegation in the complaint asserting the joint employer status of Prime and Tanaka be dismissed. 250 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 8. Interrogation The complaint in paragraph 6 alleges that RMT, through its supervisor, Wakida, interrogated employees concerning their union activity. The General Counsel provided a witness, Alfredo Erece, who testified without refutation as follows: Erece stated that after he was called back to work he was approached by Wakida and asked if had signed a card. Erece asked what kind of a card, and Wakida ex- plained he was asking about a union authorization card. Erece responded that he had signed a card. During Wa- kida's testimony, he stated that he asked this question of about three employees, apparently including Erece. This interrogation constitutes a violation of Section 8(a)(l), and I so find. 9. The "Open-Shop" agreement The employees who returned to work for RMT were required to sign a document which I call an open-shop agreement and which has been discussed in detail supra. Being forced to sign this document before they could go to work, the employees were coerced to relinquish their membership in Local 3 and repudiate the contract ex- ecuted on their behalf by Local 3. These activities on the part of Respondent RMT, which Company it has been established is an alter ego of employer JMT, created in RMT the obligation to abide by the terms and conditions of JMT's contract with Local 3. As a consequence, Wakida and Raymond Tanaka violated the employees' Section 7 rights and thereby violated Section 8(a)(5) and (1) of the Act. I so find. III. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of Respondents set forth above, occur- ring in connection with the operations of Respondents described above, have a close, intimate, and substantial relationship to trade, traffic, and commerce among the several States, and tend to lead, and have led, to labor disputes burdening and obstructing commerce and the free flow of commerce. CONCLUSIONS OF LAW 1. R. M. Tanaka Construction, Inc., and J. M. Tanaka Construction, Inc., at times material herein were employ- ers engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. Operating Engineers Local Union No. 3 is a labor organization within the meaning of Section 2(5) of the Act. 3. Operating engineers employed by Respondents J. M. Tanaka Construction, Inc., and R. M. Tanaka Con- struction, Inc., excluding office clerical employees, pro- fessional employees, guards and supervisors as defined in the Act, constitute a unit appropriate for purposes of col- lective bargaining within the meaning of Section 9 of the Act. 4. The Union at all times material herein was and is the exclusive representative of all employees in the afore- said unit for purposes of collective bargaining. 5. On and after October 3, 1978, to date, by refusing to honor and implement the collective-bargaining agree- ment between J. M. Tanaka Construction, Inc., and its alter ego, R. M. Tanaka Construction, Inc., Respondents violated Section 8(a)(5) and (1) of the Act. 6. By refusing to continue to recognize the Union on and after October 3, 1978, and by withdrawing recogni- tion and repudiating the collective-bargaining contract with Local 3, Respondents violated Section 8(a)(5) and (1) of the Act. 7. By unilaterally imposing illegal conditions of work on the unit employees on and after October 3, 1978, by requiring them to sign letters that they could only work as nonunion employees and thereafter enforcing such conditions and by failing to make payment for fringe benefits to the Union, J. M. Tanaka Construction, Inc., and its alter ego, R. M. Tanaka have violated and are vio- lating Section 8(a)(3) and (1) of the Act. 8. By illegally interrogating certain employees, Respo- dent R. M. Tanaka Construction, Inc., further indepen- dently violated Section 8(a)(l) of the Act. THE REMEDY Having found that Respondents engaged in the unfair labor practices enumerated above, I shall recommend that they cease and desist therefrom and take certain af- firmative action designed to effectuate the policies of the Act as follows: 1. Both Respondents, J. M. Tanaka Construction, Inc., and R. M. Tanaka Construction, Inc., shall retroactively comply with the terms and conditions of the collective- bargaining agreement with Local 3. Both Respondents, jointly and severally, shall make all necessary contribu- tions, with interest, to the Union's trust funds retroactive to the day R. M. Tanaka Construction, Inc., began to hire J. M. Tanaka Construction, Inc., employees. Be- cause the provisions of employee benefit fund agree- ments are variable and complex the addition of interest shall be left to the compliance stage of the proceeding. These additional amounts may be determined by refer- ence to provisions in the documents governing the fund, and, if there are no governing provisions, by evidence of any loss directly attributable to the unlawful withholding action, which might include the loss of return on invest- ment of the funds withheld, additional administrative costs, etc. Inland Cities, Inc, 241 NLRB No. 56, fn. 2 (1979); Merryweather Optical Company, 240 NLRB No. 169 (1979). 2. All employees who may have suffered any loss of pay for the period from October 3, 1978, through mid- February 1979 and to date, shall receive backpay, with interest, in the manner set forth in F. W. Woolworth Com- pany, 90 NLRB 289 (1950), and Florida Steel Corporation, 231 NLRB 651 (1977).3 Respondents' unlawful activities make appropriate an order requiring Respondents to cease and desist from in any like or related manner infringing on the statutory rights of employees. I further recommend that Respond- ents make available to the Board, upon request, all pay- roll and other records necessary to facilitate checking :' See, ,clcrall , Isis Plumbing & Heating Co.. 138 NL.RB 716 (1962). J. M. TANAKA, CONSTRUCTION, INC. 251 the amounts of backpay due, if any, the employees and any other rights and fringe benefits they may be entitled to receive. The General Counsel's contention that the rate of in- terest should be 9 percent is rejected on the authority of Florida Steel Corporation, supra. [Recommended order omitted from publication.]