B & J Plumbing, Inc.

B & J PLUMBING, INC. B & J Plumbing, Inc., and Hagan Brothers, Inc. and Local Union No. 249, United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, AFL-CIO. Case 17-CA-3668 June 2, 1969 DECISION AND ORDER BY CHAIRMAN MCCULI OCH AND MEMBERS FANNING AND JENKINS On March 14, 1969, Trial Examiner A. Norman Somers issued his Decision in the above-entitled proceeding, finding that the Respondents, had engaged in and were engaging in certain unfair labor practices and recommending that they cease and desist therefrom and take certain affirmative action. as set forth in the attached Trial Examiner's Decision. Thereafter, the General Counsel filed an exception to the Trial Examiner's Decision. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National 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 exception, and the entire record in this case, and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner, except as modified herein. THE REMEDY We agree with the Trial Examiner's Recommended Order insofar as it orders Respondents to recognize the Union as the exclusive bargaining representative of the plumbers, pipefitters, and apprentices employed by them on work performed in Salina, Kansas and vicinity, and to honor the existing collective-bargaining agreement executed by Respondent B & J Plumbing, Inc., and the Union on August 13, 1968, establishing the terms and conditions of employment of such employees for a 2-year term commencing July 1, 1968. However, although it is implicit in his Recommended Order, the Trial Examiner does not expressly state that Respondents should be ordered to give retroactive effect to all terms and conditions of the aforementioned contract, so that the Section 8(a)(5) violation herein found may be completely remedied by assuring that Respondents in no manner profit from their conduct. Accordingly, we shall so modify the Trial Examiner's Recommended Order.' Backpay, if any, shall be computed in accordance with the formula set forth in F. W. Woolworth Company, 90 NLRB 289, and shall bear 293 interest as prescribed in Isis Plumbing & Heating Co., 138 NLRB 716, and all other fringe benefits shall be paid to the appropriate recipients. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby adopts as its Order the Recommended Order of the Trial Examiner, as modified herein, and orders that Respondents, B & J Plumbing, Inc., and Hagan Brothers, Inc., Salina, Kansas, their officers, agents, successors, and assigns, shall take the action set forth in the Trial Examiner's Recommended Order, as so modified: 1. Substitute the following for paragraph 1(b) of the Trial Examiner's Recommended Order: "(b) Refusing to honor and fully apply, retroactively and prospectively, the terms and provisions of the collective-bargaining agreement executed on August 13, 1968, by Respondent B & J Plumbing, Inc. and the Union." 2. Insert the following as subparagraph (b) of paragraph 2 of the Trial Examiner's Recommended Order, and redesignate the succeeding subparagraphs accordingly: "(b) Honor and give retroactive effect, from July 1, 1968, to the terms and provisions of the aforementioned collective-bargaining agreement, including but not limited to the provisions relating to wages and other employment benefits, and, in the manner set forth in this Decision and Order entitled "The Remedy," make whole their employees for losses, if any, they may have suffered by reason of Respondents' failure to honor and fully comply with such agreement." 3. Substitute the following for the second indented paragraph of the notice to the Trial Examiner's Decision: WE WILL honor, fully comply with, and give retroactive effect to all terms and provisions of the collective-bargaining agreement signed by B & J Plumbing, Inc. with the said Union on August 13, 1968, including those provisions relating to wages and other employment benefits to make whole our employees for any losses they have suffered. 'N.L.R.B v. Joseph T Strong, d/b/a Strong Roofing & Insulating Company. 89 S. Ct 541 (1969); Ray Hopman d/b/a Ray Hopman Plumbing and Heating . 174 NLRB No 64. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE A. NORMAN SOMERS, Trial Examiner . This case was heard before me in Salina , Kansas on December 4 and 5, 1968.' The complaint, issued by the General Counsel on October 17 on a charge filed by the Union September 9, The year is 1968 in all instances except where otherwise stated. 176 NLRB No. 43 294 DECISIONS OF NATIONAL LABOR RELATIONS BOARD alleges the violation of Section 8(aX5) and (1) of the Act, by the refusal of B & J Plumbing, Inc., directly and through Hagan Brothers , Inc., its alleged " alter .ego" to bargain collectively with the Union as the exclusive bargaining representative of the employees in the unit involved, or to honor the collective-bargaining agreement executed by B & J Plumbing, Inc., with the Union.' At the time set for the opening of the hearing, Boyd Lee, president of Respondent B & J, speaking for himself and his brother, Charles Lee, president of Respondent Hagan, stated that under arrangements made the preceding day with their counsel, Respondents would handle the hearing themselves, but counsel would represent them in the subsequent steps in the proceeding. Since there had been no communication from counsel to that effect, the undersigned caused a telephone call to be made to Respondents' counsel so that his (or his firm's) role in the case might be clarified. On the telephone, counsel, speaking to the official reporter in this case for transcription in the record, substantially confirmed the arrangements expressed by Iespondents themselves. During the hearing, Boyd Lee, at the counsel table acted as the "representative" or "counsel" for both Respondents. He examined and cross-examined witnesses, raised and argued objections and motions, and when all parties rested, he presented oral argument. Though he stated that when the record would be transcribed, their lawyer would prepare and file the brief, the brief filed before me is in the name only of Boyd Lee, as "Representative of the Respondent." However, Respondents' counsel (and his firm), pursuant to counsel's statement on the telephone , are still retained in the case as attorneys for Respondents. Counsel for the General Counsel too has filed a brief and it has been duly considered along with the brief filed for Respondents. On the entire record (as corrected on an order issued on notice to all parties) and my observation of the demeanor of the witnesses, I hereby make the following: FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENTS B & J Plumbing, Inc. (hereafter B & J), and Hagan Brothers, Inc. (hereafter Hagan), are Kansas corpo -ations located in Salina, Kansas, and are engaged in plumbing and related operations.' Boyd Lee, president of B & J, admitted that B & J during the period involved, received at least $50,000 worth of supplies a year that originate out of the State and that it is engaged in commerce within the meaning of the Act. The commerce jurisdiction over B & J extends to Hagan if the functional relationship of the two calls for their being treated as one employer or for the conclusion that Hagan was an instrument for B & J's evasion of its bargaining obligation under the Act - a matter to be treated on the merits.' The caption in the complaint reads , "B & J Plumbing, Inc., and its alter ego Hagan Brothers, Inc." I have stricken the term "its alter ego" in the caption, since it thereby assumed a matter which calls for decision within the litigation itself. 'This includes heating and air conditioning . Boyd Lee testified B & J is (or until recently was) engaged in a limited sense in heating and air conditioning, but that Hagan is engaged in plumbing only (though it may well at a future time be engaged in heating and air-conditioning as well). The point is that Hagan was established to perform whatever it was that B & J performed in the Salina area. Such work as B & J had performed outside the Salina area (and by that token outside the coverage of B & J's contract with the Union , whose geographic jurisdiction is in the Salina area only ) does not concern us here. 11. THE LABOR ORGANIZATION INVOLVED The Charging Party, Local Union No. 249 of the Plumbers Union AFL-CIO, is a labor organization within the meaning of the Act. III. THE UNFAIR LABOR PRACTICES A. Issue The issue ( as suggested in Part I above) is whether Hagan, a newly-formed corporation, bears with B & J the latter's liability for disregarding its bargaining obligations with the Union, including the contract B & J signed with the Union for the 2-year term commencing July 1, 1968. B. The Facts 1. Synopsis The principals of B & J are Boyd Lee, its president, and M. J. Martin (sometimes referred to as "Jay"). They started the enterprise as copartners, and since incorporation (in 1964), have been 50-50 stockowners of B & J and have operated the B & J enterprise together. (Charles, brother of Boyd, was an employee of B & J since 1963, and ceased being on B & J's payroll upon the later described formation of Hagan.) B & J began contractual relations with the Union in 1965. All negotiations with the Union on behalf of B & J, including the signing of contracts or other agreements, have been conducted by Boyd Lee. In 1965, B & J signed a contract for a 1-year term expiring June 30, 1966. This was coterminous with the 2-year contract customarily signed with the Union by the plumbing contractors in the Salina area that deal with the Union. These plumbing contractors in the Salina area (7 or 8 in number) negotiate the terms of the contract with the Union together, but they sign the contract singly, each in a separate document in which the plumbing contractor there is named "the employer." In 1966, following such negotiations, B & J signed a 2-year contract with the Union expiring June 30, 1968. Negotiations for a succeeding contract to begin July 1, 1968, did not culminate in agreement by June 30, and so on July 1, a strike occurred among the said employer contractors in the Salina area, including B & J. On July 9, the strike was settled by a "letter of consent" signed with the Union by all the above-mentioned employer contractors in the Salina area, including B & J; and On August 13, B & J signed the formal contract for the 2-year term running consecutively from the expiration of the last prior contract; i.e., from July 1. B & J did not comply with the terms of the 1968 contract. At a grievance meeting held September 5, B & J rejected the grievance, claiming that B & J's entire personnel now worked for Hagan. Hagan was incorporated on July 2, the day after the strike began. Its incorporators were Boyd Lee and M. J. Martin, and also Charles Lee, younger brother of Boyd, and until June 28 an employee of B & J. Charles Lee was named president of Hagan. On June 28, before the actual incorporation of Hagan and when the then current contract had a few days to run, Boyd Lee, for B & J, and Charles Lee, for Hagan, signed a paper, prepared by Boyd Lee, under which B & J turned over to Hagan the "house plumbing contracts" and 'N.L R.B. v. Jordan Bus Company. 380 F 2d 219 (C.A. 10), and cases cited B & J PLUMBING, INC. 295 its accounts receivable on work already performed by B & J, as well as all tools and equipment. None of this was mentioned to the Union. On July 2, the day Hagan was incorporated, Charles Lee saw William Bachofer, business manager of the Union, at his office. Charles said he wanted to give up his union card, and told Bachofer he was setting up his own plumbing shop, and though he was finishing some house plumbing contracts of his brother's, he assured Bachofer that his was an independent shop (located in a storehouse in a separate building from B & J) and totally unconnected with his brother's shop. Boyd Lee, when he signed the "letter of intent" on July 9 settling the strike, similarly said that his brother's shop and B & J had no connection with each other. On August 13, when Boyd signed the formal contract for B & J for the term beginning July 1, he told Bachofer he was not sure how long B & J would stay in business, and that that was due to financial troubles. (Boyd, on that score, mentioned that he had recently been turned down by the bonding company on a bid for a contract for work in a city outside the Salina area - work that is not in the Union's geographic jurisdiction or within the coverage of the contract with the Union, since this contract covers plumbing and allied work in "Salina and vicinity.") The Onion, when it filed its grievances on September 5, pointed out that it had interveningly received information showing the interconnection of the two shops. Boyd insisted that Hagan was independent of B & J, even though the entire personnel of B & J in Salina was now on Hagan's payroll, including Boyd Lee and M. J. Martin themselves. The Union, on September 9, filed charges of violation of 8(a)(5) and ( 1), naming B & J and also Hagan. B & J responded by a letter sent by Boyd Lee on September It, cancelling the contract in its entirety. The ground stated was that the employees of B & J who struck on July 1 did not return to the job after the settlement of July 9. B & J had not theretofore made such a complaint, and if it had had any on that score, the established procedure was to invoke the hiring 'hall provision of the contract by requesting of the Union the help the employer needs. Boyd Lee admitted he never made such a request of the Union, nor could he have wanted to, since to do so would be the reverse of what Boyd testified he wanted to accomplish by the establishment of Hagan, - to get B & J out from under the coverage of the contract with the Union altogether. At all events, it is not seriously disputed that B & J disregarded its bargaining and its contract obligations, in violation of Section 8(a)(5) and (1) of the Act. What Respondents seek to avoid is Hagan 's being held liable, along with B & J, for B & J's violations of Sections 8(a)(5) and (1) of the Act and, particularly, being held responsible along with B & J for remedying the violations. 2. Background: The prior attempt in 1967, through a company called Blue Jay, to get B & J out of the coverage of the then contract The evidence abounds in admissions by Boyd Lee and brother Charles Lee that a purpose, if indeed not the sole purpose, in establishing Hagan was to remove B & J from the coverage of B & J's contract with the Union. This was not the first such effort by B & J. In 1967, during the life of B & J's 1966 contract with the Union, B & J turned over its Salina plumbing operations to Blue Jay Company, a newly formed partnership composed of B & J's principals, Boyd Lee and M. J. (Jay) Martin. B & J changed the names on its trucks from B & J to Blue Jay, and when the Union Qled a grievance based on B & J's failure to comply with various requirements of the contract (i.e. the hourly rate, the requirement that those used in the plumbing work be journeymen plumbers or apprentices, and the use of the hiring hall provision), Boyd Lee claimed in 1967 in respect to Blue Jay as he was to do in 1968 in respect to Hagan, that this was a separate company and not involved in the collective- bargaining agreement. However, in 1967, unlike what was to happen in 1968, B & J accepted the grievance. It signed a paper acknowledging that it had violated the wage requirements and the exclusive hiring hmlll provision . It agreed that it would "strictly adhere to the terms of the contract," and specifically implemented the wage and exclusive hiring hall provisions of the contract.' B & J further vouched that "only regular fulltime qualified journeymen plumbers and registered apprentices will be permitted to do work within the jurisdiction of the [Union]" and further agreed that "so long as the parties are obligated by this contract or any other contract between the parties, the Employer will conduct all plumbing business through [B & J]." 3. Identity of purpose of Hagan with that of Blue Jay and the claim that the means used made the difference in result a. The contract and its geographic coverage: The Salina area It has been mentioned that the Union's geographic jurisdiction is the Salina area. The contract, the one signed 1966, like the one signed 1968, states in the preamble that "the Employer is engaged in Plumbing [and related work] throughout Salina and vicinity" and "the Parties hereto desire to establish uniform working conditions for Journeymen and Apprentices." The point here is whatever plumbing and allied work B & J does in the Salina area is covered by the contract with the Union. Boyd Lee testified that B & J had until recently (when it went a cropper on its ventures outside Salina) engaged in commercial plumbing (i.e., bidding for bonded contracts on commercial buildings) in cities outside the Salina area - which, as stated, involved work and personnel outside the concern of any contract with this union. b. Transfer of B & is Salina area plumbing as signifying its intention to get out of the contract altogether So if B & J wanted to use some set-up, whether it be Blue Jay in 1967 or Hagan in 1968, in order to get out of the coverage of its contract with the Union, it meant turning over to such newly formed company its plumbing and allied work in Salina and vicinity, whatever the specific character of such plumbing. In the instances of both Blue Jay and Hagan, Boyd Lee stressed that each 'Under the contract of 1966 (as in the one of 1968 ), the employer informs the Union of the help it needs, and the Union refers the needed worker to the employer on the basis of the applicant 's order in the hiring hall list. The list is based on the worker's fulfilling journeymen's and apprentices' qualifications. without relation to union membership. The employer retains the right to reject the applicant referred . In the paper signed to rectify B & J's aberrations via the Blue Jay route , B & J agreed that in rejecting an applicant B & J would do so on reasonable grounds stated in writing. 296 DECISIONS OF NATIONAL LABOR RELATIONS BOARD was used to do "house" or "residential" plumbing, and that it, B & J, wanted to get out of "house" plumbing. At the same time, Boyd made the point that he also wanted B & J to get out of the coverage of the contract altogether , from which either of two things would follow: either that the only plumbing B & J had in the Salina area happened to be house plumbing or that the term, "house plumbing" semantically covered whatever plumbing and allied work B & J had in Salina and vicinity or had held itself out to perform in the Salina area. The breadth of Boyd Lee's, i.e., B & J's purpose, in forming Hagan in 1968 , and Blue Jay in 1967 came from Boyd himself. He testified: TRIAL EXAMINER: To the extent that there were employees who would not be covered by the contract, you retained, B & J retained that work. THE WITNESS: Yes, Sir. TRIAL EXAMINER : The only work that was, that B & J did not retain but assigned to Hagan was work involving employees that are covered by the agreement, is that correct? THE WITNESS' Yes, sir, which at the time this assignment was made, there was no contract. This last referred to the interval between July 1, when the strike begin, and July 9, when it was settled. As Boyd Lee admitted, the terms of the contract to succeed the one of 1966 were in active negotiation during the strike and the new contract by its terms runs from the time that the 1966 contract expired.' The 1968 contract is in all other respects a replica of the 1966 contract except in respect to the hourly wage rate. The "letter of intent" of July 9, settling the strike shows that under the new contract there was to be an increase in the hourly rates over those in the 1966 contract. This, apparently, was what the strike had been about, and the agreed increase in hourly rate is embodied in the appropriate clause of the formal contract of 1968. Boyd Lee acknowledged that negotiations for the 1968 contract continued after the 1966 contract expired. He testified: Q. And the reason for this was to avoid the obligations under the union contract that B & J had signed, isn't that correct? A. At that time, there was no contract. * * * * TRIAL EXAMINER: And to avoid the obligation that was then the subject of negotiation for another contract? THE WITNESS: Right, it was under negotiation at the time B & J Plumbing Company had had it, they wanted to do no house plumbing at all. The inquiry then turned to whether Blue Jay and Hagan had the same purpose. Boyd Lee testified' Q. In other words, Blue Jay was set up for the same reason Hagan Brothers were set up? A. No, sir. Blue Jay was set up at that time to be operated in conjunction with B & J Plumbing Company The preamble of the 1968 contract has an additional paragraph, which recalls the caveat in the paper signed in 1967 in the wake of the Blue Jay venture. The third and new paragraph of the preamble of the 1968 contract provides: This agreement covers all work done by the Employers (sic], his successors, assigns, subcontractors on the job-site, and all work done under his direction and/or control directly or indirectly, and all work performed in whole or in part with his equipment or employees as a nonunion branch of that company. Q. And nonunion was the main reason it was set up? A. That was the only reason Blue Jay was set up. Q. To avoid having to live up to obligations under the union contract? * A. Yes, sir. Boyd's "No, sir" was belied by his specific admission of the purpose of forming Hagan: TRIAL EXAMINER: Then the purpose for forming Hagan Brothers was to take over the work of B & J that was sought to be taken out of the contract with the union. WITNESS' Yes, Sir. Boyd Lee was manifestly expressing a difference not in purpose but in the means used: that Blue Jay was set up as a "nonunion branch" of B & J, while Hagan was an independent entity and not a "branch" of B & J. 4. The functional relationship of Hagan to B & J In view of the admitted purpose of Hagan as the means of B & J's getting out of its contract with the Union, the details of the interconnection between B & J and Hagan, while perhaps not essential, are mentioned only because of the plethora of the evidence showing Hagan, was the "disguised continuance,"' of B & J. Boyd Lee, as his testimony indicates, thought B & J had accomplished through Hagan what B & J had not achieved through Blue Jay because it thought Hagan, unlike Blue Jay, was not a "branch" of B & J, and that this derived from the fact that Hagan was a corporate entity, had a president other than Boyd and Martin, and that Charles owned 98 of Hagan's 100 shares of stock (while he and Martin owned 1 share apiece). In all other respects, however, Hagan was the replica of B & J. It was not only set up to do the work of B & J, but it did so, and in connection with it, took over B & J's entire Salina personnel (which included those engaged in B & J's plumbing work in Salina as well as the principals of B & J and also the secretary or bookkeeper of B & J). It took over B & J's contracts, the amounts owing on work already done and B & J's tools and equipment in that work. Further, as appears, the performance of the work is controlled by Boyd and Martin, the principals of B & J, and the bidding or estimating on new contracts is done by them and not Charles. The paper signed on June 28 by Boyd and Charles respectively for B & J and Hagan provided: Due to the problems involved in continuing the residential plumbing trade B & J Plumbing and Hagan Bros. enter into the following agreement, Hagan Bros. is to receive from B & J Plumbing all of their current contracts, receivables, tools and what inventory is at present in stock pertaining to the housing business. In return for the foregoing items Hagan Bros. agrees to assume the current liabilities for housing accounts at Salina Supply Company for the months of May and June and to finish all houses started by B & J Plumbing and to maintain all houses previously finish [sic] for a period not to exceed one year. Boyd Lee and W.J. Martin are to receive one share of stock in Hagan Bros. to insure that the maintainence 'Southport Petroleum Company v N.L.R B ., 315 U.S. 100, 106. B & J PLUMBING, INC. 297 (sic) terms and the aforementioned liabilities are properly paid. This agreement entered into on the 28th day of June, 1968, shall become binding on all parties at 12 PM, June 30, 1968. Hagan Bros. by /s/ Charles Lee by /s/ Boyd Lee B & J Plumbing, Inc. by /s/ Boyd Lee by /s/ Boyd Lee The accounts due on the tools and equipment came out of the amounts due on the work, so that the receipts in excess of the accounts due went to Hagan. The question is, what was B & J getting for what it was giving Hagan? Charles testified the quid pro quo was Hagan's warranting the performance on the work. But the warranted performance was achievable only through the principals of B & J. A prerequisite for opening and conducting a plumbing shop in Salina is that it have a licensed master plumber. The master plumber passes on the product for which the customer is to be billed. Charles, although he is a journeyman plumber, is not a master plumber. (He had well before there was a Hagan applied to be one without success, and so far as appears, he never tried again.) The licensed master plumber of Hagan is the licensed master plumber also of B & J - Boyd Lee. It was not disputed that there had been no prior instance in Salina where the licensed master plumber of a plumbing shop is other than an owner, and in any event where the licensed master plumber is other than attached exclusively to only one shop. So the very thing that B & J was supposed to be getting in exchange for what it was giving up was the very thing that B & J too was providing, the licensed master plumber's imprimatur on the work done. Then, there was the matter of how Hagan submits bids for future work, i.e. for new contracts. Charles testified he was hazy on the quantity and the amount of Hagan's new contracts, but the one who had the information was his "estimator." Hagan's estimator, Charles testified , was his brother Boyd. He later qualified this by indicating that M. J. Martin too did some estimating. Boyd testified that he and Martin were the estimators for Hagan as they had been for B & J. (Boyd suggested that Charles does some "light" estimating , despite Charles' own admission that he does none, but that suggestion of Boyd petered out on its own in any event.) So the very capacities of Hagan to bid on new contracts, i.e., to evaluate a bid on the work to be charged in the light of the expenses of the business, both current and prospective, hinge on the very persons who performed the crucial work for B & J - Boyd Lee and M. J. Martin. Then what accounted for Charles' receiving nearly all of the capital stock of Hagan? Charles prefaced his explanation with a belittlement of the significance of the capital stock - that it did not mean much, since Hagan has no dividends and the three of them, Charles, Boyd and Martin, receive $200 a week from Hagan which indicates that that is their yield above the expenses. At any rate, as to how Charles came to be the owner of the capital stock, the evidence was as follows: Boyd testified that to form a corporation the State requires a capital investment of $1,000. Charles and Boyd testified that Charles met that requirement by depositing $ 1,000 in the bank in the name of Hagan, and that he, Charles, deposited that $1,000 in the bank in cash. Charles had a personal checking account in the bank of $250. He still does. None of this $250 was touched when Charles deposited the $1,000 as the requisite capital investment of Hagan . Charles testified that the $1,000 came from a cookie jar at his home, where he had accumulated F#me $1,300 over several years. Asked why he had not put it in savings, where it would draw interest, Charles replied, "Some people have a thing about things like that, it is the way I felt about it. I can save easier that way." As to the remainder of the cookie jar's contents, Charles testified he bought a "camper" with it. Asked how the attorneys who drafted the incorporation papers were paid, that too came in part from the cookie jar and in part from the $1,000 capital investment deposited in the Hagan name. At any rate, the cookie jar since then has been an empty one. Every reasonable inference is that even the $1,000 used in Hagan's capital investment had the same source as all else that was used in setting up Hagan's - the resources of B & J. The explanation as to why Hagan was chosen to do B & J's work was, in essence, as Boyd and Charles testified, that the contract, under its "working rules," forbade the "employer" (i.e., Boyd and Martin) from performing employees' duties, except "emergency work," whereas without a union contract all of them could perform regular employees' duties. And so as Charles testified: Q. All three of you got together and formed the corporation called Hagan Brothers, Inc., so all three of you could make some money, is that right? A. Yes sir. Q. And that they would go back in the house business with you under the name of Hagan Brothers, is that what you are trying to tell me? A. Yes, sir, that is what it really amounts to. Boyd Lee testified: TRIAL EXAMINER: To what extent does Charles Lee, does his work differ from the work he did with B & J, aside from the fact he is named as president and so on, really his actual work, does it consist of the same work that he did with B & J? THE WITNESS: His work is quite similar. He had worked for B & J in a supervisory capacity on jobs. TRIAL EXAMINER : His day-to-day form of operating his business is just about the same now as it was under B&J? THE WITNESS: Yes, sir except now he has got the total responsibility. TRIAL EXAMINER: Let us say he worries more but he does the same work. THE WITNESS: Approximately yes, sir. The extent of Charles' comprehension of the responsibilities of Hagan, as distinguished from Boyd's, already appears. On other matters Charles was corrected by Boyd as to the following. He testified Hagan's officers included himself as president and Boyd as vice-president. Boyd testified the vice-president was Martin and he was not an officer. Even the $200 a week that Charles testified that he, his brother, and Martin received from Hagan did not accord with Boyd's version . Boyd, speaking for himself, testified it was $150 a week and $50 for expenses, "for tax purposes." The brothers gave other testimony to suggest that Charles, in addition to the above-described motive, had another motive of his own in establishing Hagan - 298 DECISIONS OF NATIONAL LABOR RELATIONS BOARD namely to be in business for himself. This need hardly detain us. Charles testified that in March 1968, he took the first step toward having his own business by purchasing motor vehicles from B & J in contemplation of some day being an excavator. He never in fact embarked on that venture and continued on B & J's payroll until the signing of the B & J-Hagan paper of June 28. The purported transaction in March is expressed in a paper in which the installments on the payments owed by Charles Lee to B & J are substantially met by the rental that B & J agreed to pay on one of these vehicles (a tractor) that Charles rented back to B & J. So far as appears, Charles did not apply for certification of title for the vehicles until July, which is after Hagan was formed. So the fair inference is that this purported transaction of March was retrospectively conceived in July to give verisimilitude to the claim that Charles had for some time past wanted to go into the business for himself, albeit as an excavating company, and that that aspiration was realized by the formation of Hagan, albeit as a plumbing company. To similar effect is the testimony of Charles that he bought new trucks well before Hagan was formed, one in April and the other in June. He testified that for the truck he bought in April he made a down payment of $1,000. He testified that that $1,000 came not from the cookie jar but from $1,000 B & J gave him as a bonus on a job he had supervised. He did not think it extraordinary to receive this handsome emolument from B & J, despite B & J's own financial troubles to which he testified, or to investing in an operation which had not yet been formed, whether the ultimate venture be excavating or plumbing. There was also the matter of how on June 28, when Hagan was conceived and the Hagan-B & J paper signed, B & J could have become the warrantor of the performance of B & J's contracts, when the customers of B & J had not yet agreed to the assignment of B & J's contracts to Hagan. Charles explained that about 2 weeks earlier, he approached these customers on his own because he had heard B & J was in difficulty and they okayed his new company's being the warrantor for performance of B & J's contracts - though the customers signed no papers, no new company existed, and none was conceived until June 28, when he, his brother and Jay Martin thought of it together.' C. Conclusions Since, as admitted, a purpose in forming Hagan was to take B & J from out of the coverage of its contract with the Union (both the one expiring on June 30 and the one under negotiation for the term to commence the day after June 30), and Hagan was itself a participant in that purpose, it would follow that they are both jointly liable for B & J's violations of its obligation to bargain collectively with the Union and of its obligation to abide by the contract terms. This conclusion is reinforced by the combination of facts indicating that Hagan was a facade for B & J itself. Hagan acquired the entire personnel of B & J in Salina, its contracts on uncompleted work, the accounts receivable on work performed, and the tools and equipment for the work. The performance of the work and the bids on contract for future work are controlled by the 'Charles added a piquant touch in explaining what inspired the names used. The Blue Jay of 1967 stood for Boyd Lee and Jay Martin. The Hagan of 1968 stood for a known and admired character in a TV western. The brothers Lee, as did Jay Martin, were intrigued by the Hagan designation and used it to symbolize the Lee brothers. principals of B & J. B & J's functional role in Hagan's operations would supersede whatever power inhered in Charles Lee's title as president of Hagan or his status as owner of its capital stock, assuming even the genuiness of his role. That these items had no genuine reality is manifest from the fact that Boyd Lee, president of B & J, called every shot in the formation and establishment of Hagan from its inception. Even the $1,000 capital investment which was supposed to be the basis on which Charles Lee owned the stock of Hagan is not rationally accounted for by the cookie jar as distinguished from the inference to be drawn from the fact that B & J was the source of Charles' bounty as it was the source of Hagan's bounty. This is in fact to say that Hagan is the alter ego of B & J." But one need not go that far in concluding that Hagan shares the liability of B & J for violating the bargaining, as well as the contract, obligation with the Union. Boyd Lee's characterization of the 1967-formed Blue Jay Company as a "branch" of B & J is also applicable to the 1968-formed Hagan." Yet even if one were to conclude that Hagan was a separate company, then at the very least Hagan, as the inheritor of B & J's total personnel and the performer, present and future, of all of the work embraced by B & J's contract with the Union is B & J's successor," and since it was a conscious instrument used in B & J's violation of its bargaining obligation and of the contract, Hagan was a co-participant with B & J in the violations. Additionally, Hagan, through Charles Lee, and B & J through Boyd Lee, misrepresented to union business manager Wachofer the nature of the relationship between the old and the new corporations, thereby violating the obligation of the employer to notify the bargaining agent concerning changes in the mode of operation of the business affecting the employees. It is found that B & J violated Section 8(a)(5) and (1), and that Respondent Hagan is a co-participant with B & J in said violations. IV. THE REMEDY It will be recommended that Respondents cease and desist from the violations found and take the requisite action to remedy them. What is called for under the facts here existing is that B & J and Hagan cease and desist from dishonoring the contract and its provisions, and affirmatively bargain with the Union as the representative of the employees engaged in the work covered by the contract and to honor and comply with its terms.' 2 This remedial action is especially called for here, since B & J for such plumbing operations as are performed in Salina is now performed in the name of Hagan. Boyd Lee testified that B & J's other operations, i.e., those outside Salina, have ceased (assertedly because of inability to obtain performance bonds on bids). However, B & J's existence as a corporate entity has been retained, and, according to Boyd Lee will continue. It is thus appropriate to name B & J and Hagan in the order, as jointly 'Jenks d/b/a Glendora Plumbing, 172 NLRB No 197; Charles T. Reynolds, Sr, d/b/a Charles T Reynolds Box Company. 139 NLRB 519 "N L R.B v. Jordan Bus Company, supra, fn. 4 "Randolph Rubber Company, Inc., 152 NLRB 496, 499, Maintenance, Incorporated, 148 NLRB 1299, 1301. "Cf. N.L.R.B. v. Strong. 393 U.S. 357, enfg. 152 NLRB 9; Jenks d/b/a Glendora Plumbing . supra, fn. 9 See also Hackney Iron & Steel Co, 167 NLRB No. 84, as remanded in International Chemical Workers Union v. N.L R.B. 395 F 2d 639 (C.A.D.C ). B & J PLUMBING, INC. 299 responsible for its provisions." On the findings above and on the entire record, I state the following: CONCLUSIONS OF LAW 1. Respondents, B & J Plumbing , Inc., and Hagan Brothers, Inc., are a single employer engaged in plumbing in Salina and vicinity , Hagan being either the alter ego of B & J or a branch of B & J's enterprise. 2. The employees used by said Respondents in connection with said plumbing and allied work in Salina or vicinity are an appropriate unit for the purpose of collective bargaining. 3. The Union is the exclusive collective bargaining representative of said employees within the meaning of the Act. 4. Respondents have failed and refused to bargain collectively with the Union as the said bargaining agent and have failed and refused to abide by the contract signed by B & J Plumbing, Inc., and have repudiated said contract, thereby engaging in unfair labor practices within the meaning of 8(a)(5) and (1) of the Act, affecting commerce within the meaning of Section 2(6) and (7) of the Act. On the findings and conclusions above and on the entire record , the undersigned hereby recommends that the Board issue the following "Appendix."' ° Copies of said notice on a form provided by the Regional Director of Region 17, after being duly signed by Respondents' representatives shall be posted by them immediately upon receipt thereof and be maintained by them for 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken to insure that said notices are not altered, defaced or covered by any other material. (c) Notify said Regional Director, in writing, within 20 days from the date of receipt of this Decision, what steps Respondents have taken to comply therewith." "In the event that this Recommended Order is adopted by the Board, the words "a Decision and Order" shall be substituted for the words, "the Recommended Order of a Trial Examiner" in the notice. In the further event that the Board 's Order is enforced by a decree of a United States Court of Appeals, the words "a Decree of the United States Court of Appeals Enforcing an Order " shall be substituted for the words "a Decision and Order." "In the event that this Recommended Order is adopted by the Board, this provision shall be modified to read "Notify said Regional Director, in writing, within 10 days from the date of this Order, what steps Respondents have taken to comply herewith." APPENDIX NOTICE TO ALL EMPLOYEES ORDER B & J Plumbing, Inc. and Hagan Brothers , Inc., their officers, agents, successors, and assigns , shall: 1. Cease and desist from: (a) Refusing on request, to bargain collectively with, and in good faith, with the Union as the exclusive bargaining representative of the unit of employees employed by Respondents, or either of them, in connection with plumbing and allied work in Salina and vicinity, or to notify the Union, as such representative, of any changes in the mode or structure of operations affecting the employees in said unit. (b) Refusing to abide by the terms and provisions of the collective-bargaining agreement executed between Respondent B & J Plumbing , Inc. and the Union. (c) In any like or related manner interfering with, restraining, or coercing its employees in the exercise of rights guaranteed to them by Section 7 of the Act. 2. Take the following affirmative action which it is hereby found will effectuate the policies of the Act: (a) Upon request, recognize and bargain with the Union as exclusive representative of all the employees in said unit with respect to rates of pay, wages, hours of work, and other conditions of employment and sign such agreement as may be reached - consistently , however with the additional requirement that Respondents honor and comply with the said contract executed between B & J Plumbing, Inc. and the Union. (b) Post in the place of business of Respondents in Salina, Kansas, copies of the notice attached hereto as "An added element in Hagan's own obligation is the provision under the third paragraph of the preamble of the 1968 contract (supra, In. 6), which embraces all work done by the employer, "his successor and assigns and all work under his direction and/or control," or performance in whole or in part with the employer's "equipment or employees." Boyd Lee complains that compliance with the contract would be financially difficult. That, however, does not abrogate a contract obligation or its terms. Pursuant to the Recommended Order of a Trial Examiner of the National Labor Relations Board and in order to effectuate the policies of the National Labor Relations Act, as amended, we hereby notify our employees that: WE WILL NOT refuse to bargain and, on request, will bargain collectively in good faith with Local Union no. 249, United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, AFL-CIO, as the exclusive representative of the unit of employees employed by B & J Plumbing, Inc., and/or Hagan Brothers, Inc., in plumbing and related operations in Salina and vicinity, in respect to hours, wages, conditions of work, grievance or disputes, and sign such agreement as may be reached, and further; WE WILL honor and comply with the terms of the contract signed by B & J Plumbing, Inc., with the said Union on August 13, 1968, for the 2-year term beginning July 1, 1968, and ending June 30, 1970; WE WILL NOT in any other like or related manner interfere with, restrain, or coerce employees in the exercise of the rights guaranteed by the National Labor Relations Act. B & J PLUMBING, INC. (Employer) Dated By (Title) (Representative) Dated HAGAN BROTHERS, INC. (Employer) By (Title) (Representative) This notice must remain posted for 60 consecutive days from the date of posting, and must not be altered, defaced, or covered by any other material. 300 DECISIONS OF NATIONAL LABOR RELATIONS BOARD If employees have any question concerning this notice East Twelfth Street, Kansas City, Missouri 64106, or compliance with its provisions they may communicate Telephone 816-374-5282. directly with the Board 's Office, 610 Federal Building, 601