Blazer Corp.

BLAZER CORPORATION Blazer Industries, Inc. a/k/a Blazer Corporation and Tru-Air Corporation and Sheet Metal Workers' International Association, Local 569, AFL-CIO. Case 22-CA-7281 May 16, 1978 DECISION AND ORDER BY MEMBERS JENKINS. PENELLO. AND MURPHY On August 3, 1977, Administrative Law Judge John F. Corbley issued the attached Decision in this proceeding. Thereafter, the General Counsel and Charging Party filed exceptions and supporting briefs; Respondent filed cross-exceptions and a brief in support of its cross-exceptions and an answer to the General Counsel's and Charging Party's excep- tions; and General Counsel filed an answering brief to Respondent's cross-exceptions. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has considered the record and the at- tached Decision in light of the exceptions and briefs and has decided to affirm the rulings, findings, and conclusions of the Administrative Law Judge and to adopt his recommended Order.' ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Re- lations Board adopts as its Order the recommended Order of the Administrative Law Judge and hereby orders that the complaint herein be, and it hereby is, dismissed in its entirety. t In adopting the Administrative Law Judge's finding that the receiver is not the alter ego of Blazer Corporation and Tru-Air (Corporation. we note that the facts surrounding the instant receivership are distinguishable from those in Airport Limousine Service, Inc., 231 NLRB 932 (1977). and Jersye Juniors, Inc., 230 NLRB 329 (1977). Member Murphy, who would have found the alter ego relationship in Cagle's. Inc. 218 NLRB 603 (1975). also finds thai case distinguishable on the facts DECISION STATEMENT OF THE CASE JOHN F CORBLEY, Administrative Law Judge: A hearing was held in this case at Newark, New Jersey, on March 17 and 18, 1977, pursuant to: a charge filed by Sheet Metal Workers' International Association, Local 569, AFL-CIO, hereinafter referred to as the Union, on October 29, 1976, which was served by registered mail upon Blazer Indus- tries, Inc., hereinafter referred to as Respondent, on Octo- ber 29, 1976, and on a complaint and notice of hearing, issued on December 8, 1976, by the Regional Director of Region 22 of the National Labor Relations Board, which was also thereafter duly served upon Respondent. The complaint, which was amended on the record at the hear- ing, alleges that Respondent violated Section 8(a)(l) and (5) of the Act, variously, by refusing to recognize and bar- gain collectively with the Union, by refusing to honor a certain collective-bargaining agreement, and by unilater- ally changing wage rates and other terms and conditions of employment. In its answer to the complaint, Respondent has denied the commission of any unfair labor practices. For reasons which appear hereinafter, I find and con- clude that Respondent has not violated the Act and I shall recommend that the complaint be dismissed in its entirety. At the hearing all parties were represented by counsel. The parties were given full opportunity to examine and cross-examine witnesses, to introduce evidence, and to file briefs. Excellent briefs have subsequently been filed by all parties and have been considered. Upon the entire record ' in this case, including the briefs. and from my observation of the witnesses, I make the fol- lowing: FINDINGS OF FACT I THE BUSINESS OF RESPONDENT Respondent is, and has been at all times material herein, a corporation duly organized under, and existing by virtue of. the laws of the State of New Jersey. At all times material herein Respondent has maintained its principal office and place of business at 700 21st Ave- nue, Paterson, New Jersey. herein called the Paterson plant, and is now, and at all times material has been, con- tinuously, engaged at said place of business in the manu- facture, sale, and distribution of air-conditioning equip- ment and related products. In the course and conduct of Respondent's business op- erations during the 12 months preceding the issuance of the complaint, said operations being representative of its oper- ations at all times material herein, Respondent caused to be manufactured, sold, and distributed at said place of business, products valued in excess of $50,000, of which products valued in excess of $50,000 were shipped from said place of business in interstate commerce directly to States of the United States other than the State of New Jersey. Respondent is, and has been at all times material herein, an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. IOn Jul, 11. 1977. 1 issued a telegraphic order upon all the parties to show cause wh h the record in these proceedings should not be corrected No party having opposed this order the record is hereby noted and corrected At the conclusion of the hearing. I made arrangements for later reception in evidence bs mail of a certain exhibit identified as G.C. Exh 40 No such exhibit was forwarded to me. howeeser. in the time allotted (or at any subse- quent time) Accordingl., that exhibit number is cancelled and the record is hereb, cloased 236 NLRB No. 12 103 DECISIONS OF NATIONAL LABOR RELATIONS BOARD II. THE LABOR ORGANIZATION INVOLVED Sheet Metal Workers' International Association, Local 569, AFL-CIO, is, and has been at all times material herein, a labor organization within the meaning of Section 2(5) of the Act. 111. THE ALLEGED UNFAIR LABOR PRACTICES A. A Synopsis of the Case The principal question involved in this proceeding is whether or not Blazer Industries, Inc. (Respondent), is bound by a collective-bargaining agreement entered into between Tru-Air Corporation and the Union on August 27, 1973. The case turns on the issue whether Blazer Indus- tries, Inc., is the alter ego of Tru-Air Corporation and Blaz- er Corporation-which two latter corporations went into bankruptcy during the period 1974-75. If Respondent is not the alter ego, the second question is whether it is the successor to Blazer and Tru-Air and therefore obligated to bargain with the Union. B. Background and Sequence of Events 1. Blazer Corporation and Tru-Air Corporation Blazer Corporation was engaged in the manufacture and sale of air-conditioning equipment and related prod- ucts for the computer industry. It had been founded in 1908 as M. Blazer and Son. Tru-Air Corporation supplied the labor to Blazer Corporation. Blazer Corporation and Tru-Air Corporation were a single-integrated enterprise, as Respondent stipulated at the hearing. Except for one share of stock in each, Blazer Corpora- tion and Tru-Air Corporation were owned until 1974 by members of the Blazer family. That other single share was owned by David Harrison (one-time lawyer for the Blaz- ers), and, after Harrison's decease, by Harrison's estate. In July 1974, a 50-percent interest in both corporations was sold by the Blazers to Clifford Lindholm. Thus, as of July 1, 1974, the stock ownership of Blazer Corporation and that of Tru-Air Corporation was as follows: Benjamin Blazer, his wife Clair Blazer, and the estate of David Harri- son owned 50 percent and Clifford Lindholm, 50 percent. Notwithstanding the single share of stock owned by the estate of David Harrison in each corporation, it was con- sidered that, for all practical purposes, the Blazers owned half of the stock and Lindholm owned the other half. Also, as of July 1974, the officers and directors of Blazer Corporation and Tru-Air Corporation were identical, as set forth below: Officers Benjamin Blazer-President Claire Blazer-Secretary/Treasurer Clifford Lindholm-Executive Vice President Michael Blazer (son of-Vice President Benjamin and Claire) Directors Benjamin Blazer Claire Blazer Clifford Lindholm Benjamin Blazer was the principal officer of both corpo- rations and controlled their labor relations. Claire Blazer did not take an active role in the day-to- day operations of Blazer Corporation and Tru-Air Corpo- ration. Lindholm was brought into both corporations in 1974 to take charge of manufacturing and to find a new location for the plant in which both corporations operated. Blazer Corporation and Tru-Air Corporation had been located, respectively, since 1962 and 1956 at a site in East Rutherford, New Jersey, which consisted of at least two buildings and some 10 acres. The East Rutherford site was owned by Blazer Realty Corporation of which the presi- dent and vice president were Benjamin Blazer and Claire Blazer.2 Sheet Metal Workers' International Association was cer- tified by the National Labor Relations Board in 1963 as the exclusive collective-bargaining representative of the production and maintenance employees of Tru-Air Corpo- ration. Thereafter, Tru-Air entered into a series of collec- tive-bargaining agreements with Local 569, Sheet Metal Workers' International Association (the Union herein), the latest of which was effective from 1973 to August 20, 1976, with an automatic renewal clause.3 This agreement also contained a union-security clause. The Union's business representative, who serviced Tru-Air Corporation, was Murray Silverstein, the Union president. As of August 1974-and indeed for more than a year before-Blazer Corporation and Tru-Air Corporation were under pressure to move from the East Rutherford location as the result of an ongoing condemnation proceeding to make way for the New Jersey Sports Complex which would consist, inter alia, of a football stadium for the New York Giants and a racetrack. The financial affairs of Blazer Corporation had also been deteriorating for several years to the point where its inventory and accounts receivable were both factored by Lincoln Factors, i.e., the latter advanced operating capital to Blazer Corporation which capital was secured by Blazer Corporation's inventory and accounts receivable. 2. The move from East Rutherford; the receivership; the bankruptcy and sale of assets of Blazer Corporation and Tru-Air Corporation On July 16, 1974, the New Jersey Superior Court, before which the condemnation proceeding had been brought, is- sued an order directing that the East Rutherford premises be vacated by August 15, 1974, and giving the State of New Jersey the right physically to enter the property on that date. After the condemnation proceedings had begun, Benja- nun Blazer looked at approximately 80 buildings in an ef- 2 The court order to vacate the premises in 1974, about which more will be said hereinafter, was directed to Blazer Realty Corporation. ' Neither party made any effort to forestall automatic renewal of this contract for the I-year period, August 20, 1976, to August 20, 1977. 104 BLAZER CORPORATION fort to find suitable plant and storage space for Blazer Cor- poration to continue in business. Evtntually Blazer found a building in Hackensack, New Jersey, and was negotiating a lease with the landlord when he was notified by letter dat- ed August 12, 1974, that a contract had been awarded by the State of New Jersey for the East Rutherford premises to be removed by the Main Trucking & Rigging Co., Inc., on August 15, 1974, But Blazer was unable to consummate the lease on the Hackensack location because Blazer Cor- poration and Tru-Air had insufficient funds for a security deposit on the lease and for the further reason that the Hackensack premises would not be ready by August 15, 1974. On August 14, 1974, upon learning of the impending removal of Blazer Corporation and Tru-Air Corporation from East Rutherford, Lincoln Factors refused to advance any further moneys to Blazer Corporation and Tru-Air Corporation for operating expenses. On August 15, 1974, Main Trucking arrived at the East Rutherford site to commence the move. After discussions with Lindholm it was agreed that the move would not be- gin until August 16. In the meantime, on August 16, 1974, Benjamin Blazer, as president of both Blazer Corporation and Tru-Air Cor- poration, filed a petition with the U.S. District Court for the District of New Jersey under the provisions of the Bankruptcy Act (chapter XI). The petition sought, inter alia, an order enjoining the New Jersey Sports and Exposi- tion Authority from interfering with the orderly removal of the assets of Blazer Corporation and Tru-Air Corporation, from entering into possession of the East Rutherford prem- ises and from commencing the demolition of such prem- ises. The petition also requested the appointment of a re- ceiver to protect the assets of the two corporations. The reason-as described in the petition-why Blazer Corpora- tion and Tru-Air Corporation sought this relief was be- cause of the injury to their business which would be occa- sioned by a precipitous move. Further, as Benjamin Blazer testified, the impending move had also caused Blazer Cor- poration and Tru-Air Corporation to lose their funding from Lincoln Factors. This petition was, in fact, granted by the court (Judge DeVito) on August 16, 1974, and Jerome La Penna, Esq., was appointed the receiver. The complement of Blazer Corporation and Tru-Air Corporation was immediately re- duced from about 130 employees to about 15 to 25 employ- ees. The latter, who were members of the Tru-Air collec- tive-bargaining unit, and a supervisor completed some $100,000 worth of orders which had been pending when the receiver was appointed. The employees utilized for completion of the work were paid wages by the receiver but no fringe benefits under the Union's contract. Also during late August and early September 1974, the physical assets of Blazer Corporation and Tru-Air Corpo- ration were removed from the East Rutherford location by Main Trucking. Inasmuch as there was no place to move these assets they were stored in some 108 trucks of Main Trucking or on the premises of the latter concern. Despite the court order the move was accomplished in haste. In September 1974, Benjamin Blazer acquired office space in Hackensack and some affairs of Blazer Corpora- tion and Tru-Air Corporation continued at this location until May 1975, as will be described more fully hereinafter. Sometime in late November or early December 1974, the assets of Blazer Corporation and Tru-Air Corporation were removed from the trucks and yard of Main Trucking to a plant in Paterson, New Jersey (where Respondent is now located). This property had been obtained by Benja- min Blazer at the request of Judge DeVito of the U.S. Dis- trict Court in order to conserve the assets of Blazer Corpo- ration and Tru-Air Corporation in the face of high storage claims by Main Trucking. The move to the Paterson loca- tion was completed in January 1975. After the $100,000 of pending orders had been complet- ed in early September 1974, all of the Tru-Air bargaining unit personnel were released. However, certain other employees of Blazer Corporation and Tru-Air Corporation were retained by the receiver during the receivership on the recommendation of Benja- min Blazer. These employees, who operated out of the newly acquired Hackensack office, included three sales personnel-Michael Blazer (Benjamin Blazer's son), W. Lesco, and N. Droumbrouki. Other employees retained were the comptroller, Kerler, who collected accounts re- ceivable, and Meyerdierks (who had previously worked for Blazer Corporation as a sales coordinator) and Robinson (who had worked for Blazer Corporation at an earlier time) who maintained control over the inventory which was stored on the trucks in the yard of Main Trucking.4 In addition the receiver hired a secretary to assist in the col- lection of certain sales taxes claimed by New York State or in obtaining appropriate tax exemption certificates. Gen- tile, still another employee of Tru-Air, was hired by the receiver to estimate machinery damages caused by the move. Some income was generated by the receivership in late 1974 or in 1975 by sales from inventory of refrigeration compressors as well as replacement parts for use in air- conditioning units which had been previously sold by Blaz- er Corporation. Benjamin Blazer was active in the affairs of the receiver- ship and was paid a salary by it. He went to the office in Hackensack each day and advised the receiver on the han- dling of matters affecting Blazer Corporation and Tru-Air Corporation. During this period Blazer likewise attempted to persuade former or potential customers that the indispo- sition of Blazer Corporation was only temporary. The three sales personnel retained by the receivership followed the same tack and tried to "retain some relationship with con- tractors and engineers" who might be in a position to pro- vide future business. However, except for the sales from inventory, previously described, the business did not improve. And the receiver, who directed the affairs of Blazer Corporation and Tru-Air from the receiver's office in Newark, New Jersey, ada- mantly refused Blazer's requests to resume manufacturing operations. Since there were no manufacturing operations (after the completion of a few outstanding orders in Sep- tember 1974, as also previously described) no production 4Another former Tru-Air unit employee. O'Krinksy. also worked for the receiver. 105 DECISIONS OF NATIONAL LABOR RELATIONS BOARD or maintenance (Tru-Air unit) employees were employed thereafter by the receivership. On February 24, 1975, while the receivership continued, Blazer Corporation and Tru-Air Corporation-as the debtor corporations-and their president, Benjamin Blaz- er, filed with the Bankruptcy Court a so-called "plan of arrangement" with the creditors of Blazer Corporation whereby the claims of these creditors would be satisfied. However, due to a continuing dispute with the Sports Complex and the trucking company over the expense of reconnecting the machinery of Blazer Corporation, the plan was never consummated. Accordingly, on July 17, 1975, Blazer Corporation and Tru-Air Corporation were adjudged bankrupt corpora- tions. Following a notice to show cause by Judge DeVito on July 21, 1975, he issued an order dated August 11, 1975. for a sale at public auction of all the assets of Blazer Cor- poration and Tru-Air Corporation to be held on August 20, 1975. The auction sale was indeed held, as scheduled, at the Paterson location (where the assets of Blazer Corporation and Tru-Air Corporation had been moved in January 1975) and Benjamin Blazer was the successful bulk bidder through his attorney. Benjamin Blazer purchased the assets of Blazer Corporation and Tru-Air Corporation (with the exception of a couple of vehicles) for $150,000. The sale was confirmed by Judge DeVito in an order issued on Au- gust 28, 1975. 3. The formation of Blazer Industries, Inc. (Respondent) Benjamin Blazer petitioned to incorporate Blazer Indus- tries on September 5, 1975. The Secretary of State for the State of New Jersey issued him a certificate of incorpora- tion on September 16, 1975. The assets of Blazer Corpora- tion and Tru-Air purchased by Benjamin Blazer at the auc- tion on August 20, 1975, were assigned to Benjamin Blazer by the trustee of bankruptcy (the former receiver, La Pen- na) by bill of sale dated September 12, 1975. Benjamin Blazer became the president of Blazer Indus- tries, Inc. Between the time of the assets sale and the receipt of the certificate of incorporation there was no specific cut-off date in the sales operations of the receiver and calls were accepted for orders. These orders were not, however, filled until Blazer Industries became officially incorporated. Blazer Industries (Respondent) began its operations at the same location in Paterson, New Jersey, as that to which the Blazer Corporation and Tru-Air Corporation assets had been moved in January 1975, and at which Benjamin Blazer had purchased said assets at public auction on Au- gust 20, 1975. By September 20, 1975, Respondent had six employees working in the Paterson plant. These were: Analecto Gen- tile, a former Tru-Air unit employee also employed by the receiver; J. O'Krinsky, a former Tru-Air nonunit employ- ee, also employed by the receiver; T. Robinson, who had been employed by the receiver and who had also been em- ployed by Tru-Air or Blazer C'orporation in 1968; 0. Feli- ciano, a former Tru-Air nonunit employee, who had not been employed by the receiver: S. Hoppe, who had been employed by the receiver; and C. Kerler, a former Blazer Corporation comptroller (nonunit).5 From September to November 1975, Respondent did nothing except bill repairs and handle replacement parts orders. As previously noted, replacement of parts had also been undertaken by the receiver to generate income. After a couple of months, Benjamin Blazer hired Larry Presti (a former Blazer Corporation employee from 1949 through 1968) who helped plan the layout of equipment at the Paterson plant. Presti is now the plant manager. Respondent began its own production in November or December 1975, gradually, as orders came in. Production employees were also hired on an "as needed" basis. For- mer employees of Blazer Corporation or Tru-Air Corpora- tion who had previously performed in the needed classifi- cation were offered these positions first. After the last of such former employees were exhausted, the positions were offered to individuals with whom Benjamin Blazer had no prior experience. The employees who were hired between September 1975 and January I, 1976, were told, usually by Benjamin Blaz- er, that there was no union in the plant but that they could have one if they wanted one after the employee comple- ment became large enough, and that this was up to the men to decide. These employees were hired at the wage rates last in effect at the East Rutherford plant at the time of the receivership, but were not-initially-promised any bene- fits such as holidays, paid vacations, or hospitalization. Production is now well underway and the employee complement had risen to between 35 and 40 at the time of the hearing herein. A detailed comparison of the operations and organiza- tion of Respondent with those of Blazer Corporation and Tru-Air Corporation will follow later in this Decision. 4. Activities of the Union during the receivership and after the formation of Respondent Within a day or two after the petition for appointment of a receiver was filed on August 16, 1974, by Benjamin Blazer, Blazer was visited by Silverstein, president of the Union. Silverstein told Blazer that the receivership was a terrible thing and that he hoped Blazer would get back into business. Silverstein also visited Blazer later before the move from the East Rutherford plant. While Blazer was working out of his office in Hacken- sack under the direction of the receiver during the period from September 1974 until May 1975, Silverstein saw Ben- jamin Blazer on several more occasions. After May 1975, while the receivership continued and after the Hackensack office was closed, Silverstein visited Benjamin Blazer a couple of times at the Paterson plant. What was said by Blazer and by Silverstein in these later meetings at East Rutherford, Hackensack, and Paterson-during the period from September 1974 to August 1975--is not shown by the record. Only Blazer testified as to these events-in sum- mary fashion. Silverstein is deceased. About 2 days after Benjamin Blazer purchased the assets of Blazer Corporation and Tru-Air Corporation on August 'The spelling of these names is taken from the (j.( . Exh. 9. 106 BLAZER CORPORATION 20, 1975, Silverstein visited Blazer at Paterson, congratulat- ed Blazer and told Blazer "I hope we can get together again." After the incorporation of Respondent in September 1975, Silverstein came to the Paterson plant in October 1975 and in December 1975, on each occasion stopping to speak to Respondent's employees. During the course of one visit-which I conclude from the nature of Silverstein's remarks (to appear) was that in October-Silverstein spoke specifically to three employees including Analecto Gentile, a Respondent employee and former union steward at Tru-Air Corporation. Silverstein began by observing to the men that the place had opened up again. Silverstein went on that the employees did not have to get into the Union at that time but, if they wanted to, they should let him know. Silverstein added that there must be at least 16-20 men working in the shop before he accepted them back into the Union. Gentile replied that this would take years. Silverstein nonetheless rejoined that he would visit the shop from time to time in the future.6 Silverstein came by the plant in January 1976 and spoke with Benjamin Blazer. After noting to Blazer that a num- ber of pieces of production machinery had been hooked up, Silverstein commented that "One of these days we'll probably get together again." Blazer responded, "perhaps some day." Benjamin Blazer next noticed Silverstein in the plant in March 1976, speaking with the employees. After Silverstein's conversation had gone on for an extended pe- riod of time, Blazer requested Silverstein to come into Blazer's office. Blazer objected strenuously to the time Sil- verstein had spent talking to the employees during work hours on company property. Blazer further told Silverstein that he, Blazer, had never been informed that Silverstein represented Respondent's employees. Blazer then asked Silverstein point blank whether or not the Union did repre- sent them. Silverstein replied in the negative. Upon hearing this Blazer advised Silverstein that Silver- stein had no right to come into the plant. Blazer further told Silverstein that, if Silverstein wished, Silverstein could visit Blazer in the office but could not speak with the men in the plant without first obtaining Blazer's permission. Sil- verstein retorted that this was not the way things were done in East Rutherford. Blazer then pointed out to Silverstein that this was not East Rutherford but Paterson. He further reminded Silverstein that Respondent was Blazer Indus- tries and not Tru-Air Corporation. Blazer concluded the conversation with the concession that, if Silverstein re- turned with authorization cards from Respondent's em- ployees, Blazer would talk to Silverstein. With this Silver- stein left. On March 8, 1976, Silverstein filed charges against Re- spondent with the Board's Regional office, alleging that Respondent. since December 15, 1975, had refused to bar- 61 have held that this meeting took place in October on the hasis of Silverstein's remark that the place had opened up again If. hov'eper. this is in error, the meeting clearlb occurred before March or April 1976, i.e, be- fore 14 or 15 employees were working in the shop and before the emplos.ees' shop committee, to he described. was estahlished Gentile so testified credi- blN gain collectively with the Union in violation of Section 8(a)(l) and (5) of the Act (Case 22-CA-6854). The Region- al Director approved withdrawal of these charges on March 24, 1976. On May 12, 1976, the Union was placed under Trustee- ship. On September 22, 1976, Edward Carlough, president of the Union's International, sent a letter addressed to Tru- Air Corporation in which Carlough indicated that the Union had been placed under trusteeship on May 12, 1976. In the letter Carlough, on behalf of the Union, also de- manded enforcement of its collective-bargaining agree- ment. This letter was received by Benjamin Blazer in late September or early October 1976. In late October 1976, Ronald Jaworski, an International organizer of the Union's International and Ernest Miller, another organizer. visited Respondent's plant and spoke with Elmer Doppler, Respondent's vice president for sales. Jaworski advised Doppler of the Union's trusteeship and asked Doppler if Respondent had any agreement with the Union (copies of the Union's collective-bargaining agree- ment had, purportedly, been stolen from the offices of the Union along with the Union's records). Jaworski said that he and Miller were there to ask for bargaining and to see if any part of any agreement between Respondent and the Union was still in effect. Doppler told Jaworski that the employees did not want a union and, as far as Doppler knew, there was no agreement in the plant. Jaworski then asked to see Benjamin Blazer. Doppler said he would con- ve) the message to Blazer. 7 A week later Jaworski and Miller again came to see Blazer. They spoke to a receptionist who told them that Blazer was not available. Jaworski left his telephone num- ber and asked that Blazer call him. On three other occa- sions in October and November 1976, Jaworski telephoned Respondent and left word for Blazer to call him back. Blazer has returned none of these calls. 5. Respondent's direct dealings with its employees and changes Respondent effected in its wages and other terms and conditions of employment: the shop committee As previously noted, all of Respondent's employees who were hired in the fall of 1975 were brought on board at the wages last in effect under the Tru-Air collective-bargaining agreement at East Rutherford before the receivership but without any' fringe benefits. There is some confusion in the testimony of Respon- dent's witnesses, Benjamin Blazer and Gentile, whether the formation of the shop committee was originally Blazer's idea or the idea of the employees. In any event, as Blazer admitted, he held a meeting of all of Respondent's produc- tion employees after work in late January or early Febru- ary 1976 and suggested to them that they elect a committee "to function for them, to establish work rules, to establish benefits. These findings are based on the credible testimons of Jaworski in this regard. lo the extent that the testimon; of Doppler disagrees, I do not credil it Doppler admitted on the stand that he did nit hae a clear recol- lecllioll of the conxers.ltion 107 DECISIONS OF NATIONAL LABOR RELATIONS BOARD In late March or early April 1976, a committee was in- deed elected by the employees. The committee included Gentile, George Fezza, and M. Gonzalez. About a week of two after the committee was elected, Blazer and Plant Manager Presti began meeting with the committee to discuss wages and working conditions. The committee demanded the establishment of job classifica- tions with work descriptions and also certain wage increas- es. Respondent agreed to the formulation of the job de- scriptions and, at the next meeting, a week or 10 days later, further agreed to make some wage increases and to prepare some job descriptions. Still other wage increases were put into effect subsequently. Respondent has continued to hold meetings with the committee every 10 days to 2 weeks since April of 1976. As the result of these discussions Respondent has established, inter alia. a major medical plan, life insurance, and job classifications and has handled grievances. Blazer and Presti have participated in these discussions and Blazer made the decisions to establish the foregoing employment conditions. The wage increases put into effect in April 1976, and later, are different from those set forth in the collective- bargaining agreement between the Union and Tru-Air Corporation. The major medical plan and a life insurance benefit were put into effect on or about June 1, 1976. 6. Respondent's business, customers, suppliers, operations, etc.: a comparison with Blazer Corporation and Tru-Air Corporation a. Ownership and control All of the stock of Respondent is owned by Benjamin Blazer and his wife, Claire. The officers of Respondent are: Benjamin Blazer, president; Clair Blazer, secretary trea- surer; Elmer Doppler, vice president - sales; and Presti, vice president - plant manager. The day-to-day affairs of Respondent are handled by Benjamin Blazer, assisted primarily by Presti and Doppler. Hirsch, Respondent's director of engineering and his engi- neer. Miller, were previously employed by Tru-Air Corpo- ration. "Supervisory" personnel include Robinson, Shaw. Gentile, Ortiz, Haper, and Rodriguez. Presti, Doppler, and Robinson had worked for Blazer Corporation at one time but had left before the receivership in 1974. Gentile also previously had a supervisory position with Blazer Corpora- tion or Tru-Air Corporation. The foregoing "supervisory" personnel are apparently working supervisors and there is no probative showing that they are supervisors within the meaning of Section 2(11) of the Act.8 Benjamin Blazer is Respondent's principal officer and controls Respondent's labor relations just as he was and did while Blazer Corporation and Tru-Air Corporation were in existence. ' ShNaw and Orti; were Ifrmer enmploees of I ru Air b. Products and equipment Respondent, like Blazer Corporation, is engaged in the design, manufacture and sale of air-conditioning equip- ment, cooling coils, and cooling towers. Respondent produces only small cooling towers, whereas Blazer Corporation produced large ones. Such large tower work constituted 20-25 percent of Blazer Corporation's business. Respondent does not wholesale re- frigeration parts, which made up 5 8 percent of Blazer Corporation's business. Further Respondent does not oper- ate a service department as did Blazer Corporation. Respondent uses the same machinery, tools, and equip- ment for manufacturing which it purchased from Blazer Corporation replacing some damaged equipment with new machinery and also utilizing some improvements on old machinery. Respondent also purchased from Blazer Cor- poration the latter's patterns. drawings, and copyrights and Respondent is still using inventor)y materials purchased from Blazer Corporation. c. Advertising, customers, and suppliers Respondent uses promotional literature which it pur- chased from Blazer Corporation some of which has been updated. Respondent also utilizes 80 percent of the suppliers for- merly utilized by Blazer Corporation. Approximately 80 percent of Respondent's customers had also at one time been customers of Blazer Corporation. Whereas Blazer Corporation had its own sales force and independent sales agents, Respondent uses independent sales agents only. However, Michael Blazer, (Benjamin Blazer's son), who had been Blazer Corporation's vice pres- ident in charge of sales, now works for the independent sales agent which handles 60-65 percent of Respondent's sales. d. Employees and skills As noted, Respondent's initial work force was recruited from among former employees of Tru-Air and Blazer Cor- porations. New employees were hired after these sources were exhausted. Of some 53 personnel hired by Respondent (not all of whom remain) some 29 were formerly employed by Tru- Air or Blazer Corporations just prior to the receivership. Blazer Corporation and Tru-Air had 135 employees prior to the receivership working on two shifts. Respondent's employees work one shift. Inasmuch as Respondent is manufacturing essentially the same products as Blazer Corporation using, largely, equipment it purchased from the latter (or improvements thereon) the skills exercised by employees are essentially the same. Respondent's initial wage rates for employees were the same as for production and maintenance unit employees as those rates paid under the Union contract at East Ruther- ford. 108 BLAZER CORPORATION e. Financial Respondent uses the same factor. Lincoln Factors, as did Blazer Corporation and Tru-Air. to finance its opera- tions. Respondent did not purchase the accounts receiva- ble of Blazer Corporation nor did it assume the liabilities of Blazer Corporation and Tru-Air. Respondent took over no contracts, orders, or agreements of Blazer Corporation or Tru-Air. f. Location Respondent's plant at Paterson is some 12 16 miles away from Blazer Corporation's plant at East Rutherford. g. Misccllaneis Respondent uses new stationery and invoices. new tax identification numbers, new telephone numbers, new signs on plant and vehicles, a new mailing address and post of- fice box--all being different from those of Blazer ('orpora- tion and Tru-Air Corporation. Concluding Findings i. Alter ego The difference between a determination of alter cgo sta- tus and a determination of successorship is that the aler ego is required to assume its predecessor's collective-bar- gaining agreement, 9 whereas a successor normally assumes only the obligation to recognize and bargain with the ex- clusive bargaining representative of its predecessor's em- ployees.10 In its recent decision in Crawford Door Sales ( omreatni. Inc. and Cordes Door Conipan. Inc.. 226 NL R B 1144 (1976), the Board stated that it would find altcr cego status "where the two enterprises have 'substantiall? identical' management. business purpose, operation, equipment. cus- tomers, and supervision, as well as ownership" In the present case there are strong factors which favor the conclusion that Respondent is the alter ego of Blazer Corporation and Tru-Air Corporation based on the anil- sis and comparison set forth, slpra. tlow cser, the riesolu- tion of this issue is not that simple. For Respondent's im- mediate predecessor was not the consolidated enterprise of Blazer Corporation and Tru-Air Corporation. Respon- dent's predecessor was rather the receiver of the latter tlo corporations. A receiver in bankruptcy is not the same entity as a prc- bankruptcy company. It is rather a new entit, for pir- poses of determining its obligations under the National L.a- bor Relations Act and the Bankruptcy Act --with its own rights and duties, subject to the supervision of the hank- ruptcy court.t' As such, it has, under the aegis of the Na- F .g. Mfarqus Prinwon, ( ,rporar, n , nd t utual I nOirnfti ( , *,t[," l ' I I NI RB 394 (1974) ' V 1. R . B trn, Irrhlonal . Lrl; .SS'' lr, c .S In, . X 4(t [ S '72 (1972) I.Sh,-plt 'n' 1,., (nlol q No' ) .> 4. In'rtlolrl'llil, .2,,, .... 2 {2 Rt lltd ,. tionl Bankruptcy Act and the National Labor Relations Act the obligation to comply with requirements of the lat- ter.12 Indeed the Board itself has asserted jurisdiction over a receivership.3 On the other hand such an entity also has leave under the Bankruptcy Act to reject the collective- bargaining agreement of the corporation involved in the bankruptcy proceeding." In view of the separate entit' nature of the receivership, it therefore becomes necessary to determine whether Re- spondent is the alter ego of Blazer Corporation and Tru-Air ( orporation and of thIe receivership as well 15 In so doing it must also be decided whether the receivership is the alter c o of the Blazer Corporation and Tru-Air Corporation."' I conclude that the receiver was not the alter ego of Blaz- er Corporation and Tru-Air and that Respondent. which, ais will appear. engaged in a substantially different activity from that of the receiver. was not the alter ego of Blazer Corporation and Tru-Air and the receiver Evaluating the operations of the receiver in the light of the Board's recent definition of an alter ego in Cra fibrd. slurat. it is clear that the operations of the receiver were different from the operations of Blazer Corporation and Tru-Air. Thus, the receiver did no manufacturing for more than a ,ear after completing some $100,000 worth of or- ders in the first 2 or 3 weeks of the receivership despite Benjamin Blazer's request that the receiver resume. Indeed the Blazer Corporation machinery was not even laid out and hooked up after the more. but merely sat in the plant at Paterson essentially on a storage basis under a month- to-month lease. The control of the receivership was in the hands of the receiver and not in Benjamin Blazer or his fellow corporate officers. The work force was reduced to about six individuals none of whom were production and maintenance employees. While the receiver continued sales to customers, such sales were out of inventory only and consisted merely of replacement parts. The receiver had. earlier on, rejected the Union's collective-bargaining agree- ment. Ac /anto,, bh pasing only wages to production and mainteinance employees (during the first 2 or 3 weeks of the receivership while some tere still employed) and by not pas ing fringe benefits called for by the contract. Froim the foregoing it is obvious that since the receiver opelted the business, and on a substantially reduced ba- si. that the receivership could not be the alter ego of Blazer (Corpo,ration and Tru-Air within the meaning of the Bolard's Decision in Croa, JOrd, supra. Contrasting the activities of Respondent with those of the receiver. it is clear that Respondent, unlike the receiver. is a ,ital. xibrant, and growing manufacturing enterprise. Its affairs are firmls in the hands of Benjamin Blazer and 5ir ,lI, 2222 ltl ()rOiI,2I l ai/ [ r,; , I ! o r2r. , fi/ (1 0 A t. t, n S; S e! ]'rtlr u,,, In, 1 9 1 h9d '14 ( ((' \ 2. 197%, i' S /,c IRB i B/ljl.,l l,( ;rnIt rrt H r,.i 128 F 2d 39 43 (( 3I ;(d2 , 2l/221 /1l, I2t, ,,c i n, I t, 1ltl rftl, i'rhl lltnll Trader (Co eMpan ,i1, 2 i. 1' NI RB IS?7 i17 I nf ld 10 I2d 428 i(( A 4. 19621. 1 S.h I / , I]I elif 1 Vo . . t T itn Iew 4l 'i A l in Sr,'ty Prodtu, I. /In, ../ira .!21 ]'7)t ( ipr ?n /t-I, l' 1.,04 -- i4 )*4 1 8i.herol , ctl,2 1,h2r ,,,, a lrptnr l in JnI , t ', Am . r,2 i. t[[ ( 1( 2 , I ]ur l l,,,,I Pr, ,llt. In, 289 F Slrpp I43. ] ,hr r , . 1 t7 I 11 8 3 ti ( N ,, 1 ' ,,5t,9I:I P h,/ I.ttt, r 1,, ( i Sul, p il ItlS I 'D 4 I 'l l [ 51 ,¥! , thm lr ,w; I n, , Ih Is' N I.RB ?94 798 t19hh 109 DECISIONS OF NATIONAL LABOR RELATIONS BOARD his supervisors-and not the receiver's. Respondent has set up its machinery and is actively engaged in production in a plant for which it has a long-term lease. Respondent has a production and maintenance work force-not merely a skeleton holding and sales cadre as did the receiver. 1, therefore, conclude from the foregoing that the receiv- er was not the alter ego of Blazer Corporation and Tru-Air and that Respondent is not the alter ego of Blazer Corpora- tion and Tru-Air and the receiver.' In reaching my conclusion that Respondent is not the alter ego of Blazer Corporation and Tru-Air and their re- ceiver, I have also taken into account the facts that the demise in bankruptcy of Blazer Corporation and Tru-Air was not fraudulent or illusory and was involuntary. That is, the condemnation of the East Rutherford facility which triggered the receivership, was brought about by third par- ties not affiliated with Benjamin Blazer and indeed against whom he is continuing to litigate in other proceedings ad- verted to by this record. The ultimate adjudgment of bank- ruptcy came about from the failure of Blazer's plan of ar- rangement with creditors (which would have restarted the business) and was largely due to the fact that no agreement could be reached with these same third parties to under- take the reconnection of machinery which had been dis- connected following the move from East Rutherford which they occasioned. Hence, by the time Benjamin Blazer bid on the assets of Blazer Corporation and Tru-Air those cor- porations had gone bankrupt despite Blazer's efforts. Thereafter Blazer stood in the shoes of a stranger and pur- chased their assets in an arms-length court-approved trans- action. Finally, I note that there is no showing whatsoever that Respondent was formed for the purpose of avoiding the obligations under the National Labor Relations Act of Tru-Air Corporation pursuant to the latter's contract with the Union. Thus, for all these reasons as well, I conclude that Re- spondent is not the alter ego of Blazer Corporation and Tru-Air and their receiver.s Having concluded that Respondent is not the alter ego of Blazer Corporation and Tru-Air and their receiver, it fol- lows that Respondent is not bound by the terms of I'ru- Air's collective-bargaining agreement with the Union. 2. Successor Inasmuch as I have held that Respondent is not an alter ego, the question then becomes whether it is a successor to In re..aching this c.onclusion. I am not unmindful that the Board has held that the mere purchase of the assets directly from a predecessor or from a third part) is insufficient in and of itself to defeat an alter ego finding. Marquis Printing ('orporation, supra. Itowever, here, unlike Marquis and other cases of that line (e.g., Interstate 65 Corporation d/b/a (ontlinntal Inn, 186 NLRB 248 (1970)), the manner in which the business was last operated here by the third party receiver-differed significantly from the operations of the predecessor and further involved, as noted. the de aul to rejection by the third party receiver of the collective-hargaining contract of the predecessor While such rejection requires court approval under the Bankruptc, Act. the fact remains that the receiver did not honor the fhinge benefit require- ments of the I ru-Air contract. 1 Duimt I an di Storage; Great Western Ia'n & StoragR e ('). 218 NLRB 1339 (1975) Blazer Corporation and Tru-Air and, as such, has the obli- gation to bargain with the Union as the exclusive collec- tive-bargaining representative of its production and main- tenance employees.s I conclude that Respondent is not a successor and does not, for that reason, have the obligation to bargain with the Union. The test developed by the Board and sanctioned by the courts in determining whether the successor employer has inherited the bargaining obligations of its predecessor is whether there has been a continuity in the employing in- dustry after the transfer.20 Application of this test involves consideration of the totality of the circumstances sur- rounding the transfer as well as a comparison of the opera- tions of the predecessor and the successor enterprises.2' Here many of the same reasons which defeated the alter ego theory of the complaint apply with equal force against the claimed successorship. Thus, Respondent did not take over an on-going manufactoring enterprise. There had rather been a hiatus in production operations of more than a year under the receiver 22 which was not caused by Benja- min Blazer who tried, as I have noted, to have the receiver resume production operations and who also, unsuccessful- ly, developed a plan of arrangement with the creditors of Blazer Corporation and Tru-Air under which they might have gone back in business. Further, when Respondent be- gan operations, it did so with a substantially reduced com- plement which (even accepting as valid the General Coun- sel's contention) included only a bare majority of 10 out of 19 employees in Respondent's production and mainte- nance force at the time of the hearing who had formerly worked in the Tru-Air collective-bargaining unit.2 3 Further, unlike Tru-Air, Respondent has attempted to cross-train its smaller work force to give it a versatility not known in the larger Tru-Air force. In all the foregoing circumstances I conclude that the evidence is insufficient to support a finding that Respon- dent is a successor employer to Blazer Corporation and Tru-Air. 24 What Respondent purchased was essentially the remains of a corporate shell-inventory and equipment stored in a shut-down plant---and an inventory sales busi- ness in which the receiver, when he last engaged in produc- tion on a limited scale, did not even honor the collective- bargaining agreement with Tru-Air. 25 9 N.L.R B v. Burns Seuritr Ser ice, supra 2 E.g. Radiant Fashions. Inc . 202 NL.RB 938 (1973). 2 Cagle's inc. 218 NLRB 603. 605 119751 2 Which indeed continued for severai more months after the formation iof Respondent until its machinery could be installed and production got un- derway. 23 Or again assuming the correctness of the General Counsel's contention. but counting the working supervisors. 12 present emplosees out of 23 were formerly in the Tru-Air unit. 14 Cagles l nc. supra. Radiant Fahnhion. Irnc rupra (agle'e Inc. supra. Union Texas Petroleum, a Dtiision of Allied (hemical ('orporation, 153 NLRB H49 (1965). affd. 362 F.2d 943. (('.A.D.('.. 1966).: Norton Precision. Inc., A Subsidiari of Nortan FIundries (onapani, 199 NLRB 1003. 1007 11972). Daneker (lock (ompani, Inc., 211 NL.RB 719 (1974). relied on b, the Charging Part), is inapposite. Here, unlike DaneAer. there had been a dis- ruption and significant reduction of the predecessor's business occasioned by an intervening receivership prior to the acquisition b) the claimed suc- cessor. Indeed the decision in Daneker suggests that such a disruption caused by a bankruptcy proceeding might well have dictated a contrary result therein Id at 721. 110 BLAZER CORPORATION It follows therefore that Respondent is not obliged to bargain with the Union as the exclusive collective-bargain- ing representative of its employees 26 and that any increas- es or changes in wages or benefits which it has instituted since it began operations could not have occurred in dero- gation of any duty to bargain.27 I shall, accordingly, recommend the dismissal of the complaint in its entirety. CONCLUSIONS OF LAW i. Respondent is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2t This obligation to bargain could only have existed upon a finding that Respondent succeeded to the bargaining obligations of Blazer Corporation and Tru-Air The Union has not made any demand for recognition upon Respondent based on any showing of union authorization cards from a majonty of Respondent's employees. Norton Precision, Inc., supra at p 1008. 1 am not unmindful that there is a suggestion in the evidence recited that Respondent hired former I ru-Air employees with the observation-perhaps unsettling to some that there was no union in the plant and that Respondent later, in JanuarN and Febru- ary. encouraged the formation of a shop committee. To the extent that such activities may have, respectively. violated Sec 8(aH I) and Sec 8{a)(2i and (I) of the Act, they are not alleged as unlawful in the complaint and would. in any event, be barred by the 6-month statute of limitations of Sec 10bh) 2. The Union is a labor organization within the meaning of Section 2(5) of the Act. 3. The Respondent is not the alter ego of Blazer Corpo- ration and Tru-Air Corporation and their receiver. 4. The Respondent is not the successor employer to Blazer Corporation and Tru-Air Corporation. 5. Changes in the wages and working conditions of its employees from wages and working conditions under the Tru-Air collective-bargaining agreement with the Union were not put into effect by Respondent in violation of Sec- tion 8(aX 5) and (I) of the Act. Upon the foregoing findings of fact and conclusions of law and the entire record, and pursuant to Section 10c) of the Act, I hereby issue the following recommended: ORDER 28 It is hereby ordered that the complaint be, and it hereby is, dismissed in its entirety. "' In the esent no exceptions are filed as provided bh Sec. 102 46 of the Rules ind Regulations of the National labor Relations Board, ihe findings, conclusions, and recommended Order herein shall, as provided in Sec 1()02 48 of the Rules and Regulations. be adopted by the Board and be-come its findings, conclusions. and Order. and all objections thereto shall he deemed awived for all purposes III