Edward C. Kelly Co., Inc.

EDWARD C. KELLY CO., INC. Edward C. Kelly Co., Inc. and Shaw Mechanical Contractors, Inc. and Plumbers and Gas Fitters, Local No. 12, a/w United Association of Journey- men and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada. Case I-CA-11327 June 20, 1977 DECISION AND ORDER BY MEMBERS JENKINS, PENELLO, AND WALTHER On March 2, 1977, Administrative Law Judge James L. Rose issued the attached Decision in this proceeding. Thereafter, Respondents filed exceptions and a supporting brief, and the General Counsel and the Charging Party filed briefs in support of the Administrative Law Judge'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 authority in this proceeding to a three-member panel. The Board has considered the record and the attached Decision in light of the exceptions and briefs and has decided to affirm the rulings, find- ings,2 and conclusions 3 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 Relations Board adopts as its Order the recommend- ed Order of the Administrative Law Judge and hereby orders that the Respondents, Edward C. Kelly Co., Inc. and Shaw Mechanical Contractors, Inc., East Braintree and North Quincy, Massachu- setts, their officers, agents, successors, and assigns, shall take the action set forth in the said recommend- ed Order. I As the record adequately presents the positions of the parties, the Respondents' and the Charging Party's requests for oral argument are hereby denied. 2 In finding that Respondents herein constituted a single employer, the Administrative Law Judge relied on the amounts of unsecured loans that Respondent Shaw received from Respondent Kelly Co. and from Kelly individually. He concluded that these amounts were $20,800 and $79,000 respectively. The record reveals that the total of these loans from both sources was $36,000. In our view, even this lesser amount is substantial enough to support the conclusion that Shaw is, to a large extent, financially dependent upon Kelly Co. Respondent excepts to the Administrative Law Judge's finding that Morrissey admitted that she calls upon Kelly's expertise in running the Shaw business. The record reveals that Morrissey did so testify and also testified that she had recently been consulted on the "Howard Johnson job" as to the placement of the fire equipment. The record includes a number of bills from Kelly to Shaw for "estimating and supervisory" services, the amounts of which were unilaterally decided upon by Mornssey for Kelly Co. and paid by Mornssey for Shaw. Morrissey testified that the aforementioned example of consultation with Kelly is the type of 230 NLRB No. 51 "supervisory" services that were billed. We agree with the Administrative Law Judge that such circumstances indicate that Shaw would have difficulty surviving as an independent company but for its relationship with Kelly and Kelly Co. 3 The Administrative Law Judge failed to take note of the interchange of employees, namely truckdrivers and estimators, in reaching his conclusion that there is common control of labor relations. We find this fact significant and supportive of his conclusion. No exceptions were filed to the Administrative Law Judge's finding as to the scope and composition of the appropriate bargaining unit. DECISION STATEMENT OF THE CASE JAMES L. ROSE, Administrative Law Judge: This matter was heard before me at Boston, Massachusetts, on January 3, 1977, upon the General Counsel's complaint which alleged that the two named Respondents constitute a single employer and as such have violated Section 8(a)(5) of the National Labor Relations Act, as amended, 29 U.S.C. § 151, et seq., by failing and refusing to bargain with the Charging Party. All parties appeared and presented evidence. Upon the record as a whole, including briefs and arguments of counsel, I hereby make the following: FINDINGS OF FACT 1. JURSIDICTION Edward C. Kelly Co., Inc. (herein Kelly Company), is a Massachusetts corporation engaged in business as a mechanical contractor. It annually purchases goods, products, and materials valued in excess of $50,000 directly from outside the Commonwealth of Massachusetts and annually supplies to users and others who are themselves engaged in interstate commerce goods and services valued in excess of $50,000. Shaw Mechanical Contractors, Inc., is also a Massachu- setts corporation engaged in business as a mechanical contractor. Shaw also purchases goods, products, and materials valued in excess of $50,000 directly from points outside the Commonwealth of Massachusetts and annually supplies to users and others who are themselves engaged in interstate commerce goods and services valued in excess of $50,000. The Respondents each admit, and I find, that they are employers engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 1. THE LABOR ORGANIZATION INVOLVED The Charging Party, Plumbers and Gas Fitters, Local No. 12, a/w United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada (herein the Union), is admitted by the Respondents to be, and I find is, a labor organization within the meaning of Section 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES A. Factual Background For a number of years Kelly Company has been a member of the Masters Plumbers' Association of Boston 337 DECISIONS OF NATIONAL LABOR RELATIONS BOARD and Vicinity, Inc., an employer association representing its members in dealing with the Union. As a member of the association, Kelly Company has been signatory to a series of collective-bargaining agreements with the Union. The current agreement is effective September 1, 1976, through August 31, 1978. According to the testimony of Marion R. Morrissey, Kelly Company's bookkeeper for many years, in the early part of 1973 she determined that it would be a good idea to form a separate corporation in order to make some "money" on small jobs that Kelly Company was unable successfully to compete on because of its union labor. Robert E. Frazier, who had worked for Kelly a number of years as a master plumber, testified that "Kelly . . . had been getting beat on a lot of jobs by nonunion firms." Thus it happened that on March 29, 1973, Morrissey, Agnes B. Kelly, the wife of Edward C. Kelly, Jr. (herein Kelly), president, treasurer and director of Kelly Company, and Patrice A. Kelly, his daughter, incorporated Shaw Mechanical Contractors, Inc. Since that time Shaw has been engaged in business as a mechanical contractor, operating with Frazier's master plumber's license. Shaw does the same type of work as Kelly Company, but on somewhat smaller jobs. They do not, apparently, bid competitively with one another. In the fall of 1975, Paul Madden, the business agent for the Union, learned that Kelly Company was "operating double-breasted" (both union and nonunion), though he stated that he had suspected this since 1970 or 1971. In any event, on December 26, 1975, Madden wrote to Kelly stating that all signs indicated an affiliation between Kelly Company and Shaw. He wanted "to remedy this situa- tion," presumably by having Shaw sign and abide by the association agreement. On the same day, Madden wrote Morrissey in care of Shaw indicating that Shaw was not on the Union's list of fair shops. He enclosed a stipulation to be bound by the association agreement for her to sign on behalf of Shaw. On January 5, 1976, Morrissey replied, declining to sign the contract principally because the types of jobs Shaw was doing were small projects which "does not command the present hourly rates that are currently paid to members (of the Union) and also, the regulations imposed governing Journeymen/Apprentice ratio, would be a hardship." Kelly Company does in fact abide by the association agreement with the Union and does employ journeyman plumbers. Additionally, Kelly Company employs estima- tors (who are members of the Union) and Morrissey, the bookkeeper. In overall charge of the operation is Kelly. Shaw, on the other hand has one journeyman plumber, Frazier, who, since the inception of Shaw, is no longer a member of the Union. Generally, Shaw employs apprentic- es who are hired from a vocational technical school. Shaw does not employ estimators. Its bookkeeper is Morrissey, who, according to her testimony, is also Shaw's chief executive officer. 425 U.S. 800(1976). 2 Local No. 627, International Union of Operating Engineers, AFL-CIO v. N.L.R.B., 518 F.2d 1040 (C.A.D.C., 1975), reversing 206 NLRB 562 (1973). B. Issues The principal issue raised by the pleadings in this matter is whether Kelly Company and Shaw form a single integrated enterprise or are separate employers. If they are a single integrated enterprise, then it is also alleged that the mechanical employees of both constitute a unit appropriate for purposes of collective bargaining; and that the enterprise has breached its obligations to bargain with the Union by not applying the association contract to Shaw employees. C. Analysis and Concluding Findings 1. Single integrated enterprise In South Prairie Construction Co. v. Local No. 627, International Union of Operating Engineers, AFL-CIO, et at, ' the United States Supreme Court affirmed the circuit court's finding that two construction companies consti- tuted a single employer.2 The Supreme Court, quoting with approval the circuit court's decision, stated: IT]hat in addition to the "presence of a very substantial qualitative degree of centralized control of labor relations," the facts "evidence of substantial qualitative degree of interrelation of operations and common management-one that we are satisfied would not be found in the arm's length relationship existing among unintegrated companies." In Radio & Television Broadcast Technicians Local Union 1264, v. Broadcast Service of Mobile, Inc.,3 the Supreme Court enumerated with approval the criteria considered by the Board in determining whether or not two companies constitute a single employer: The controlling criteria, set out and elaborated in Board decisions, are interrelation of operations, com- mon management, centralized control of labor relations and common ownership. [Citations omitted.] Most recently the Board in The Carvel Company and C and D Plumbing and Heating Company4 concluded that two plumbing contractors were separate employers. In reaching this conclusion, the Board noted that the two companies were separate legal entities and had separate bank and payroll accounts and separate lines of credit, and that in fact the principal manager of each company was a different person. There was common ownership of two companies, but this is not determinative absent common control of the labor relations policy. And "such common control must be actual or active, as distinguished from potential control." 226 NLRB at 11. Tested by these standards it is my conclusion that in fact Kelly Company and Shaw constitute a single integrated enterprise. While the community of ownership here is not determi- native, critical to finding the operations interrelated is the fact that Shaw depends on Kelly individually and/or Kelly 3 380 U.S. 255, 256 (1%5). 4 226 NLRB II111 (1976). 338 EDWARD C. KELLY CO., INC. Company to supply cash for operating expenses when needed. From 1973, when Shaw was organized, through December 31, 1976, Shaw borrowed $79,000 from Kelly and $20,800 from Kelly Company, of which $72,800 has been repaid.5 These loans were unsecured and were repaid without interest. Such substantial noninterest loans to a rather small company, even though largely repaid, shows that Shaw looks to and receives from Kelly and/or Kelly Company its cash flow. These records suggest that, without Kelly, Shaw would not be able to operate. In short, from the financial standpoint, Kelly exercises substantial control over Shaw. And there are additional indicators that the operations are interrelated. For instance, Shaw does not employ estimators but relies principally upon estimators employed by Kelly Company. It is claimed that Shaw reimburses Kelly Company for this service. The fact of reimbursement, however, is at best loose and at worst suspect. For nearly 2 years Kelly Company employees did the Shaw estimating without any charge for their services. Then Morrissey, on behalf of Kelly Company, determined that those services were worth $150 a month. She billed Shaw to that effect as an agent for Kelly, and then as an agent for Shaw paid the $3,600. She was unable to testify precisely how she arrived at $150 a month, or why 2 years elapsed before the service was billed or paid. Rather than showing an arm's-length relationship between the two companies, the handling of estimators suggests an interrelated operation. The workmen's compensation policy for Shaw employees is carried as a rider on Kelly Company policy. Again after about 2 years, Morrissey, on behalf of Kelly Company, billed Shaw. Morrissey, on behalf of Shaw, paid the bill. Incidentally, how the amount billed was arrived at Morrissey could not say nor is it apparent from the documentary evidence. Further evidencing interrelated operations is the fact that such truckdriving as is required by Kelly Company is done by Shaw employees. The record also shows common, rather than separate, management. While Morrissey appears to be generally familiar with the industry, she was not shown to be particularly knowledgeable with regard to running a mechanical contracting business nor did she claim to be. The same can be said of Frazier, who really functions as a field foreman. This apparent void in management capabili- ty is, I find, filled by Kelly. And, in fact, Morrissey admitted that she calls upon Kelly's "expertise" in running the Shaw business. It is noted that Kelly was not called by either Respon- dent to deny his actual participation in the day-to-day operation of both Kelly Company and Shaw. From this failure and given the testimony of Morrissey - that Kelly Company and Shaw operate from the same building, that Kelly personally is present much of the time and has in fact lent his "expertise" - I infer that had Kelly been called he would have affirmed his participation in the day-to-day operations of Shaw. Finally in this regard, a business agent for one of the Union's sister locals in fact called the Shaw 5 This is from ledgers stipulated to by the parties and is at variance with Morrissey's testimony that such loans amounted to $25,000. telephone number. Kelly answered and purported to speak as an agent for Shaw. This was not denied. While Morrissey claims to be the chief executive officer of Shaw, in reality the record reveals that she is the bookkeeper for Shaw, as she is for Kelly Company. The actual operating control - indeed the determination to operate a nonunion company along with a union company - is, I find, in Kelly. There is little evidence concerning control of labor relations policy, other than that outlined above concerning common management. It does appear that Morrissey hires the Shaw employees while the Kelly Company employees are hired through the union hall by Kelly or the foremen. And, of course, the rates are different. However, given Kelly's substantial involvement in both operations, it is more reasonable than not to conclude that he, in fact, controls the labor relations policy of both. Finding that Kelly is actually in control and supplies the cash flow for Shaw, along with the interchange of employees to do particular jobs, leads me to conclude that Kelly Company and Shaw are not separate employers but in fact form a single enterprise. 2. The bargaining unit. It is alleged that the appropriate bargaining unit constitutes employees of both Kelly Company and Shaw as follows: All plumbers, gas fitters, pipe and/or drain layers, temporary fireman and apprentices of Respondent (Kelly Company and Shaw) employed at its Allen Street and/or Colby Road locations, exclusive of office clerical employees, stockmen, truck drivers, guards and supervisor as defined in Section 2(1 1) of the Act. Kelly Company admitted the appropriateness of the bargaining unit while Shaw denied it. However, in their joint brief both indicated that the scope and composition of the bargaining unit is not really a substantive issue in this matter. In any event, based upon the record before me, I find that the mechanical employees of Kelly Company and Shaw have a sufficient community of interest to be in the same bargaining unit. While generally employees of Kelly Company are journeyman plumbers whereas those of Shaw are apprentices, they nevertheless do essentially the same kind of work under the same general working conditions and work out of the same general location. I therefore conclude that an appropriate bargaining unit within the meaning of Section 9(b) of the Act is as alleged, except that truckdrivers will not be excluded, inasmuch as such trucking as is required is done by apprentice mechanics. 3. The violation of Section 8(aX5) Concluding that Kelly Company and Shaw comprise a single integrated enterprise and that the appropriate unit includes all mechanical employees of Shaw as well as those of Kelly Company, and given the fact that Kelly is 339 DECISIONS OF NATIONAL LABOR RELATIONS BOARD signatory to a collective-bargaining agreement covering those employees, I find that by refusing to abide by the terms of the collective-bargaining agreement as to the employees on the Shaw payroll, the Respondents have violated Section 8(a)(5) of the Act.6 IV. THE REMEDY Having found that the Respondents have failed to bargain with the Union by refusing to abide by the collective-bargaining agreement between the Union and the Association, I will recommend that the Respondents be ordered to bargain with the Union and to give retroactive effect to the agreement as to Shaw's employees to January 5, 1976, 7 and make them whole for any loss of wages or other benefits that they may have suffered as a result of the Respondents' refusal to abide by the agreement from and after January 5, 1976, with interest as prescribed in Isis Plumbing & Heating Co., 138 NLRB 716 (1962). The Respondents will also be ordered to pay to the appropriate source such contributions as are required by the agreement with respect to such employees, with interest. CONCLUSIONS OF LAW 1. Edward C. Kelly Company, Inc., and Shaw Mechan- ical Contractors, Inc., constitute a single integrated employer engaged in interstate commerce within the meaning of Section 2(2), (6), and (7) of the Act. 2. Plumbers and Gas Fitters, Local No. 12, a/w United Association of Journeymen and Apprentices of the Plumb- ing and Pipe Fitting Industry of the United States and Canada, is a labor organization within the meaning of Section 2(5) of the Act. 3. By failing and refusing to recognize the Union as lawful representative of employees of Shaw within the job classifications described in the Association's agreement with the Union, and by failing and refusing to apply the terms of such agreement to those employees, the Respon- dents have unlawfully refused to bargain collectively with the Union and are thereby engaging in an unfair labor practice within the meaning of Section 8(aX5) and (1) of the Act. 4. The aforesaid unfair labor practice is an unfair labor practice affecting commerce within the meaning of Section 2(6) and (7) of the Act. Upon the foregoing findings of fact, conclusions of law, and the entire record in this matter, and pursuant to Section 10(c) of the Act, I hereby issue the following recommended: ORDER8 The Respondents Edward C. Kelly, Co., Inc. and Shaw Mechanical Contractors, Inc., East Braintree and North Quincy, Massachusetts, their officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Failing and refusing to recognize Plumbers and Gas Fitters, Local No. 12, a/w United Association of Journey- men and Apprentices of the Plumbing and Gas Fitting Industry of the United States and Canada, as the representative of all employees in the following bargaining unit found appropriate under Section 9(b) of the Act: All plumbers, gasfitters, pipe and/or drain layers temporary firemen and apprentices of the Respondents employed at their Allen Street and/or Colby Road locations, exclusive of office clerical employees, stock- men, guards and supervisors as defined in Section 2(11) of the Act. (b) In any like or related manner interfering with, restraining, or coercing their employees in the exercise of the right to self-organization, to join and assist the said Union, or any other labor organization, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection. 2. Take the following affirmative action designed to effectuate the policies of the Act: (a) Forthwith implement the agreement in existence between the above-named Union and the Masters Plum- bers' Association of Boston and Vicinity, Inc., effective September 1, 1976, to August 31, 1978, and its predecessor as it applies to all employees of Shaw Mechanical Contractors, Inc., retroactive to January 5, 1976, including but not limited to the provisions relating to wages and other employment benefits and make whole their employ- ees for any losses that may have been suffered by reason of the Respondents' failure and refusal to implement said contract in the manner set forth in the remedy section of this Decision. (c) Post at their places of business in Quincy and Braintree, Massachusetts, copies of the attached notice marked "Appendix." 9 copies of said notice, on forms provided by the Regional Director for Region 1, after being duly signed by the Respondents' representative, shall be posted by them, 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, defaced, or covered by any other material. (d) Notify the Regional Director for Region 1, in writing, within 20 days from the date of this Order, what steps the Respondents have taken to comply herewith. 6 Cf. Peter Kiewit and Sons' Co. and South Prairie Construction Co., 206 NLRB 562 (1973); cf. Gerace Construction Inc. and Helger Construction Conpany, Inc., 193 NLRB 645 (1971). I This is the date alleged that the Respondents began engaging in the unfair labor practice. 8 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. 9 In the event that the Board's Order is enforced by a Judgment of a United States Court of Appeals, the words in the notice reading "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." 340 EDWARD C. KELLY CO., INC. APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government After a hearing in which all parties were given the opportunity to participate and present its position, it has been found by the National Labor Relations Board we have committed certain unfair labor practices. We have been ordered to cease and desist therefrom, to post this notice,and to comply with its terms. WE WILL NOT refuse to recognize and bargain in good faith with Plumber and Gas Fitters, Local No. 12 a/w United Association of Journeymen and Apprentic- es of the Plumbing and Pipe Fitting Industry of the United States and Canada, as a representative of all our employees including those employees who work for Shaw Mechanical Contractors, Inc., in the following appropriate bargaining unit: AU plumbers, gas fitters, pipe and/or drain layers, temporary fireman apprentices employed at the Allen Street and/or Colby Road locations exclusive of office clerical employees, stockmen, guards and supervisors as defined in Section 2(11) of the Act. WE WILL recognize and give effect to the contracts existing between the above-named labor organization and Masters Plumbers' Association of Boston and Vicinity, Inc., as it applies to the employees of Shaw Mechanical Contractors, Inc., retroactive to January 5, 1976. WE WILL make our employees whole for any losses they may have suffered by our refusal to implement said agreement. WE WILL NOT in any like or related manner interfere with, restrain, or coerce our employees in the exercise of the rights guaranteed them by Section 7 of the Act. EDWARD C. KELLY Co., INC. AND SHAW MECHANICAL CONTRACTORS, INC. 341