Teckwal Corp. and E.M. Andrews Sales, Inc.

DECISIONS OF NATIONAL LABOR RELATIONS BOARD Teckwal Corp. and E.M. Andrews Sales, Inc. and Chauffeurs, Teamsters, Warehousemen and Helpers, Local Union No. 301, affiliated with International Brotherhood of Teamsters, Chauf- feurs, Warehousemen and Helpers of America. Case 13-CA-19074 August 31, 1982 SUPPLEMENTAL DECISION AND ORDER BY MEMBERS FANNING, JENKINS, AND HUNTER On November 3, 1980, the National Labor Rela- tions Board issued a Decision and Order in Case 13-CA-190741 in which, inter alia, the Board or- dered Respondent Teckwal Corp. (Teckwal) to make its employees whole for any loss of pay or other employment benefits they may have suffered by reason of its various unfair labor practices. On June 30, 1981, the United States Court of Appeals for the Seventh Circuit entered a consent judgment enforcing in full backpay provisions of the Board's Order. A controversy having arisen over the amount of backpay due under the terms of the Board's Order, the Regional Director for Region 13, on November 30, 1981, issued a backpay specification and notice of hearing alleging, inter alia, at paragraph 3 there- of that Teckwal Corp. and E.M. Andrews Sales, Inc. (Andrews Sales), at all material times herein "have been affiliated business enterprises with common officers, ownership, directors, manage- ment, and supervision; have formulated and admin- istered a common labor policy affecting employees of said operations; have shared common premises and facilities; have provided services for and made sales to each other; have interchanged personnel with each other; and have held themselves out to the public as a single integrated business enter- prise." The specification also alleged at paragraph 4 that, by virtue of their status as referred to above, Teckwal and Andrews Sales were jointly and severally liable for the monetary liability im- posed by the Board's Order. The specification then alleged specific amounts of backpay due under the Board's Order and the method of computing that backpay. On January 21, 1982, Teckwal and Andrews Sales (Respondents) filed a response to the backpay specification and notice of hearing in which Re- spondents admitted the amounts of backpay due under the Order and the propriety of the method of computation of backpay. Respondents also ad- mitted paragraph 3 of the specification which, as Teckwal Corp., 253 NLRB 187. 263 NLRB No. 122 noted, alleged that Respondents at all times materi- al have been a single integrated business enterprise. However, Respondents denied that Andrews Sales was liable for any of the moneys due under the Board's Order since Respondents contended that the Board's Order did not apply to Andrews Sales. Thereafter, on April 16, 1982, counsel for the General Counsel filed directly with the Board a motion to transfer proceedings to the Board and Motion for Summary Judgment with exhibits at- tached. In the motion, the General Counsel assert- ed that, notwithstanding their denial of liability on the part of Andrews Sales, Respondents had none- theless admitted the fact that they held themselves out to the public as a single integrated business en- terprise. The General Counsel asserted that Re- spondents are therefore a single employer and, con- sequently, Andrews Sales is Teckwal's alter ego. Further, the General Counsel contended that al- though Andrews Sales was not named as a party in Teckwal, supra, it is established that derivative lia- bility for backpay may be imposed upon a party to a supplemental proceeding, even though the party was not named in the earlier proceeding in which the unfair labor practices were found, if that party is closely and sufficiently related to the party which committed the unfair labor practices. The General Counsel stated that, by definition, an alter ego in a supplemental proceeding shares with the named party in the original proceeding an obliga- tion to provide backpay upon proper proof of the alter ego relationship. And, as Respondents had ad- mitted that they were alter egos and also had ad- mitted the various backpay computations, the Gen- eral Counsel urged that there were no issues which needed to be litigated and that, pursuant to Section 102.54(b) of the Board's Rules and Regulations, the General Counsel was entitled, as a matter of law, to a summary judgment that Respondents were jointly and severally liable for the backpay amounts set forth in the specification. Subsequently, on April 27, 1982, the Board issued an order transferring the proceeding to the Board and a Notice To Show Cause why the Gen- eral Counsel's Motion for Summary Judgment should not be granted. On May 11, 1982, Respond- ents filed their reply to the motion to transfer. They also filed at the same time a motion for leave to amend their answer, and they included an amended answer to the backpay specification and notice of hearing. In their amended answer, Re- spondents now deny that Teckwal and Andrews Sales are a single employer, and, tracking the lan- guage of paragraph 3 of the specification, they now claim, without elaboration, "that there is no common management or supervision, no formula- 892 TECKWAL CORP. tion or administration of any common labor policy affecting employees of the said two corporations, no functional interrelationship, no common prod- ucts, no interchange of personnel, and at no time have the parties held themselves out as a single in- tegrated business enterprise." Respondents there- fore deny that they are jointly and severally liable for the backpay due, and they assert that Andrews Sales was at no time a party to the "initial com- plaint proceedings" brought against Teckwal, and has never had the opportunity to respond to the unfair labor practice allegations. Accordingly, Re- spondents seek to have the matter set for hearing. In support of their motion to amend their answer, Respondents cite Section 102.57 of the Board's Rules and Regulations which states in part that: After the issuance of the notice of hearing, but prior to the opening thereof, the regional di- rector may amend the backpay specification and the respondent affected thereby may amend his answer thereto ... Subsequently, on May 21, 1982, the General Counsel filed an opposition to Respondents' motion to amend their answer. The General Counsel notes that in their original answer Respondents admitted all facts and computations set out in the specifica- tion but denied only the conclusionary allegations that, as a matter of law, they were jointly and sev- erally liable for the amounts set out in the backpay specification. The General Counsel contends that, notwithstanding that original answer, Respondents now seek to deny selectively certain facts which they have previously admitted and, without any ex- planation, now seek to deny that they are a single employer in order to avoid joint and several liabili- ty. The General Counsel argues that Respondents should be held to the responses in their original answer and that summary judgment should be granted in his favor based on that answer. 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. Upon the entire record in this proceeding, the Board makes the following: Ruling on the Motion for Summary Judgment Section 102.54(b) of the National Labor Rela- tions Board Rules and Regulations, Series 8, as amended, states: (b) Contents of the answer to specification.- The answer to the specification shall be in writing, the original being signed and sworn to by the respondent or by a duly authorized agent with appropriate power of attorney af- fixed, and shall contain the post office address of the respondent. The respondent shall spe- cifically admit, deny, or explain each and every allegation of the specification, unless the respondent is without knowledge, in which case the respondent shall so state, such state- ment operating as a denial. Denials shall fairly meet the substance of the allegations of the specification denied. When a respondent in- tends to deny only a part of an allegation, the respondent shall specify so much of it as is true and shall deny only the remainder. As to all matters within the knowledge of the re- spondent, including but not limited to the var- ious factors entering the computation of gross backpay, a general denial shall not suffice. As to such matters, if the respondent disputes either the accuracy of the figures in the speci- fication or the premises on which they are based, he shall specifically state the basis for his disagreement, setting forth in detail his po- sition as to the applicable premises and furnish- ing the appropriate supporting figures. (c) Effect of failure to answer or to plead spe- cifically and in detail to the specification.-If the respondent fails to file any answer to the speci- fication within the time, prescribed by this sec- tion, the Board may, either with or without taking evidence in support of the allegations of the specification and without notice to the re- spondent, find the specification to be true and enter such order as may be appropriate. If the respondent files an answer to the specification but fails to deny any allegation of the specifi- cation in the manner required by subsection (b) of this section, and the failure so to deny is not adequately explained, such allegation shall be deemed to be admitted to be true, and may be so found by the Board without the taking of evidence supporting such allegation, and the respondent shall be precluded from introduc- ing any evidence controverting said allegation. In their answer to the backpay specification, Re- spondents expressly admitted the allegations in paragraph 3 of the specification. Those allegations clearly established that Respondents have at all times material operated as a single employer.2 Ac- cordingly, it is clear that Respondents in their original answer admitted their single employer status. It is also clear that their sole opposition to the backpay specification at that time was its inclu- sion of Andrews Sales as liable for any moneys due and that the opposition to such inclusion was based only on the contention that the Board's original I Crawford Door Sales Company. Inc., 226 NLRB 1144 (1976). 893 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Order did not apply to Andrews Sales. However, it is well established that derivative liability may be imposed upon a party to a supplemental proceeding even if that party had not been a party to the un- derlying unfair labor practice proceeding if it is "sufficiently closely related" to the party which was found in the original proceeding to have com- mitted the unfair labor practices. 3 Respondents, having initially admitted their status as a single in- tegrated business enterprise, would clearly be "suf- ficiently closely related," and derivative liability would attach. Respondents' original answer effec- tively admitted that Andrews Sales is the alter ego of Teckwal. As such, Andrews Sales shares an ob- ligation with Teckwal, the named party in the original unfair labor practice proceeding, to pro- vide backpay.4 However, in their amended answer, filed only after the General Counsel's Motion for Summary Judgment, Respondents now seek to deny their status as a single employer. Respondents offer no reason for this change of position on a critical issue in this proceeding. We think that the import of Section 102.54(b) and (c) of the Board's Rules re- quired more from Respondents than this complete change in position without explanation or support- ing affidavits. Inasmuch as Respondents presum- ably have knowledge as to why they now deny an alleged business relationship which they previously admitted, the foregoing-mentioned sections of the Board's Rules and Regulations require that Re- spondent's motion to amend their answer should have been supported by a specific explanation of their actual business relationship, and why they otherwise would not be jointly and severally liable. To the extent they now deny that any business re- lationship exists, Respondents should have ex- plained why they initially admitted each and every indicia of single employer status which was alleged at paragraph 3 of the specification.s In sum, we ' Coast Delivery Service, Inc., 198 NLRB 1026, 1027 (1972), and cases cited therein. ' Southeascern Envelope Co., Inc. e Southeastern Expandvelope, Inc., (Diversiled Assembly, Inc), 246 NLRB 423 (1979). ' In their motion to amend their answer, Respondents indicate that they denied the allegations at par. 3. In this, they are clearly in error since their answer stated: "Respondents admit the allegations of para- graph 3." Moreover, Respondents argue in their motion to amend their answer that they deemed "the conclusions set forth in said Backpay Specification were insufficient in themselves to support the findings of an alter ego or single employer relationship, and believe the evidence will so show, and in that manner so responded." Again, Respondents are in error for the allegations they admitted clearly established single employer status (see fn. 2, supra). We note too that while Respondents filed their motion to amend their answer pursuant to Sec. 102.57 of our Rules, that section is inapplicable here. See Standard Materials Inc., 252 NLRB 679 (1980). Further, while the Board permitted a respondent to amend its answer to a backpay spec- ification in that case, we deem the facts inapposite to those present here. There the Board permitted the amendment of an answer which initially had not been sworn to and which did not contain respondent's address. A find that, absent a supporting explanation from Re- spondents, the General Counsel's single employer allegation as set forth in paragraph 3 of the back- pay specification should be deemed admitted, and that Respondents are precluded from amending their answer in that respect. In sum, as the Motion for Summary Judgment alleges, the answer filed by Respondents admits their status as a single integrated business enter- prise, and Respondents' affirmative defense that the Board's Order and court's judgment do not apply to Andrews Sales is contrary to established Board precedent.s Accordingly, we shall grant the Gener- al Counsel's Motion for Summary Judgment.7 ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Re- lations Board hereby orders that the Respondents, Teckwal Corp. and E.M. Andrews Sales, Inc., Gilmer, Illinois, their officers, agents, successors, and assigns, shall make whole the discriminatees named below by paying them the amounts set forth adjacent to their names, plus interest to be comput- ed in the manner specified in Isis Plumbing & Heat- ing Co., 138 NLRB 716 (1962), and Florida Steel Corporation, 231 NLRB 651 (1977),8 less any tax withholdings as required by Federal and state laws. The amounts ordered to be paid the several discri- minatees are as follows: Mitchell Neilsen David Skinner Earl Williams $1,258.54 961.18 4,808.41 Respondents shall also make payment to the Health and Welfare Fund and the Pension Fund of Chauffeurs, Teamsters, Warehousemen and Help- ers, Local Union No. 301 affiliated with Interna- tional Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America in the amounts set forth below: Health and Welfare Fund Pension Fund $6,480.00 7,080.00 later response from the respondent was sworn to and did contain re- spondent's address and the Board accepted that response as an amended answer. But the errors in that respondent's original answer were minor, and may well have been inadvertent. Here, there is no showing the ad- missions in Respondents' answer were inadvertent. They clearly were not minor. WSiile we are mindful that our Rules and Regulations are to be liberally construed, we are not satisfied that Respondents have presented us with a valid reason for permitting the amendment of their answer. 8 Coast Delivery Service. Inc.. supra. Southeastern Envelope Co., supra 7 We likewise deny Respondents' motion to amend their answer. 8 Member Jenkins would award interest on the backpay due in accord- ance with his partial dissent in Olympic Medical Corporalion, 250 NLRB 146 (1980). 894