P. A. Hayes, Inc.

230 DECISIONS OF NATIONAL LABOR RELATIONS BOARD P.A. Hayes, Inc. and- P.H. Mechanical Corp. and Pipefitters Local 537, a/w United- Association= of Journeymen and Apprentices of the Plumbing and Pipefitting and Refrigeration -Industry of A6 -United States and Canada, AFL-CIO. Case 1-CA--10741' October 4, 1976 DECISION AND ORDER BY CHAIRMAN MURPHY AND MEMBERS FANNING AND PENELLO On June 8, 1976, Administrative Law Judge Stan- ley N. Ohlbaum issued the attached Decision in this proceeding. Thereafter, Respondents filed exceptions and a supporting brief; and General Counsel filed an answering brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has-delegated its,au- thority in this proceeding to a three-member panel. The Board has considered the record and the at- tached Decision in light of the exceptions and briefs and has decided to affirm the rulings, 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 Respondents, P.H. Mechanical Corp. and P.A. Hayes, Inc., Boston, Massachusetts, their officers, agents, successors, and assigns, shall take the action set forth in the said- recommended Order, except that the attached notice is substituted for that of the Administrative Law Judge. 1 We agree with the Administrative Law Judge that P.H Mechanical Corp is the alter ego of P A Hayes, Inc, and is therefore bound by the collective-bargaining agreement entered into with the Union by Hayes, Inc., and its recogmtional, bargaining, and other obligations APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government After a hearing at which all sides had the opportunity to present evidence and arguments , the National La- bor Relations Board has found that we have violated the National Labor Relations Act, and has ordered us to post this notice and do what it says. The National Labor Relations Act gives all em- ployees these rights: To engage in self-organization To form, join, or help. unions, To bargain, collectively through- representa-tives of their own choosing To act together for collective bargaining or other mutual.aid or protection To refrain from any or all these things. WE WILL NOT refuse to recognize and bargain in good faith with Pipefitters Local 537, a/w United Association of Journeymen. and Appren- tices of the Plumbing and Pipefitting and' Re- frigeration Industry of the -United States and Canada, AFL-CIO, as the duly designated ex- clusive bargaining 'representative of the-follow- ing appropriate collective-bargaining unit: All journeymen, apprentices, and metal tradesmen employed by P.A. Hayes, Inc., or by P.H. Mechanical Corp. (including all em- ployees of P.H. Mechanical Corp. performing work of the foregoing categories of employees as set forth and defined by collective, agree- ment between P.A. Hayes, Inc., and Pipefit- ters Local 537, andregardless of the job titles of said employees of P.H. Mechanical Corp.) at or from our premises on West First Street, Boston, Massachusetts, but, excluding all other employees, office clerical employees, guards and supervisors as defined in Section 2(11) of the Act. WE WILL NOT refuse to, observe, adhere to, and apply the provisions, terms, and conditions of the subsisting collective-bargaining agreement with said Union effective September 1, 1974, through August 31, 1977, except to the extent said agreement may be duly modified by valid agreement with said Union. WE WILL NOT unilaterally and -without bar- gaining in good faith with said Union, withdraw from, annul, nullify, abrogate, or change said collective-bargaining agreement or any provi- sion, term, or condition thereof, or attempt so to do, in violation of the Act. _ WE WILL NOT, through formation or utilization of a juridical entity, or through shifting unit work to such other entity, or otherwise, in viola- tion of the Act, unilaterally evade or attempt to evade or escape from the obligations of said col- lective-bargaining agreement while it is in force and effect. 226 NLRB No. 39 P.A. HAYES, INC. WE WILL NOT in any like or related manner interfere with, restrain, or coerce employees in the exercise of their rights as stated above. WE WILL, upon request, bargain in good faith with said Union as such exclusive collective-bar- gaining representative, retroactively as of the date we ceased, failed, or refused to recognize or continue to recognize said Union; and, if re- quested, embody in a signed agreement or agreements any understanding reached. WE WILL apply the promises, terms, and con- ditions of said collective-bargaining agreement retroactively to the time of its inception (except to the extent it may be duly modified by valid written agreement with the Union). WE WILL make whole each of the pastor pres- ent members of the aforesaid bargaining, unit to the extent of any wages or other moneys, pen- sion or frmge or other, benefits due, whether payable to employees or- into the Union's pen- sion or other fund, together with 6-percent inter- est. P.A. HAYES, INC. P.H. MECHANICAL CORP. DECISION PRELIMINARY STATEMENT; ISSUES STANLEY N. OHLBAUM, Administrative Law Judge: This proceeding I under the National Labor Relations Act, as amended, 29 U.S.C. § 151, et seq. (Act), was heard before me in Boston, Massachusetts,: on January 6-7 and Febru- ary 4, 1976, with all parties participating throughout by counsel or other representative and afforded full opportu- nity to present evidence and contentions, and also-to file briefs which, after extension of time upon request of coun- sel, were received by March 18, 1976. Record and briefs have been carefully, considered. The principal issues presented are whether Respondents are in violation of Section 8(a)(5) and (1) of the Act through failing and refusing to bargain with the Charging Party Union as exclusive bargaining representative of an appropriate collective-bargaining unit of employees and as required under a subsisting collective-bargaining agree- ment; and through failing and refusing to apply the provi- sions of that agreement, executed by Respondent P.A. Hayes, Inc., and attempting to escape therefrom and uni- laterally establishing and maintaining different terms and conditions of employment through the device of forming and shifting operations to Respondent P.H. Mechanical Corp. Upon the entire record and my observation of the testi- monial demeanor of the witnesses, I make the following: 1 The proceeding is based on a complaint issued by the Board's Regional Director for Region I on September 25, as amended at the hearing, growing out of a charge ,filed by the above Charging Party (Union) on May 29, as amended on September 17, 1975. FINDINGS AND CONCLUSIONS I. JURISDICTION 231 At all material times Respondents P.A. Hayes, Inc. (Hayes Inc.) and P.H. Mechanical Corp. (Hayes Mechani- cal Corp.) have been and are Massachusetts corporations, with principal offices and sole places of business re- spectively at premises designated as 405 West First Street (Hayes Inc.) and 403 West First Street (Hayes Mechanical Corp.), Boston, Massachusetts, where and whence Respon- dents engaged in the installation, renovation, and servicing of heating, air-conditioning, refrigeration, and ventilation systems. During the representative year immediately pre- ceding issuance of the complaint, in the course and con- duct of their said business operations, each Respondent performed services valued in excess of $50,000 for users located in Massachusetts, including a user or users meeting a monetary inflow or jurisdictional standard of the Board. I find that at all material times Respondents respectively have been and' are an employer or employers engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. I further find that at all of those times Pipefit- ters Local 537, the Charging Party Union herein, has been and is a labor organization within the meaning of Section 2(5) of the Act. II. ALLEGED UNFAIR'LABOR PRACTICES A. Facts as Found 2 Paul A. Hayes (Hayes herein) has headed up and operat- ed a Boston-based heating/air-conditioning/refngerating/ ventilating system installation and servicing business for many years, under one name or another. From 1968 to March 1, 1973, this enterprise was known as, United Air- conditioning Corporation; on the latter date that name was changed to P.A. Hayes, Inc. (Hayes Inc. herein). Since 1970 the enterprise had been operating from a commercial building known as 405 West First Street (Boston), its sole premises. From September 1, 1973, to August 31, 1974, Respondent Hayes, Inc., was a party to a collective agree- ment with the Charging Party (Union) here; effective Sep- tember 1, 1974, Respondent Hayes, Inc., bound itself to a further collective agreement with the Union until August 31, 1977. These agreements cover service maintenance work as well as installation work, and include union-secun- ty provisions mandating maintenance of union member- ship by unit employees. In August 1974, at a trade association outing in Canton, Massachusetts, a discussion took place between Hayes and Union Business Manager Robert W. Baynes, in which Hayes informed Baynes that it was "easy . . . to beat the union agreement. All you have to do is form another com- pany. Don't have the [same] two people showing on the papers of the other company, and operate just the way you want. This led to a little bit of a heated discussion... . and we got to yelling a little bit over what was right and 2 Respondents called no witness. (Paul A Hayes was called as an adverse witness by General Counsel, and information was elicited from him, as well as from other General Counsel witnesses, by Respondents on cross-exami- nation ) 232 DECISIONS OF NATIONAL LABOR RELATIONS BOARD what was wrong. And I told Mr. Hayes to be a dual shop contractor it was a lot more than just forming two compa- nies with different names running with the same people, the same tools and out of the same shop. And Mr. Hayes appeared to have better legal counsel than me, or he thought he did. And when he got a little heated one of"my business agents stepped in and grabbed me and took me for a walk down the other end of the room... . Following this lively exchange of views, in December 1974 Hayes and his attorney Peter D. Gens_ asked Hayes, Inc., employee, William K. Pittman, whether he (Pittman) was interested in "go[ing]-into business" with a''"23,per- cent" share for himself, in a company to be known as "P. H. Mechanical Corporation" (Hayes Mechanical Corp. herein) since "they wanted to become a minority contrac- tor." Pittman, who is black, readily agreed, and was'subse- quently informed he had been made president of the "new company" and, without investment, the owner of 23 per- cent of its' stock, while nevertheless continuing to work as before as an employee of Hayes, Inc. Pittman was and remains unaware of any investment by anybody in Hayes Mechanical Corp. Pittman, a thoroughly credible witness, further testified that, notwithstanding the foregoing, he just continued working in`his regular capacity as an employee of Hayes, Inc., until May 1975, at which time he quit that employment and voluntarily relinquished his presidency of and surrendered his shares of Hayes Mechanical Corp. without payment. Pittman insists that at no time was he ever told he was no longer working for Hayes, Inc., al- though he had noticed that commencing in March 1975 he was paid by check of Hayes Mechanical Corp. instead of Hayes, Inc.; Pittman also insists that in no way did the nature of his work change until he quit in May 1975, and, indeed, that at the time he quit he was working on a job for one of the same customers whom he had serviced about a year earlier. At no time did Pittman receive any income 3 from or notice of meeting of Hayes Mechanical Corp.; when he received papers to sign relinquishing his "presi- dency" of and surrendering his "shares" in Hayes Mechan- ical Corp., it was from Eileen Coughlin, a longtime secre- tarial employee of Hayes, Inc. What triggered Pittman's resignation, withdrawal, and quitting was that he learned from Union Business Manager Baynes that ` Hayes had dropped him from the union pension `plan. Pittman-as I have indicated, a thoroughly credible witness-was insis- tent in his testimony that the nature of the business done by Hayes Mechanical Corp. was no different from' that done by Hayes, Inc.' The record further establishes that prior to the described August 1974 statement by Hayes to Union Business Man- ager Baynes as to how "easy [it is] to beat the union agree- ment; all you have` to do is form another company," in May 1973 the corporation known as P.H. Mechanical Corp. (Hayes Mechanical Corp. herein) had been formed 3 Other than his same usual pay, since March 1975 as stated above This is conceded by Hayes. a Pittman indicated, however, that the one job handled by him apparently for Hayes Mechanical Corp was '"smaller" than those he had handled for Hayes, Inc , and that under Hayes Mechanical Corp he did some work (i e., covering pipe with rubberized material) which he did not and could not have done for Hayes, Inc, since it is considered as asbestos workers' work not permitted to be done by union pipefitters. as a Massachusetts corporation, with officers and directors consisting of Peter D. Gens (attorney for Hayes, Hayes, Inc., and Hayes Mechanical Corp.), M. Frederick,Pritzker (listed on the letterhead of Gens' law firm as his partner or associate), and Patricia A. Tuohy (Gens' secretary)-all of 85 Devonshire Street, Boston, the address of the law firm. On January 11, 1974, there was filed with the Massachu- setts authorities a "certificate of change of directors or offi- cers" of Hayes, Inc. "located at 405 West First Street, South Boston," listing as its president and treasurer Paul A. Hayes (Hayes herein), as its clerk Jean Hayes (wife of Hayes), and as a third director, in addition to the foregoing two, Thomas Hayes of Medfield, Massachusetts (brother of Hayes). On October 31; 1974, there was likewise filed with the same,authorities a similar "certificate of change of directors or officers" for Hayes Mechanical Corp. "located at c/o Peter D. Gens, Fifth Floor, 85 Devonshire Street, Boston, Mass." (i.e., Gens' law office), listing as its presi- dent,' treasurer, and sole director Thomas J. Hayes of Can- ton, Massachusetts (Hayes' nephew), and as its clerk, Peter D. Gens. On December-20, 1974, there was filed a further change substituting as president and adding as a director of` Hayes Mechanical Corp., William' K. Pittman. Around April or May 1975, Hayes, Inc., began default- ing in payment of the fringe benefits (pension, etc.) pay- able under its collective agreement with the Union, and Union Business Manager Baynes informed Pittman that his name was no longer "show[ing] up on the reporting forms from the P.A. Hayes company. . . . And he [Pitt- man] seemed very surprised to find that out. So, I [Baynes] told him I suspected that there was something a little foul going on. . . . what I told him [Pittman] in so many words was that I knew he was on the papers of the non-union company [i.e.; Hayes Mechanical Corp.]. And I, told` him I felt he was being probably used by these people because he was a minority. And I suggested to him that if he?wanted to go into business to come in and sign a legitimate agreement and we'll give him all the help we can. But we wish he'd remain a ,good union person. F also showed him the report- ing forms where he was' not being reported on for that particular month." -On May 8, 1975, Union Business Manager Baynes dis- patched certified letters 5 to Hayes, Inc., and Hayes Me- chanical Corp., pointing out that they were in default in connection with fringe (pension, health/hospitalization, etc.) payment requirements of the subsisting collective agreement, and requesting that the default be cured. Postal service receipts establish that these letters were received and signed for on behalf of both corporations on May 9, 1975, by Eileen Coughlin.6 On May 8, Baynes wrote direct- ly to Respondents' attorney, Peter D. Gens, on the same subject and also asking that Hayes Mechanical Corp. sign the collective agreement. Replying on,May 19, Gens stated that "I know of no obligation on the part of P.H. Mechani- cal Corp. to execute any contract with Local Union 537"; that Hayes Mechanical Corp. Was in a business "in which typically there are few union contractors, if any"; that "ba- s The letter is apparently misdated April 7 instead of May 7, since postal service receipts show it was mailed May 8. 6 It will be recalled that Eileen Coughlin was the longstanding secretarial employee of Hayes, Inc., and she continues in that capacity for Hayes Me- chanical Corp P.A. HAYES, INC. sically" Hayes Mechanical Corp. did "small" jobs; that "much attention has been devoted" by Hayes Mechanical Corp. to "its development as a minority business enter- prise,' an undertaking which as a very practical matter could not be enhanced by the dearth of minority members in your local"; and, finally, that while he would be "pleased to discuss this with you further," it appeared that "so long as" the "scope" of the business remained un- changed "there can be no meaningful discussion of con- tractual alliances with any union." At no time has the described default in payments due under the collective agreement been cured. On September 3, 1975, Hayes, Inc., executed a formal "assignment for the benefit of creditors" to Henry Ges- mer (a partner or associate of Peter D. Gens as listed on the law firm's letterhead) and Joseph Braunstein (another attorney). It is noted that the assignment is signed only by Hayes and Gesmer, and not by Braunstein, and that, not- withstanding its recital, it is not signed by any "assenting creditors." When Union Business Manager Baynes visited the premises of Hayes, Inc., on May 6,1975, immediately prior to dispatching the aforedescribed certified letters, in order to ascertain what was going on, he observed the usual busi- ness sign (P.A. Hayes, Inc.) on the premises of Hayes, Inc., at 405 West First Street, as well as a "For Lease" sign on the adjoining premises at 403 West First Street; and he took photographs of these, which have been placed into evidence here (G.C. Exhs. 15a and 15b). At the time (May 6, 1975, the 405 building was occupied, with people work- ing inside, whereas the 403 building appeared to be unoc- cupied and vacant. According to the testimony of Hayes, buildings 403 West First Street (a one-story brick and base- ment structure) and 405 West First Street (a 2- or 3-story structure) are interconnected ("even though they were dif- ferent buildings you could go through") with at least one inner passageway, and the 1970 10-year lease of Hayes, Inc., included space in the also-connected premises known as 6 Dorchester Street (a large garage). When Baynes attempted in September and October 1975 to persuade Hayes to operate under the collective agree- ment, Hayes "denied he knows anything at all" about Hayes Mechanical Corp., and merely referred Baynes to Gens. According to Hayes-testifying only as a General Coun- sel witness-he was the president and principal of Hayes, Inc,, and he has also been and is the "general manager" in charge of all operations of Hayes Mechanical Corp., whose president is his 25-year-old 8 nephew Stephen M. Hayes of Medfield, Massachusetts, a rank-and-file employee of Hayes Mechanical Corp .9 Hayes claims that Hayes, Inc., ceased business operations on July 5, 1975, after having "vacated" premises 405 West First Street and 6 Dorchester Street around May 11975 when Hayes `just got up and left r Hayes testified at the hearing that he did not wish to do this for Hayes, Inc., because "I didn't want to be a minority contractor, I wanted to be Paul Hayes." Respondent placed into evidence a January 16, 1975, bid by Hayes Mechanical Corp. for refrigeration maintenance in a school cafeteria or cafeterias of the Town, of'Brookline (Resp. Exh. 3). Hayes conceded that this work could have been bid and gone by Hayes, Inc., but at a higher labor rate-close to $20 per hour instead of the $15-per-hour unit cost on the bid of Hayes Mechanical Corp, Hayes testified that after Pittman left Hayes Mechanical "ceased" being a minority enterprise 233 .... I was the only one left.... I just didn't, you know, go to 405 any more. [I started going to] 403." According to Hayes, the Hayes, Inc., business sign continues to be dis- played on the Dorchester Street adjoining building even now, and the Hayes Mechanical Corp. sign is on the 403 West First building. Hayes concedes that at no time have his wife Jean, his brother Thomas, or his nephew Thomas Jr. taken any role in the operation of Hayes, Inc., or of Hayes Mechanical Corp. Although Hayes professedly now considers Gens to be his "boss" in Hayes Mechanical Corp., it is Hayes who is in full charge of all of its business operations and who signs all checks including those for his own pay. Hayes went off the payroll of Hayes, Inc., on July 6 and went on the payroll of Hayes Mechanical Corp. on July 13, 1975, at the same pay of $600 per week.10 Hayes claims that from October 1974 to July 7, 1975, he functioned as an unpaid "adviser" and "construction con- sultant" to Hayes Mechanical Corp., including assisting the accountant to establish a new set of books and hiring new employees for it. According to Hayes, during the peri- od of October 1974 to July 5, 1975, Hayes, Inc., and Hayes Mechanical Corp. were both in business-with Hayes Me- chanical Corp. occupying 403 West First Street commenc- ing in October, without a lease 11 -and in competition with each other, or at any rate each capable of doing the business done by the other; and that he (Hayes) was run- ning both companies and deciding which one should get or do a particular job-thus, seemingly a truly "double- breasted" operation.12 Further according to Hayes, all rec- 8G.C. Exh. 16. 9 Hayes professes not to know to whom Hayes Mechanical Corp. stock was issued, although he asserts it is currently all held by Gens, who, while allegedly receiving no "income" from that corporation, at the'end of 1975 received $5,000 as a "bonus" or for "services rendered." The foregoing af- fords a flavor of Hayes' testimony. ]()Also according to Hayes, his secretary Eileen Coughlin left the payroll of Hayes, Inc., during the week ending March 30, 1975, and went on the payroll of Hayes Mechanical Corp. during the following week at a $5- a-week increase, with access to the books and records of both corporations for all purposes. ii Hayes explained that Gens drew up or arranged for a lease for Hayes Mechanical Corp' in January 1975 with the new owners of that building. According to Hayes, in 1970 he personally owned the entire group of four interconnected buildings "all abutted together" and gave a 10-year lease to Hayes Inc on all or part of the premises, in 1973, or 1974, title to the premises was transferred by Hayes to a partnership consisting of himself (Hayes) and Gens; and the building or buildings were "sold" around De- cember 1974 or January 1975, with the new owner presumably taking title subject to the existing lease of Hayes, Inc However , according to Hayes, a new lease was drawn , up or arranged by Gens for Hayes Mechanical Corp in January 1975 with the "new owners." 12 Hayes also testified that, when Pittman left the employ of Hayes Me- chanical Corp (Harvard jobsite project), his work was completed by em- ployees of Hayes, Inc. and paid for by Hayes, Inc, without chargeback to Hayes Mechanical Corp.; the same was true for services rendered to Hayes Mechanical Corp. by Hayes himself as well as by Eileen Coughlin as em- ployees of Hayes, Inc Conversely, Hayes, Coughlin, and on one occasion Stephen Hayes as employees of Hayes Mechanical Corp., according to Hayes, performed services for or required to be performed by Hayes, Inc, without chargeback to Hayes Inc. In both of these cai'egones, it was Hayes who decided these matters. Moreover-still according to Hayes-Hayes Mechanical Corp has also sent its employees to do work which' Hayes, Inc, was obligated to do under its (Hayes , Inc.) contract's or guarantees, with some such work paid for and some not paid for; these jobs were invariably billed by Hayes Mechanical Corp. to Hayes, Inc., and Hayes,' Inc., turned over to Hayes Mechanical Corp. the moneys receivedi by Hayes, Inc., from the customers. Furthermore, according to Hayes, Hayes Mechanical Corp. Continued 234 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ords of Hayes, Inc. (occupying a good-sized room), togeth- er with its Secretary Eileen Coughlin, were shifted from 405 West First Street premises to the connected 403 West First Street premises when Hayes Inc. "ceased" and Hayes Mechanical Corp. "commenced" business; neither corpo- ration has paid anything to the other for the acquisition, use, moving, or storage of those records. According to Hayes, the-office equipment and "miscellaneous tools" and equipment of Hayes, Inc., were acquired by Hayes Me- chanical Corp. After the "move" from 405 to 403 West First Street, ac- cording to Hayes, Hayes Mechanical Corp. obtained its customers and business through Hayes, who merely con- tinued to go or "went to customers" of Hayes Inc. andjust "took over some of them." 13 According to Hayes, no con- sideration passed for the acquisition of goodwill. Hayes added that the customers were "dissatisfied with the union employees" and that as a nonunion enterprise Hayes Me- chanical Corp. is able economically to bid lower than Hayes, Inc. (as a unionized company) would or could have. Hayes, Inc., merely executed an "assignment for the bene- fit of creditors," as aforedescribed, and its accounts have been taken over by Hayes Mechanical Corp., following which the collective agreement has been regarded as a dead letter. At no time has Hayes, Inc., been adjudicated or filed a petition in bankruptcy. Of the 11 employees of Hayes Mechanical Corp. from the inception of that corporation (including hires through December 31, 1975) five had been employees of Hayes, Inc.; of these five, one (Scolamiero) had been a truckdriver with Hayes, Inc., and not covered by the collective agree- ment, but since working for Hayes Mechanical Corp. he does regular contract work, at a $20-a-week increase, but as a nonunion worker; another (Stephen Hayes, Hayes' young nephew and "president" of Hayes Mechanical Corp.) has been paid at only the apprentice pay scale, as distinguished from the higher "service mechanic" pay set forth in the collective-agreement for the work he is doing; and Hayes himself also works with the others to the extent he desires to do so, in contrast to the prohibition on such work under union conditions. According to Hayes, the re- maining three to five employees of unionized Hayes, Inc., did not transfer to nonunionized Hayes Mechanical Corp. but "saw the handwriting on the wall" and left "voluntari- ly," and-in contrast to the employees of Hayes Inc.- none of the employees of Hayes Mechanical Corp. (except Pittman, until he quit) was or is a member of the Union. It is conceded that the employees of Hayes Mechanical Corp., not being subject to any union rules, requirements, or restrictions, have been doing work which the union members of the bargaining unit in Hayes, Inc., were pre- cluded from doing (i.e., sheetmetal and other work). It is Hayes' contention that Hayes Inc. "went out of business" at least in part because it could not meet its performed services for Holy Cross College during the existence of a Holy Cross College contract with Hayes, Inc 13 Hayes evaluates himself as a "substantial asset" to any enterprise in the heating/air-conditionmg/refrigeration/ventilation line, because of his per- sonal contacts-with customers such as Boston Symphony and Harvard Uni- versity. As Hayes bluntly puts it, "all they know is Paul Hayes " He adds that the Hayes Mechanical Corp rates (as a nonunion enterprise) are sub- stantially lower than those of Hayes, Inc (as a unionized enterprise). bonding obligations to or satisfy the requirements of its corporate surety company, assertedly- because it was no longer able to operate "profitably" or to the degree of its profit expectation as a unionized enterprise, in view of the financial requirements of the collective agreement. Al- though, according to Hayes, Hayes Mechanical Corp. has not undertaken any "bonded" jobs, Hayes concedes that (1) bonds were not required on all jobs done by Hayes, Inc.;14 (2) the unbonded work which had been done by Hayes, Inc., is now being done by Hayes Mechanical Corp.; (3) if it had so desired, Hayes, Inc., could have re- stricted its operations to work not requiring bonds; and (4) Hayes Mechanical Corp. is at least to an extent doing the same kind of work as, for at least some of the customers of, Hayes, Inc. - According to Hayes, approximately 80 percent of the accounts of Hayes Mechanical Corp. consist of the former customers of Hayes, Inc. The accounts of Hayes, Inc. (shown as "HI" in the listing which follows) which Hayes Mechanical Corp.15 (shown as "HMC" in the following listing)- "took over" or to which it succeeded, concededly "through me"-i.e., Hayes alone-were substantial in number and included the following, according to Hayes: Name Year Amt. (approx.) Cambridge City Hospital 1974 HI $ 14,000 1975 HMC 25,000 Chestnut Hill Mall _ 1974 HI (subcontract) (Brookline) 1975 HMC 8,000 Harvard University 1974 HI 48,000 1975 HMC 35,000 Holy Cross College 1974 HI 18,000 1975 HMC 16,000 New England Telephone Co. 1974 HI 50,000 1975 HMC 3,000 Shawmut Bank 1973-74 HI 110,000 1975 HMC 30,000 Symphony Hall 1974 HI 6,000 1975 HMC 8,000-10,000 Town of Brookline, Mass. 1974 HI 3,000 1975 HMC 10,000 U & U ("You and You") Store (Chestnut Hill Mall) 1974 HI 310 1975 HMC 310-400 United Christian 1974 HI 8,000 Evangelical Assn. 1975 HMC 11,000 Figure 1 shows the comparative business done by Hayes Mechanical Corp. and Hayes Inc. during 1974 and 1975 in various work categories. 14 Thus, Hayes, Inc, did unbonded as well as bonded work for Harvard University, one of its regular customers which Hayes Mechanical Corp "took over" or to which it succeeded. Hayes testified that in 1974 the "un- bonded" work of Hayes, Inc, amounted to $134,000, with $40,000-50,000 for one customer (Richard Clark) alone 15 Hayes Mechanical Corp "took over" or-succeeded to the maintenance work previously done by Hayes, Inc, as subcontractor for General Contrac- tor Barkan (Barkin, Barken) Construction Company at Chestnut Hill Mall P.A. HAYES, INC. 235 Fig. 1. Comparative Business: Hayes Mechanical Corp. vs. Hayes Inc. (in Dollars) (HI: Hayes Inc.; HMC: Hayes Mechanical Corp., Tot : Total HI + HMC) Subcontractor Installations: Bonded Subcontractor ? Installations, Unbonded Service & Maintenance Window Units Installations (Other Than Window) Time Period HI HMC Tot. HI HMC Tot. HI HMC Tot. HI HMC Tot. HI EMC Tot. 1974 Jan 96,307 0 96 , 307 16,430 0 16,430 1579 0 1579 600 0 600 17 499 0 12,199 Feb. 103,136 0 103,136 20,901 0 20,901 6392 0 6392 413 0 413 10 096 10,096 Mar. 74,405 0 74,405 11,327 0 11,327 6841 0 6841 0 0 0 2310 0 2310 Apr. 101,725 0 101,725 32,910 0 32,910 5040 0 5040 1068 0 1068 2521 0 2521 May 87,691 0 87,691 8500 0 8500 8986 0 8986 2227 0 2227 0 0 0 Jun. 196,553 0 196,553 4121 0 4121 6825 0 6825 4398 0 4398 212 0 212 Jul. 239,476 0 239,476 7448 0 7448 4059 0 4059 2917 0 2917 11,032 , 0 11,032 Aug. 85 , 794 0 85,794 353 0 353 3427 0 3427 1680` 0 1680 0 0 0 Sep. 163,428 0 163,428 15,870 0 15,870 1890 0 1890 2863 0 2863 24 562 0 24,562 Oct. 90 , 362 0 90,362 12 , 786 0 12,786 2493 )8456 213 1 600 600 0 131 15413 1672 Nov. 27 , 479 0 27,479 0 0 0 , 264 3 3 0 3 0 Dec. 42,648 0 42,648 13 , 912 0 -13 , 912 0 5346 5346 0 375 375 17 , 058 3096 20 154 1975 Jan. 31,400 0 31,400 8000 0 8000 0 7457 7457 0 615 615 0 1789 11,789 Feb. 58,155 0 58,155 12,000 0 12,000 180 8300 8480 0 245 245 0 0 0 Mar 23,705 0 23,705 6017 0 6017 0 3630 3630 0 0 0 0 1144 11,144 Apr. 9000 0 9000 4000 0 4000 0 9514 9514 0 0 0 0 6447 16,447 May 3000 0 3000 15 , 000 0 15 , 000 0 8251 8251 0 1897 1897 0 7800 7800 Jun. 0 0 0 0 0 0 0 6551 6551 800 2496 3296 0 2328 2328 Jul. 0 0 0 1000 0 1000 0 27280 27280 0 2016 2016 0 130255 ,30 255 Aug. 0 0 0 0 0 0 0 9947 9947 0 442 442 1 0 1 7478 17 , 478 Sep. 0 0 0 0 0 0 0 13656 13656 0 0 0 0 0199 30 199 Oct. 0 0 0 0 25,500 25 , 500 0 7977 7977 0 0 0 0 0891 10 891 Nov. 0 0 0 0 23,750 23,750 0 3142 3,142 1 1 0 0 0 0 0000 10 000 Dec. 0 0 0 0 3 Y 0- 9 9 1 1 0 ? 9 9 9 9 Figure 2 shows the comparative annual totals 16 of these der these circumstances, it is apparent that for practical business figures for 1974 and 1975 for the work categories, purposes at least a substantial segment of the business of other than "`bonded" subcontract installation," shown on Hayes, Inc., has merely been diverted, shunted, or shifted Figure 1. to Hayes Mechanical Corp. as its alter ego; and that in Fig. 2 - Comparative 1975 vs. 1974 Business Totals by Work Categories (in Dollars) 1974 1975 (Jan.-Nov. only) Subcontractor 144,558 100,713 Installations, Unbonded Service and 61,598 105,885 Maintenance Window Units 17,141 8,511 Owners' Instal- 84,758 148,331 lations (Other than Window) Total 308,055 363,260 It is apparent from Figures 1 and 2, which are derived from Respondent's own books and records (Resp. Exh. 4) that-aside from "bonded" subcontract installation work, which has not yet been undertaken by Hayes Mechanical Corp. for reasons of its own-the decline in the business of Hayes, Inc., was paralleled by a commensurate rise in the business of Hayes Mechanical Corp. And, as has already been indicated, Hayes himself acknowledges that the latter corporation, through him, just "took over" the business of the former, so that what he estimates as 80 percent of the accounts of the former were passed over to the latter Un- 16 For only January-November 1975 - 17 "Bonded" subcontract installation, concededly not undertaken to date by Hayes Mechanical Corp, is commented upon in sec 1I1,B, infra essence what was here transacted by Hayes, Inc., in con- cert with Hayes Mechanical Corp., in an attempt to free Hayes, Inc., from its obligations under its collective agree- ment with the Union, was that, while Hayes Inc. was under collective agreement with the Union, and without bargain- ing with the Union, a new corporation (i.e, Hayes Me- chanical Corp.) was activated and took over the clientele and continued to handle the business which Hayes, Inc., had been doing or would have done under the collective agreement, but assertedly free from the obligations of that agreement. I so find. B. Discussion and Rationale While it is of course true that an employer may go out of business rather than enter into a contract with a union,18 nevertheless, once a collective agreement has been entered into the employer may not "escape" from it through the expedient of executing an "assignment for the benefit of creditors" 19 or "going out of business" only to resume it in another form 20 A contractual obligation may not be uni- laterally erased merely because performance has become unprofitable or burdensome, or because it was improvi- dently entered into Since only an "assignment for the benefit of cred- itors"-unilaterally accomplished by Respondent Hayes 18 Textile Workers Union of America v Darlington Manufacturing Co et al, 380 U S 263 (1965) 19 Nestor Brothers, Inc, 222 NLRB 466 (1976) 20 E Bressette as Secretary-Treasurer No 22727, AFL-CIO v. Internation- al Talc Company, Inc, 527 F 2d 211, 215 (C A 2, 1975), Elite Chief, Inc, 220 NLRB 1112 (1975), Plumbers Local Union No 519 of Miami, Florida v Service Plumbing Co, Inc, 401 F Supp 1008 (D C Fla, 1975), Stone & Continued 236 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Inc. itself through the mere stroke of Hayes' pen-is in- volved here, it is unnecessary to consider what if any the effect of a bankruptcy proceeding might have been. Such an "assignment for the benefit of creditors" neither erases nor stays the statutory bargaining obligation of the assig- nor. Furthermore, the remedial order in an unfair labor practices proceeding extends to the Respondent's assign- ees. Respondents contend that, as shown by some of their figures, the nature of the business of Hayes Mechanical Corp. differs from that of Hayes Inc. in that the operations of Hayes Mechanical Corp. have been smaller in scale and that it has not (as yet) undertaken any work requiring sure- ty company "bonding." " Even were it to be assumed that this is true-in the face of the conceded facts that 80 per- cent of their chief customers remain the same-such mat- ters are in any event subject to change at will and there is no reason to assume that profitable business would be turned away. The fact of the matter is that Hayes Mechani- cal Corp. is essentially the same enterprise as Hayes, Inc., even assuming that its direction may have been turned or modified, or that its scope or extent may be somewhat more limited; and that, if it chose to do so, Hayes Mechan- ical Corp. could at any time extend its operations to corres- pond precisely to those of Hayes, Inc., just as Hayes, Inc., could at any time have limited or otherwise changed its operations to correspond to those being carried on by Hayes Mechanical Corp. The collective agreement covers service and maintenance work as well as installation work. There are all sorts of reasons why Respondents or either of them might desire, as a matter of business expediency, to discontinue "bonded" work as unprofitable or otherwise undesirable; the cessation of that kind of work as a deliber- ate business decision, as here, does not constitute a legal basis for unilateral', nullification of a collective agreement, covering work whether "bonded" or unbonded. Indeed, Hayes' testimony at the hearing here that the reason Hayes Mechanical Corp. has not undertaken "bonded" work is that it requires a "personal" indemnity agreement which neither Hayes nor Gens is willing to provide, constitutes an explanation that would have been applicable as well for Hayes, Inc., so that the decision to discontinue "bonded" work would appear to be immaterial to the basic issues here presented. Respondents also urge that certain changes in their per- sonnel further establish that the business of Hayes Me- chanical Corp. is essentially different from that of Hayes, Inc. In the,overview of the case, however, those personnel Thomas, 221 NLRB 573 (1975), Miami Industrial Trucks, Inc and Bobcat of Dayton, Inc, 221 NLRB 1223 (1975), Wiley Bros Transit Mix, Inc Sham- rock Sand and Rock Inc and Shamrock Trucking, Inc, 211 NLRB 382 (1974); B & J Plumbing, Inc. and Hagan Brothers, Inc, 176 NLRB 293 (1969), J Howard Jenks, d/b/a Glendora Plumbing, 165 NLRB 101 (1967), Garwin Corporation, 153 NLRB 664 (1965), enfd. as modified 374 F.2d 295 (C A D C, 1967), cert denied 387 U S 942 (1967), Supplemental Decision 169 NLRB 1030 (1968), enfd 70 LRRM 2465, 59 LC ¶13,342 (C A.D C, 1969), cert denied 395 U S. 980 (1969) Gerace Construction, Inc. and Helger Construction Company, Inc., 193 NLRB 645 (1971), and Frank N Smith Associates, Inc and Keuka Construction Corporation; 194 NLRB 212 (1971), relied on by Respondents, are readily distinguishable; unlike here, those cases involved clearly separated businesses, and not commonly controlled and operated businesses with one phased out while the other "took over " changes are consistent with the contention of General Counsel and the Charging Party that, in shifting operations from Hayes, Inc., to Hayes Mechanical Corp., Hayes sought basically-as he openly indicated and foretold-to shift to a nonunion operation and thereby to rid himself of the obligations of the collective agreement; to carry this out, it was obviously essential to sign up a nonunion crew for Hayes Mechanical Corp. in place of the union crew of Hayes, Inc. Under the circumstances shown and found, considering in realistic terms the essential continuity of the location of the business as an uninterruptedly ongoing enterprise, its principals and management, its custom and clientele com- prising its most valuable asset, and its manner of opera- tions_and business viewed as a totality, d find, within the frame of reference of the record as a whole, Hayes Me- chanical Corp. to be the alter ego of Hayes, Inc., to the extent at any rate- of being bound by the collective agree- ment entered into with the Union by Hayes, Inc., and its recognitional, bargaining, and other- obligations. It is accordingly determined that by their described ac- tions Respondents have jointly and severally failed to ful- fill their statutory obligation of bargaining collectively with the Union as the duly designated and recognized exclusive bargaining representative of the appropriate bargaining unit here; have unilaterally applied terms and conditions of employment (wage rates, work, job classifications, union membership, pensions, etc.) other than those set forth in and required by the subsisting collective agreement with the Union, and have sought to nullify that agreement; and have interfered with, restrained, and coerced employees in the exercise of rights guaranteed under Section 7 of the Act, all in violation of Section 8(a)(5) and (1) of the Act. Upon the foregoing findings and the entire record, I state the following: CONCLUSIONS OF LAW 1. Jurisdiction is properly asserted in this proceeding. 2. Under the circumstances described and found in sec- tion III, supra, Hayes Mechanical Corp. was and is the alter ego, as well as technical successor, of Hayes, Inc., and was and is bound by the provisions, terms, and conditions of the collective agreement effective September 1, 1974- August 31, 1977, between Hayes, Inc. and the Union, and has been and is obligated to comply therewith and to rec- ognize, bargain, and otherwise deal as appropriate with the Union as the duly authorized exclusive bargaining repre- sentative of the appropriate employee unit herein, viz: All journeymen, apprentices, and metal tradesmen employed by Respondents or either of them (including all employees of P.H. Mechanical Corp. performing work of the foregoing categories of employees as set forth and defined by collective agreement between P. A. Hayes, Inc. and Pipefitters Local 537, and regard- less of the job titles of said employees of P.H. Me- chanical Corp.) at or from the premises of Respon- dents or either of them on West First Street , Boston, Massachusetts, but excluding all other-employees, of- fice clerical employees, guards and supervisors as de- fined in Section 2(11) of the Act. P.A. HAYES, INC. 237 3. By failing and refusing, under the circumstances de- scribed and found in section III, supra, to continue to ac- cord recognition to and bargain with the Union, and to apply the provisions, terms, and conditions of said collec- tive agreement, and by unilaterally changing and attempt- ing to nullify the same, Respondents have jointly and sev- erally violated and are continuing to violate Section 8(a)(5) and (1) of the Act. 4. The unfair labor practices comprising said violations have affected, are affecting, and unless permanently re- strained and enjoined will continue to affect, commerce within the meaning of Section 2(6) and (7) of the Act. All -journeymen, apprentices, and metal tradesmen employed by Respondents or either of them (including all employees of P.H. Mechanical Corp. performing work of the foregoing categories of employees as set forth and defined by collective agreement between P. A. Hayes, Inc. and Pipefitters Local 537, and regard- less of the job titles of said employees of P.H. Me- chanical Corp.) at or from the premises of Respon- dents or either of them on West First Street, Boston, Massachusetts, but excluding all other employees, of- fice clerical employees, guards and supervisors as de- fined in Section 2(11) of the Act. REMEDY Respondents, having been found to be in violation of Section 8(a)(5) and (1) of the Act,21 should be required to cease and desist therefrom and to take certain affirmative actions in effectuation of the policies of the Act. Those affirmative actions should consist of acknowledging con- tinued recognition of the Union, applying the provisions of the collective agreement, and making whole employees as appropriate for the failure to do so, together with interest computed as explicated by the Board in F. W. Woolworth Company, 90 NLRB 289, (1950) and Isis Plumbing & Heat- ing Co., 138 NLRB 716 (1962), making available necessary records for computation purposes; and posting the usual informational notice. 22 Upon the foregoing findings of fact, conclusions of law, and the entire record, and pursuant to Section 10(c) of the Act, there is hereby issued the following: ORDER23 Respondents P.A. Hayes, Inc., and P.H. Mechanical Corp., Boston, Massachusetts, jointly and severally, and their officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Failing to continue to recognize and bargain in good faith with Pipefitters Local 537, a/w United Association of Journeymen and Apprentices of the Plumbing and Pipefit- ting and Refrigeration Industry of the United States and Canada, AFL-CIO, as the duly designated exclusive bar- gaining representative of the following appropriate collec- tive-bargaining unit: 21 No violation of Sec 8(a)(3) is alleged or was litigated here. 22 I reject Respondents' plea that, if they be found in violation here, the remedy be restricted to a bargaining order This contention overlooks the fact that there already is in effect here a signed and binding collective agreement. Cf. M S.P. Industries, 222 NLRB 220 (1976) Under the circum- stances, it is appropriate that Respondents merely be required to acknowl- edge or confirm the recognized status of the Union and that collective agreement, and the Order shall in effect so provide. There is, of course, nothing to prevent the parties from negotiating a mutually acceptable modi- fication of that agreement Merely to require Respondents to bargain for a contract at this juncture would permit them to accomplish through unfair labor practices their object of depriving unit employees of the "fruits of [their union] contract." Local 1912, International Association of Machinists v United States Potash Company, Division of United States Borax and Chemical Corporation, 270 F.2d 496, 498 (C A. 10, 1959), cert denied 363 U.S. 845 (1960), cited with approval in Local 627, International Union of Operating Engineers, AFL-CIO [Peter Kiewit Sons' Company,) v N L.R B., 518 F.2d (b) Failing, in violation of the Act, to continue to ob- serve, adhere to, and apply the provisions, terms, and con- ditions of the subsisting collective agreement with said Umon effective September 1, 1974-August 31, 1977, ex- cept to the extent said agreement may be duly modified by valid agreement with said Union. (c) Unilaterally and without bargaining in good faith with said Union, withdrawing from, annulling, nullifying, abrogating, or changing said collective agreement or any provision, term, or condition thereof, or attempting so to do, in violation of the Act. (d) Through formation or utilization of a juridical enti- ty, or through shifting unit work to such other entity, or otherwise, in violation of the Act, unilaterally evading or attempting to evade or escape from the obligations of said collective agreement while it is in force and effect. (e) In any like or related manner interfering with, re- straining, or coercing employees in the exercise of their right of self-organization; to form, join, or assist any labor organization; to bargain collectively through representa- tives of their own choosing; to engage in concerted activi- ties for the purposes of collective bargaining or other mutu- al aid or protection; or to refrain from any and all such activities, except to the extent that such right may be af- fected by an agreement lawfully requiring membership in a labor organization as a condition of employment, as au- thorized in Section 8(a)(3) of the Act as modified by the Labor-Management Reporting and Disclosure Act of 1959. 2. Take the following affirmative actions necessary to effectuate the policies of the Act: (a) Notify said Union, in writing, within 10 days from the date of this Order, that the recognition of said Union as exclusive bargaining representative of the aforesaid collec- tive-bargaining unit is acknowledged and confirmed for all 1040, 1049 (C.A.D.C, 1975). The Order does not impose contract terms upon an employer who never agreed to them, but merely requires Respon- dents to reinstate and honor the contract agreed to and from which they sought unlawfully to escape N L.R.B. v. Strong, d/b/a Strong Roofing and Insulating Co, 393 U.S. 357, 359-362 (1969); NL R.B v. Gene Hyde, d/b/a Hyde's Supermarket 339 F 2d 568, 572 (C A. 9; 1964). The Order also re- stores the terms and conditions of employment which Respondents unilater- ally altered and thereby establishes a predicate for future good-faith negoti- ations Fibreboard Paper Products Corp v. N.L.R B., 379 U S. 203, 216 (1964). zr In the event no exceptions are filed as provided by Sec. 102.46 of the Rules and Regulations of the National Labor Relations Board, the findings, conclusions, and recommended Order herein shall, as provided in Sec 102.48 of the Rules and Regulations, be adopted by the Board and become its findings, conclusions, and Order, and all objections thereto shall be deemed waived for all purposes. 238 DECISIONS OF NATIONAL LABOR RELATIONS BOARD purposes under the collective agreement effective Septem- ber 1, 1974-August 31, 1977. (b) Upon request, bargain in good faith with said Union as such exclusive collective-bargaining representative, ret- roactively as of the date when Respondents or either of them ceased, failed, or refused to recognize or continue to recognize said Union; and, if requested, embody in a signed agreement or agreements any understanding reached. (c) Applying the provisions, terms, and conditions of said collective agreement retroactively to the time of its inception (except to the extent it may be duly modified by valid written agreement with the Union), make whole each of the past or present members of the aforesaid bargaining unit to the extent of any wages or other moneys, pension, or fringe or other benefits due, whether payable to employ- ees or into the union pension or other fund, together with 6 percent interest computed in the manner referred to in the section of this Decision entitled "The Remedy." (d) Preserve and, upon request, make available to the Board or its agents,'for examination and copying, all pay- roll records, job records, social security payment records, timecards, personnel records and reports, and all other rec- ords, documents, and entries necessary to determine any sums, payments, or benefits due under and the extent of compliance with the terms of this Order. (e) Post at their premises on West First Street, Boston, Massachusetts, copies of the attached notice marked "Ap- pendix." za Copies of said notice, on forms provided by the Board's Regional Director for Region 1, after being signed by Respondents' authorized representatives, shall be post- ed by Respondents immediately upon receipt thereof, and 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, de- faced, or covered by any other material. (f) Notify the Regional Director for Region 1, in writ- ing, within 20 days from the date of this Order, what steps Respondents have taken to comply herewith. 24 In the event this Order is enforced by a Judgment of a United States Court of Appeals, the words in the notice "Posted by Order of the National Labor Relations Board" shall read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board "