Ref-Chem Co.

376 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Ref-Chem Company and El Paso Products Co., In- dividually and as Co-Employers, and International Association of Heat and Frost Insula- tors and Asbestos Workers, Local No. 66, AFL-CIO. Case 16-CA-2392 January 26, 1968 DECISION AND ORDER BY MEMBERS FANNING, BROWN, AND JENKINS On November 3, 1966, Trial Examiner William Seagle issued his Decision in the above-entitled proceeding, finding that Respondents had not en- gaged in the unfair labor practices alleged in the complaint and recommending that the complaint be dismissed in its entirety, as set forth in the attached Trial Examiner's Decision. Thereafter, the General Counsel filed exceptions to the Trial Examiner's Decision with a supporting brief and Respondent Ref-Chem Company' filed cross-exceptions and a brief in answer to the General Counsel's excep- tions. 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 powers in connection with this case to a three- member panel. The Board has reviewed the rulings of the Trial Examiner made at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Trial Examiner's Decision, the exceptions, cross- exceptions, and briefs, and the entire record in the case, and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner only to the extent consistent with the following. We can not agree with the Trial Examiner's con- clusion that in the circumstances here present it is unnecessary to determine, as alleged in the com- plaint, that Respondents Ref-Chem and El Paso2 are joint employers and, if so, whether they were obliged to recognize and bargain with Local 663 as the bargaining representative of their employees in an appropriate unit. El Paso is engaged in the manufacture, sale, and distribution of petrochemical products. In the course of its operations, El Paso requires certain in- sulation maintenance services and, over the years, this work has been contracted to a series of cor- porate entities, the most recent of which is Ref- Chem. Although El Paso has utilized the services of different companies, the insulation maintenance work has at all times been performed by Steve Har- ris and his crew. Local 66 claims to be the bargain- ing representative for the employees who are mem- bers of Steve Harris' crew. El Paso had its corporate beginning in 1955 or 1956 and at that time was located in El Paso, Texas. In 1958, it contracted to have its insulation main- tenance work performed by Erectors & Construc- tors, Inc.,4 a firm which had been engaged in general construction work. On July 15, 1960, E & C was dissolved as a corporation and its assets and liabilities, including the maintenance contract with El Paso, were taken over by Insulation & Special- ties, Inc.5 Shortly thereafter, on or about October 7, 1960, I & S entered into an area contract with Asbestos Workers' Local No. 106, and at the same time entered into a "maintenance addendum" modi- fying the area contract with respect to the main- tenance crew performing work for El Paso.6 I & S moved to Odessa, Texas, in early 1961, locating in what is known as the Odessa complex. At that time, I & S joined the Master Felters Association, a mul- tiemployer group of insulation contractors, and on January 17, 1961, it became a party to the Associa- tion's collective-bargaining agreement with Local 66. A maintenance addendum to the Association contract was also made effective between I & S and Local 66. Pursuant to the terms of this agreement, I & S began, on April 9, 1961, to make payments on behalf of its maintenance crew to the Local 66 health and welfare fund. On July 3, 1961, and July 3, 1962, the Association on behalf of its members, including I & S, entered into collective-bargaining agreements with Local 66. The latter agreement by its terms was to expire on June 30, 1965. Although the maintenance crew at El Paso had been covered under the January 17, 1961, addendum, I & S and the Union were unable to agree on coverage of these employees under the last two contracts. How- ever, I & S continued to make payments to the Union's welfare fund for these employees. As a result of the dispute over coverage of the maintenance crew at El Paso, Local 66 filed charges with the Association's Joint Board alleging that I & S was paying substandard wages to these employees. The Joint Board took no action on these charges. Local 66 filed new charges on October 12, 1962, whc n the wage scale of the 1962 contract was not applied to these employees. These charges were pursued through arbitration and on September 16, 1963, the arbitrator handed down an award in which he found that the 1962 contract covered the Hereinafter referred to as Ref-Chem. 3 El Paso Products Company herein referred to as El Paso. 3 International Association of Heat and Frost Insulators and Asbestos Workers Local No. 66, AFL-CIO, herein referred to as Local 66 or the Union. Hereinafter referred to as E & C. Hereinafter referred to as I & S. s This addendum incorporated by reference the area contract governing wage scales and conditions of employment and provided that maintenance employees were not to be paid travel allowance or subsistence . It also established work shifts and overtime provisions which differed from the area contract. 169 NLRB No. 45 REF-CHEM CO. 377 employees in question.' After several attempts to secure I & S's compliance with the award failed, Local 66 was successful in obtaining court enforce- ment of the award and, as a consequence, the insu- lation maintenance crew were paid the wage rates prescribed by the 1962 collective-bargaining agree- ment from December 14, 1964, to January 18, 1965. Meanwhile other events were taking place which bear upon the bargaining relationship. In January 1964, El Paso moved its operations to Odessa, Tex- as, and located its new facilities in the Odessa com- plex. After the transfer, I & S continued to provide insulation maintenance services for El Paso until October 1, 1964. On that date a newly formed com- pany, Leona Lee Corporation, took over all the as- sets and liabilities of I & S, including the main- tenance contract with El Paso." In performing the contract, Leona Lee occupied the building vacated by I & S and retained the same maintenance crew, under the direction of Steve Harris, which had per- formed the work for both E & C and I & S. Under the terms of the maintenance agreement, El Paso's permission was required in order to in- crease the wage rates of Harris' crew. On January 16, 1965, Leona Lee sent a letter to El Paso for- mally requesting permission to raise the wage rates of the insulation maintenance crew. El Paso responded immediately by informing Leona Lee that it was exercising its discretion to terminate the maintenance agreement at will. Under the agree- ment; El Paso was not required to, nor did it, give any explanation for this action.9 El Paso's abrupt termination of its contract with Leona Lee left El Paso without any arrangement for the performance of its insulation maintenance work. However, El Paso acted swiftly to correct the situation. El Paso immediately entered into an oral agreement with Ref-Chem10 providing for the performance of this work under an existing contract between Ref-Chem and El Paso. I t In order to perform these new duties, Ref-Chem retained the services of Steve Harris and the nine members of his crew, who were then unem- ployed as a result of El Paso's termination of its contract with Leona Lee. Local 66 did not learn that Ref-Chem had replaced Leona Lee as maintenance contractor for El Paso until early in February 1965. Local 66 did not take immediate action upon learning of the change apparently because it was attempting to secure enforcement of its contracts in the courts. In any event, it was not until June 11, 1965, that Local 66 notified Ref-Chem that it was demanding recog- nition and compliance with the terms of the collec- tive-bargaining agreement which allegedly covered these employees. When Ref-Chem did not reply to these demands, Local 66 instituted this proceeding. A complaint issued on November 16, 1965, charg- ing El Paso and Ref-Chem, individually and as coemployers, with violations of Section 8(a)(5) of the Act by refusing on January 18, 1965, and thereafter to recognize and bargain with Local 66 as majority representative of the insulation main- tenance crew and by unilaterally and without notice to the Union changing wages and other terms of em- ployment of these employees on or about January 18 and July 1,1965. The relationship between El Paso and Leona Lee and its predecessors was clearly and unmistakably that of joint employers. El Paso's control over the operations of these contractors is perhaps best illustrated by the maintenance agree- ment itself. As noted earlier, El Paso retained the right to terminate the agreement at will and "in its absolute discretion." In addition, the contract con- tained provisions granting El Paso the right to request the removal of any employee who, in its opinion, was "incompetent, careless, unqualified" or "guilty of improper conduct"; the right of ap- proval over all work; control over wages and the cost of equipment rental and materials; and a prohibition against assigning subletting, or subcon- tracting any work under the agreement without prior written consent of El Paso. Furthermore, there is evidence that, in practice, El Paso's control over the contractors' employees extended even beyond the terms of the maintenance contract. For example, Steve Harris credibly testified that, until January 1965, El Paso approved applications for employment on his insulation maintenance crew; determined the number of his employees, including any extra help which he might require; and also whether any of them should be permitted to work overtime. The foregoing establishes the high degree of con- trol exercised by El Paso over the operations of Leona Lee and its predecessors, but it is not dispositive of the crucial considerations in this proceeding; namely, the relationship that existed between Respondents El Paso and Ref-Chem.12 7 On April 19, 1963, 1 & S filed a representation petition with the Board, requesting that an election be conducted among the employees performing insulation maintenance work at El Paso. On November 13, 1963 , the Board issued a decision honoring the arbitrator 's award and dismissing the petition on the grounds of its contract-bar doctrine. See Insulation & Specialities, Inc, 144 NLRB 1540. 8 The record shows that all the stock in both E & C and I & S was owned by two individuals, Jack Tillery and James L. Baker With the in- corporation of Leona Lee, the business activities of I & S ceased and it became a mere corporate shell Leona Lee's corporate stock is held exclu- sively by immediate members of Tillery's family 9 A few days earlier, Local 66's business agent Schaffer attempted to gain admittance to the Odessa complex and was turned away because he did not have a gate pass. At the time, Schaffer threatened to get a Federal marshall in order to gain access to the complex . Steve Harris learned of this incident the following day and he made arrangements with El Paso's safety director for the issuance of a pass for Schaffer's use However, Schaffer was never notified of this fact. 10 El Paso did not invite bids on this work. " El Paso's existing contract with Ref-Chem was dated October 1, 1963, and entitled "Routine Maintenance and Miscellaneous Construc- tion Agreement " 12 The Trial Examiner was in error in concluding that James L. Baker, the president of Ref-Chem, was the same individual who had been as- sociated with Jack Tillery in the ownership and operations of E & C and I & S. See, fn 8, supra The record is devoid of any evidence which would indicate a connection, financial or otherwise, between the operations of Ref-Chem and Leona Lee and its predecessors 378 DECISIONS OF NATIONAL LABOR RELATIONS BOARD This relationship had its beginning in 1957 when Ref-Chem was incorporated. In October 1963, El Paso contracted with Ref-Chem for the per- formance of various work under an agreement enti- tled "Routine Maintenance and Miscellaneous Construction Agreement." The agreement pro- vided that it would be in effect on a month-to-month basis only, and that it could be terminated by either party on 90 days' notice. By its terms, Ref-Chem was obligated to perform such work as might be requested by El Paso and in turn was to be compen- sated by the payment of a fixed fee over and above Ref-Chem's expenses for labor, equipment, and other costs, which were to be in accordance with a prescribed schedule. Although the agreement ex- pressly provided that Ref-Chem would be perform- ing this work as an independent contractor, El Paso reserved the right to request the removal of any em- ployee who in El Paso's opinion was "incompetent, careless, unqualified, or is guilty of improper con- duct," and to approve the number of personnel furnished by the contractor in each job classifica- tion as well as the right to approve the superin- tendent and foremen for the particular job. An illustration of the manner in which this agree- ment was carried out in practice may be found in the testimony of Harold Stewart. Stewart stated that he had been hired by Ref-Chem on August 10, 1964, to serve as the general foreman for the con- struction of a fertilizer plant near Georgetown, Idaho. The construction job was being performed for El Paso by Ref-Chem under the terms of the aforementioned agreement. Although Stewart was actually hired by Robert Gertson, construction manager for Ref-Chem,13 he was told that El Paso would have to approve his employment. As a con- sequence Stewart was interviewed by several El Paso officials and although he eventually received their approval, it was only after doubt had been ex- pressed that he was the proper man for the job because of his union background.14 Stewart testified that Gertson stressed the fact that the job was to be run on a nonunion basis and that he (Stewart) would have to obtain El Paso's approval before a man could be hired. Stewart stated that, although he had been a construction superintendent all his life, he had never been so closely supervised by a customer's representative. According to Stewart, El Paso's representative told him whom he could hire, when he could hire, how much he could pay, and what he was to do on the job. On one occa- sion, Stewart complained to Gertson about the closeness of this supervision and suggested that they remind El Paso that under the contract Ref- Chem was an independent contractor. Gertson " Gertson had been formerly employed by El Paso as a supervisor of maintenance. " Ell Paso and Ref-Chem have not recognized any labor organizations as representatives of their employees. 's El Paso Natural Gas owns approximately 75 percent of the outstand- ing stock of its subsidiary El Paso. warned Stewart that El Paso did not like reference to the term independent contractor even though it was in the contract and told him not to mention it again. The close relationship between El Paso and Ref- Chem is also demonstrated by the fact that since March 17, 1965, their financial interests have been intertwined. On this date, El Paso Natural Gas, the parent corporation of El Paso,15 purchased 48 per- cent of Ref-Chem's stock. On the same date, 5 per- cent of Ref-Chem's stock was acquired by Jack S. Elliott, an individual who manages an insurance operation for El Paso Natural Gas. The remaining 47 percent of the stock has been held since 1960 by James L. Baker, Ref-Chem's president. Baker and Elliott are, in turn, partners in the ownership of 4,000 shares of El Paso Natural Gas stock. An ef- fect of the transaction is reflected in Ref-Chem's sales figures during this period. In 1965, the year in which El Paso Natural Gas acquired its stock in- terest in Ref-Chem, 77.5 percent of Ref-Chem's total sales were to El Paso Natural Gas and its sub- sidiary, El Paso, whereas in the prior year these two customers accounted for only 36.7 percent of Ref- Chem's total sales. We have set forth in some detail the circum- stances surrounding El Paso's relationship with Leona Lee and its predecessors and the general na- ture of its relationship with Ref-Chem because, in our judgment, it is only in this context that Ref- Chem's role as contractor for El Paso' s insulation maintenance work can be properly evaluated. It will be recalled that when El Paso terminated its con- tract with Leona Lee, it immediately entered into an oral arrangement with Ref-Chem for the per- formance of the work. While the record is unclear as to the precise nature of this arrangement, there is testimony by J. M. Strickland, vice president of El Paso, that the parties contemplated that the work would be performed under the terms of the existing contract between El Paso and Ref-Chem. So far as the record indicates, Ref-Chem had not performed insulation maintenance work in the past and, hence, its immediate problem was one of finding an ex- perienced work force which would permit Ref- Chem to promptly assume its responsibilities under the contract. Leona Lee's termination of Steve Har- ris and his crew provided a ready solution to the problem. On the same day Harris and his crew were let go by Leona Lee, they filed applications for em- ployment with Ref-Chem and, within a week, Har- ris was hired as insulation superintendent along with nine of his regular crewmembers.16 Although Ref-Chem's insulation maintenance crew was ap- parently made up entirely of employees who had 16 The record is unclear as to the number of crewmembers who over the years had been employed on a regular basis. However, Harris testified that, prior to 1965, his crew was composed of six or seven men with extras being hired as needed , while, under Ref-Chem, he normally operated a crew of nine men. REF-CHEM CO. worked under Harris over the years, the wage rates of those hired were in many cases substantially less than that which they had been receiving while em- ployed by Leona Lee. Although, under Ref-Chem, Harris' crew per- formed essentially the same work as in the past, there were changes instituted which affected Harris and his crew's method of operation. Under the ar- rangement between El Paso and Leona Lee and its predecessors, the contractor occupied buildings leased from El Paso and also provided the neces- sary materials and equipment. When El Paso ter- minated its contract with Leona Lee, it took over these buildings and arranged to purchase the materials and equipment in the possession of the contractor. As a consequence, the materials and equipment which in the past had been provided for the exclusive use of Harris and his crew are now available on a general basis to other work crews, in- cluding crews employed by Ref-Chem which pro- vide various maintenance services for El Paso.17 Another change, according to Harris, was a lessen- ing in the control El Paso had exercised over him. Harris stated that previously he was required to seek El Paso's permission before he could hire any extra help, or permit overtime, whereas now, only Ref-Chem's approval is necessary. Harris also stated that he works closely with Ref-Chem super- vision and does not have the contact with El Paso officials he formerly experienced.18 Under the present arrangement between El Paso and Ref-Chem, a work order must be received from El Paso's central maintenance department before Harris' crew can undertake any project. In some in- stances, this work order will be directed to several crews and require that different aspects of the job be performed by each. Although in such cases it may be said that the crews work in conjunction with one another, it can not be properly said that the job functions and duties of Harris' crew are now in- termingled with those of other crews. In fact, the record quite clearly establishes that Harris' crew performs the same kind or type of insulation main- tenance work it has in the past and that any assistance received from another crew is clearly of a supportive nature. There appears to be little, if any, interchange between Harris' crew and others although, on occasion, Harris will borrow members of crews to perform routine maintenance such as painting. All work is performed according to El Paso's specifications. If El Paso is dissatisfied in any way with the work performed, they may take the matter up with Harris, personally, or with Ref- Chem's maintenance supervisor. On the basis of the foregoing, we conclude that from the time El Paso and Ref-Chem entered into the arrangement for the performance of this insula- 17 Ref-Chem has approximately nine work crews performing services for El Paso at the Odessa complex. 18 We do not credit Hams' testimony that his position is merely that of 379 tion maintenance work, a joint-employer relation- ship existed between the two Respondents. We have chronicled the history of El Paso's relation- ship with its former insulation maintenance contrac- tors and demonstrated that while El Paso professed to be dealing with these companies as independent contractors, it was, in fact, maintaining virtually complete control over the contractors' operations and employees. More important perhaps is the fact that El Paso has exhibited this same high degree of control over Ref-Chem's operations at a time when both parties were operating pursuant to the very contractual arrangement which governs their rela- tionship with respect to the work at issue here. Nor, need we speculate over the nature of El Paso's ar- rangement with Ref-Chem for the performance of the insulation maintenance work. The record evidence demonstrates quite clearly that-El Paso retained the same type of control over the per- formance of the insulation maintenance work that it had under its agreement with Leona Lee and its predecessors. For example, the agreement between El Paso and Ref-Chem was only on a month-to- month basis and required that the contractor operate according to a fixed-cost schedule, includ- ing that of labor. Thus, under the agreement, Ref- Chem had no authority to make any change in the wage rates of employees without securing the ap- proval of El Paso. Also pursuant to the agreement, El Paso had the virtually unqualified right to request the removal of an employee of the contrac- tor and to approve the number of personnel hired in each job classification as well as to play a role in determining who would be selected for the jobs of superintendent and foremen. El Paso's control is also reflected in the day-to-day operations under this agreement. The insulation maintenance work is performed on El Paso's premises with materials and equipment owned by El Paso. Harris may not undertake any project without receiving a work order and specifications from El Paso's central maintenance and, if the work is performedin an un- satisfactory manner, Harris is answerable to El Paso officials. If Ref-Chem has any authority to ex- ercise discretion in the manner in which the work is carried out, it is not evident in this record. Rather, the evidence points to the fact that El Paso exer- cises a high degree of control over not only Ref- Chem's employees, but its labor relations policies as well. Therefore, in view of this, and the close financial and business ties between the two Respon- dents, we are constrained to conclude that a joint- employer relationship exists between El Paso and Ref-Chem with respect to the performance of this work. We must now consider what, if any,-bargaining obligations attached to Respondents in light of our a foreman under Ref-Chem in view of the documentary evidence establishing that he was hired by Ref-Chem for the position of insulation superintendent. 380 DECISIONS OF NATIONAL LABOR RELATIONS BOARD finding that, at all times material, an employer-em- ployee relationship existed between El Paso and its insulation maintenance crew. Certainly, as joint em- ployer with Leona Lee and its predecessors, El Paso had an obligation to, and in fact did, recognize Local 66 as the contractual bargaining representa- tive of its insulation maintenance employees. Ab- sent intervening circumstances affecting the bar- gaining relationship, the obligation continued and El Paso's action in terminating the Leona Lee crew and subsequently changing their wage rates without consultation with the Union would constitute a breach of its duty to bargain. Likewise, these same obligations would have attached to Ref-Chem at the time it entered into the joint-employer relationship with El Paso to the extent that the obligations of the one are the obligations of the other. With respect to the specific allegations of the complaint, neither El Paso nor Ref-Chem deny that they unilaterally established wage rates for Harris' crew in January 1965 and on July 1, 1965, and that in January 1965 and thereafter, they did not recog- nize and bargain with Local 66 as the representative of these employees. However, they raise several defenses to the unfair labor practices charged which we shall consider seriatim. The first such matter raised is a procedural defense urged by El Paso in response to the allega- tion that the January 1965 unilateral establishment of new wage rates for Harris' crew was a violation of Section 8(a)(5). El Paso points out that the original charge filed on July 6, 1965, named only Ref-Chem as a Respondent and that it was not until an amended charge was filed on October 25, 1965, that El Paso was charged as a Respondent. Hence, it argues that inasmuch as the alleged illegal con- duct occurred in January 1965, more than 6 months before El Paso was named as a Respondent, the matter would be barred by Section 10(b) of the Act. We find no merit in this contention. Respondent El Paso's liability under the Act can not be considered separate and apart from that of Respondent Ref- Chem. As joint employers, each is responsible for the conduct of the other and whatever unlawful practices are engaged in by the one must be deemed to have been committed by both. Therefore, although the original charge mentions only Ref- Chem as Respondent, the nature of the joint-em- ployer relationship is such that the charge against 19 The complaint as amended describes the unit as follows: All mechanics and improvers of employers comprising the Master Fetter Association , who are engaged in the preparation , distribution and application of pipe and boiler coverings, insulation of hot sur- faces, ducts, flues, etc., the covering of cold piping and circular tanks connected with .the same and all other work included in the trade ju- risdictional claims of the Union, including alterations and repairing of work similar to the above, and the use of all materials for the purpose mentioned and/or all mechanics and improvers of Respondent El Paso and Respondent Ref-Chem who are engaged in the preparation, distribution and application of pipe and boiler coverings , insulation of hot surfaces, ducts, flues, etc., the covering of cold piping and circular tanks connected with the same and all other work included in the trade jurisdictional claims of the Union , including alterations and Respondent Ref-Chem also constituted a charge against El Paso for any unfair labor practices found against its coemployer Ref-Chem. Accordingly, we conclude that El Paso as a coemployer was in- cluded under the original charge filed on July 6, 1965, and as there is no dispute over the fact that the unfair labor practice allegations of the complaint are based upon events which occurred within the 10(b) period established by the filing of the original charge, we find that Section 10(b) does not serve as a defense for either Respondent to any of the unfair labor practices alleged. A second issue raised by both Respondents con- cerns the alleged failure of the General Counsel to define the appropriate unit. This defense is. prompted by the General Counsel's amendment to the complaint in which he sets forth three separate units which the General Counsel alleges constitute the appropriate unit or units. At first blush, there would appear to be merit in the Respondents' con- tention that in such circumstances an appropriate unit has not been properly defined. However, upon inspection, it becomes clear that only one of the units alleged differs in any material way from the unit described in the collective-bargaining agree- ment entered into by the Union and I & S and upon which the Union rests its present claim. Specifi- cally, the first of these alternative units is a craft unit of all mechanics and improvers on a multiem- ployer basis, i.e., on the basis of the associationwide unit described in Local 66's collective- bargaining agreement; the second of the alternative units is the very same unit, but on a single-employer basis; and the third alternative unit is a single-employer unit consisting of the employees of Respondents who are performing insulation maintenance work for El Paso and/or at the Odessa complex operated by El Paso.19 It is apparent that the first and second alter- native units alleged by the General Counsel are for practical purposes considered one and the same unit insofar as this case is concerned. The sole distinction between the two is that one is set forth on a multiemployer basis, whereas the other is described on a single or to be precise, joint-em- ployer basis. Furthermore, not only are these two units identical in content, they are unquestionably appropriate because they constitute the contractual bargaining unit in which the Union was afforded recognition. The third unit alleged by the General repairing of work similar to the above, and the use of all materials for the purpose mentioned and/or all regular and regular part -time em- ployees of Respondent El Paso and Respondent Ref-Chem, who are engaged in the repair, maintenance and renovation of insulation, in sheet metal and refactory work, in the erection and dismantling of scaffolding, and in the servicing of heating units and evaporate coolers for Respondent El Paso at the plant and/or complex operated by Respondent El Paso in Odessa, Texas, exclusive of all other of Respondent El Pasp's and Respondent Ref-Chem's employees, all of- fice clerical employees, guards, watchmen, and supervisors as defined in the Act constitute a unit and/or constitute units appropriate for the purpose of collective bargaining within the meaning of Section 9(b) of the Act. REF-CHEM CO. 381 Counsel differs substantially from the other two because it is not based upon craft considerations and does not limit the scope of the unit to those in- dividuals performing insulation maintenance work at El Paso's plant. No justification for this third al- ternative unit is offered by the General Counsel and we fail to see on what basis such a unit could be found to be appropriate in the circumstances of this case. If the third alternative unit were the only unit alleged by the General Counsel to be appropriate, our finding that such a unit is not appropriate would be fatal to the complaint. This, of course, is not the case here for we have already found that two of the units urged by the General Counsel are appropriate within the meaning of Section 9(b) of the Act. Hence, the General Counsel has met the obligation of establishing in an 8(a)(5) proceeding the ap- propriate unit in which the alleged refusal occurred. The fact that the General Counsel has in addition pleaded a unit which is not appropriate does not in our judgment cause his pleading to be defective, especially, where as here, there is nothing but a bare allegation to support Respondents' claim that they were prejudiced by the General Counsel's alterna- tive unit theory. The alleged appropriate units are also attacked by Respondents on the ground that the craft units described no longer exist because of the changes in Ref-Chem's method of operation. In suns, Respond- ents contend that the insulation maintenance crew, which in the past had as its principal function the performance of duties associated with a craft, is no longer a functioning entity, but rather has been replaced by "utility" or all purpose crew which does not operate on a craft basis. In our opinion, the record does not support such a contention. It can not be seriously argued that prior to their employ- ment with Ref-Chem, Harris' crew was not per- forming craft functions, or that, by contract the work was recognized to be of a craft nature. When Ref-Chem hired these employees it was, for the pur- pose of performing the same identical work. During the course of their employment with Ref-Chem they have continued to perform this same insulation maintenance work and although, recently, the crew's designation has been changed to that of "u- tility crew," there is no evidence that the function or duties of the crew has changed in any material way. As we have indicated elsewhere in this Deci- sion, the evidence demonstrates only that under the present arrangement Harris' crew may call upon other work crews to assist in the performance of routine maintenance functions, but there is no sug- gestion in the record that Harris' crew is no longer performing-insulation maintenance craft work. Ac- cordingly, we find no merit in this contention. We have reserved until now our discussion of what would appear to be Respondents' principal contentions; namely, that the General Counsel failed to establish that Local 66 was the majority representative of these employees during the rele- vant period or that a timely demand for recognition was made upon Respondents by Local 66. With respect to the former contention, Respondents argue that the General Counsel was under an af- firmative obligation to establish that a majority of the crewmembers hired by Respondent were represented by Local 66 and that not only did the General Counsel fail to meet this requirement, he also was unable to rebut the record evidence establishing that Local 66 did not in fact represent any of these employees. We do not agree with Respondents' assessment of the General Counsel's burden of proof or that the record evidence establishes the Union was not the majority representative of these employees. At all times material, Local 66 was the contractual representa- tive of these employees and, as such, it is presumed to be the majority representative of the employees in the unit. 20 This is not to say that this presumption of majority status can not be overcome, but to do so, the record must offer clear and convincing proof that the union no longer represents a majority of the unit employees. In the circumstances here present, Local 66's claim of representative status is based upon the 1962 contract entered into with I & S. We have previously found that at the time this agree- ment was entered into, I & $ and Respondent El Paso were the joint employers of their employees covered by the agreement. As a consequence, Respondent El Paso is deemed to have recognized Local 66 as bargaining representative for these em- ployees during the term of the agreement, which did not expire until June 30, 1965. At the time Respond- ents El Paso and Ref-Chem entered into a joint- employer relationship with the hiring by Ref-Chem of Harris' crew, El Paso's obligation to recognize Local 66 as representative of these employees at- tached also to Ref-Chem as a joint employer and, as a result, both Respondents were obligated to recog- nize Local 66 as majority representative, absent clear and unmistakable evidence to the contrary. In our judgment, the record evidence is insufficient to overcome this presumption. While the record does indicate that on November 15, 1963, each member of Harris' maintenance crew signed an af- fidavit in which the affiant stated, inter alia, that he was not a member of the Insulators Union and that ,he did not wish the union to represent him in any way, these statements were procured in an unlawful fashion.2 1 Accordingly, we can give no effect to this testimony because it is of no value in determining the uncoerced desires of the employees on the question of representation. Nor can it be said that the record in any other respect establishes em- ployee sentiment on whether or'not the Union had 20 Cf. Oilfield Maintenance Co., Inc., etc, 142 NLRB 1384. the employees by Marvin Hargraves, I & S's secretary-treasurer, and 21 These affidavits, which were prepared in advance, were handed to each employee who agreed to sign was paid the sum of $10. 382 DECISIONS OF NATIONAL LABOR RELATIONS BOARD their continued support. Accordingly, we conclude that the presumption of majority status running in favor of the Union as the contractual representative has not been overcome and we find that, at all rele- vant times, Local 66 must be considered to be the majority representative of the employees in question.22 The last matter urged by Respondents in defense of the unfair labor practices charged may properly be characterized as the alleged untimeliness of the Union's request for recognition. The record shows that El Paso and Ref-Chem entered into their agree- ment for the performance of this work on or about January 18, 1965, and that Harris and his nine crewmembers were hired as of January 26, 1965. When Local 66 learned of this in early February 1965, it took no immediate action and it was not until June 11, 1965, that Local 66 addressed a letter to Ref-Chem requesting recognition.23 While Local 66's demand for recognition may have been tardy, we do not think it can be said that, by such action, it has waived the right to be recognized as the em- ployees' bargaining representative. Employee bar- gaining rights are not to be treated so lightly. Respondents were under a continuing obligation to recognize Local 66 as the contractual bargaining representative of their employees and to comply with the requirements of Section 8(d) of the Act by bargaining in good faith with Local 66 over matters concerning wages, hours, and other terms and con- ditions of employment for these employees. Because of the contractual nature of this relation- ship, the obligation imposed upon Respondents ex- isted, irrespective of whether or not Local 66 for- mally demanded recognition and/or bargaining. Ac- cordingly, we find no merit in Respondents' conten- tion that Local 66's failure to take immediate af- firmative action relieved Respondents of their bar- gaining obligations. On the basis of the foregoing and the entire record, we find that at all times material, Local 66 was the majority representative in an appropriate unit of Respondents' employees, consisting of the following: All mechanics and improvers of El Paso Products Co. and Ref-Chem Company, who are engaged in the preparation, distribution, and application of pipe and boiler coverings, in- sulation of hot surfaces, ducts, flues, etc., the covering of cold piping and circular tanks con- nected with the same and all other work in- cluded in the trade jurisdictional claims of the Union; including alterations and repairing of work similar to the above, and the use of all materials for the purpose mentioned, but ex- cluding all other employees of El Paso Products Co. and Ref-Chem Company, all of- fice clerical employees, guards, watchmen, and all supervisors as defined in the Act.24 We further find that on or about January 26, 1965, Respondents El Paso and Ref-Chem acted in derogation of their bargaining obligations to Local 66 as representative of their employees in an ap- propriate unit by unilaterally and without consulta- tion with Local 66 and by effecting changes in the existing wage rates of these employees, and, based upon this conduct, we find that Respondents vio- lated Section 8(a)(5) of the Act. We also find that on January 18, 1965, and thereafter, Local 66 was the contractual bargaining representative for Respondents' employees in the appropriate unit described above, and that, at all times relevant, Respondents failed to meet their obligation under Section 8(d) of the Act to recog- nize and/or bargain with Local 66 as the representa- tive of their employees. Accordingly, we find that, by such conduct, Respondents have refused to recognize and/or bargain with Local 66 in violation of Section 8(a)(5) of the Act. We likewise find that on July 1, 1965, Respondents El Paso and Ref- Chem, unilaterally and without notice to the Union, changed existing wage rates of the employees in the appropriate unit and by so doing violated Section 8(a)(5) of the Act.25 CONCLUSIONS OF LAW 1. The Respondent, Ref-Chem Company, and the Respondent, El Paso Products Company, are employers engaged in commerce, or in an industry affecting commerce, within the meaning of Section 2(6) and (7) of the Act. 2. International Association of Heat and Frost Insulators and Asbestos Workers, Local No. 66, AFL-CIO, is a labor organization within the mean- ing of Section 2(5) of the Act. 3. All mechanics and improvers of El Paso Products Co. and Ref-Chem Company, who are en- 22 It is also significant to note that Respondents Ref-Chem and El Paso did not question the Union's majority status at any time prior to the in- stitution of these proceedings . While Respondents contend that they did not take such action because they recognized no obligation to deal with the Union, the fact remains that we have found that such an obligation does exist and the Union's letter of June 11 , 1965, to Ref-Chem served as notice to Respondents that the Union was claiming to be the contractual representative of these employees. 23 We find no merit in Respondents' contention that the June I 1 letter was not a request for recognition . This letter clearly on its face in- dicates that Local 66 by virtue of its contract is claiming to be the bargain- ing representative for the insulation maintenance crew. We likewise find no merit in Respondent El Paso's contention that because the letter was sent only to Ref-Chem it can not be interpreted as a demand for recogni- tion upon El Paso. In view of our finding that El Paso and Ref-Chem are joint employers, a demand upon the one must be deemed to be a demand upon both. 24 Because neither Respondent El Paso nor Respondent Ref-Chem are represented by the Master Felters Association, the description of this unit on the individual employer basis is appropriate. 25 Although the collective-bargaining agreement which served as the basis for the Union's presumption of majority status expired on June 30, 1965, the day before these unilateral changes were effected, the presump- tion once properly invoked is continuing until such time as it is overcome by proper evidence. No such evidence is to be found in this record. REF-CHEM CO. gaged in preparation, distribution, and application of pipe and boiler coverings, insulation of hot sur- faces, ducts, flues, etc., the covering of cold piping and circular tanks connected with the same and all other work included in the trade jurisdictional claims of the Union, including alterations and repairing of work similar to the above, and the use of all materials for the purpose mentioned, but ex- cluding all other employees of El Paso Products Co. and Ref-Chem Company, all office clerical em- ployees, guards, watchmen, and all supervisors as defined in the Act, constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act, 4. Respondent El Paso Products Co. and Respondent Ref-Chem Company are the joint em- ployers of the employees in the appropriate unit described above. 5. At all times material herein, the Union has been the exclusive bargaining representative of the employees in the aforesaid unit within the meaning of Section 9(a) of the Act. 6. On or about January 26, 1965, Respondents El Paso Products Co. and Ref-Chem Company acted unilaterally and without consultation with the Union in effecting changes in the wage rates and employment of unit employees and thereby Respondents El Paso Products Co. and Ref-Chem Company have engaged in and are engaging in un- fair labor practices within the meaning of Section 8(a)(5) of the Act. 7. On July 1, 1965, Respondent El Paso Products Co. and Respondent Ref-Chem Company acted unilaterally and without consultation with the Union in effecting changes in the wage rates of unit employees and, by such conduct, Respondents have engaged in and are engaging in unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act. 8. By refusing on January 18, 1965, and thereafter to recognize and bargain with the Union, the Respondents have engaged in unfair labor prac- tices within the meaning of Section 8(a)(5) and (1) of the Act. 9. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2(6) and (7) of the Act. THE REMEDY We have found that Respondents, by refusing to recognize and bargain with the Union as the representative of their insulation maintenance em- ployees and by unilaterally effecting changes in the insulation maintenance employees' wages, violated Section 8(a)(5) and (1) of the Act. In fashioning a remedy, we must be mindful of our obligation to restore, as nearly as possible, the situation which would have existed but for the unfair labor prac- tices. We shall, of course, order the Respondents to 383 cease and desist from engaging in the unfair labor practices found, and affirmatively, upon request, to bargain with the Union concerning the wages, hours, and other terms and conditions of employ- ment of these employees. In addition, however, we believe it is necessary to require Respondents, jointly and severally, to make such employees whole by payment to them of a sum of moneys equal to the amount of wages and other benefits lost as a result of reductions in benefits unilaterally im- posed on January 26 and July 1, 1965, together with interest at the rate of 6 percent per annum. Backpay shall be further computed in the manner set forth in F. W. Woolworth Company, 90 NLRB 289; N.L.R.B. v. Seven-Up Bottling Company of Miami, Inc., 344 U.S. 344; with interest added thereto in the amount and in the manner set forth in Isis Plumbing & Heating Co., 138 NLRB 716. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that Respondent El Paso Products Co., Odessa, Texas, and Respond- ent Ref-Chem Company, Odessa, Texas, their of ficers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Refusing to bargain collectively with Interna- tional Association of Heat and Frost Insulators and Asbestos Workers, Local No. 66, AFL-CIO, as the exclusive bargaining representative of their em- ployees in the following appropriate unit: All mechanics and improvers of El Paso Products Co. and Ref-Chem Company, who are engaged in the preparation, distribution, and application of pipe and boiler coverings, in- sulation of hot surfaces, ducts, flues, etc., the covering of cold piping and circular tanks con- nected with the same and all other work in- cluded in the trade jurisdictional claims of the Union; including alterations and repairing of work similar to the above, and the use of all materials for the purpose mentioned, but ex- cluding all other employees of El Paso Products Co. and Ref-Chem Company, all of- fice clerical employees, guards, watchmen, and all supervisors as defined in the Act. (b) Instituting changes in the rates of pay of em- ployees in the aforesaid appropriate unit without first consulting with and bargaining with the Union as the exclusive representative of these employees. (c) In any other manner interfering with, restraining, or coercing employees in the exercise of the right to self-organization, to form labor or- ganizations, to join or assist the above-named Union, or any other labor organization, to bargain collectively through representatives of their own choosing, and to engage in concerted activities for the purposes of collective bargaining or other mu- 384 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tual aid or protection as guaranteed in Section 7 of the Act, or to refrain from any and all such activi- ties. 2. Take the following affirmative action which the Board finds will effectuate the purposes of the Act: (a) Bargain collectively , upon request, with In- ternational Association of Heat and Frost Insula- tors and Asbestos Workers, Local No. 66, AFL-CIO, as the exclusive representative of the appropriate unit described above , with respect to rates of pay, wages , hours of employment, and other conditions of employment , and if an un- derstanding is reached , embody such understanding in a signed agreement. (b) Make whole, jointly and severally, any em- ployee who has suffered a loss of earnings as a result of the reduction in benefits unilaterally im- posed on January 26 and July 1, 1965, in the manner and to the extent provided in the section of this Decision entitled "The Remedy." (c) Preserve and, upon request , make available to the Board or its agents , all payroll records and other records in the Respondents ' possession necessary for the computation of lost earnings due hereunder. (d) Post at their plants in Odessa, Texas , copies of the attached notice marked "Appendix."26 Copies of said notice , on forms provided by the Re- gional Director for Region 16, after being duly signed by an authorized representative of each Respondents, shall be posted by Respondents im- mediately upon receipt thereof, and be maintained by them for 60 consecutive days thereafter , in con- spicuous places, including all places where notices to their employees are customarily posted. Reasonable steps shall be taken by Respondents to insure that said notices are not altered , defaced, of covered by any other material. (e) Notify the Regional Director for Region 16, in writing, within 10 days from the date of this Order, what steps Respondents have taken to comply herewith. 26 In the event that this Order is enforced by a decree of a United States Court of Appeals, there shall be substituted for the words "a Decision and Order" the words "a Decree of the United States Court of Appeals En- forcing an Order." APPENDIX NOTICE TO ALL EMPLOYEES Pursuant to a Decision and Order of the National Labor Relations Board and in order to effectuate the policies of the National Labor Relations Act, as amended, we hereby notify you that: WE WILL NOT refuse to bargain collectively with International Association of Heat and Frost Insulators and Asbestos Workers, Local No. 66, AFL-CIO,:as the exclusive represent- ative of the employees in the bargaining unit described below. WE WILL NOT institute changes in the rates of pay of employees in the aforesaid bargaining unit without first consulting with and bargain- ing with the above-narked organization. WE WILL NOT in any other manner interfere with, restrain, or coerce our employees in the exercise of their right to self-organization, to form labor organizations, to join or assist the above-named Union, or any other labor or- ganization, to bargain collectively through representatives of their own choosing, and to engage in any other concerted activities for the purposes of collective bargaining or other mu- tual aid or protection, or to refrain from any or all such activities. WE WILL, upon request, bargain collectively with the said Union as the exclusive represent- ative of all our employees in the appropriate unit with respect to rates of pay, wages, hours of employment, and other conditions of em- ployment, and if an understanding is reached, embody such understanding in a signed agree- ment. The bargaining unit is: All mechanics and improvers of El Paso Products Co. and Ref-Chem Company, who are engaged in the preparation, dis- tribution, and application of pipe and boiler coverings, insulation of hot sur- faces, ducts, flues, etc., the covering of cold piping and circular tanks connected with the same and all other work included in the trade jurisdictional claims of the Union, including alterations and repairing of work similar to the above, and the use of all materials for the purpose mentioned, but excluding all other employees of El Paso Products Co. and Ref-Chem Com- pany, all office clerical employees, guards, watchmen, and all supervisors as defined in the Act. WE WILL make whole any employee who has suffered a loss of earnings as a result of the reductions in benefits unilaterally imposed on January 26 and July 1, 1965. Dated By EL PASO PRODUCTS CO. (Employer) (Representative) (Title) Dated By REF-CHEM COMPANY (Employer) (Representative) (Title) REF-CHEM CO. This notice must remain posted for 60 consecu- tive days from the date of posting and must not be altered, defaced, or covered by any other material. If employees have any question concerning this notice or compliance with its provisions, they may communicate directly with the Board's Regional Office, Federal Office Building, Room 8A24, 819 Taylor Street, Fort Worth, Texas 76102, Telephone 334-2921. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE WILLIAM SEAGLE, Trial Examiner: Upon a charge filed by the Union on July 6, 1965, against the Respondent Ref-Chem Company, and, upon an amended charge filed by the Union against both Ref-Chem Company and El Paso Natural Gas Products Company on October 25, 1965, the Regional Director for Region 16 issued a com- plaint dated November 16, 1965, in which the Respond- ents were charged with the violation of Section 8(a)(5) and (1) of the Act. The hearing on the complaint opened in Odessa, Texas, on January 25, 1965, and upon motion of counsel for the General Counsel, the complaint was amended in various respects. The hearing had to be adjourned sine die on January 26, 1965, however, due to the failure of several of the General Counsel's principal witnesses to respond to the subpenas which had been duly served upon them. During the recess, the judicial enforcement of the sub- penas was secured but the recess was prolonged when one of the subpenaed witnesses became involved in an automobile accident which incapacitated him for a con- siderable time. During the long recess, the complaint was further amended in various respects upon motion of coun- sel for the General Counsel, in order to correct various technical defects, and to allege various bargaining units as appropriate in the alternative. The hearing was resumed in Odessa, Texas, on May 23 and completed on May 27, 1966. Subsequent to the hear- ing counsel for the General Counsel and for the Respond- ent El Paso Natural Gas Products Company filed briefs with the Trial Examiner. i Upon the record so made, and in view of my observa- tion of the demeanor of the witnesses, I hereby make the following findings of fact: 1. THE RESPONDENTS AND THE OTHER EMPLOYERS IN- VOLVED IN THE PRESENT PROCEEDING The Respondent, Ref-Chem Company (it will be referred to hereinafter as Ref-Chem), is a Texas corpora- tion, which maintains its principal office and place of business in Odessa, Texas, and which engages in the con- struction of plants and in the maintenance of industrial equipment. During the past year, Ref-Chem, in the course and con- duct of its business operations, performed services valued in excess of $100,000. Of these, services valued in excess of $50,000 were furnished to, among others, Rexall 385 Chemical Company, a division of Rexall Drug and Chemical Company, and El Paso Natural Gas Company, each of which enterprises annually produces and ships goods valued in excess of $50,000 directly outside the State of Texas and receives goods valued in excess of $50,000 directly from points outside the State of Texas. The Respondent, El Paso Natural Gas Products Com- pany, the name of which has recently been changed to El Paso Products Company (it will be referred to hereinafter as El Paso), is a Texas corporation which had its incep- tion in 1955 or 1956. Up to January 1964, El Paso was located in El Paso, Texas, but it then moved to Odessa, Texas, where it is presently located. El Paso is engaged in the manufacture, sale, and distribution of petrochemi- cal products. El Paso is a subsidiary of El Paso Natural Gas Company (it will be referred to hereinafter as El Paso Natural Gas), with which it should not be confused. El Paso Natural Gas owns approximately 75 percent of the stock of El Paso. During the past year, El Paso, in the course and con- duct of its business operations, purchased, transferred, and delivered to its Odessa, Texas, plant, goods and sup- plies valued in excess of $50,000. Of these, goods and supplies valued in excess of $50,000 were transported to its plant directly from States of the United States other than the State of Texas. During the past year, El Paso has also received gross revenues in excess of $250,000 in the course and conduct of its business operations. Erectors & Constructors, Inc. (it will be referred to hereinafter as E & C), was a Texas corporation which was incorporated in 1954 or 1955 for the purpose of en- gaging in general construction work, and which was based in El Paso, Texas. In 1958, however, Steve G. Caldwell, the president of E & C, obtained a contract to do main- tenance work for El Paso-the contract was dated December 1, 1958. E & C had a shop, office, and warehouse all located on the plantsite of El Paso, the land on which the E & C building was located being leased from El Paso. The work performed by E & C for El Paso was insulation maintenance work. On July 15, 1960, E & C was dissolved as a corporation, and its assets and liabili ties, including the maintenance agreement of December 1, 1958, was taken over by Insulation & Specialties, Inc. Insulation & Specialties, Inc. (it will be referred to hereinafter as I & S), is a Texas corporation which had its inception in 1954. It was at-first located in El Paso, Tex- as, but it moved to Odessa, Texas, early in 1961, where its address was Farm Road 1936. I & S has been engaged primarily as an insulation contractor in the insulation of piping and boilers and other components of industrial plants under construction, as well as in the repair and maintenance of such facilities. During the year prior to September 30, 1964, which is a representative period, I & S, in the course and conduct of its business operations; performed services valued in excess of $500,000. Of these, services valued in excess of $50,000 were performed in States other than the State of Texas. During the same period of time, I & S purchased goods and materials directly from suppliers located outside the State of Texas, and such goods and materials had a value in excess of $50,000. Leona Lee Corporation (it will be referred to hereinafter as Leona Lee) is a Texas corporation, which had its inception on October 1, 1964, and which at all I Counsel for the Respondent Ref-Chem also filed a brief in the form of a letter. 386 DECISIONS OF NATIONAL LABOR RELATIONS BOARD material times has maintained its business at Farm Road 1936, Odessa, Texas , where it has been engaged primari- ly as an insulation contractor in the insulation of piping, boilers, and other components of industrial plants under construction, as well as in the repair and maintenance of such facilities. During the past year, Leona Lee, in the course and con- duct of its business operations, has performed services valued in excess of $200,000. Of these, services valued in excess of $50,000 were performed in States of the United States other than the State of Texas. During the same period of time, Leona Lee has purchased goods and materials valued in excess of $50,000 directly from sup- pliers located outside the State of Texas. [I. THE LABOR ORGANIZATION INVOLVED IN THE PRESENT PROCEEDING International Association of Heat and Frost Insulators and Asbestos Workers Local No. 66 , AFL-CIO (it will be referred to hereinafter as the Insulators Union or as Local 66) is a labor organization within the meaning of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES A. General Introduction The basic issue involved in the present proceeding is whether the doctrine of the continuity of the "employing industry" is applicable in the rather complex circum- stances of the present case, which involves a succession of corporate employers, a union contract with one of them, and the efforts of some of the employers to escape the obligations of that contract, insofar as it concerned the work of an insulation maintenance crew, known as Steve Harris' crew, at a group of plants which are at a common situs known as the Odessa complex. The plants comprising the Odessa complex are, ap- parently, the plants of El Paso, the Rexall Drug and Chemical Company, and the Shell Oil Corporation. The complex came into existence when the construction of the first El Paso plant, the butadiene plant, was started in 1956; between 1956 and 1961, El Paso added a styrene plant, a refinery, benzine, and ethylene units, a power plant, and a boiler plant. The record does not show precisely when the Rexall and Shell plants were con- structed but, apparently, both of them are within the fence that surrounds the El Paso complex.2 Insulation work is involved, of course, in the construc- tion of plants of the type of those involved in the Odessa complex. Such insulation work is, however, of a noncon- tinuing nature. But continuous insulation maintenance is also required to keep piping, boilers, and other thermal equipment in a state of good repair. In some plants, the in- sulation maintenance work is performed by a main- tenance department of the plant itself. El Paso has never had, however, a maintenance department of its own pro forma, and all of its insulation maintenance work has been done under contract by an insulation maintenance crew, which throughout the period of the events involved in the present proceeding has worked under the direction of Steve Harris, and hence has come to be known as 2 Some of these findings concerning the Odessa complex, as well as some of the subsequent findings relating to the work performed at the complex, are based on the evidence in an earlier representation proceed- Steve Harris' crew. This crew has serviced, moreover, not only the El Paso plants but the other plants of the Odessa complex. Insulation work comes under the jurisdiction of the in- sulators' union, which has instituted the present proceed- ing by filing charges against Ref-Chem and El Paso. The insulators' union is a craft union whose members are denominated "mechanics" or "improvers," the former corresponding to "journeymen" and the latter to "ap- prentices" in the traditional craft unions. They specialize in performing insulation work on piping and boilers but this work may also involve sheet metal work, bricklaying, welding, the building of scaffolding, and painting. Since this work falls generally within the jurisdiction of other craft unions, agreements have been worked out in the course of the years with these craft unions, such as the sheet metal workers union, the boilermakers' union, the bricklayers' union, the carpenters' union, and the paint- ers' union, by means of which the jurisdictional claims of the respective unions have been determined. So far as the Odessa complex is concerned, the insulators' union has never recognized that continuous maintenance work is not within its jurisdiction, or that there is any distinction between insulation construction work and insulation maintenance work. B. The Maintenance Agreements In order to secure the performance of its maintenance work, El Paso entered into a maintenance agreement, dated December 1, 1958, with E & C, the agreement being signed on behalf of E & C by Steve G. Caldwell, its president. Under date of October 1, 1963, El Paso also entered into an agreement with Ref-Chem, the agreement being entitled "Routine Maintenance and Miscellaneous Construction Agreement," and being signed by James L. Baker, its president. In the agreement with E & C, the contractor was ex- pressly declared to be an "independent contractor" but the actual provisions of the contract belied the designa- tion and gave El Paso complete control and supervision of the maintenance operations. Under these provisions, El Paso was given the right to request the removal from the work of any employee who, in its opinion, was "in- competent, careless, unqualified" or "guilty of improper conduct"; the work performed was made subject to the approval of El Paso's inspector and El Paso had the right to stop the work at any time "in its absolute discretion"; the contractor's compensation was limited in accordance with a wage-rate schedule, equipment rental schedule, and a price list of materials attached to the contract; and, finally, the contractor was prohibited from assigning, subletting, or subcontracting the agreement in whole or part without the previous written consent of El Paso. The evidence shows, moreover, that under this main- tenance agreement with E & C, the control exercised by El Paso even went beyond what the literal provisions thereof permitted. Although the initial selection of em- ployees was to be made by the contractor, it is clear from Steve Harris' testimony that until January 1965, El Paso approved applications for employment on his insulation maintenance crew; determined the number of his em- ployees, including any extra help which he might require; ing involving I & S (Case 16-RM-244). The transcript of the evidence in this proceeding was incorporated in the record in the present complaint proceeding by stipulation of counsel representing all parties. REF-CHEM CO. and also whether any of them should be permitted to work overtime. The later maintenance and construction agreement with Ref-Chem differed considerably in verbiage from the provisions contained in the E & C contract. So far as compensation was concerned, the Ref-Chem contract provided for payment to the contractor of fixed fees over and above its expenses for labor, equipment, and other expenses, which were to be in accordance with a prescribed schedule. The Ref-Chem contract, unlike the E & C contract, contained no express prohibition on as- signments. The contract ran, however, only from month to month, and was subject to termination by either party on 90 days' notice. No insulation maintenance work ap- pears to have been done under this contract for El Paso, however, until January 1965, as hereinafter related. C. The Corporate Structure in Relation to the the Per- formance of the Insulation Maintenance Contracts The corporate structures, by means of which the insu- lation maintenance work was performed, did not, how- ever, remain constant. From 1958 to 1965, the insulation work was performed under the contract with E & C but the organization that did so could aptly be described as the "Tillery-Baker enterprises" because they were owned by two entrepreneurs whose names were Jack Tillery and James L. Baker. It seems that E & C was merely one of the ways under which they operated. Although Steve G. Caldwell was the president of E & C, he was probably not much more than a figurehead. Harris, who described him as the superintendent of the insulation maintenance crew of which in the early days he was merely the foreman, was obviously unaware of the actual office which Cald- well, apparently, filled in E & C. Indeed, in these years, Harris did not really know whether he was working for E & C or I & S. When Harris was made superintendent of the insulation maintenance crew, in succession to Cald- well, he knew that he owned his elevation to Tillery but he did not know precisely what Tillery's position was. His understanding was that E & C was simply a unit of I & S, and in fact this accurately described the situation. E & C and,I &. S were so closely integrated in their opera- tions that at least after they moved from El Paso to Odes- sa they occupied the same building, which was leased from El Paso. In both E & C and I & S, all the stock of the corporations was owned by Tillery and Baker, although the precise distribution of the stock between them at all times is' not established.3 Although Tillery was never an officer of E & C, he was president of I & S, and to all out- ward seeming, he was the dominant figure in its affairs, Baker contenting himself, apparently, with being vice pre- sident of I & S, and president of Ref-Chem.4 For reasons best known to themselves, Tillery and Baker decided in 1960 to dissovle E & C and terminate its existence. This was accomplished by a Certificate of Dis- solution dated July 15, 1960. Upon the dissolution of E & C its assets were transferred to I & S, and the latter as- sumed all its liabilities. I & S continued to occupy the same building on the El Paso plantsite, and El Paso was advised of the assumption of the assets and liablities of E & C by I & S. It does not appear that any official of El 3 At one time at least, Tillery held only one-third of the stock of E & C. 4 Counsel for I & S, in the representation proceeding in 1964 (144 NLRB 1540) summed up the situation felicitously when he described E & C and I & S as "pockets in the same pants " 5 The figures relating to the sales of Ref-Chem to El Paso were sup- 387 Paso interposed any objection to the change which had been effected. Another change in the Tillery-Baker enterprises was represented by the incorporation of Leona Lee on Oc- tober 1, 1964. All the stock of Leona Lee was held by the immediate members of Tillery's family, and Baker was neither a stockholder nor an officer of the corporation. The corporate officers of Leona Lee were the same as those of I & S, except for a shift in the presidency. Til- lery, who had been president of I & S, became a vice pre- sident of Leona Lee, while Allen De Villier, who had been a vice president of I & S, became president of Leona Lee. Just before the incorporation of Leona Lee the cor- porate officers of I & S had been Jack Tillery, president; Allen De Villier and John H. Williams, vice presidents; and Marvin Hargraves, secretary-treasurer. The first cor- porate officers of Leona Lee were Allen De Viller, pre- sident; Jack Tillery and John H. Williams, vice pre- sidents; and Marvin Hargraves, secretary-treasurer. Upon its incorporation, Leona Lee, with the consent of El Paso, took over all the assets and liabilities of I & S, in- cluding the performance of the insulation maintenance contract of 1958 between El Paso and E & C. Leona Lee took over Steve Harris' crew, and continued the opera- tions which had theretofore been performed by I &-S, oc- cupying the same building that-had previously been occu- pied by I & S. Although I & S was not dissolved as a cor- poration when Leona Lee came into existence, it became "a mere shell," as Tillery himself conceded, and never thereafter performed any work. Although he was not a stockholder or officer of Leona Lee, Baker was a stockholder of Ref-Chem, and its pres- ident. When Ref-Chem was incorporated in 1957, Baker had held 46 percent of Ref-Chem's stock. By March 4, 1960, Baker's share of Ref-Chem's stock had risen to 47 percent. On March 17, 1965, El Paso Natural Gas, of which El Paso was a subsidiary, acquired 48 percent of Ref-Chem's stock and it has maintained this stock per- centage since then. The remaining 5 percent of Ref- Chem's stock has been held, since March 17, 1965, by one Jack S. Elliott, who manages an insurance operation for El Paso Natural Gas and, in partnership with Baker, is also the owner of 4,000 shares of El Paso Natural Gas stock. El Paso Natural Gas and El Paso also do business with Ref-Chem. In 1964, before El Paso Natural Gas had acquired 48 percent of Ref-Chem's stock, the sales of Ref-Chem to it and to El Paso were 36.7 percent, of its total sales. In 1965, the year in which El Paso Natural Gas acquired its stock in Ref-Chem, 54 percent of Ref- Chem's routine sales were to it and to El Paso. However, in 1965 Ref-Chem also constructed a mineral processing plant for El Paso Natural Gas in Conda, Idaho, at a cost of $5,188,762. If this work is included in Ref-Chem's total sales, as it properly should be, Ref Chem's sales to El Paso Natural Gas would be 77.5 of its total sales.s D. The Relations between the Tillery-Baker Enterprises and the Insulators Union There is evidence that in his early operations, when he was still located in El Paso, Tillery had trouble with locals of the Insulators Union which led the locals to pull men plied, pursuant to agreement of counsel for all parties, in an affidavit made by Wesley K. Martin, secretary of Ref-Chem, on May 31, 1966 On mo- tion of counsel for the General Counsel, the affidavit is admitted in evidence as G.C Exh. 86. 350-212 0-70-26 388 DECISIONS OF NATIONAL LABOR RELATIONS BOARD off his jobs . Tillery then felt compelled to enter relations with the insulators Union. The early history of these rela- tions is set forth in the Board 's decision in Insulation & Specialties, Inc., 144 NLRB 1540 at 1541-42, as follows: The Employer was formerly located in and operated in El Paso , Texas. During this time the Erectors and Construction Company (herein called E & C), a firm which was related to the Employer, was also based in El Paso , and inter alia, performed maintenance services under contract with El Paso Natural. In, or about , September 1960 E & C was dissolved and the Employer took over the E & C contract with El Paso Natural. Shortly thereafter, on or about October 7, 1960, the Employer entered into an area contract with Asbestos Workers' Local No. 106, and at the same time entered into a "main- tenance addendum" modifying the area contract with regard to the El Paso Natural maintenance crew. The addendum incorporated by reference the area con- tract governing wage scales and conditions of em- ployment and provided that maintenance employees were not to be paid travel allowance or subsistence. It also established work shifts and overtime provi- sions which differed from the area contract. The Employer moved to Odessa in early 1961, and joined the Master Felters Association , a multiem- ployer group of insulation contractors , herein called the Association. On January 17, 1961, the Employer became a party to the associationwide contract with the Union, to expire June 30, 1961, and at the same time made the "maintenance addendum " effective between the Employer and the Union. Thereafter, on April 9, 1961, pursuant to the terms of the basic con- tract, the Employer commenced making payments into the Local No. 66 Health and Welfare Fund on behalf of the maintenance crew members . On July 3, 1961, and July 3, 1962, the Associaition, on behalf of its members including the Employer herein, en- tered into collective-bargaining agreements with the Union. The latter contract expires by its terms on June 30, 1965. The Employer and the Union, after numerous bargaining meetings , were unable to agree on an addendum covering the maintenance em- ployees at El Paso Natural, the employees involved herein. However, the Employer has continued pay- ments into the Local No. 66 Welfare Fund for these employees. As noted above, pursuant to the terms of the January 17, 1961, addendum, the El Paso Natural maintenance crew was paid the basic contract wage scale. Although the July 3, 1961, contract provided for an increase in the basic wage scale , the main- tenance crew was not paid the increased contract scale. Thereafter, on November 28, 1961, the Union filed a charge with the Joint Board alleging that the Employer was paying substandard wages to these employees. This charge was not resolved by the Joint Board and no further action was taken . The July 3, 1962, contract provided for further wage increases and again the contract scale was not applied to the maintenance crew's wages. On October 12, 1962, the Union filed charges with the Joint Board alleging, inter alia, "Violation of Article VIII [contract wage scale] ; by paying substandard wages to some em- ployees on the El Paso Gas Products Plant, Odessa, Texas." These charges were considered on October 27, 1962, by the Joint Board, the parties deadlocked, and, pursuant to a motion by the Association's representative, the Joint Board directed that the matter be referred to the American Arbitration As- sociation in accordance with the arbitration clause. Accordingly, on October 29, 1962, the Union in- stituted arbitration proceedings. The Employer refused to acknowledge the right of the Union to take the matter to arbitration, challenged the authority of the arbitrator, and refused to participate. Thereafter, on April 19, 1963, the Employer filed the instant petition. On September 16, 1963, an award was handed down by an arbitrator designated by the American Arbitration Association, holding that the contract entered into July 3, 1962, between the Em- ployer and the Union "is valid on its face and covers the employees in question." Tillery maintained both before the arbitrator and the Board that the contract of July 3, 1962, with the Insula- tors Union, did not cover continuous maintenance work, such as that done by Steve Harris' crew, despite the fact that the contract covered all mechanics and improvers, and the evidence showed that the word "all" had been added to the language of the 1961 agreement to make it clear that the Union would represent all of them, irrespec- tive of whether they did maintenance or construction work. The arbitrator rejected Tillery's contentions, how- ever, and held that the contract was valid on its face and covered the maintenance employees in question. In the representation proceeding brought by I & S, the Board honored the arbitrator's decision, and held that the con- tract of July 3, 1962, constituted a bar to an election. "In- deed," said the Board, "even without reliance on the ar- bitrator's award, we would find on the record in this proceeding that the contract executed on July 3, 1962, covers, in an appropriate bargaining unit, the employees herein petitioned for, among others, and accordingly operates as a bar to the petition." However, Tillery failed to comply with the arbitrator's award, which was rendered on September 16, 1963. Mar- vin Hargraves, the secretary-treasurer of I & S called a meeting of the members of Steve Harris' crew at the Odessa complex on October 14, 1963, in order to discuss with them what to do about the payments which were being made on their behalf into the Union's health and welfare fund. The employees at the meeting signed a statement in which they declared that they were in favor of either having the 10 cents an hour being paid into the Union's health and welfare fund added to their wages, or used to secure for them a more desirable insurance pro- gram. At another meeting called by Hargraves on November 15, 1963, which was 2 days after the Board's decision in the I & S proceeding, he had each of the insulation main- tenance employees present renounce the benefits which would inure to them under the arbitrator's award, and release their employer from the obligations arising thereunder. For these renunciations and releases, each employee was paid a consideration of $10. These releases, which apparently, had been prepared by the at- torney who represented I & S in the proceeding before the Board, and which had been mailed to Allen De Villi- er, one of the I & S vice presidents, who, presumably, had turned them over to Hargraves, were in the form of af- fidavits. In these affidavits, in addition to making the renunciations and releases already mentioned, each deponent declared that he was not a member of the Insu- REF-CHEM CO. 389 lators Union, and that he did not wish the union to represent him in any way. Shortly after the Board's decision, Donald G. Schaffe the corresponding secretary of Local 66, who was i principal witness in the present proceeding,6 filed the first of a series of grievances with the Trade Board of the Master Felters Association, in an effort to secure com- pliance with the terms of the 1962 collective-bargaining agreement.' Nothing ever came of the attempt to invoke the grievance procedure of the agreement, however, since Tillery persisted in his refusal to recognize the validity of the agreement, and would not participate in the grievance procedure set forth therein. At the same time, however, Local 66 brought suit in the Federal District Court for the Western District of Texas, sitting at El Paso, Texas, to secure enforcement of the terms of the 1962 collective-bargaining agreement, and on December 14, 1964, the court entered a sweeping preliminary injunction restraining I & S, against whom the suit had been brought, from refusing to comply with any of the terms of the 1962 collective-bargaining agree- ment. As a result of the restraining order, the members of Steve Harris' insulation maintenance crew were paid at the wage rates prescribed by the 1962 collective-bargain- ing agreement from December 14, 1964, the date of the restraining order, to January 18, 1965. A few days before January 18, Schaffer, who by this time was the business agent of Local 66, attempted to storm the gates of the Odessa complex. He beat on the gates of the complex, demanding entrance, but he had no pass and was denied admittance, despite the fact that he threatened to get a Federal marshall to let him in. Harris was not on the job that morning, being ill, but when he came in the next day, and learned what had happened, he obtained a pass for Schaffer from the El Paso safety director. Hams neglected apparently, to notify Schaffer, that he had a pass for him, but even if he had done so, it would have made no difference, for El Paso's officials proceeded to make a decision to terminate Leona Lee's rights under the insulation maintenance agreement of 1958 with E&C. Shortly before this happened, Tillery, in conversations with El Paso officials, had tried, apparently, to get them to agree, to higher wage rates for Steve Harris' crew. He formalized these efforts by sending a letter dated January 16, 1965, to El Paso, in which on behalf of Leona Lee he requested-permission to increase the wage rates of the in- sulation maintenance employees. The response to this request was not only unfavorable but also immediate. By letter dated January 18, 1965, El Paso notified Leona Lee that it was terminating the contract as of December 1, 1964. Apart from referring to article XII of the con- tract, which allowed El Paso to terminate the contract "in its absolute discretion," no reason for the termination was given in the letter. Schaffer's inability to penetrate the complex is only one illustration of El Paso's nonunion policy. It was made even clearer by the experience of one Harold H. Stewart, who began,working for Ref-Chem on August 10, 1964, as the general foreman of a construction project near Georgetown, Idaho, known as the Georgetown Con- struction Project, which was a fertilizer plant. Stewart was hired by Robert Gertson, who was construction ' By this time, however, Schaffer had become business manager of the Union ° The first of the grievances was dated November 19, 1963, and was followed by other grievances dated January 7 and 14 and April 6, 1964. manager for Ref-Chem, but he was unable to go to work until his employment had been approved by El Paso of- ficials, who in their interviews with Stewart, made it clear to him that the iob was to be operated strictly on a non- union basis. The reason for making this clear was that Stewart himself had a union background. Although Stew- art was finally hired, it was only after doubt had been expressed that he was the proper man for the job be- cause of his union background. Despite the fact that all personnel on the job had to be approved by El Paso, Stewart did manage to hire a few union men but they seem to have come under suspicion as "union agitators." Stewart expressed the opinion that, although he had been a construction superintendent all his life, he had never been so closely supervised before by a customer's representative. Once when Stewart was talking to Gertson about the closeness of this supervision, he sug- gested to the latter that they ought to invoke the provi- sion of the contract with El Paso that declared Ref- Chem to be an "independent contractor." Gertson at once warned Stewart never to mention that term again. "They do not like that term, `independent contractor."' he said. "Although it is in the contract, don't use that." The precautions taken by the El Paso officials in the case of Stewart may seem excessive but they may well have been due to the fact that Baker, the president of Ref- Chem and the longtime associate of Tillery, who prac- ticed partial unionism, had not been as steadfast in his nonunionism as the El Paso officials themselves. Baker had sometimes accepted contracts which had to be per- formed strictly on a union basis. But these contracts had not been performed by Ref-Chem but by still another cor- poration known as American Western," which had been under Baker's complete control until the end of 1964, for until then he had been president of the corportaion and the owner of all of its stock.9 During the period of Baker's ownership of American Western, its business transac- tions had been carried on on the premises of Ref-Chem, and all of its work had been performed under contract with labor organizations. E. The Present Performance of the Insulation Maintenance Work When El Paso terminated Leona Lee's rights, it became necessary, of course, for it to make other arrange- ments to have the insulation maintenance work per- formed. No bidding on this work was invited, however. An oral agreement was simply made with Ref-Chem to perform this work under the terms, apparently, of its ex- isting maintenance contract with El Paso. Ref-Chem needed, therefore, to acquire an insulation maintenance crew in a hurry but this proved to be no problem. When Leona Lee had lost the contract, Tillery informed Harris of this development, and told him to pay off his crew. All of them, including Harris, were now unemployed but the period of unemployment of Steve Harris and of nine members of his crew proved to be brief. They applied to Ref-Chem for employment, and Harris and the nine members of his crew were hired by Ref-Chem within a week after their termination by Leona Lee. On the very day that they were terminated by Leona Lee -the date was January 18, 1965-they filed employ- ment applications with Ref-Chem, and they were hired by 8 It had been incorporated on February 23, 1959, as American Western Construction Company but the name of the corporation was changed to American Western Company, Inc., on May 10, 1962. 1 As of January 1, 1965, Baker sold all of his stock to one C. F. Opel. 390 DECISIONS OF NATIONAL LABOR RELATIONS BOARD it as of January 26; 1965, although some of them at least received somewhat reduced wages. 10 These nine mem- bers of Harris' crew were, to give their names in alphabetical order, Floyd Frederick Brunner, Johnny Ed- ward Fowler, Antioco Guerra, Guillermo N. Lara, Sifreda G. Mata, Marshall Don Mullis, Don L. Murray, William Roberson, and Owen Rodgers. Two other mem- bers of Steve Harris' crew, Andrews R. Sauseda, and Ish- mael Gonzales, who also applied for employment to Ref- Chem on January 18, 1965, were hired later-on March 12 and September 28, 1965, respectively. Five other members of Steve Harris' crew made applications to Ref- Chem for employment later in 1965, and were hired on various dates between March and September 1965. These five were Charles B. Baugus, James R. Ray, Bobby G. Nichols, M. T. Mullis, and L. D. Collins. Vir- tually all 16 of these employees were old hands, having previously worked either for I & S or for Leona Lee. Local 66 did not learn of the change in the performance of the insulation maintenance work at the Odessa com- plex until early in February 1966.11 The reason for this appears to have been the fact that the Union had no mem- bers at the Odessa complex, and that there were, there- fore, no channels of communication between Schaffer and the employees working at the Odessa complex. Schaffer took no immediate action, however, even after he knew what the situation was. The reason for this may have been that the Union was still seeking to secure en- forcement of its contracts in the courts. In any event, under date of June 11, 1965, counsel representing the union in the present proceeding finally addressed a letter to Ref-Chem, reading as follows: On behalf of my client, the International Associa- tion of Heat and Frost Insulators and Asbestos Workers Local No. 66 of Amarillo, Borger, Lub- bock and Odessa, Texas, you are hereby requested to comply with the terms of the contract applicable to the employees engaged in maintenance work at the El Paso Natural Gas Company complex in Odessa, Texas. A copy of the contract is enclosed herewith. In view of the fact that your company has taken over the employees and supervision from Insulation & Specialties and Leona Lee, the former employer, under applicable law the union looks to you for com- pliance with the terms of the contract. The union also expects you to recognize it as bargaining agent for these employees. Your prompt reply will be appreciated. Ref-Chem never made any reply to this letter and Local 66 proceeded to file the charge which has led to the present proceeding. By way of postscript, it should be added that on March 15, 1966, Local 66 entered into an agreement with Tillery and his companies, I & S and Leona Lee (significantly, in the agreement they were collectively called the Em- ployer), under which the Union agreed to withdraw charges that it had filed with the Board in other cases'12 and the parties settled the court litigation in which they were involved.13 Under other terms of the settlement agreement, Leona Lee was to be dissolved; Tillery's insu- lation business was to be performed only by I & S; Tillery agreed to enter into an individual collective-bargaining agreement with whatever local of the Insulators Union had jurisdiction; and to abide by the hiring practices of the locals of the Insulators Union which had jurisdiction in any other area in which he might operate. It was ex- pressly provided in the settlement agreement that it would cover both construction and maintenance work, in- cluding any work at the Odessa complex, in the event that Tillery should obtain a contract to perform such work.'4 F. Concluding Findings It is established doctrine that if assets and employees are transferred from one employer to another, and the identity of the employing enterprise is left substantially intact, it is the duty of the successor employer to bargain with an incumbent union. This doctrine rests upon the necessity of protecting the incumbent union when the em- ploying enterprise has changed hands, in order to carry out the policies of the Act and to promote industrial peace. Since the duty imposed upon the successor em- ployer rests upon broad considerations of public policy, it cannot be avoided by private contract.' 5 Thus it cannot be avoided by providing in the contract of sale that the purchaser would not assume the obligations of the union contract. 16 I find, however, many difficulties in applying the "em- ploying industry" doctrine in the circumstances of the present case. These difficulties, which involve policy, as well as technical, considerations, do not rest merely upon the multiplicity of the corporations involved, although they appear greater in number in the present case than ever before'17 or upon the fact that the only asset ever transferred has been a maintenance contract, and the only employees transferred have been the members of a single maintenance crew. It has been held that a transfer of as- sets or employees does not have to be complete, and a successor corporation, which has taken over a part of business employing a unit of unionized employees, is no less obligated, in appropriate circumstances, to honor the terms of the union contract than if it had taken over the whole of the business.' 8 Counsel for the General Counsel emphasizes El Paso's steadfast nonunion policy, and the evidence compels the conclusion that its officials have always avoided having any dealings with a union. But the maintenance of such a 10 The pay of some of the mechanics was reduced, apparently, from $3.90 to $3.75 an hour. 11 The date is probably February 5, 1965, when Schaffer encountered Tillery at a contempt hearing in El Paso and the latter informed him that Ref-Chem had taken over the work for El Paso. 12 These cases were 16-CA-2395, 2461, 2486, 2232, and 2329. 13 Tillery agreed to dismiss his appeal in the case between I & S and Local 66 that was pending in the United States Circuit Court of Appeals for the Fifth Circuit. The parties also agreed to entry of judgment of dismissal in the case of Local 66 v. Leona Lee, Civil Action 2592, in the U.S. District Court for the Western District of Texas. 14 Although a party to the agreement as an individual , Tillery did not sign the agreement in his individual capacity. He alone signed it, however, on behalf of I & S, and he, together with John H. Williams, signed it on be- half of Leona Lee, which, under the terms of the agreement , was destined to be dissolved. 15 See Maintenance, Incorporated, 148 NLRB 1299, 1301. 1s See Wackenhut Corporation v. International Union, Plant Guard Workers , 332 F.2d 954 (C.A. 9); U. S. Steelworkers of America v. Reliance Universal, Inc., 335 F.2d 891 (C.A. 3); Paper Mill Workers v. Fibre Co., 62 LRRM 2772 (D.C.E. Wash., November 17, 1965). 17 1 have been able to find only one case, Southerland's Tennessee Company, Inc., 102 NLRB 1178, in which a succession of corporation was involved, but these were limited to three. 16 See Cruse Motors, Inc., 105 NLRB 242, 247-248; Royal Oak Tool & Machine Company, 132 NLRB 1361. REF-CHEM CO. 391 policy is not in itself an unfair labor practice, and, in any event, even if it were, it would only be an aggravating fac- tor, so far as the application of the successorship of doc- trine is concerned, for the duty of a successor employer to deal with an incumbent union exists quite apart from its attitude towards union, if the other requisite circum- stances are present. If El Paso had any duty towards the union in the present case, it would have rested, moreover, on its rela- tionship with Ref-Chem, and the establishment of its status as a joint employer with Ref-Chem. The primary inquiry must be, therefore, whether Ref-Chem became a successor employer, which was obligated to carry out the terms of the 1962 contract with Local 66. Counsel for the General Counsel has established a very solid case in trac- ing the line of succession from E & C to I & S and to Leona Lee. Each of these three corporations was the alter ego of the other. The line of succession is, however, interrupted with the elimination of Leona Lee. The evidence hardly justifies the conclusion that Ref-Chem is the alter ego of Leona Lee, or of El Paso. While the rela- tionship between Ref-Chem and El Paso has been close, it has not been shown that the latter exercises majority control either directly or through its parent corporation, El Paso Natural Gas. Knowledge of Tillery's troubles with Local 66 is a fac- tor in evaluating the motives of the officials of El Paso in terminating his rights under the maintenance contract, and of the officials of Ref-Chem in taking over the main- tenance work. But, again, the knowledge of the former is far better established than that of the latter. There is no doubt that Jack M. Strickland, El Paso's vice president, knew about the court proceedings in which Tillery was in- volved and about the pressure that was being exerted on the latter to get him to accept the wage rates required by the union contract. But there is no direct evidence that Baker or any other official of Ref-Chem knew exactly what the score was, so far as Tillery was concerned. The Ref-Chem officials must have known in a general way about Tillery's union troubles. But there is quite a dif- ference between knowledge based on rumor and hearsay and the more precise knowledge obtained from examining legal documents, signed and sealed. It must not be forgot- ten that in January 1965, when Ref-Chem began to per- form the insulation maintenance work at the Odessa com- plex, Baker was no longer involved in any enterprise with Tillery, and that the former had, therefore, no direct source of knowledge. In evaluating the conduct of Baker, it should also not be forgotten, moreover, that he did not always pursue a nonunion policy. In any event, the crucial question to be determined is not the extent of the knowledge of the Ref-Chem officials but whether they continued substantially the same em- ploying enterprise and whether the work of the insulation maintenance employees remained substantially unchanged after they took over the insulation main- tenance work at the Odessa complex in January 1965. Throughout the chronology of the events in the present case, reference has been made to Steve Harris' crew. But this has been done for the sake of convenience. It was not the intention to imply that the members of the crew remained virtually unchanged during the many years that they have performed the insulation maintenance work at the Odessa complex. However, it is precisely this as- sumption that is made, apparently by counsel for the General Counsel.19 While some of the same insulation maintenance employees undoubtedly worked under Har- ris at the Odessa complex through the years, it is apparent that there were also many changes in the crew. As a matter of fact, it is not possible to trace the continuous history of Steve Harris' crew from the documents in- cluded in the record, which consist of payrolls and other personnel records, and which only cover their employ- ment during certain periods. It would seem from the evidence as a whole that Harris' crew had a hard core of regulars but there were also irregulars or extras who were hired from time to time in accordance with the volume of the work. Harris testified that during the Tillery days his crew consisted of 6 or 7 men, and that after Ref-Chem took over, of 11 or 12 men, but these would hardly in- clude the extras.20 It is doubtful, therefore, that the nine insulation maintenance employees who were hired by Ref-Chem after their discharge by Leona Lee constituted a majority of the complement of employees who normally constituted Steve Harris' crew. Three of these nine em- ployees, i.e., Antioco Guerra, G. V. Lara, and F. F. Brunner, were transferred, moreover, to Shell and Rexall about the middle of February 1965, and two of them, Don L. Murray and F. F. Brunner, were terminated in Sep- tember 1965. Furthermore, in assessing the takeover of the Leona Lee employees by Ref-Chem, it is important to realize that the "extras" on Steve Harris' crew were not just casual employees who were taken on for brief periods, and then never heard from again. They, too, were old hands, and most of them had worked for Tillery at least as far back as 1963. The question of the number of the insulation main- tenance employees who were taken over by Ref-Chem is, however, less important than what happened to them when they became part of the Ref-Chem organization. Ref-Chem represented a considerably larger business than any of Tillery's corporations, and it was engaged in large scale construction, in addition to insulation main- tenance work.21 Ref-Chem maintained not only an insula- tion maintenance crew but eight other crews; i.e., an in- struments crew, a welders' crew, a pipefitters' crew, a millwrights' crew, a mechanics' crew, a cleanup crew, a paint crew, an electrical crew, and an equipment crew.22 As has already been pointed out, the work of insulators involves work which requires the skills of many other crafts, so much so that many jurisdictional conflicts with other craft unions had to be solved by a series of agree- ments. Since the insulator's craft is such an amorphous character, it is easy to understand how in an organization which comprised so many crews who could perform work involved in insulation maintenance, a rigid separation of crafts and skills would not be maintained. In fact, it was not strictly maintained after Steve Harris' crew came to work for Ref-Chem. They could now get the painters to paint their fittings; the laborers to move their scaffolds 19 Thus, in his brief, he states that "Hams' crew has maintained a rather steady complement of employees over the period of years, the same em- ployees having worked on Hams' crew for Erectors and Constructors, In- sulation & Specialties, Leona Lee and non Ref-Chem .. ." (Emphasis supplied) Counsel for the General Counsel also states that "Harris' crew vas hired by Ref-Chem. . " 11 No less than 19 insulation maintenance employees signed the releases of November 15, 1963. 21 This is pretty definitely indicated by the construction in 1965 by Ref- Chem of the mineral processing plant at Conda, Idaho, at a cost of $5,188,762 22 There are references in the record also to a separate cleaning unit but this appears to have been no more than a piece of equipment, presumably run by a single operator. 392 DECISIONS OF NATIONAL LABOR RELATIONS BOARD and help the bricklayers to clean out the boilers; and tc obtain the help of the welders and electricians when it was needed. They worked in particularly close collabora- tion with the carpenters and painters. Steve Harris may have exaggerated a bit when he declared that "all of the eggs are in one basket now" but there is no doubt that a considerable degree of integration was accomplished. There has not only been mutual aid but some degree of movement between crews, particularly when layoffs were impending.23 There have even been occasions when Har- ris turned a work order to another foreman when he thought that the latter's crew could do the job better. Another important factor in breaking down the autono- my of Harris' crew has also been the acquisition by El Paso of the building, equipment, and materials formerly owned by Tillery. This has made the materials and equip- ment available to other crews than Steve Harris'. Indeed, this change in the use of equipment and materials in- dicates that in performing the insulation maintenance work Ref-Chem has not really been doing so under the terms of its 1963 agreement with El Paso, for, under arti- cle I I 1 of that agreement, the contractor was "to purchase such supplies, materials and outside services and rent such equipment as may be required for the performance of such work." Moreover, after the takeover of Steve Harris and some of his men, the primacy of Steve Harris has been undermined and El Paso has not been exercising the degree of control over the insulation maintenance work which obtained during the Tillery regime. Under Tillery, Harris was his employer's second in command, whereas now Harris is only one of eight or nine foremen. Like them, he is supervised by the Ref-Chem managerial hierarchy, especially by John Cowan, the Ref-Chem vice president in charge of maintenance. He does not work closely with the El Paso officials any longer, and his day- to-day operations are no longer supervised by them. If he needs extra men, or wishes his employees to work over- time, he gets permission from the Ref-Chem officials rather than from those of El Paso. The retention of em- ployees is also cleared by him with officials of Ref-Chem only. It is also Ref-Chem that issues the passes that are now required by the employees to gain entrance into the Odessa complex. The employees working under Harris are now known as the utility crew. While this designation was adopted only after the present case arose, Harris proposed the change of name long before that, and it better expresses the nature of the work performed by the employees work- ing under him. Ref-Chem does not employ the terms "mechanics" or "improvers," and its wage scales are dif- ferent, although, like the union wage scales, they embody a line of progression, depending on skill and experience. What now exists in Ref-Chem would seem to be a depart- mental maintenance unit which has a variety of craft characteristics. Indeed, although it is, apparently, the position of counsel for the General Counsel that nothing has ever really changed, so far as the performance of the insulation maintenance work at the Odessa complex is concerned, he actually demonstrates that a change has occurred with the advent of Ref-Chem. Thus, he argues in his brief: " Insulation maintenance crew employees under Ref-Chem maintain their role as craftsmen except that now they are part of a maintenance craft unit rather than a construction and maintenance craft unit .... The conclusion to be drawn from this evidence is that the in- sulation crew at El Paso retained its craft characteristics after having been `severed' from the construction and maintenance unit by the assumption of the insulation maintenance work by Ref-Chem .... This "`severance' from the construction and maintenance unit found ap- propriate in the Insulation & Specialties, Inc. case supra does not destroy the appropriateness of the craft main- tenance unit of insulation employees or, in the alternative a departmental unit with craft-like characteristics because the insulation department continued as a `functionally distinct and separate,' group and this union has 'tradi- tionally devoted itself to serve the special interest of the employees in question."' It is, moreover, one of the striking aspects of the present case that counsel for the General Counsel has re- peatedly amended the allegations of his complaint setting forth the bargaining unit. In the final versions, there are alleged in the complaint three bargaining units in the alter- native. The first of these alternative units is a craft unit of all mechanics and improvers on a multiemployer basis, i.e., on the basis of the Master Felters Association; the second of the alternative units is the same unit on a single- employer basis; and the third of the alternative units is a single-employer unit consisting of the employees of the Respondent who are engaged in insulation maintenance work at the Odessa complex. This last-mentioned unit is clearly different from the contractual unit found ap- propriate in the Insulation & Specialties case, and all three units are different from those set forth in the brief of counsel for the General Counsel. So far as the third of the alternative units is concerned, moreover, it is clear that the union does not now represent any of the employees in such unit. I am aware, to be sure, that in a multiemployer bargain- ing unit, the duty of an employer to bargain with the union for the duration of the contract depends on whether the union represents a majority of the employees in the mul- tiemployer bargaining unit as a whole'24 and thus it is theoretically possible for an employer to be included in a multiemployer bargaining unit, and to have to bargain with the incumbent union, although none of his em- ployees are or have been union members. Nevertheless, the Board has never explicitly held, so far as I am aware, that the duty of an employer to bargain with an incumbent union for the duration of its contract also extends to an employer, who has never been a member of a multiem- ployer bargaining unit, or a party to the contract between the multiemployer bargaining unit and the union , and who knows at the time he receives a request from the union to bargain that his own employees are not members of the union. It may reasonably be required in such case that the General Counsel at least go forward with proof that the union represented a majority of the employees in the bar- gaining unit at the time the contract was made, especially in a case such as the present in which it has never been af- firmatively established that the Union represented a majority of the employees in the multiemployer bargain- ing unit at the time that the contract was made, and the validity of the contract depended wholly on the presump- tion that the Union was the majority representative of the employees at the time of the execution of the contract.25 2' For example, one of Harris' men, who originally came from the paint crew, is not working in the instrument shop. Two pipefitters, who would otherwise have been laid off, have been working for Harris. 11 See Sheridan Creations, 148 NLRB 1503, 1506, and other cases there cited. 25 See Shamrock Dairy, Inc., 119 NLRB 998, at 1001-02, and 124 NLRB 494 at 495-496, enfd. 280 F.2d 665 (C.A.D.C.). REF-CHEM CO. 393 In the present case, no proof was offered by counsel for the General Counsel that the union ever represented a majority of the employees in the multiemployer bargain- ing unit, nor did he attempt to rebut the proof that the em- ployees of the Respondent Ref--Chem who performed in- sulation maintenance work were not union members. Normally, it is the function of the successorship doc- trine to protect employees who are union members, and who wish to remain so, from being deprived of the benefits of their union membership. If the successorship doctrine were to be applied in the present case, however, the result would be to confer upon the employees of the successor employer a form of protection which they quite clearly no longer desire, and which rests at best upon a pyramid of presumptions. The perplexities are multiplied in the present case by the policy followed by the Union in dealing with the suc- cession of employers. This policy was to seek judicial en- forcement of the 1962 contract, rather than to invoke the jurisdiction of the Board and charge the employers with violations of Section 8(a)(5) of the Act. This policy was followed not only in the case of I & S but also in the case of Leona Lee when it took over the insulation main- tenance work. Even after Ref-Chem began performing the insulation maintenance work, Local 66 seems to have hesitated for a considerable time in deciding what action to take. It waited approximately 4-1/2 months before dispatching the letter of June 11, demanding that Ref- Chem recognize it as bargaining agent and comply with the terms of the 1962 contract with I & S. This was not a demand for future bargaining, and even as a request for recognition, it was ambiguous since it could readily be construed as a threat that a suit would be brought against Ref-Chem if it failed to comply with the terms of the 1962 agreement. It seems to be, indeed, the type of letter which is usually preliminary to litigation. It was not sent, moreover, until almost the end of the term of the 1962 agreement, which was due to expire in 19 days. By this time notice of modification could no longer even be given under Section 8(d) of the Act, and it would be reasonable for Ref-them to assume in these circumstances that the Union was not interested in negotiations. So far as secur- ing enforcement of the wage rates required to be paid under the 1962 agreement is concerned, the Board has al- ways hold that this is not one of its functions. As the Board declared in United Telephone Company of the West, '112 NLRB 779, 782; "The Board is not the proper forum for parties seeking to remedy an alleged breach of contract, or to obtain specific performance of its terms."26 The violation of Section 8(a)(5) of the Act is predicated in the complaint, to be, sure, not only upon the general refusal of the Respondents to honor the 1962 contract but also upon the unilateral change in the wage rates of Steve Harris' crew effected by the Respondents without bar- gaining with the Union and without complying with the provisions of Section 8(d) of the Act. The accuracy of the allegations is, however, open to question. Some of the members of Steve Harris' crew who were hired by Ref- Chem were, apparently, receiving more than the union wage scale required, at least by the time the union letter of June 11, 1965, was received by Ref- Chem. When they had been hired, moreover, the rates at which they were hired bore no direct relationship to the union scale of wages. To support an allegation of unilateral change in wage rates, it must be shown that the employer had direct knowledge that he was paying less than the union scale required. The former members of Steve Harris' crew gave the wage rates which they had been receiving at Leona Lee on their employment applications but this in itself would not indicate that they were being paid at these rates pursuant to a union contract. Ref-Chem did not definitely obtain this information until it had received the Union's letter of June 11, 1965. Realistically regarded, this belated demand simply represented an attempt to revive unfair labor practices which had been committed for the first time several years before the Union's letter was written. Counsel for Ref-Chem invokes technical defenses based on Section 10(b) of the Act and failure to serve a charge on El Paso until after the 6-month period specified in that section and run. In my view of the case, there would seem to be no need to decide these questions, or the question whether El Paso was a joint employer with Ref-Chem. I have considered some of the elements of the technical defenses, however, as policy factors militating against holding Ref-Chem as a successor employer. CONCLUSIONS OF LAW 1. The Respondent, Ref-Chem Company, and the Respondent, El Paso Products Company, are employers engaged in commerce, or in an industry affecting com- merce, within the meaning of Section 2(6) and (7) of the Act. 2. International Association of Heat and Frost Insula- tors and Asbestos Workers Local No. 66, AFL-CIO, is a labor organization within the meaning of Section 2(5) of the Act. 3. By refusing to honor the agreement of July 3,1962, between Insulation & Specialties, Inc., and Local 66 of the Insulators' Union, the Respondents did not commit unfair labor practices affecting commerce within the meaning of Section 8(a)(5) and (1) of the Act. RECOMMENDED ORDER In view of my findings of fact and conclusions of law, I recommend that the Board enter an order dismissing the complaint. 26 This would still seem to be Board doctrine today, notwithstanding C & C Plywood, 148 NLRB 414, to which enforcement was denied in 351 F.2d 224 (C.A. 9) 169 NLRB No. 45