Baker Electric

D. L. BAKER, INC. 351 NLRB No. 35 515 D. L. Baker, Inc. t/a Baker Electric and its alter ego and/or successor Baker Electric, Inc.; Herndon Animal Medical Center, Inc.; and Daniel L. Baker, and Maggie Barry, Individually and In- ternational Brotherhood of Electrical Workers, Local Union No. 26. Cases 5–CA–24131 and 5– CA–24190 September 29, 2007 SUPPLEMENTAL DECISION AND ORDER REMANDING BY MEMBERS LIEBMAN, KIRSANOW, AND WALSH On March 28, 2001, Administrative Law Judge Tho- mas R. Wilks issued the attached Supplemental Decision, Order of Severance, and Remand. Thereafter, the Gen- eral Counsel, the Charging Party International Brother- hood of Electrical Workers, Local Union No. 26 (the Union), and Respondent Baker Electric, Inc. (BEI) filed exceptions and supporting briefs. Respondents D.L. Baker, Inc. (DLB) and Herndon Animal Medical Center, Inc. (HAMCI) filed cross-exceptions1 and supporting briefs. The General Counsel, the Union, and Respon- dents DLB, Daniel L. Baker (Baker), BEI, and Maggie Barry (Barry) filed answering briefs, and the General Counsel, the Union, and Respondents DLB and BEI filed reply briefs. The General Counsel also filed a motion to strike attachments to DLB’s brief in support of its cross- exceptions.2 DLB filed an opposition brief, and the Gen- 1 DLB and HAMCI incorporate by reference BEI exceptions 1–15; HAMCI also incorporates by reference “any other” Respondents’ ex- ceptions. 2 Only the General Counsel filed a separate formal motion to strike attachments. The Union similarly “moved” via brief, and also to strike attachments to BEI’s exceptions. DLB seeks to strike the attachments to the General Counsel’s exceptions brief if the Board strikes DLB’s attachments, and also to strike attachments to the General Counsel’s posthearing brief. The General Counsel’s (and the Union’s) argument is that DLB’s (and BEI’s) attachments include charts (showing various backpay “adjustments”) containing “legal argument” that, together with the brief, exceed the Board’s 50-page limit, and also include correspon- dence not entered into evidence. As to the correspondence, we note that, in the underlying merits decision, Judge Ladwig observed that DLB had gone “outside the record” in attaching unintroduced docu- ments to its posthearing brief, but he found “no necessity to strike the improperly filed attachment.” Baker Electric, 317 NLRB 335, 343 (1995), enfd. mem. 105 F.3d 647 (4th Cir. 1997), cert. denied 522 U.S. 1046 (1998). The Board did not find otherwise then, and we likewise find no necessity or prejudice here. As to the charts, we have disre- garded them as part and parcel of the Respondents’ misguided attempt, which we reject in sec. VI,B, below, to persuade the Board to deviate from its longstanding, traditional mitigation standards and to micro- manage discriminatee Tangy’s mitigation efforts. Having disregarded these attachments, we find it unnecessary formally to strike them. See Ryder Distribution Resources, 311 NLRB 814, 817 fn. 13 (1993) (stat- ing that Board did not rely on attachment to brief and therefore need not pass on GC’s motion to strike attachment). Because we do not eral Counsel and the Union requested special permission to file a reply, which DLB opposed.3 The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. The Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge’s rulings, findings,4 and conclusions only to the extent consistent with this Supplemental De- cision and Order Remanding. I. OVERVIEW This compliance proceeding is the latest chapter in protracted litigation over a variety of remedial issues arising out of the Board’s Decision and Order finding merit in certain unfair labor practice (ULP) allegations. See Baker Electric, 317 NLRB 335 (1995). Respondent DLB is an electrical contractor. Dan Baker is the sole shareholder of DLB. In the liability phase, the Board found that DLB violated Section 8(a)(3) of the National Labor Relations Act (the Act) by discriminatorily dis- charging employee Michael Tangy due to his organizing efforts on behalf of the Union, and Section 8(a)(5) by refusing to recognize the Union and by failing to honor the terms of an 8(f) prehire agreement. As to the latter, the Board rejected DLB’s defense that the charges were untimely filed under Section 10(b) of the Act because of the passage of 16 years and the occurrence of intervening strike DLB’s (or BEI’s) attachments, we need not pass on DLB’s con- tingent request. 3 Although we grant permission to file reply briefs, we strike, as a disguised surreply, DLB’s opposition to the General Counsel’s and the Union’s requests for special permission to file a reply. This is consis- tent with the Board’s general policy of not permitting surreply briefs “except by special leave” where circumstances so warrant, as explained in the Board’s Order earlier in this case granting the General Counsel’s Motion for Partial Summary Judgment. Baker Electric, 330 NLRB 521, 521 fn. 4 (2000). 4 The General Counsel, the Union, and the Respondents have ex- cepted to some of the judge’s credibility findings. The Board’s estab- lished policy is not to overrule an administrative law judge’s credibility resolutions unless the clear preponderance of all the relevant evidence convinces us that they are incorrect. Standard Dry Wall Products, 91 NLRB 544 (1950), enfd. 188 F.2d 362 (3d Cir. 1951). We have care- fully examined the record and find no basis for reversing the findings. DLB contends that the judge erred by not striking discriminatee Tangy’s testimony due to the revelation, midway through the hearing, that the Union had begun “subsidizing” Tangy for wages lost while testifying, which subsidy is to be reimbursed from Tangy’s backpay award. Rather than striking the testimony, the judge considered the subsidy in evaluating Tangy’s credibility. DLB’s citation to a federal criminal statute dealing with bribery and to clearly inapposite caselaw, along with counsel’s distortion of Tangy’s testimony, misses the point. As the judge rightly observed, the situation presented here is nothing more than an advance of backpay due (and even if it were not, the Board has deemed employee wages to be a reasonable measure for determining witness fees, see, e.g., General Electric Co., 230 NLRB 683, 685 (1977)). Thus, we find no error in the judge’s refusal to strike Tangy’s testimony. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 516 events that assertedly precluded applying and enforcing the 8(f) agreement against DLB. The Board’s remedial order provided for three categories of claimants: (1) Tangy (reinstatement, backpay), (2) DLB’s own employ- ees (wage rate differentials, expenses, and fringe benefit contributions), and (3) hiring hall claimants, i.e., indi- viduals DLB should have hired and did not hire under the 8(f) agreement’s hiring hall provisions (backpay, ex- penses, and fringe benefit contributions). In mid-1995, almost immediately after the Board’s Order in the ULP phase issued, DLB, also in trouble with the Internal Revenue Service (IRS), sold its assets to BEI. BEI’s sole shareholder is Maggie Barry, Baker’s wife. DLB’s as- sets were not offered to any other potential buyer. Barry, a veterinarian, is also the sole shareholder of HAMCI. Originally a sole proprietorship, HAMCI was incorpo- rated by Barry during the pendency of this case.5 After the Fourth Circuit Court of Appeals enforced the Board’s Order, mem. 105 F.3d 647 (1997) (per curiam), and the Supreme Court denied certiorari, 522 U.S. 1046 (1998), the Board’s Regional Office issued a compliance specification (CS). The original CS alleged that BEI was both a successor to and an alter ego of DLB, and, under either theory, jointly and severally liable for DLB’s obli- gations. The CS further alleged that Baker and Barry diverted DLB’s and BEI’s corporate funds to themselves; therefore, the CS seeks to pierce the corporate veils of DLB and BEI and hold Baker and Barry individually liable. The General Counsel amended the CS during the hearing to add HAMCI as a party. The Board granted partial summary judgment on the CS. See Baker Elec- tric, 330 NLRB at 522–523. The CS alleged a total backpay liability of $2,914,030.18. It alleged a backpay liability period for the Respondents’ failure to adhere to the 8(f) agreement from August 7, 1993 (the beginning of the 10(b) period), through May 28, 1997 (when the Respondents sent a letter to the Union formally repudiating the 8(f) agree- ment and bargaining relationship). The Respondents counter that the agreement was repudiated no later than March 31, 1994. The CS also alleged a continuing back- pay obligation to employee Tangy. The parties contested the validity of a July 1997 reinstatement offer to Tangy; they stipulated that the Respondents made a valid rein- statement offer to Tangy on September 28, 2000, which Tangy declined. Accordingly, the General Counsel al- leged that the backpay period for Tangy ran from his 5 In this decision, when we refer to “the Respondents” collectively, we mean DLB, BEI, Dan Baker, and Maggie Barry, except when we discuss events predating BEI’s mid-1995 creation, in which case we mean DLB and Baker. December 1, 1993 discharge through the stipulated Sep- tember 28, 2000 offer of reinstatement. The General Counsel amended the CS a number of times during the course of the compliance hearing, which lasted more than 45 days. Approximately halfway through the hearing, Judge Wilks proposed bifurcating the proceedings: he would decide the issues of alter ego/successor liability, piercing the corporate veil, the contract repudiation date, and Tangy’s make-whole rem- edy; the remaining issues—HAMCI’s alleged derivative liability and the net backpay due the other two sets of claimants (DLB’s employees and the hiring hall claim- ants)—would be severed and remanded for a hearing before another judge. In accordance with this bifurcation, Judge Wilks ren- dered the following findings of fact and conclusions of law. First, he interpreted the Board’s partial summary judgment Order as encompassing both backpay calcula- tion formulae and the actual calculations alleged in the CS. Second, he interpreted the Order as establishing that individuals claimed by the Respondents to be office and supervisory personnel fell within its scope. In other words, the judge determined that the Respondents were precluded from litigating entitlement to backpay for in- dividuals who, according to the Respondents, were not bargaining unit employees. Third, he found that BEI was an alter ego of and successor to DLB, and thus liable for DLB’s unfair labor practices. Fourth, he found that, al- though Baker and Barry disregarded corporate formali- ties, there was insufficient evidence that their abuse of the corporate form “tended to defraud any creditor or evade any debts.” On that basis, the judge determined there was insufficient evidence to pierce the corporate veils of DLB and BEI to hold Baker and Barry individu- ally liable. Fifth, the judge concluded that liability under the 8(f) agreement terminated on October 5, 1994, find- ing that the then-existing “factual configuration” im- parted knowledge to the Union of DLB’s repudiation of the agreement as of that date. Sixth, the judge issued a make-whole remedy as to Tangy, adopting the “alter- nate” rather than the “revised” version of the General Counsel’s backpay calculations (the significance of those terms is fully explained below). The judge found Tangy is due net backpay of $85,407.66, medical expenses of $217.35, and contributions to Union health and welfare funds. Finally, the judge issued an order of severance and remand, sending certain issues (summarized briefly above) back to the chief administrative law judge for assignment to another judge. As discussed more fully below, we adopt in part and reverse in part the judge’s findings and conclusions, and we remand certain issues. Broadly, we find and con- D. L. BAKER, INC. 517 clude as follows. First, we affirm the judge’s interpreta- tion of the Board’s summary judgment Order as encom- passing both backpay calculation formulae and the actual calculations. Second, we find that the judge erred in in- terpreting the summary judgment Order as precluding the Respondents from seeking to exclude from its scope in- dividuals claimed by the Respondents to be nonunit of- fice and supervisory personnel. Third, we adopt the judge’s findings that BEI is liable for DLB’s unfair labor practices both as a successor and as an alter ego. Fourth, we reverse the judge and find that the corporate veils of DLB and BEI should be pierced to reach Baker and Barry individually. Fifth, we reverse the judge’s finding that repudiation of the 8(f) agreement occurred on Octo- ber 5, 1994, finding instead that it occurred on March 31, 1994. Sixth, we adopt the judge’s findings that DLB’s 1997 reinstatement offer to Tangy was invalid, that he was entitled to backpay at the 8(f) contractual rate even after contract repudiation, and that with very limited ex- ceptions, Tangy reasonably mitigated his damages and is entitled to his claimed expenses. However, we find that the judge erred in accepting the General Counsel’s “al- ternate” calculations as the measure of Tangy’s backpay. Instead, we find that the General Counsel’s “revised” calculations (except as to certain discrete issues, which we will remand) accord with traditional Board method- ology in determining backpay in compliance proceedings and more appropriately measure the Respondents’ back- pay obligation. Finally, we interpret and clarify the Board’s previous summary judgment Order (330 NLRB at 523) vis-à-vis the judge’s remand Order. II. CLARIFICATIONS OF THE IMPORT AND SCOPE OF THE BOARD’S ORDER GRANTING PARTIAL SUMMARY JUDGMENT ON THE COMPLIANCE SPECIFICATION After the CS issued, the General Counsel moved for partial summary judgment. Specifically, the General Counsel sought summary judgment as to the allegations in CS paragraphs 17, 18, and 19, setting forth backpay computational formulae and amounts of gross backpay, interim earnings, and net backpay due DLB’s own em- ployees; paragraph 24, setting forth a computational for- mula and calculations of gross backpay due hiring hall claimants; and paragraph 32, setting forth a computa- tional formula and calculations of gross backpay due Tangy. The General Counsel stated that the motion did not encompass issues regarding (a) interim earnings and calendar quarter net backpay for hiring hall claimants or Tangy, (b) whether employees are supervisory employ- ees excluded from coverage under the 8(f) agreement, or (c) the derivative liability of BEI, Baker, or Barry. The Board6 found that the Respondents, by virtue of their defective answers, had admitted CS paragraphs 17, 18, 19, 24, and 32, and issued an Order granting the General Counsel’s motion with respect to “formulae and calcula- tions of gross backpay for all claimants and interim earn- ings and calendar quarter net backpay for claimants who worked for [DLB].” 330 NLRB at 523 (emphasis added). Moreover, as will be discussed more fully be- low, the Board, noting that the Respondents denied li- ability for the backpay period on the ground that DLB repudiated the contract in September 1993, stated: “In the underlying case, however, the Board and the court of appeals specifically found that the Respondent had never effectively repudiated the agreement. Thus the Respon- dents’ argument that backpay tolls in September 1993 has already been rejected and may not be relitigated in this proceeding.” 330 NLRB at 523. On its face, Judge Wilks’ decision under review here appears both internally inconsistent and at odds with the Board’s prior decision granting partial summary judg- ment. At the hearing and in his decision, the judge clearly considered himself bound by the Board’s partial summary judgment Order, yet he remanded issues related to paragraphs 17, 18, 19, and 24.7 The General Counsel excepts to the judge’s remand of issues on which the Board has granted summary judgment. The General Counsel also argues that the judge failed to rule on the oral motion at the compliance hearing for summary judgment on calculation formulae and actual calculations for fringe benefit contributions for the Respondents’ em- ployees, and seeks a Board Order directing the Respon- dents to pay the fringe benefit contributions alleged in CS paragraph 20. The General Counsel argues that, be- cause the Board granted summary judgment on the hours worked by the Respondents’ own employees during the backpay period, and because the record includes the ap- plicable contractual fringe benefit rates, the Board can, and should, enter the appropriate order. In their exceptions and cross-exceptions, respectively, BEI and DLB argue as follows: (1) the Board abused its discretion in granting partial summary judgment because (a) Tangy did not truthfully report concerning interim employment, and (b) the Regional Office induced the Respondents through subterfuge into believing that it would provide supporting documentation for the CS be- fore the Respondents had to provide a complete answer;8 6 The panel consisted of former Chairman Truesdale, former Mem- ber Hurtgen, and Member Liebman. 7 In sec. VI,B, fn. 28, the judge erroneously stated that the Board also granted summary judgment on par.23. 8 The Board previously rejected the Respondents’ arguments regard- ing the General Counsel’s failure to return original documents or to DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 518 (2) the judge ignored the Respondents’ amended an- swers; and (3) the judge erred in interpreting the Board’s Order to include more than backpay calculation formu- lae, i.e., as setting specific backpay dollar amounts and as encompassing office and supervisory personnel as well. We find no merit in the Respondents’ first two excep- tions. Regarding the first, that Tangy did not truthfully report, the Respondents allege inaccuracies in Tangy’s reporting related to the number of hours he worked for interim employers. Even assuming, as the judge found, some minor inadvertent misreporting, this is not relevant to the Respondents’ failure to answer the CS’s gross backpay allegation that DLB provided 40 hours of work per week to employees during the backpay period. Re- garding the second, that the judge ignored the Respon- dents’ amended answers to the CS, we note that DLB admitted that its amended answer addressed the “gross backpay hours, wage rates, and amounts.” The Respon- dents failed to comply with the judge’s instruction to respond only to amendments to the CS, which amend- ments primarily addressed union fund contributions and Tangy’s interim earnings and expenses. Thus, we find that the judge properly disregarded the Respondents’ “expansive amended answer” as an attempt to “escape the partial summary judgment.” The third exception raises an issue concerning the scope of the summary judgment Order. Although we acknowledge that, in the text of the Supplemental Deci- sion, the Board stated that it deemed “the Respondent to have admitted . . . the gross backpay formula for all claimants,” 330 NLRB at 523, the Order itself unambi- produce additional documents prior to the Respondents’ deadline for filing an answer to the CS. The Board rejected the Respondents’ mo- tion to compel return of original documents because the Board was concerned about the integrity of the evidence and because the General Counsel had provided the Respondents with copies of their original documents. The Board rejected the motion for production on the basis that the requested information (which related to interim earnings of hiring hall employees) was not relevant to matters on which summary judgment was sought. 330 NLRB at 522 fn. 5. The precedent cited by DLB on this issue is inapposite. We emphasize that the Respondents had access to a copy of the 8(f) agreement, which formed the backbone of the CS, as it was introduced as an exhibit in the underlying merits hearing. Inasmuch as there was no prejudice to Respondents, and no change in law or circumstances that would lead us to believe that the prior Board panel erred on this point, we do not disturb the Board’s rulings. We do, however, note that on the last day of the compliance hearing, the judge ordered counsel for the General Counsel to return the Respondents’ original documents 14 days after the filing of briefs. Counsel for the General Counsel did not timely comply with this order, but subsequently represented that the documents would be hand deliv- ered to the Respondents’ counsel, pursuant to the parties’ agreement, by a date certain. Because this date has long since passed, we expect that counsel for the General Counsel has now complied; if she has not, we order her to do so. guously grants summary judgment “with respect to for- mulae and calculations of gross backpay for all claim- ants” (emphasis added), id. Thus, we affirm the judge’s interpretation of the Board’s summary judgment Order as encompassing both formulae and calculations. However, to the extent that the judge interpreted the summary judgment Order as establishing that individuals claimed by the Respondents to be office and supervisory person- nel fell within its scope, we find, as explained below, that the judge erred. CS paragraph 16 alleges that “[t]he employees em- ployed by Respondents during the backpay period are listed in Exhibit A.” CS paragraph 17(a) alleges the gross backpay formula “for discriminatees whose names appear on Exhibit A.” (Emphasis added.) Answering paragraph 17(a), the Respondents stated that many of the alleged discriminatees were hired as supervisors or office personnel not covered by the 8(f) agreement. In the Mo- tion for Partial Summary Judgment, the General Counsel represented that the motion did “not deal with issues re- garding whether employees are supervisory employees excluded from coverage by the NECA agreement.” The General Counsel also did not move for summary judg- ment on CS paragraph 16. At the hearing before Judge Wilks, however, counsel for the General Counsel ob- jected when the Respondents tried to question an em- ployee as to his supervisory authority, arguing that the Board’s Order granted summary judgment as to those individuals named in exhibit A. A colloquy ensued,9 after which the judge ruled that the Respondents were permitted to cross-examine on the supervisory issue. Subsequently, however, after hearing further argument by the parties, the judge ruled that the Board’s summary judgment Order precluded litigation as to whether the alleged discriminatees named in exhibit A were appro- priate claimants. In so ruling, the judge relied on the Board’s grant of summary judgment as to paragraph 17(a), which incorporated by reference paragraph 16. The judge also relied on footnote 3 in the supplemental decision, which states: “The motion does not seek sum- mary judgment with respect to alter ego or successor issues, interim earnings of hiring hall claimants or Tangy, claimants’ medical expenses, or contractual funds payments.” 330 NLRB at 521 fn. 3. Judge Wilks rea- soned that because footnote 3 listed issues still out- standing and did not mention the supervisory issue, the 9 During this colloquy, the judge asked: “[I]f the Board has already decided that . . . and you are saying you preclude litigation of the issue of his being a supervisor, then why did you get into that on direct ex- amination?” The counsel for the General Counsel responded: “They don’t preclude litigation of that insofar as he is appropriately named claimant in the compliance specification. . . .” D. L. BAKER, INC. 519 Board must have intended that litigation of that issue was foreclosed. The judge’s interpretation represents one reasonable reading of the Supplemental Decision and Order. How- ever, we find merit in the Respondents’ exception be- cause, in light of the General Counsel’s representations, both in support of the motion and at the hearing, to pre- clude further litigation of the status of individuals listed in exhibit A would raise serious due process concerns. By its own terms, the General Counsel’s motion repre- sented that it preserved “issues regarding whether em- ployees are supervisory employees excluded from cover- age by the NECA agreement.” The General Counsel’s failure to seek summary judgment on CS paragraph 16 and initial statements at hearing reinforced that represen- tation. Moreover, the Respondents’ answer explicitly raised this defense.10 In these circumstances, we think the Respondents are justified in questioning how the Board could grant summary judgment on an issue that the General Counsel explicitly disclaimed. Accordingly, and guided by principles of fundamental fairness, we interpret the Board’s Order concerning CS paragraph 17 as being limited to formulae and calculations for all dis- criminatees listed on exhibit A ultimately found to be employees covered by the 8(f) agreement. Paragraph 1 of the judge’s proposed Order of Severance and Remand directs, in relevant part, that another judge “resolve the issues of the make-whole remedy for the Respondents’ ‘employees in the bargaining unit.’” We adopt paragraph 1, pursuant to which we remand to determine whether (1) the disputed employees are office personnel or supervi- sors, and (2) if the latter, whether they are covered by the 8(f) contract.11 Addressing the General Counsel’s and the Union’s ex- ceptions, there is obvious merit in the argument that the Board should not remand issues previously decided by summary judgment. Thus, we clarify that we interpret the summary judgment Order to preclude any further litigation as to the amounts due the Respondents’ own employees listed in paragraph 16 who are ultimately found to be covered by the 8(f) agreement. Moreover, we find merit in the General Counsel’s argument that a grant of summary judgment on fringe benefit contribu- tions for the Respondents’ own employees logically fol- 10 The Board’s Supplemental Decision stated that the Respondents “generally deny the General Counsel’s formulae for computing back- pay and the application of those formulae to the claimants.” 330 NLRB at 521. 11 We note that working foremen and supervisors are entitled to backpay when their wages and working conditions are covered by an 8(f) agreement. F. G. Lieb Construction Co., 318 NLRB 914, 916 (1995); Industrial TurnAround Corp. v. NLRB, 115 F.3d 248, 253 (4th Cir. 1997). lows from the Board’s grant of summary judgment on gross backpay (CS par. 17). However, because it re- mains to be determined which of the Respondents’ own employees were covered by the agreement, we cannot issue a final order mandating payment of benefit fund contributions at this time. We emphasize, however, that in any final order issued upon remand, the fund contribu- tions owed for those of Respondents’ employees found to have been covered under the 8(f) agreement are to be as alleged in CS paragraph 20, as shown on General Coun- sel’s Exhibit 1(c), as amended at the hearing. III. WHETHER BEI IS JOINTLY AND SEVERALLY LIABLE FOR DLB’S ULPS The judge found that BEI is jointly and severally liable for DLB’s ULPs, both (1) as a Golden State successor with knowledge of DLB’s ULPs; and (2) as an alter ego/disguised continuance. BEI excepts to both bases of liability. We adopt the judge’s findings. A. Whether BEI is DLB’s Golden State Successor In Golden State Bottling Co. v. NLRB, 414 U.S. 168 (1973), the Supreme Court held that a bona fide pur- chaser of a business who has knowledge of the seller’s ULPs at the time of the purchase and who continues the business without interruption or substantial change in operations, employee complement, or supervisory per- sonnel has joint and several liability for remedying the seller’s ULPs. The judge found that BEI was DLB’s Golden State successor because (1) BEI was the same employing business, with Baker as its “driving force”; (2) Baker’s knowledge of DLB’s ULPs is imputed to BEI, based on Baker’s status as a “silent partner” and thus a principal of BEI; and (3) Barry’s knowledge of DLB’s ULPs (the judge discredited her denial of knowl- edge) is imputed to BEI, based on her relationship with Baker. BEI excepts, arguing that there is no evidence that Barry had knowledge of DLB’s ULPs at the time of the asset sale, and that the judge erred in imputing Baker’s knowledge to Barry based on his “silent partner” finding. In addition, BEI, citing Perma Vinyl Corp., 164 NLRB 968 (1967), enfd. sub nom. U.S. Pipe & Foundry Co. v. NLRB, 398 F.2d 544 (5th Cir. 1968), argues that the General Counsel failed to prove that DLB’s potential liability was reflected in the purchase price. We adopt the judge’s finding that BEI is liable for DLB’s ULPs as its successor with knowledge of the ULPs.12 BEI’s argument that only Barry’s knowledge is 12 We do not rely on the judge’s finding that Baker was a “silent partner” in adopting the judge’s finding that Baker was a principal of BEI. The Board has found “principal” status, even absent an ownership DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 520 material in a successorship analysis is foreclosed by Golden State itself, where the successor’s employment of the predecessor’s manager, who had committed the ULP, satisfied the knowledge requirement. 414 U.S. at 173. Moreover, Perma Vinyl, above, does not support BEI’s contention that the General Counsel, to establish BEI’s status as a Golden State successor, must prove that po- tential unfair labor practice liability was reflected in the purchase price of the business. The Board in Perma Vi- nyl imposed no such evidentiary requirement. It merely justified the Golden State rule by pointing out that the successor is in the best position to remedy the predeces- sor’s unfair labor practices and suffers no unfair hardship because it can account for the potential liability in the purchase price or secure an indemnity clause in the sales agreement. 164 NLRB at 969. B. Whether BEI is DLB’s Alter Ego/Disguised Continuance A corporation will be deemed the alter ego of a prede- cessor corporation if there is not “a bona fide discontinu- ance and a true change of ownership” or if there is “merely a disguised continuance of the old employer.” Southport Petroleum Co. v. NLRB, 315 U.S. 100, 106 (1942), rehearing denied 315 U.S. 827 (1942). Alter ego situations involve a formal or technical change in the structure or identity of the employing entity, frequently to avoid the effect of the labor laws, without any substan- tial change in ownership or management. In such cir- cumstances, the Board and the courts have held that the successor is in reality the same employer as the prede- cessor and subject to all of the predecessor’s legal and contractual obligations. Howard Johnson Co. v. Hotel & Restaurant Employees, 417 U.S. 249, 259 fn. 5 (1974). Determining alter ego status is a question of fact for the Board. Southport Petroleum Co., above. In deciding whether one employer is the alter ego of another, the Board considers whether the “two enter- prises have ‘substantially identical’ management, busi- ness purpose, operations, equipment, customers, and su- pervision, as well as ownership.” Midwest Precision Heating & Cooling, 341 NLRB 435, 439 (2004), affd. 408 F.3d 450 (8th Cir. 2005) (quoting Advance Electric, 268 NLRB 1001, 1002 (1984), enfd. as modified 748 F.2d 1001 (5th Cir. 1984), cert. denied 470 U.S. 1085 (1985)). An employer’s intent to evade its responsibili- ties under the Act by creating the alleged alter ego is also a relevant consideration, but such an intent is not requi- site to an alter ego finding. Fugazy Continental Corp., 265 NLRB 1301, 1301–1302 (1982), enfd. 725 F.2d interest, under similar circumstances. Reliable Electric Co., 330 NLRB 714 (2000), enfd. mem. 12 Fed. Appx. 888 (10th Cir. 2001). 1416 (D.C. Cir. 1984); Johnstown Corp., 313 NLRB 170, 171 (1993), review granted in part, enfd. in part 41 F.3d 141 (3d Cir. 1994); Fallon-Williams, Inc., 336 NLRB 602, 602 (2001). The Board has found alter-ego status even though the entities have different owners when the owners are in a close familial relationship. Midwest, above at 435; Fallon-Williams, above at 1275; Crossroads Electric, Inc., 343 NLRB 1502 (2004), enfd. mem. 178 Fed. Appx. 528 (6th Cir. 2006); Kenmore Contracting Co., 289 NLRB 336, 337 (1988), enfd. 888 F.2d 125 (2d Cir. 1989). No single factor is determina- tive, and not all the indicia need be present for the Board to find alter ego status. Reigel Electric/Central Electri- cal Services, 342 NLRB 847, 847 (2004); Standard Commercial Cartage, Inc., 330 NLRB 11, 13 (1999). The judge, recognizing that “actual common control is more significant than a change in ownership,” found that Baker dominated BEI’s operations. Stating the principle that an intent to evade responsibilities under the Act is relevant but not necessary to finding alter-ego status,13 the judge noted that, although there is a lack of uniform- ity in the circuit courts as to the necessity of finding in- tent to evade, the Fourth Circuit looks to whether the transfer resulted in a “reasonably foreseeable benefit.” Alkire v. NLRB, 716 F.2d 1014, 1020 (4th Cir. 1983). Here, even if Baker’s primary intent was to evade liabil- ity to the IRS, a reasonably foreseeable benefit was also to escape NLRB liability. Significantly, the judge found that, while the IRS debt was the “primary debt” of con- cern, “the elimination of any other debt that threatened the viability of DLB was also a minor factor” in the crea- tion of BEI. BEI excepts, arguing that there was no “substantial continuity” between DLB and BEI because BEI aban- doned DLB’s “company apparel practice” and used a different bank and a different accounting firm. BEI em- phasizes that the tax attorney who structured the asset sale did not know of the NLRB obligation; rather, the asset sale was conceived to avoid the IRS obligation. BEI contends that neither prong of the two-pronged Alkire test is met here: the first prong because there is no 13 Even assuming, arguendo, that intent to evade is requisite to find- ing alter ego status, the judge found such intent here. The judge cited to the testimony of Tas Coroneos, the attorney who prepared the asset purchase agreement between DLB and BEI, who admitted that “elimi- nation of any other debt [besides the principal debt to the IRS] . . . was also a minor factor” driving the asset sale. The judge also found that Baker concealed his control of BEI from the Union, and openly ex- pressed to employee Petty that the Union could not touch BEI because it was owned by his wife. Where a new entity is formed with “‘an ob- jective of escaping further dealings with the Union,’” the Board has found unlawful motivation. Crossroads Electric, Inc., above at 1507 (quoting Martin Bush Iron & Metal, 329 NLRB 124 (1999)). D. L. BAKER, INC. 521 identity of control; the second prong because the transfer did not provide an “expected or reasonably foreseeable benefit to the old employer [DLB] related to the elimina- tion of its labor obligations.” We adopt the judge’s finding that BEI is an alter ego and disguised continuance of DLB and hence liable for DLB’s unfair labor practices. The claimed differences between DLB and BEI (abandoning DLB’s “company apparel practice”14 and using a different bank and ac- counting firm) do not defeat “substantial continuity,” as evidenced by the identity of the corporate undertaking, Baker’s control of both corporations, a substantially similar customer base, and BEI’s use of former DLB employees to minimize the appearance of change. The temporal proximity between DLB’s cessation of business and BEI’s creation, together with BEI’s takeover of DLB’s projects, are additional factors supporting an alter ego finding. Twin Cities Electric, 296 NLRB 1014, 1020 (1989), enf. granted in part and denied in part 914 F.2d 263 (9th Cir. 1990); Cofab, Inc., 322 NLRB 162, 163 (1996), enfd. sub nom. NLRB v. DA Clothing Co., 159 F.3d 1352 (3d Cir. 1998). The Board will find an alter ego relationship where an employer attempts to evade liability by closing one business and opening the same business under a new name. Barnard Engineering Co., 295 NLRB 226, 246 (1989). Moreover, the judge’s un- excepted-to factual finding that the General Counsel ad- duced “undisputed evidence of a history of ‘loans’ from Dan Baker, Barry, and her sole proprietorship HAMC to DLB, and from Barry to BEI,” all of which were “un- documented as to duration and manner of repayment or other terms,” indicates lack of an arm’s-length relation- ship, which further supports a finding of alter ego status. Vallery Electric, 336 NLRB 1272, 1275 (2001), enfd. 337 F.3d 446 (5th Cir. 2003); Reigel Electric, above at 847. The Respondents’ reading of Alkire as requiring a spe- cific intent to evade a Board obligation, in the face of the judge’s finding that Coroneos “effectively admitted” intent to evade IRS back-tax liability, is unpersuasive. As noted by the judge, the Fourth Circuit applies a “rea- sonably foreseeable benefit” test. Here, the asset sale provided a reasonably foreseeable benefit to Baker by enabling him to continue in his profession while escaping his debts (both to the IRS and under the Board’s Order), and by potentially eliminating DLB’s collective- bargaining obligation. 14 DLB actually stopped using uniforms in 1993 or 1994, before BEI purchased DLB’s assets. IV. WHETHER THE CORPORATE VEILS OF DLB AND BEI SHOULD BE PIERCED TO HOLD BAKER AND BARRY INDIVIDUALLY LIABLE A. Applicable Law White Oak Coal Co., 318 NLRB 732 (1995), enfd. 81 F.3d 150 (4th Cir. 1996), governs the Board’s analysis relative to piercing the corporate veil. Under White Oak Coal, the Board will pierce a corporate veil when (1) the shareholders and the corporation have failed to maintain separate identities; and (2) adherence to the corporate form would sanction a fraud, promote injustice, or lead to the evasion of legal obligations. Under the first prong of this test, the Board considers the degree to which (a) corporate formalities have been maintained; and (b) indi- vidual and corporate funds, assets, and affairs have been commingled. Among the factors considered by the Board in applying the first prong are the nine “Kansas City factors”: (1) whether the corporation is operated as a separate entity; (2) commingling of funds and other assets; (3) failure to maintain adequate corporate records; (4) nature of the corporation’s ownership and control; (5) availability and use of corporate assets, the absence of same, or undercapitalization; (6) use of the corporate form as a mere shell, instrumentality or conduit of an individual or another corporation; (7) disregard of corpo- rate legal formalities and the failure to maintain an arm’s-length relationship; (8) diversion of the corporate funds or assets to noncorporate purposes; and (9) transfer or disposal of corporate assets without fair considera- tion.15 When assessing the second prong, the Board con- siders whether the inequity flowed from the misuse of the corporate form; moreover, the individuals charged with liability must have participated in the fraud, injus- tice, or inequity. 318 NLRB at 735. Applying the White Oak Coal two-prong test here, the judge found that the first prong was met but that the sec- ond prong was not. Accordingly, the judge found that neither Baker nor Barry could be held individually liable. In finding the first prong satisfied, the judge focused on the factors of undercapitalization (finding DLB and BEI were both undercapitalized before 1999), disregard of corporate formalities, and failure to maintain arm’s- length relationships. In finding that the second prong was not satisfied, the judge found insufficient evidence that the misuse of the corporate form was intended to, or tended to, defraud creditors or evade potential liability under the Board’s Order. The judge found that Baker’s concern was with his IRS (not Board) debt; moreover, the judge found insufficient evidence that Barry’s abuse 15 NLRB v. Greater Kansas City Roofing, 2 F.3d 1047, 1052 fn. 6 (10th Cir. 1993). DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 522 of the corporate form threatened satisfaction of BEI’s Board-related debt. As explained below, we find that both prongs of the White Oak Coal test have been met. We thus reverse the judge to hold Baker and Barry individually liable. We acknowledge that piercing the corporate veil is an exceptional remedy. See, e.g., Flat Dog Productions, Inc., 347 NLRB 1179, 1182 (2006) (“insulation” of a stockholder from his corporation’s debts is a “critical and longstanding element of the Federal common law of cor- porations”; burden of showing corporate veil should be pierced is a “heavy one”); Dole Food Co. v. Patrickson, 538 U.S. 468, 475 (2003) (piercing corporate veil “is the rare exception, applied in the case of fraud or certain other exceptional circumstances . . . and usually deter- mined on a case-by-case basis”). For the reasons that follow, however, we think that this is just such an excep- tional case. B. Application of First Prong of the White Oak Coal Test BEI excepts generally to the judge’s application of the Kansas City factors, and specifically to the judge’s find- ings that BEI was undercapitalized and failed to follow arm’s-length corporate formalities.16 BEI argues that the challenge to capitalization came from the General Coun- sel’s expert witness, Richard Booth, who failed to testify that there was anything improper regarding the asset sale, and whose classification of transactions as “distributions to shareholders” (i.e., dividends), rather than repayment of loans, was (according to BEI) self-serving. BEI also argues that it merely operated like other small busi- nesses. The General Counsel and the Union also filed excep- tions, contending that the judge failed to make specific findings regarding DLB’s and BEI’s repayment of “loans” to Baker and Barry. The General Counsel and the Union assert that the corporations “paid back” more money than was loaned.17 Baker did not file exceptions or cross-exceptions regarding the judge’s findings under the first prong of the White Oak Coal test. In his answer- 16 DLB “adopts the arguments in [BEI’s] Exceptions and [Baker’s] Answering Briefs.” 17 The General Counsel, citing Bannon Mills, Inc., 146 NLRB 611 (1964), also seeks to strike, from R. Exh. 116 (R-116), journal entries, admitted by the judge over the General Counsel’s objections, that pur- port to show that interest was paid to Barry (therefore suggesting arm’s-length transactions). We find it unnecessary to pass on this exception because the judge’s ruling, even if erroneous, did not preju- dice the General Counsel. See AEi2, LLC, 343 NLRB 433, 433 (2004). The judge did not rely on R-116, finding that it raised more questions than it answered, and crediting (over the R-116 entries) Barry’s testi- monial admission that she did not charge interest on loans to herself. For the same reasons, we also do not rely on those entries. ing brief, however, Baker argued that (1) the law speaks to “degree,” and (2) DLB’s actions met corporate law standards for small, closely held corporations.18 Commingling, treatment of corporate assets as one’s own, and undercapitalization often constitute the most serious forms of abuse of the corporate entity. Seymour v. Hull & Moreland Engineering, 605 F.2d 1105, 1112 (9th Cir. 1979); NLRB v. O’Neill, 965 F.2d 1522, 1531 (9th Cir. 1992), cert. denied 509 U.S. 904 (1993). In adopting the judge’s finding that the first prong of the White Oak Coal test is satisfied, we find these serious forms of abuse here. Individual and corporate funds and affairs have been commingled, and BEI was undercapi- talized. In addition, corporate legal formalities have not been maintained. First, although BEI disagrees with Booth’s classifica- tion of certain transactions, Booth was clear, as the judge found, that BEI engaged in a pattern of behavior that rendered it undercapitalized. Booth testified that (1) it was inappropriate for Barry to lend the entire capitaliza- tion to BEI; (2) by the end of 1999, BEI’s entire capital and more had been withdrawn (DLB’s 1993 tax return also showed negative equity); (3) Barry treated BEI as a “personal piggybank, rather than attempting to ade- quately capitalize it”; and (4) constant “inflows” and “outflows” were necessary because BEI did not have enough capital to pay its bills when due. Second, accord- ing to Booth’s expert testimony, which the Respondents failed to undermine, an undocumented infusion of money is presumed to be an equity contribution, not a loan; if that presumed equity contribution is then withdrawn such that the shareholder owes the corporation money, that is an abuse of the corporate form and evidence of under- capitalization. Undocumented transactions and inade- quate loan documentation also indicate an absence of arm’s-length transactions. Third, an asset purchase agreement should contain certain provisions absent from the agreement here. Finally, BEI’s defense of “everyone does it” must fail. C. Application of Second Prong of White Oak Coal Test The General Counsel and the Union except both to the judge’s failure to pierce the corporate veil and to the judge’s finding that Baker and Barry’s diversion of 18 The Union seeks to strike that portion of Baker’s answering brief related to the first prong, arguing that it goes beyond the scope of the Union’s partial exceptions and thus violates Board Rule Sec. 102.46(d)(2). We decline to strike. In its exceptions, the Union seeks more detailed findings as to the flow of funds. Thus, its exceptions are not limited to the second prong of the White Oak Coal test, and Baker’s answering brief is within the scope of those exceptions. Moreover, as a practical matter, the judge’s findings on the first prong are in issue because of BEI’s exceptions. D. L. BAKER, INC. 523 DLB’s and BEI’s assets does not diminish the ability of those corporations to satisfy the Board’s remedial order. They emphasize that the Respondents bear the burden of clarifying any confusion surrounding financial transac- tions. Bufco Corp., 323 NLRB 609, 628–629 (1997), enforcement granted in part, order vacated in part 147 F.3d 964 (D.C. Cir. 1998). They also note that, although it is not necessary to show actual intent to defraud, both Baker and Barry had the intent to evade DLB’s and BEI’s legal obligations. We find merit in these excep- tions. Again, where, as here, the first prong of White Oak Coal is satisfied, piercing is warranted where “adherence to the corporate form would sanction a fraud, promote injustice, or lead to the evasion of legal obligations.” 318 NLRB at 735. In conducting the second-prong analysis, the Board considers whether abuse of the cor- porate form would have the “natural, foreseeable, and inevitable consequence” of diminishing a corporation’s ability to satisfy the remedial obligation. Id. Such abuse includes an individual’s use of corporate funds for per- sonal benefit at a time when the corporation is unable to meet statutory obligations. West Dixie Enterprises, 325 NLRB 194, 195 (1997), affd. 190 F.3d 1191 (11th Cir. 1999). An individual’s removal of a corporation’s assets through “fluid transactions” that place those assets be- yond the reach of the remedial order also suffices to es- tablish the second prong. Reliable Electric Co., 330 NLRB 714. As explained below, adherence to DLB’s and BEI’s corporate forms would sanction a fraud, pro- mote injustice, or lead to an evasion of legal obligations. First, the judge erred by finding there was insufficient evidence to establish that the abuse of DLB’s and BEI’s corporate forms diminished the ability of those busi- nesses to satisfy the remedial obligation. The judge fo- cused on monies flowing into the corporations (the un- documented “loans” to DLB and BEI), but failed to ade- quately consider the numerous disbursements by DLB and BEI directly to Baker and Barry or to the third-party creditors of both individuals.19 The judge’s focus on 19 For example, the record shows that DLB made payments to Fair- fax Bank & Trust, the lender for the construction loan on Baker’s and Barry’s residence, to K.M. Fleming and Loudoun Lumber for other building materials, to Virginia Concrete to pour sidewalks, and to Dozer Associates to perform grading work. DLB assigned two electri- cians to install the electrical wiring in the residence; one of them testi- fied he was paid by a DLB paycheck. DLB also made payments on Baker’s Humvee, which was purchased as a personal vehicle and titled to him personally, and paid his homeowners’ insurance premium and furniture storage fees. DLB paid tuition for Baker’s son at George Washington University, and made payments to credit card companies for personal expenses charged on Baker’s personal credit cards. BEI also paid for personal charges incurred on credit cards owned by Baker, accounting services rendered for Baker personally, delivery of a sauna inflow, not outflow, led him to conclude that Baker was DLB’s rescuer and not its exploiter, but his conclusion does not take into consideration the entirety of the re- cord.20 A similar pattern of BEI loans and repayments shows BEI disbursed thousands of dollars to cover per- sonal expenses of Barry and Baker.21 Through undocu- mented “loans,” both Baker and Barry diverted substan- tial amounts of money from the corporate accounts at times when the corporations were struggling financially. If the corporations cannot satisfy their corporate debts but for infusions of cash from Baker and Barry, then the corporations’ ability to satisfy their remedial obligation is illusory.22 The Board has not hesitated to pierce the corporate veil when individuals divert corporate funds for their personal benefit and, in the process, diminish the corporation’s ability to satisfy its remedial obligation. Reliable Electric Co., supra at 714–715; West Dixie En- terprises, supra at 195; Bufco Corp., 323 NLRB at 629; door, season football tickets, and repairs to HAMCI’s facility. BEI employees installed a vacuum system at HAMCI. Both DLB and BEI continuously paid the mortgage on Baker’s and Barry’s residence, even after Barry’s “loan” to BEI to purchase DLB was repaid, and even though Baker drew a salary from DLB and, beginning in 2000, from BEI. Indeed, the fact that Baker did not receive a salary from BEI from 1995 until 2000, despite his role as operations manager, supports both the judge’s finding that Baker commingled funds and a finding that corporate funds were being diverted to pay personal obligations. 20 For example, according to the testimony of Chorazy, DLB’s ac- countant, and to R. Exh. 118, at the beginning of 1993 DLB owed Baker $46,780.02, but at the end of 1993 Baker owed DLB $18,906.42. Chorazy testified she did not develop a year-end summary for 1994 or 1995 similar to what she prepared for 1993 because Baker failed to provide her with DLB records. Expert witness Booth testified that from 1993 to 1994, DLB was continuously undercapitalized, with Baker transferring funds from DLB, purportedly in repayment of his loan to DLB, without regard for whether DLB’s assets exceeded its debts at the time of disbursement (GC Exhs. 9–11, 13–18, 20, 22, 36). From March 1993 through March 1995, Baker signed DLB checks written to Barry, even though she had no formal relationship with the corporation (GC Exh. 53). 21 BEI’s corporate tax returns show BEI’s liabilities exceeded assets by $38,000 in 1995, $71,000 in 1996, $36,000 in 1997, and $75,000 in 1998 (CP Exhs. 4, 8; GC Exh. 252); during this time, Barry was with- drawing funds for noncorporate expenses (GC Exh. 52). R. Exh. 116 (R-116), which reflects, at best, after-the-fact documentation, is the only document in evidence, other than checks themselves, showing transactions between BEI, Barry and other creditors. Although R-116 purported to show all such transactions, it does not show all of the payments in the record to First Union, thereby calling into question its accuracy and supporting the judge’s observation that it “raises more questions than answers and, at best, revealed a confusion that BEI was obliged to but did not fully explain.” By year-end 1999, Barry owed BEI $18,857.87. The Respondents did not produce any similar “sum- mary” for transactions between BEI and Baker. 22 Booth testified that the issue is not that Barry should be faulted for contributing money when needed, but that the continuous need to in- fuse funds to meet payroll and other recurring obligations demonstrates that BEI was undercapitalized. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 524 Genesee Family Restaurant, 322 NLRB 219, 229–230 (1996), enfd. 129 F.3d 1264 (6th Cir. 1997). Second, a corporation’s undercapitalization adversely affects its ability to satisfy backpay and other remedial obligations (e.g., contributions to union benefit funds). While undercapitalization is relevant to a prong-one analysis to demonstrate misuse of the corporate form, it also serves to ground a prong-two finding that adherence to the corporate form would lead both DLB and BEI to evade their legal obligations. Third, the record here clearly demonstrates an intent to evade legal obligations.23 Neither Baker nor Barry told Coroneos, who drew up the asset sale, about any liability imposed by the Board’s Order. Rather than try to ac- commodate that liability, and contrary to federal labor policy, they contrived to have DLB, the “violator of the Act,” “shed all responsibility for remedying [its] own unfair labor practices by simply disposing of the busi- ness.” Golden State Bottling Co., 414 U.S. at 186–187. Indeed, just a little over a week after the Board issued its Order, they rendered DLB an asset-less shell and left the Board an unprotected creditor.24 Moreover, since BEI’s inception, Baker has concealed his control of BEI from the Union, openly boasting that the Union could not touch BEI because it was owned by his wife. Where an individual respondent tries to evade the corporation’s labor law obligation by concealing his ownership and control of the alter egos, and exploits the resources of each corporation for his personal benefit, thereby deplet- ing corporate assets that could otherwise be used to sat- isfy outstanding liabilities, the Board will pierce the cor- porate veil. AAA Fire Sprinkler, Inc., 322 NLRB 69, 74 (1996), enforcement granted in part and remanded 144 F.3d 685 (10th Cir. 1998).25 As the General Counsel and the Union point out, the judge did not find that the asset sale between DLB and BEI was an arm’s-length transaction; he merely found 23 The asset sale was not intended to satisfy all of DLB’s debts. It was structured so that Baker could continue his business, while the IRS wrote off much of DLB’s tax debts: DLB paid only the “trust fund” portion of the IRS debt, i.e., that portion for which Baker was person- ally liable. 24 Courts of appeal have upheld the Board’s imposition of personal liability where the individual stockholder created various alter egos with fraudulent intent, i.e., to evade the corporation’s labor obligations, including potential or liquidated backpay liability. See NLRB v. O’Neill, 965 F.2d 1522 (9th Cir. 1992), enfg. 288 NLRB 1354 (1988) (individual respondent responsible for unfair labor practices at issue created alter ego corporations to evade his obligation under contract); Metropolitan Teletronics Corp., 303 NLRB 793, 793 (1993), enfd. mem. 961 F.2d 1568 (3d Cir. 1992). 25 As set forth below, although an intent to evade legal obligations certainly bolsters a finding that prong two of White Oak Coal has been met, such an intent is not requisite to a prong-two finding. that such was Coroneos’ intent. Representing both Baker and BEI, Coroneos drafted the transaction and offered the deal only to BEI. The judge recognized that the asset appraisals were “somewhat dubious”26 and that the unne- gotiated sale “price” was determined by what liabilities “needed to be paid,” but he failed to give adequate weight to those facts.27 The purchase agreement lacked important clauses one would expect in a bona fide asset sale agreement, such as a representation that the books and records are accurate as furnished to the purchaser, and a warranty that the seller will use the proceeds or reserve proceeds to ensure that liabilities are paid. The purchase agreement refers to schedules A and B, pur- portedly listing assets covered by the sale, but those schedules were missing and neither DLB nor BEI could account for their absence; moreover, the bills of sale for the vehicles do not cover all of the vehicles transferred to BEI. Such facts, namely, the lack of negotiation over price, haphazard paperwork, and the absence of bills of sale and receipts, have previously led the Board to find sham transactions. Naperville Ready Mix, Inc., 329 NLRB 174, 181 (1999), enfd. 242 F.3d 744 (7th Cir. 2001), cert. denied 534 U.S. 1040 (2001); Fugazy Conti- nental Corp., above at 1302. As in Naperville, the evi- dence establishes that the sale was not an arm’s-length transaction but a “stratagem designed to give the appear- ance, rather than the effect,” 329 NLRB at 181, of re- moving DLB and Baker from the electrical business while Baker continued DLB’s work under the guise of BEI. Fourth, the judge appears to have misunderstood the equitable element of the piercing test. The judge found “insufficient evidence that the misuse of the corporate form was intended to defraud” (emphasis added), but specific intent to defraud is not required. Greater Kan- sas City Roofing requires only a showing that inequity will “flow from the misuse of the corporate form.” Kan- sas City, above at 1053. As Kansas City states, to hold individual shareholders responsible, a corporation must do more than commit an unfair labor practice, breach a 26 Although the judge found that Chorazy solicited the appraisals, Chorazy testified that Baker obtained them. 27 Coroneos admitted that the $138,000 purchase price was derived from what DLB needed to pay off the “trust fund” portion of its IRS obligation and certain major creditors. DLB’s assets were “appraised” at $96,631.26, with the $41,368.74 difference between the appraisal and the $138,000 purchase price attributed to “goodwill.” On its 1995 tax filing, however, BEI listed goodwill at $83,720 (CP Exh. 4), an amount that would have raised the fair-market purchase price to over $180,000. That discrepancy, Coroneos’ admission that the purchase price was driven by DLB’s debts, and suspect flaws in the purchase agreement (discussed below) lead us to conclude that, on balance, Coroneos’ testimony regarding his intent was insufficient to support a finding that this was an arm’s-length transaction. D. L. BAKER, INC. 525 contract, or commit a tort. But the ultimate question in assessing the second prong is “whether there is adequate justification to invoke the equitable power of the court.” Id. at 1052. When individuals “disregard the separate- ness of the corporate identity and when that act of disre- gard causes the injustice or inequity,” the corporate veil may be pierced. Id. at 1053. That is precisely what hap- pened here: Baker and Barry disregarded the separate- ness of the corporate identities, commingled funds, di- verted funds to themselves, and left the corporations un- dercapitalized, all of which had and have the natural, foreseeable, and inevitable consequence of diminishing the corporations’ ability to satisfy their remedial obliga- tion. Moreover, the individuals sought to be held liable, Baker and Barry, both participated in the acts, including the asset sale itself, that caused the injustice or inequity.28 Thus, we find that the judge failed to properly consider the equities that require piercing the corporate form in order to avoid a miscarriage of justice.29 In sum, we find that adherence to DLB’s and BEI’s corporate forms would sanction a fraud, promote injus- tice, or lead to an evasion of legal obligations. We note that in White Oak Coal, and contrary to the judge’s sug- gestion here, the Board did not pierce the corporate veil based on a specific finding that the corporation was, in fact, unable to meet its obligations. Instead, the Board found that the natural, foreseeable and inevitable conse- quence of the individual respondents’ misuse of corpo- rate assets for personal gain, along with their misuse of the corporate form and disregard of corporate formalities, was to diminish the ability of the corporate alter egos to 28 Cf. SRC Painting, LLC, 346 NLRB 707 (2006). There, the judge pierced the corporate veil and found six individual respondents person- ally liable; the Board reversed as to two. As to those two, wives who had merely received corporate payments, the Board held that the “pas- sive receipt of benefits that derive from a diversion of corporate assets for noncorporate purposes” is not enough to satisfy White Oak Coal’s “participation requirement.” Id. at 708. Noting that there was no alle- gation or evidence that either wife had a corporate ownership interest, the Board declined to address the issue of whether corporate ownership would satisfy the participation requirement. Id. at 708 fn. 10. Member Liebman suggested that the two wives might be held individually liable under a fraudulent transfer theory of liability, but observed that the Board was not ruling on the merits of such an alternate theory because the General Counsel did not argue it. Id. at 709 fn. 12. 29 Since Judge Wilks issued his decision, the Board, applying White Oak Coal, has reversed judges’ recommendations, in whole or in part, to pierce the corporate veil. See Flat Dog, supra at 1179; SRC Paint- ing, supra. However, the factors that controlled those decisions are conspicuously absent here. Unlike Flat Dog, there is evidence here that “assets . . . have been diminished by the self-dealing that may accom- pany a failure to maintain the distinction between the individual and the corporation.” Flat Dog, supra at 1186. And unlike SRC Painting, not only is Barry the sole owner of BEI, but she did more than just pas- sively receive corporate disbursements—she was also a key player in the transaction plan. satisfy White Oak’s statutory obligations. 318 NLRB at 735.30 The same holds true here. Accordingly, we pierce DLB’s and BEI’s corporate veils to find Baker and Barry individually liable. V. ON WHAT DATE DID THE RESPONDENTS EFFECTIVELY REPUDIATE THE 8(F) AGREEMENT? As stated above, DLB and its alter ego, BEI, were bound to an 8(f) agreement with the Union, which by its terms was effective June 1, 1993, through May 31, 1997. The parties vigorously dispute the terminal date of the Respondents’ liability arising from their failure to adhere to the 8(f) agreement. The General Counsel, through the CS, alleges that liability begins on the date marking the beginning of the 10(b) limitations period, August 7, 1993,31 and terminates on May 28, 1997, the date the Respondents sent a letter to the Union formally repudiat- ing the agreement and 3 days before the contract termina- tion date. The Union argues that the Board should apply Deklewa32 and find that repudiation could not occur be- fore the contract’s expiration on May 31. The Respon- dents, having lost the argument in the liability phase that they repudiated the 8(f) agreement by conduct long ago, posited various repudiation dates, ranging from Septem- ber 1993, the date as of which Judge Ladwig, who pre- sided over the liability phase, found that Union Repre- sentative Charles Graham first had notice that DLB was operating nonunion, through March 31, 1994, when the 30 See also Bufco Corp. v. NLRB, 147 F.3d 964, 969 (D.C. Cir. 1998) (finding that, although there was no evidence that the corporation was insolvent, the Board “was warranted in believing that the adherence to corporate form in this instance could very well lead to an evasion of legal obligations . . . sufficient to justify piercing the corporate veil”) (internal quotations omitted). 31 We note that the CS alleges a liability commencement date consis- tent with that ordered by the Board in the liability phase. See 317 NLRB at 336. We further note, however, that in Vallow Floor Cover- ings, 335 NLRB 20 (2001), the Board, applying Pullman Building Co., 251 NLRB 1048 (1980), enfd. 691 F.2d 507 (9th Cir. 1982), held that where the union, through no fault of its own, remained unaware of the employer’s unfair labor practices, thus tolling the 10(b) period, “‘the case is before us on the same basis as is any other case, and hence the usual make-whole remedy is the appropriate one.’” Vallow, 335 NLRB at 21 (quoting Pullman, 251 NLRB at 1048). Thus, in a contract repu- diation case, if the employer’s conduct remained under the radar (as was the situation here), tolling the 10(b) clock, the make-whole remedy extends back to cover the entire period of the repudiation. But Vallow and Pullman were merits-stage decisions; this case is in the compliance phase, and the CS, in accordance with the Board’s court-enforced Or- der, has alleged a backpay obligation extending back only to the begin- ning of the 10(b) period. Thus, as a matter of due process, and because we are not at liberty to modify an Order that has been enforced by a court of appeals, Scepter Ingot Castings, Inc., 341 NLRB 997, 997 (2004), enfd. 448 F.3d 388 (D.C. Cir. 2006), we may not apply Vallow here. 32 John Deklewa & Sons, 282 NLRB 1375 (1987), enfd. sub nom. Iron Workers Local 3 v. NLRB, 843 F.2d 770 (3d Cir. 1988), cert. de- nied 488 U.S. 889 (1988). DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 526 Respondents filed their answer to the complaint. In the instant proceeding, the Respondents filed a motion in limine seeking a ruling that contract repudiation occurred no later than February 1994, when an amended charge was filed.33 Judge Wilks, based upon the Board’s sum- mary judgment Order, denied the Respondents’ motion in limine on the basis of res judicata or issue preclusion. The Board, subsequently denying the Respondents’ re- quest for special permission to appeal the judge’s denial, precluded the Respondents from “seeking to show repu- diation prior to October 4, 1994,”34 the date the unfair labor practice hearing closed. Given that limitation, Judge Wilks, specifically relying on the “factual configu- ration” existing as of October 4, found, in his subse- quently rendered decision, that repudiation occurred the next day, October 5, 1994. The General Counsel and the Union filed exceptions urging a later repudiation date; DLB filed cross-exceptions urging an earlier one. For the reasons that follow, we find that the Respon- dents repudiated the 8(f) agreement on March 31, 1994, the date that the Respondents filed their Answer denying that a contract was in effect. In so doing, we overrule the Board’s Order denying the Respondents’ request for spe- cial permission to appeal the judge’s denial of their mo- tion in limine as clearly erroneous and working a mani- fest injustice. A review of the relevant facts and proce- dural history is necessary to understand the parties’ ar- guments and our decision on this issue. In 1976, Baker’s then-wife, Holly, signed a “Letter of Assent-A” and a “Benefit Fund Agreement” (the 8(f) agreements) as the president of DLB, Inc., but under the name of the former sole proprietorship. These agree- ments had the effect of authorizing the National Electri- cal Contractors Association (NECA) to represent DLB in negotiations with the Union, and of binding DLB to an agreement entered into between NECA and the Union (which agreement contained a hiring hall referral provi- sion) and obligating DLB to make contributions to vari- ous trust benefit funds on behalf of DLB employees. In conversations with Wade Sheriff, the Union’s business manager at the time, Baker misrepresented that he was still operating as a sole proprietorship, and he promised to call the Union for referrals when he began hiring em- ployees. Contrary to his promise, however, when Baker began hiring employees, he did not go through the Un- ion’s hiring hall. Neither did he contribute to benefit funds, pay union wages, or apply any other terms of the 8(f) agreements. Nor did Baker ever terminate the Letter 33 The Respondents’ motion in limine also sought a ruling that em- ployees hired after August 7, 1993 (the beginning of the 10(b) period), were not entitled to a remedy. 34 Unpublished Board Order dated September 8, 2000. of Assent-A or the Benefit Fund Agreement by giving the requisite written notices to NECA and the Union. Sheriff never learned that Baker was hiring employees outside of the hiring hall. Charles Graham, who became the Union’s assistant business manager in 1992, first became aware that DLB was hiring employees around September 1993, when, seeing a newspaper ad for electricians, Graham “called the ad,” and the phone was answered “D.L. Baker.” However, it was not until December 1993, shortly after DLB had discharged Tangy, that Graham discovered that DLB was a signatory contractor. It was then that Gra- ham, who had been charged with conducting a review of about 300 “inactive contractor” files, came across DLB’s file, which contained the 8(f) agreements signed in 1976. On December 8, 1993, Graham sent a letter to Baker requesting compliance with the agreements (which he attached to his letter) and seeking recognition. Baker did not respond to the letter. The Union subsequently filed charges and amended charges; complaints were issued on February 7 and March 17, 1994; those complaints were consolidated on May 19, 1994. The relevant complaint provisions allege that “[s]ince on or about August 7, 1993, Respondent has refused to adhere to the terms of the 1993–1997 Agreement” (both by failing to make fund contributions under the Benefit Fund Agreement and by not applying wage, referral, fringe benefit and grievance provisions under the Letter of Assent-A) and “[s]ince prior to December 9, 1993, Respondent has refused to recognize the Union as exclu- sive bargaining representative of the Inside Unit.” DLB filed an answer on March 31, 1994, denying that the “al- leged ‘Agreement’ is in force and effect” and raising, as an affirmative defense, that the charges were time barred by Section 10(b) of the Act. Administrative Law Judge Marion Ladwig conducted the hearing in the liability phase of this case on October 3 and 4, 1994. Noting that the principal issue was “whether the 8(f) prehire letter of assent and benefit fund agreement are enforceable after the Company failed to honor them for a substantial number of years,” Judge Ladwig found that those agreements remained in effect under their terms.35 Judge Ladwig rejected DLB’s 10(b) defense, finding that DLB failed to show that the Union was on “clear and unequivocal notice” that DLB was operating nonunion because DLB’s “conduct and non- compliance with the 8(f) prehire agreements were not sufficiently ‘bald’ to put the Union on notice of its intent to repudiate the agreements.” Judge Ladwig therefore 35 The judge relied on Neosho Construction Co., 305 NLRB 100, 101 (1991), and Cedar Valley Corp., 302 NLRB 823 (1991), enfd. 977 F.2d 1211 (8th Cir. 1992), cert. denied 508 U.S. 907 (1993). D. L. BAKER, INC. 527 found that since August 7, 1993 (6 months before service of the charge), DLB “has failed and refused to adhere to the terms of the [8(f) agreements],” and that “since De- cember 9, 1993, when [DLB] failed to respond to the Union’s December 8, 1993 letter, [DLB] has refused to recognize the Union.” To remedy the 8(a)(5) violations, Judge Ladwig found that DLB must be ordered to com- ply with the “current NECA-Union Inside Wireman mas- ter agreement.” Judge Ladwig did not explicitly discuss or decide whether DLB repudiated the 8(f) contract dur- ing its term, although he cited Deklewa, supra, which prohibits unilateral midterm repudiation of 8(f) contracts. The Board affirmed Judge Ladwig’s decision. 317 NLRB at 335. The Fourth Circuit granted enforcement. NLRB v. Baker, mem. 105 F.3d 647, 1997 WL 5771 (4th Cir. 1997) (per curiam), cert. denied 522 U.S. 1046 (1998). Like the Board, the Fourth Circuit rejected DLB’s argu- ment that it had repudiated the 1976 “me-too” agree- ments by 16 years of “notorious” nonunion operations. The court observed that a prehire agreement may be re- pudiated by “specific acts,” but said that the union must have “some form of notice” of the inconsistent conduct, and cited the judge’s finding that DLB “succeeded in operating nonunion without discovery by the Union until September 1993.” Id., 1997 WL 5771, at *3. The court noted Judge Ladwig’s apparent reliance on Deklewa, but held that the same result obtained under its Clark v. Ryan standard.36 Id. at *3 fn. 3. The court agreed with the Board that DLB was bound to the current contract by renewal clauses in both the “me-too” and the 8(f) agree- ments, and that “the Company’s delegation of bargaining authority to NECA continued until revoked, and that prior to this action the Company did not revoke NECA’s authority.” 1997 WL 5771, at *3 (emphasis added). Thus, the Court upheld the Board’s conclusion that the Respondent “is bound to the current § 8(f) agreement.”37 Id. (emphasis added). The Court concluded by saying that, because the “Company never effectively repudiated the §8(f) agreement, it may be held liable for breaching its terms.” Id. at *4 (emphasis added). The case then moved into the compliance phase. The General Counsel issued the CS. In its answer to the CS, the Respondents, inter alia, denied liability for the back- pay period alleged in the CS. In its Order granting par- tial summary judgment on the CS, 330 NLRB at 523, the 36 Clark v. Ryan, 818 F.2d 1102 (4th Cir. 1987), adheres to pre- Deklewa law, under which an employer may repudiate a prehire agree- ment at any time prior to the union attaining majority status. 37 Subsequently, the Court said: “[W]e accept the Board’s conclu- sion that the Company was bound. . . .” 1997 WL 5771, at *3 (empha- sis added). Board, stating that both itself and the court of appeals had found that the Respondent had “never effectively repudiated” the contract, ruled that “Respondents’ argu- ment that backpay tolls in September 1993 has already been rejected and may not be relitigated in this proceed- ing.”38 At the compliance hearing, as noted above, the Re- spondents filed a joint motion in limine seeking (in part) to establish a contract repudiation date. The Respon- dents argued that the Board had not determined in the liability phase when repudiation had actually occurred because, under Deklewa, it was irrelevant. Thus, the Fourth Circuit had also not addressed that issue because there was no underlying Board finding to review. Ac- cording to the Respondents, because the Fourth Circuit would allow mid-term repudiation under Clark v. Ryan, supra, and because the Board must follow Fourth Circuit law, the Board must decide, in the compliance phase, when repudiation occurred under the Fourth Circuit’s “some form of notice of inconsistent conduct” standard. The Respondents also argued that the pleadings in the liability phase established that the Union had “some form of notice” of the Respondent’s repudiation at the latest on March 31, 1994, the date that the Respondents filed their Answer denying that a contract was “in effect.” The General Counsel and the Union opposed the Re- spondents’ joint motion in limine. The General Counsel argued that the Fourth Circuit’s conclusion that the Re- spondents “never effectively repudiated the 8(f) agree- ment” precluded the Respondents from asserting, as the act effecting contract repudiation, any event predating the October 1994 merits hearing. The Union argued that (1) the Respondents’ argument that the Board is bound by Clark v. Ryan rather than Deklewa is contrary to the Board’s “nonacquiescence policy,” and (2) the judge should reject the Respondents’ arguments that contract repudiation occurred any time prior to the expiration of the 1993–1997 agreement.39 Judge Wilks orally denied the Respondents’ joint mo- tion in limine, ruling that he was precluded from taking any evidence of repudiation prior to the date of Judge Ladwig’s decision. The Respondents requested special permission to appeal, arguing that the Board had merely held that the charges were not time barred, and that the Fourth Circuit’s decision had merely established that the liability period began on August 7, 1993. In their re- 38 In fact, the Board had not specifically stated that the Respondent had “never effectively repudiated” the agreement. 39 The Union suggests that the Respondents could be bound to sub- sequent 8(f) agreements until such time as DLB properly terminated its delegation of bargaining authority to NECA and notified all parties of that termination. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 528 quest, the Respondents argued that, because the underly- ing ULP case dealt with the issue of notice outside the 10(b) period, the court’s statement that the Company “never effectively repudiated” must be read to mean “outside the limitations period.” The Respondents fur- ther argued that Judge Wilks’ belief that he was pre- cluded from considering a repudiation date prior to Judge Ladwig’s decision lacked legal foundation. Finally, they argued that, under the Fourth Circuit’s “some form of notice” standard, a prehire agreement terminates by law when the union files a formal complaint of noncompli- ance. The General Counsel and the Union opposed the Re- spondents’ request to appeal. The Board, in a one- sentence unpublished Order dated September 8, 2000, denied the Respondents’ request, with a footnote stating: “Thus, the Respondent is precluded from seeking to show repudiation prior to October 4, 1994, the date on which the hearing closed in the underlying case.” In accordance with the Board’s Order, Judge Wilks, in the compliance hearing, limited the Respondents to pre- senting evidence only of “new conduct,” that is, conduct occurring on or after October 5, 1994, that would estab- lish repudiation. The Respondents presented some “new conduct” evidence, but primarily reemphasized their ar- gument that the pleadings and the evidence in the under- lying case gave the Union the requisite notice effecting a repudiation. The judge, constrained as he was from find- ing that repudiation occurred prior to October 4, but ob- serving that “none of the precedent cited by the General Counsel and the Union hold that repudiation may not be manifested by a pervasive noncompliance with all or most vital areas of agreement, especially within the con- text of conduct inconsistent with adherence to the con- tract as a whole,” found that repudiation occurred on October 5, 1994. The judge reasoned that although the Respondents could not relitigate repudiation prior to Oc- tober 5, they could rely upon evidence adduced before Judge Ladwig to “shed light upon, to explain, or to un- derstand the factual configuration existing on and after October 5, 1994, as to whether the Respondents’ conduct had constituted manifest intent of contract repudiation sufficient to put the Union upon notice on or after that date.” That evidence included Graham’s admission that, by October 5, 1994, he knew that DLB did not intend to comply with the contract. The judge further found that the Respondents could rely upon the pleadings and the underlying proceeding itself to prove that a sufficiently bald manifestation of contract repudiation existed in the Union’s perception immediately after the judge’s gavel fell on October 4, 1994. The judge thus de facto adopted the Respondents’ argument that the pleadings and the evidence in the underlying case imparted knowledge to the Union, effecting a repudiation. The General Counsel and the Union except, arguing that (1) the Board’s Order decided the issue through Oc- tober 4, 1994, (2) the Respondents may demonstrate re- pudiation only by new conduct after October 4, and (3) the Respondents’ post-October 4 conduct was legally insufficient to repudiate the contract. The General Coun- sel also argues that, although the Union was aware that DLB had not fully complied with the contract, noncom- pliance is not tantamount to repudiation. The Union ar- gues that pleadings, motions, and legal proceedings can- not evidence repudiation as a matter of law. The Union further argues that contract repudiation requires an af- firmative act directed towards the Union, and that the May 28, 1997 letter was the first such affirmative act after October 4 (although, under Deklewa, the repudia- tion was not effective until May 31, when the contract expired). The Respondents counter that (1) under Clark v. Ryan, the right to repudiate supersedes an agreement’s termination provision, and (2) the argument that there must be an affirmative act to effect a repudiation fails because it is inconsistent with the Fourth Circuit’s “some form of notice” standard. For the following reasons, we reverse the judge and find that the Union had notice that DLB clearly intended a total repudiation of the 8(f) agreements no later than March 31, 1994, the date that DLB filed its answer as- serting that there was no contract in effect. Thus, we terminate the Respondents’ liability for its violations of Section 8(a)(5) accordingly. Preliminarily, we acknowledge that this finding, con- trary to the “law of the case” doctrine, effectively over- rules our Order denying the Respondents’ request for special permission to appeal the judge’s denial of its mo- tion in limine, in which the Board precluded the Respon- dents from seeking to show repudiation prior to October 4, 1994. However, as stated in Arizona v. California, 460 U.S. 605, 618 (1983), “[u]nlike the more precise requirements of res judicata, law of the case is an amor- phous concept”—it “directs a court’s discretion, it does not limit the tribunal’s power.” Thus, as we recently stated in Teamsters Local 75 (Schreiber Foods), 349 NLRB 77, 82 (2007): “Although the law of the case doc- trine does not absolutely preclude reconsideration or re- versal of a prior decision, such action should not be taken absent extraordinary circumstances such as where the initial decision was clearly erroneous and would work a manifest injustice” (internal quotations omitted). Upon further consideration, we believe that the Board’s earlier Order was clearly erroneous and that adherence to that D. L. BAKER, INC. 529 Order would work a manifest injustice.40 As to the for- mer, we think that the Board misread the Fourth’s Cir- cuit’s decision. As to the latter, we note that the contract repudiation date is also the backpay liability termination date (except as to Tangy), and thus significantly affects the Respondents’ financial obligations by altering not only the duration of the period of liability but also the number of claimants. In the latter regard, the CS lists approximately 320 hiring hall claimants to whom back- pay is allegedly due; although roughly half of the names are repeated, this represents still far more than the 10 to 20 claimants posited to the Fourth Circuit in previous oral argument. As a preliminary matter, we reiterate that the Board continues to adhere to John Deklewa & Sons, 282 NLRB at 1375. Deklewa overruled prior Board decisions hold- ing that, prior to conversion of an 8(f) bargaining rela- tionship to one under Section 9(a), 8(f) prehire agree- ments could be repudiated by either party, at any time, for any reason, and could not be enforced through Sec- tion 8(a)(5). This pre-Deklewa interpretation of 8(f) was approved by the Supreme Court in Jim McNeff, Inc. v. Todd, 461 U.S. 260, 269–270 (1983), and by the Fourth Circuit in Clark v. Ryan, supra, both cited in the Fourth Circuit’s decision enforcing the Board’s decision in the liability phase below. Following Deklewa, a majority of the courts of appeals adopted that decision.41 However, the Fourth Circuit has held that it cannot adopt Deklewa because it directly conflicts with the holding in Clark v. Ryan that a “pre-hire agreement may be repudiated at any time by either party prior to the union’s achievement of majority status.” 818 F.2d at 1107. Apparently because the Fourth Circuit has held that Deklewa does not control within its jurisdiction, the General Counsel, through the CS, alleged an 8(a)(5) backpay period consistent with Fourth Circuit precedent rather than with Deklewa. Thus, although under Deklewa the Respondents’ liability would run through May 31, 1997, the end of the 8(f) 40 Member Liebman was a member of the panel that issued the Order in question. However, upon further reflection, she now agrees that it should be overruled. 41 See, e.g., NLRB v. Triple A Fire Protection, Inc., 136 F.3d 727, 735 (11th Cir. 1998), rehearing & suggestion for rehearing en banc denied 149 F.3d 1197 (11th Cir. 1998); NLRB v. Viola Indus.-Elevator Div., Inc., 979 F.2d 1384, 1393–1395 (10th Cir. 1992) (en banc); C.E.K. Industrial Mechanical Contractors, Inc. v. NLRB, 921 F.2d 350, 357 (1st Cir. 1990); NLRB v. Bufco Corp., 899 F.2d 608, 609, 611 (7th Cir. 1990); NLRB v. W. L. Miller Co., 871 F.2d 745, 748 (8th Cir. 1989); Mesa Verde Constr. Co. v. Northern California Dist. Council of Laborers, 861 F.2d 1124, 1129–1134 (9th Cir. 1988) (en banc). The Fifth Circuit, in Carpenters Local 953 v. Mar-Len of Louisiana, Inc., 906 F.2d 200 (5th Cir. 1990), declined to decide “whether the NLRB’s present interpretation of § 8(f), announced in Deklewa, is the control- ling law in this circuit.” Id. at 203. agreement’s term, the CS alleges liability only through May 28, 1997, the date of the letter to the Union formally announcing repudiation. Because the CS failed to put the Respondents on notice that a liability date later than May 28 could be in issue, and because the Fourth Circuit’s decision in this case makes the Clark v. Ryan standard the law of the case, we now analyze the contract repudia- tion issue consistent with Fourth Circuit precedent rather than under Deklewa.42 The Respondents concede that the Fourth Circuit, in enforcing the Board’s Order, held that the Respondents became subject to the terms of the 1994–1997 agree- ment. In so doing, and as noted above, the Fourth Circuit rejected two lines of argument. The first, to be discussed further below, was DLB’s “notice” argument—that by virtue of DLB’s prior conduct, the Union was on notice that DLB did not intend to be bound to any 8(f) agree- ment, including the 1994–1997 agreement. The second was DLB’s argument that, by signing the “me-too” agreement in 1976, it bound itself only to the then- current agreement. As to the latter, the court of appeals found that DLB bound itself to subsequent agreements by virtue of automatic renewal clauses in both the “me- too documents” and in each 8(f) agreement. The parties ascribe various meanings to particular phrases the Fourth Circuit used in its discussion of this issue: “prior to this action,” “is bound” versus “was bound,” and, especially, “never effectively repudiated.” Having closely reviewed the court’s opinion, we agree with the Respondents that, in context, it is unreasonable to read the Fourth Circuit’s rejection of DLB’s second argument as establishing any- thing more than that, because DLB had not revoked its delegation of bargaining authority to NECA prior to 42 The Board generally applies its “nonacquiescence policy,” see Ar- vin Industries, 285 NLRB 753, 757 (1987), and instructs its administra- tive law judges to follow Board precedent, not court of appeals prece- dent, unless overruled by the United States Supreme Court. Gas Spring Co., 296 NLRB 84, 97 (1989) (citing, inter alia, Insurance Agents (Prudential Insurance), 119 NLRB 768 (1957), revd. 260 F.2d 736 (D.C. Cir. 1958), affd. 361 U.S. 477 (1960)), enfd. 908 F.2d 966 (4th Cir. 1990), cert. denied 498 U.S. 1084 (1991). This nonacquiescence policy serves important goals: it defines a uniform national labor pol- icy, as distinct from a patchwork of geographically diverse rules, see San Diego Building Trades Council v. Garmon, 359 U.S. 236, 242–243 (1959); and it frees the Board from attempting to anticipate with preci- sion the locus of appellate jurisdiction, see, e.g., Harrison Steel Cast- ings Co. v. NLRB, 923 F.2d 542 (7th Cir. 1991). For those reasons, the Board has explained, it is not required, on either legal or pragmatic grounds, to automatically follow an adverse court decision, but will instead respectfully regard such a ruling as the law of that particular case. Manor West, Inc., 311 NLRB 655, 667 fn. 43 (1993), revd. 60 F.3d 1195 (6th Cir. 1995). However, in a case such as this one, where a circuit court has issued a decision, the Board must either comply with it or obtain permission from the Solicitor General to file a petition for writ of certiorari. See Shaw’s Supermarkets, 303 NLRB 382, 382 (1991); Raley’s Inc., 311 NLRB 1244, 1249 fn. 7 (1993). DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 530 NECA and the Union entering into the 1994–1997 agree- ment, it became bound to that agreement and could hence “be held liable for breaching its terms.” 1997 WL 5771, at *4. As the Respondents have repeatedly argued, however, that does not answer the question of when the Respon- dents’ liability under the 8(f) agreement terminated. In rejecting DLB’s argument that it repudiated the 1976 “me-too” documents by 16 years of “notorious” nonun- ion operations, the Fourth Circuit, citing Jim McNeff, Inc. v. Todd43 and Clark v. Ryan, stated that “acts” could ef- fect a repudiation, but that such “acts sufficient to repu- diate the prehire agreement require at least that the Union have some form of notice of the inconsistent conduct.” Id. at *3 (emphasis added). Finding no basis for revers- ing Judge Ladwig’s factual findings that there “was no reason for [the Union] to suspect that Baker was reneg- ing on his promises and operating nonunion,” and that DLB “succeeded in operating nonunion without discov- ery by the Union until September 1993,” the court re- jected DLB’s argument that its “conduct prior to Sep- tember 1993 was sufficiently ‘notorious’ to repudiate the contract.” Id.44 It does not follow, of course, that the court thereby im- plicitly found that in September 1993, DLB’s conduct was sufficiently notorious to establish repudiation. In September 1993, Graham had called the number in the newspaper ad, and the phone had been answered “D.L. Baker”—but, as Judge Ladwig found, that merely made Graham “familiar with Baker’s firm and aware that it was hiring employees.” 317 NLRB at 341. It was not until December of 1993 that Graham “came across” the Letter of Assent-A and Benefit Fund Agreement under the name “D.L. Baker.” Thus, it was not until December that Graham knew both that DLB had an 8(f) agreement and that it was hiring employees in contravention of the hiring hall provisions of that agreement. Accordingly, as of December 1993, the Union knew that DLB was not complying with a key contract provision. That knowl- edge alone, however, did not yet put the Union on notice that DLB intended to repudiate the entire agreement. 43 See 461 U.S. at 270 fn. 11 (finding it unnecessary to decide what “specific acts would affect [sic] the repudiation of a prehire agree- ment—sending notice to the union, engaging in activity overtly and completely inconsistent with contractual obligations, or . . . precipitat- ing a representation election”). 44 DLB had argued, and the Fourth Circuit’s decision established, that the following acts or conduct did not establish an effective repudia- tion: (1) the Union’s 1991–1993 “extensive organizing campaign,” (2) the Union’s 1994 organizing campaign and Graham’s reference to DLB as a “non-union shop” in the Union’s February 1994 newsletter, and (3) alleged union representatives’ site visits and citations in Dodge reports. In the liability phase, the Board affirmed Judge Lad- wig’s conclusion that DLB had violated Section 8(a)(5) by, inter alia, “refusing since December 9, 1993 . . . to recognize the Union.” 317 NLRB at 347. But it does not necessarily follow that the Union knew, as of December 9, 1993, that DLB would not comply with any of the contract terms. Nor do we find the notice issue disposed of by the fact that DLB did not immediately answer the Union’s request for recognition, especially given that the request was addressed to the sole proprietorship.45 See Convergence Communication, Inc., 339 NLRB 408 (2003) (a refusal to bargain is not ripe when an employer has merely failed to respond to a union’s demand for bargaining). On the other hand, application of the Fourth Circuit’s “some form of notice” standard mandates a result far from the other end of the spectrum, the May 1997 dates advocated by the General Counsel and the Union. We note, in this connection, that given the constraints im- posed upon the judge by the Board’s previous order, his examination of the “factual configuration” in its entirety was eminently reasonable. Certainly the Union, having received no response to its request for recognition, had to begin to formulate some idea of the Respondent’s intent to comply—or not—with the 8(f) agreement. The lan- guage the Union used in its 8(a)(5) charges reflects as much.46 To the extent that there might be any remaining 45 Upon discovering the letter of assent and benefit fund agreement in its inactive files, Graham took the reasonable step of writing to “D.L. Baker Elec. Contractor,” the sole proprietorship, not knowing that 3 months before signing the agreements in 1976, Baker had incorporated and concealed that fact from the Union. 46 In the initial charge filed on January 31, 1994, in Case 5–CA– 24190, the Union alleged: “On or about December 9, 1993, [DLB] refused and continues to refuse to bargain collectively with the [Un- ion].” In its first amended charge filed on February 25, 1994, in Case 5–CA–24190, the Union alleged: “During the six-month period pre- ceding the initial charge and continuing to date, the Employer has failed to adhere to the terms and conditions of the Inside Wireman Agreement and has refused to comply with the Local’s demand that the Employer adhere to the contract” (emphasis added). The March 17, 1994 com- plaint in Case 5–CA–24190 alleged that DLB, since on or about August 7, 1993, has failed to continue in effect and has refused to adhere to the terms of the 1993–1997 agreement. Thus, in fact, the Union was on notice of, and affirmatively alleged, conduct inconsistent with the pro- visions of the 8(f) agreement. In its March 31, 1994 answer, DLB specifically denied that the alleged 1993–1997 IBEW Agreement was “in force and effect.” Moreover, in January 1994, Graham sent a letter to Baker informing him that the Union was engaging in “an active organizing campaign.” Although we recognize that this fact does not in itself establish knowl- edge of a repudiation, we believe that the Union’s announcement of efforts to achieve 9(a) status adds to the “factual configuration” demon- strating that the Union had, or was gaining, an awareness that Baker did not intend to abide by the 8(f) agreement. D. L. BAKER, INC. 531 doubt, DLB quelled it by submitting its answer denying that any contract was in effect.47 It appears to us that the Board’s previous refusal to al- low a showing of repudiation prior to the date the hearing concluded in the liability phase (October 4, 1994) was founded upon a mistaken premise that, when the Fourth Circuit stated that DLB did not repudiate the agreement “prior to this action,” the “action” referred to was Judge Ladwig’s merits-stage hearing.48 We think it much more likely that the court used “prior to this action” in the usual legal sense, that is, prior to the commencement of an action by filing a complaint.49 We agree with the Respondents that the judge’s and the Board’s decisions in the underlying liability phase did not address the issue of a contract repudiation date because they assumed that Deklewa controlled, and that they addressed the notice issue within the context of 10(b) timeliness arguments. Thus, we further agree with the Respondents that when the Fourth Circuit stated that DLB “never effectively repudiated” the terms of the 8(f) agreement, 1997 WL 5771 at *4, the court meant that 47 The Union cites Teamsters Local 745, etc. v. Braswell Motor Freight Lines, Inc., 428 F.2d 1371 (5th Cir. 1970), cert. denied 401 U.S. 937 (1971), and Thelin v. Mitchell, 576 F.Supp. 1404 (N.D. Ill. 1983), in support of its argument that the mere filing of a charge and an answer cannot effect a repudiation. Those cases represent neither Board nor Fourth Circuit precedent, and accordingly, we are not bound by them. In any event, neither decision holds, as a matter of law, that pleadings cannot constitute “some form of notice” of 8(f) contract repudiation. The General Counsel argues that the Fourth Circuit’s decision in In- dustrial TurnAround Corp. v. NLRB, supra, 115 F.3d at 248, supports the argument that the May 28, 1997 letter effected the repudiation. In that case, the Fourth Circuit found midterm repudiation of an 8(f) agreement by a letter sent from the employer to NECA and the union announcing that repudiation. However, the court in Industrial Turn- Around did not hold that the act constituting “some form of notice” of repudiation must be in writing. Rather, it just so happened that, in Industrial TurnAround, the first (and only) notice was in writing, as the employer’s conduct would not have aroused the union’s suspicion. There, employer ITAC and the union had on ongoing relationship, and ITAC had been complying with the 8(f) agreement. Unlike this case, Industrial TurnAround did not present a “factual configuration” that would lead a reasonable person to suspect repudiation. 48 Judge Wilks, orally denying the Respondent’s motion, seemed to think that “this action” referred to December 21, 1994, the date Judge Ladwig issued his decision. The Board adopted the date the merits- stage hearing closed, October 4, 1994. In its brief opposing the Respondents’ motion in limine, the General Counsel argued that the Respondents’ attempt to obtain a ruling that DLB repudiated the 8(f) agreement on “March 31, 1994, a date prior to the presentation of evidence in the underlying case, is ludicrous and legally impermissible.” That argument is without merit: most litiga- tion, by its nature, occurs after the alleged wrong at issue in the litiga- tion; the evidence presented at trial necessarily relates to events that occurred before the trial. 49 Black’s Law Dictionary 26 (5th ed. 1979) (defining “Action” in its “usual legal sense” as meaning a “formal complaint within the jurisdic- tion”). DLB never effectively repudiated prior to the start of the 10(b) period. Because the issues before the Fourth Cir- cuit were framed in the 10(b) context, the Board erred in effectively finding that the Fourth Circuit’s decision pre- cluded “relitigation” of an issue not yet litigated— whether repudiation had been effected sometime during the contract term—and affirmatively holding that there could be no finding of repudiation before the close of the hearing below on October 4, 1994. Thus, applying Clark v. Ryan, we find that the pleadings below, considered in conjunction with the factual findings and legal conclu- sions in the liability phase, establish that the Respondents repudiated the 8(f) agreement on March 31, 1994. Ac- cordingly, the Respondents’ obligations under the 8(f) agreement and to make fund contributions came to an end on that date.50 VI. RESPONDENTS’ BACKPAY OBLIGATION TO TANGY A. Tangy’s Backpay Period By letter dated July 17, 1997, DLB offered Tangy re- instatement, beginning August 4, 1997, at his 1993 wage rate. When Tangy reported to work on August 4, he was presented with employment documents, which he was asked to complete. Tangy was then sent to Maurice Electric, one of DLB’s suppliers. Tangy worked alone on August 4, finishing the job early in the morning the following day, at which time he began calling the office for his next assignment. Because it was very early, Tangy was initially unable to reach anyone at the office number, so he began calling alternate phone numbers listed on a “communication procedure sheet” he had been provided when he began work. After not reaching any- one at the alternate numbers, he again called the office, and this time an individual whom Tangy identified as a “secretary” answered the phone. According to Tangy, the secretary said that there was no further work for him and he should go home and await contact from Baker. Instead, Tangy went back to work for his previous in- terim employer, Heller Electric. On August 6, DLB sus- pended Tangy because he had failed to report back to work on August 5 and had failed to leave a phone num- ber. On August 15, DLB terminated Tangy because he had violated company policy against “moonlighting,” failed to report to work, and failed to notify DLB of his “whereabouts.” The judge found that Tangy’s backpay period ran from December 1, 1993 (the date of Tangy’s discharge) to September 28, 2000 (the date, as stipulated by the par- ties, on which DLB made a valid reinstatement offer to 50 Liability for Tangy’s discriminatory discharge continued beyond the March 31, 1994 repudiation date until Tangy turned down the valid reinstatement offer on September 28, 2000. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 532 Tangy, which he rejected). In so doing, the judge found that Tangy was privileged to reject the July 1997 rein- statement offer as facially invalid; hence, his motive in accepting it was irrelevant. The judge found, alterna- tively, that even if the 1997 offer were not facially inva- lid, Tangy was privileged to quit the DLB job because it was not substantially equivalent to his old job, which, in 1997, would have been a BEI job. Further, the judge found that payment of the 1993 wage rate rendered the offer invalid. Finally, the judge found that Tangy’s sub- sequent termination, even if considered voluntary, did not prejudice his right to a valid reinstatement offer and continued backpay until the stipulated date that offer was made. DLB filed cross-exceptions, arguing that the judge erred by finding DLB did not make a valid reinstatement offer to Tangy in July 1997, which assertedly tolled his backpay thereafter. The General Counsel moved to strike Respondent’s Exhibit 109 (R–109), a copy of a fax, arguably relevant to Tangy’s motive in accepting the reinstatement offer, because it was encompassed by the General Counsel’s subpoena but not produced by the Respondents. We adopt the judge’s finding that DLB’s July 1997 re- instatement offer was to nonequivalent employment and was thus invalid.51 Accordingly, an evaluation of Tangy’s response to the invalid offer is unnecessary. Midwestern Personnel Services, Inc., 346 NLRB 624, 625 (2006). It is the employer’s burden to establish that it made a valid reinstatement offer. L.A. Water Treat- ment, 263 NLRB 244, 246 (1982). The Respondents failed to meet that burden. By reinstating Tangy to DLB, rather than to BEI, and for a mere 1-1/2 days52 and at his 1993 rate of pay, the Respondents did not place Tangy in the same position that he would have been in had there been no unlawful discrimination against him. Moreover, regardless of whether Tangy is deemed to have quit DLB or to have been lawfully discharged, he was still entitled to reinstatement and backpay. As a discriminatee who was not properly reinstated, Tangy was free to quit his new employment with DLB if he was not satisfied with his inadequate reinstatement. See Performance Friction, supra, 335 NLRB at 1124; Sumco Mfg. Co., 267 NLRB 253, 258 (1983), enfd. 746 F.2d 1189 (6th Cir. 1984), cert. denied 471 U.S. 1100 (1985). Even if he was law- 51 In so doing, we find it unnecessary to pass on the judge’s alternate finding that Tangy was privileged to reject the 1997 reinstatement offer as facially invalid. In addition, we find that the judge did not commit reversible error by admitting R–109 over objections. See AEi2, LLC, 343 NLRB 433 (2004), enfd. 72 F.3d 780 (10th Cir. 1995). 52 Cf. Baddour, Inc., 304 NLRB 681, 685 (1991) (discriminatee not returned to substantially equivalent employment where returned to employment for one morning and then terminated). fully discharged by DLB, the result is the same because the Respondents’ obligation to make a proper reinstate- ment offer continues unless it can show that the conduct for which Tangy was discharged was so egregious as to require forfeiture of his right to reinstatement and further backpay. Ryder System, 302 NLRB 608, 609 (1991), enfd. 983 F.2d 705 (6th Cir. 1993). DLB has not proven such egregious conduct. In sum, because we agree with the judge that the Re- spondents’ July 1997 reinstatement offer was invalid, we adopt the judge’s finding that the Respondents’ backpay obligation to Tangy continued until September 28, 2000, when Tangy rejected the Respondents’ valid reinstate- ment offer. B. Other Issues Concerning the Amount of Respondents’ Liability to Tangy 1. Whether to adopt the General Counsel’s “revised” or “alternate” backpay calculations The figures for the Respondents’ backpay liability to Tangy set forth in the initial CS were calculated by the compliance officer based upon Tangy’s submission of standard quarterly reports required by the Board in com- pliance proceedings. The Respondents developed their counter-calculations based upon extraordinarily detailed journals that Tangy had kept, which were provided to the Respondents pursuant to subpoena and admitted into evidence. The Respondents questioned Tangy for weeks about entries in these journals; and these journals and Tangy’s accompanying testimony, which provided more information than the compliance officer originally had by virtue of Tangy’s quarterly reports, compelled a number of revisions during the course of the hearing to the calcu- lations set forth in the CS. General Counsel’s post- hearing brief to the judge included both “revised” calcu- lations, which accounted for certain “voluntary quits” or other instances where Tangy unjustifiably removed him- self from the job market, and “alternate” calculations, which added further interim earnings (and correspond- ingly decreased Tangy’s net backpay award) to account for all instances where Tangy’s journal entries scrupu- lously reflected that he had, for example, slept in late, gone to the doctor, or attended to other personal business while working for an interim employer.53 53 GC Exh. 238 (GC-238), which set forth the General Counsel’s ini- tial determination of interim earnings, was assertedly based solely on Tangy’s paystubs. Appendix B to the General Counsel’s posthearing brief to the judge revised GC-238, purportedly to add interim earnings for hours with interim employers that Tangy could have worked but did not work for personal reasons. Those additional hours were adopted by the judge in his decision at sec. VI,C,3,a & b. Appendix F to the Gen- eral Counsel’s posthearing brief to the judge is an additional, “alter- nate” calculation of Tangy’s interim earnings and net backpay, reflect- D. L. BAKER, INC. 533 The judge found that Tangy “was a basically honest and responsive witness with respect to his attempts to find and keep interim employment and as to his expenses for same.” The judge, adopting the General Counsel’s “alternate” rather than “revised” calculations, further found that Tangy was due $85,407.66 in backpay, $217.35 in medical expenses, and contributions to seven union funds (the latter for the period running from Tangy’s date of employment through October 5, 1994, the date the judge found that DLB repudiated the 8(f) agreements). We find, contrary to the judge, that the General Counsel’s “revised” calculations are more con- sistent with the Board’s traditional approach to mitiga- tion analysis in compliance proceedings and that adop- tion of the “alternate” calculations would hold Tangy to a much higher standard than traditionally applied by the Board. NLRB Casehandling Manual (Part Three) Compliance Section 10545 (Mitigation) emphasizes, at Section 10545.1, that a discriminatee “must make reasonable efforts . . . to hold interim employment” (emphasis added), and that the “focus . . . is on the search for work.” The General Counsel’s “alternate” calculations go well beyond this common-sense standard, effectively punishing Tangy in a way made possible only because he provided the Respondents with a record of minor derelic- tions that most backpay claimants never generate, which the Respondents here seek to exploit to undo Tangy’s largely successful mitigation efforts.54 Scrutinizing Tangy’s journals for every instance in which he missed a brief period of work shifts the focus away from whether Tangy reasonably mitigated backpay and micromanages, retroactively, Tangy’s work history. The Board simply is not, and cannot be, in the business of micromanaging discriminatees’ mitigation efforts. The General Counsel’s “revised” calculations appear to follow the Board’s customary approach to mitigation, imputing earnings where Tangy quit or unreasonably ing increased interim earnings for tardinesses, early work departures, and brief absences for personal reasons referred to in the judge’s deci- sion at sec. VI,C,3,a. The General Counsel represented that the “alter- nate” calculations assumed that Tangy had worked 8 hours every day he was employed by an interim employer (or, if he quit, for hours that were available to work), even if he had worked less, unless prevented by circumstances beyond his control. The judge adopted the General Counsel’s “alternate” calculations, attaching the General Counsel’s posthearing brief, appendix F, to his decision as appendix A. See judge’s decision at sec. VI,D. 54 The judge recognized this when he stated that “Tangy’s meticu- lously detailed daily journals produced the ammunition for the Respon- dents’ attack upon his search for and maintenance of employment ef- forts,” and that had Tangy “been less candid and less detailed . . . the Respondents would have been hard pressed to prolong his examination beyond a few fruitless days.” refused to accept substantially equivalent employment, but not requiring perfect efforts from the discriminatee. However, because the General Counsel provides final numbers rather than underlying calculations, we cannot, on this record, resolve certain inconsistencies and evi- dentiary gaps. Accordingly, while we adopt in large measure the General Counsel’s “revised” figures, we remand certain issues, detailed below, for further action consistent with this decision. 2. Tangy’s gross backpay As noted in section II, above, the judge found that the Board’s summary judgment Order was not limited to the gross backpay formula alleged in the CS, but that it also deemed as admitted, due to the deficiency of the Re- spondents’ answer, 520-hours-per-calendar quarter as the measure of gross backpay owed by the Respondents to Tangy. As also noted above, BEI excepted and DLB cross-excepted to this finding. We adopt the judge’s finding and reaffirm that the Board’s summary judgment Order established Tangy’s gross backpay at 520 hours per quarter. The judge further found that Tangy’s gross backpay should be calculated at the 8(f) contract wage rate, which was considerably higher than Tangy’s $13 per hour wage rate, throughout his entire backpay period, notwithstand- ing contract repudiation. The judge reasoned that (1) Tangy would have been granted some raises, apart from any consideration of the 8(f) agreement rate; (2) the Re- spondents submitted no evidence regarding what rate they would have paid Tangy after the contract repudia- tion date, and all doubts are resolved against the wrong- doer; and (3) while it would have been logical for the Respondents to have done so, they failed to assert that the contract rate of pay would not apply beyond the con- tract repudiation date; thus, their defective answer results in a deemed admission that the contract rate of pay con- tinued. BEI and DLB excepted and cross-excepted, respec- tively, arguing that the wage rates must be adjusted after October 4, 1994 (the date the judge found repudiation to have occurred). Alternatively, they argue that the con- tract wage rate on October 5, 1994, was $21.70 per hour, and that the Board should apply that rate after that date. We agree that the 8(f) contract wage rates apply be- yond the contract repudiation date for the duration of Tangy’s backpay period. In its answer to the CS, DLB failed to answer with specificity concerning the wage rates it paid to its electricians, even though those wage rates were within its knowledge and control. Thus, the Board granted summary judgment on gross backpay; and because gross backpay alleged in the CS was based on the 8(f) contract wage rate (incorporated by reference in DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 534 GC Exh. 1(c), Exh. R), the Respondents cannot now seek to overturn that wage rate. 3. Offsets from Tangy’s gross backpay The Respondents dedicated much of their efforts at hearing to attempting to show that Tangy’s gross back- pay should be reduced because (1) Tangy’s testimony was untruthful (according to the Respondents, he will- fully concealed or misstated interim earnings or was bribed by the Union’s “subsidy”); (2) Tangy did not en- gage in sufficient mitigation efforts because he voluntar- ily quit interim employers, avoided employment with nonunion employers, and habitually missed work oppor- tunities; and (3) the General Counsel’s expenses offset to Tangy’s interim earnings was excessive.55 The judge, with limited exceptions, found that the Respondents failed to carry their burden to reduce Tangy’s gross backpay beyond his demonstrated interim earnings. For the reasons stated by the judge, we adopt the judge’s findings that (1) Tangy did not willfully conceal interim earnings (judge’s decision sec. VI,C,2);56 and (2) except for certain limited areas explained by the judge (judge’s decision sec. VI,C,3), the Respondents failed to prove that Tangy willfully avoided or culpably failed to maintain substantially equivalent work.57 As to the lat- ter, the judge found, and we agree, that Tangy’s duty was to seek employment equivalent to that which DLB should have afforded him; accordingly, Tangy was not 55 DLB also contends that the judge denied it due process by allow- ing the Regional Director to make claim decisions after the close of the hearing, an apparent reference to the General Counsel’s revisions to calculations related to interim earnings and expenses. We find no merit in DLB’s due-process claim. It is a respondent’s burden, not the Gen- eral Counsel’s, to establish interim earnings. United States Can Co., 328 NLRB 334, 337 (1999), enfd. 254 F.3d 626 (7th Cir. 2001). The General Counsel is entitled to provide an alternate calculation of in- terim earnings, which the General Counsel did through the CS. When a respondent fails to satisfy its burden to establish interim earnings, a judge can look to evidence supporting the General Counsel’s alternate method of determining interim earnings. U.S. Telefactors Corp., 300 NLRB 720, 721 (1990). Although the General Counsel does have the burden to prove expenses as an offset to interim earnings, DLB has not explained what harm to itself resulted from the General Counsel’s delay in revising expense calculations. Cf. Kawasaki Motors Mfg. Corp., U.S.A. v. NLRB, 850 F.2d 524, 530 (9th Cir. 1988) (General Counsel should have raised issue in more timely manner, but no prejudice by delay). Indeed, the General Counsel dropped claims for certain ex- penses. However, out of an abundance of caution, we rule that DLB may dispute on remand any posthearing revisions by the General Coun- sel to calculations concerning Tangy’s interim expenses. 56 Backpay is not denied where a claimant, through inadvertence, fails to report earnings or exhibits minor imperfections in recordkeep- ing over an extended period of time. Cibao Meat Products, 348 NLRB 47 (2006), and cases cited therein. 57 The General Counsel must show gross backpay. The respondent then has the burden of establishing affirmative defenses to mitigate its liability, including a willful loss of interim earnings. Millenium Main- tenance & Electrical Contracting, 344 NLRB 516, 517 (2004). obliged to seek nonunion jobs that did not offer terms and conditions of employment substantially equivalent to those Tangy should have been receiving at the time he was discriminatorily discharged.58 The judge further found, and we further agree, that, following Tangy’s dis- criminatory discharge from DLB, Tangy’s backpay should not be tolled if he quit or was terminated from nonequivalent employment, so long as his termination was not due to his deliberate or gross misconduct. We agree with the judge that interim earnings must be imputed for periods of time during which Tangy lost substantially equivalent employment because of unjusti- fied refusals to accept such or because of unjustified “voluntary quits.”59 Thus, we agree with the judge that 48 hours of interim earnings must be imputed in the sec- ond quarter of 1996 to account for available local work that Tangy rejected in order to work on his townhouse; 120 hours in the third quarter of 1996 to account for vol- untary quits from American Combustion and Truland System Corporation, 1 week (40 hours) and 2 weeks (80 hours), respectively, before those projects concluded; and 40 hours in the second quarter of 2000 to account for a voluntary quit from Gleeson Electric to return to Michi- gan to seek employment there. Although the General Counsel’s “revised” calculations purport to impute in- terim earnings for work lost due to those unjustified re- fusals to accept equivalent employment and voluntary quits, our review of the exhibits leaves us uncertain about the accuracy of those calculations.60 Thus, on remand, 58 See Midwestern Personnel Services, 346 NLRB 624, 627 (2006) (rejecting argument that discriminatee incurred a willful loss of earn- ings by relying almost exclusively on union’s looking-for-work list; also adopting judge’s finding that discriminatee who did not accept employment with nonunion company because he anticipated better paying union work would soon be available did not incur a willful loss of interim earnings). 59 Cf. Artim Transp. System, Inc., 193 NLRB 179, 183 (1971) (quot- ing Mastro Plastics Corp., 136 NLRB 1342, 1349 (1962), enfd. in relevant part 354 F.2d 170 (2d Cir. 1965), cert. denied 384 U.S. 972 (1966)): “‘[A] claimant who obtains a job but then leaves it for justifi- able reason is not deprived of all further claims; the assumption is that the reason for his quitting the job would not have been present at Re- spondent’s plant and therefore the job is not substantially equivalent.’” 60 The second quarter of 1996 stands out. The original attachment to the CS (GC Exh. 1(c), Exh. R) showed Tangy’s interim earnings for 2dQ/96 as $12,888.20. That figure was subsequently increased to $14,121.24 (GC Exh. 227), where it remained during the next set of revisions (GC Exh. 238), only to decrease again to $13,392.00 in the final “revised” calculations submitted as Appendix B to the General Counsel’s post-hearing brief to the judge. The General Counsel claimed that 48 hours of interim earnings were imputed to this quarter. Our concern lies in the fact that, although the final revised calculation does show an increase over the initial calculation ($12,888.20 to $13,392.00), it shows a substantial decrease from the intermediate revised calculation ($14,121.24 to $13,392.00). It is possible that the final revised calculation may have captured the 48 hours of imputed earnings, but we cannot be certain from what was submitted to us. D. L. BAKER, INC. 535 the Respondents, who bear the burden of proof with re- spect to interim earnings, may seek to prove different interim earnings calculations for those three quarters (limited to the 208 hours discussed in the instant para- graph). Of course, the General Counsel may also wish to revisit the calculations on his own initiative.61 As referenced above, the judge also found that [t]he record reflects instances of small increments of time, too numerous to discuss here, when Tangy will- fully incurred the loss of interim earnings by tardiness, early work departures, and brief absences for personal reasons, including a desire for more sleep. Contrary to the General Counsel and the Union, I find that these willful and grossly negligent work avoidances necessi- tate an increase to the interim earnings offset claimed by the General Counsel in the backpay specification, as amended at trial.62 We disagree that these “small increments of time, too nu- merous to discuss” constitute a “willful loss” of work that would require the imputation of additional interim earn- ings.63 After an employee has been discriminatorily dis- charged, and while unemployed, he is not required to spend 8 hours a day, 5 days a week searching for work,64 nor is a discriminatee required to immediately engage in a search for work after being laid off from interim employment.65 It follows that a discriminatee employed by an interim em- 61 DLB also contends that the judge failed to shift the burden of proof to the General Counsel when Tangy voluntarily quit work, and if the burden is shifted correctly, Tangy’s backpay claim virtually disap- pears after mid-1994. As the judge explained, there is no requirement that a discriminatee keep non-equivalent employment; hence, DLB’s argument related to burden-shifting only comes into play if Tangy quit (or refused to accept) interim employment that was substantially equivalent to that which DLB should have afforded him under the 8(f) agreement. Because we adopt the judge’s finding that, except for those limited instances discussed above (where we have imputed earnings), “Respondents failed to prove that Tangy ‘willfully avoided substan- tially equivalent work or had culpably failed to retain substantially equivalent work,’” we find no merit in this exception. Additionally, we find no merit in DLB’s additional exception that, because the Union “destroyed” hiring hall records, it necessarily follows, and the Board should infer, that substantially equivalent work was available to Tangy whenever he voluntarily quit an employer. 62 The Respondents contend that the judge erred by omitting this in- creased offset from gross pay, despite having found that such an offset was required. We believe that, by adopting the General Counsel’s “alternate” calculations, the judge included the offset requested by the Respondents. In any event, our reversal of the judge’s adoption of the alternate calculations effectively moots this exception. 63 See, for example, NLRB Casehandling Manual (Part Three) Sec. 10546.2, stating backpay is generally “tolled for a discriminatee who has been unable to work due to illness or injury for a period of 3 days or more” (emphasis added). 64 December 12, Inc., 282 NLRB 475, 477 (1986), enfd. 838 F.2d 474 (9th Cir. 1988). 65 Retail Delivery Systems, 292 NLRB 121, 125 (1988). ployer is similarly not held to a standard of perfection; in- deed, our precedent allows a discriminatee to be discharged from an interim employer without penalty as long as the discharge was not caused by deliberate or gross miscon- duct.66 The “‘sufficiency of a discriminatee’s efforts to mitigate backpay are determined with respect to the back- pay period as a whole and not based on isolated portions of the backpay period.’” Wright Electric, 334 NLRB 1031, 1031 (2001) (quoting Electrical Workers Local 3 (Fis- chbach & Moore), 315 NLRB 1266 (1995), enfd. mem. 39 Fed. Appx. 476 (8th Cir. 2002)).67 Here, the evidence un- doubtedly shows that Tangy’s efforts, over a 7-year period, both in searching for work and maintaining it, were, except for those isolated instances outlined above involving a total of 208 hours, reasonable and adequate. In addition to their exceptions discussed above center- ing on application of “willful” avoidance of work, BEI and DLB filed exceptions and cross-exceptions, respec- tively, arguing that the General Counsel’s interim earn- ings calculations (all versions) omitted certain amounts. We address those more specific alleged omissions below. First, BEI and DLB argue that Tangy’s interim earn- ings must be adjusted to add wages actually paid by in- terim employers up to 40 hours per week. The Respon- dents refer to the compliance officer’s testimony that, in weeks where Tangy worked 4 10-hour days, the CS’s interim earnings calculations for those weeks were none- theless based on 8-hour days, that is, 32 hours per week instead of the 40 Tangy actually worked. The General Counsel appears to have treated hours worked under 40 per week in two different ways. At one place, the General Counsel’s answering brief stated that, upon review of the record, interim earnings for instances where Tangy worked 4 10-hour days have been increased to 40 hours per week. However, in another place, the General Counsel stated that not all interim earnings up to 40 hours per week were calculated against gross back- pay. The General Counsel explained that this was be- cause some hours were compensated at an overtime or premium rate; and because Board law requires offsetting only like hours from like hours, those hours were appro- priately excluded from interim earnings. As noted above, because the underlying calculations have not been entered into evidence, we cannot discern from the General Counsel’s summary what amounts, if any, were added to interim earnings. To be sure, a back- 66 See Cibao Meat Products, supra, 348 NLRB 47, 47 fn. 5 (holding backpay not tolled when discriminatee discharged from interim em- ployer for failure to follow directions). 67 Accord: Basin Frozen Foods, 320 NLRB 1072, 1074 (1996); Schnabel Associates, 291 NLRB 648, 649 (1988); Sioux Falls Stock Yards, 236 NLRB 543, 551 (1978). DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 536 pay claimant who elects to do extra work and earn extra money on an interim job should not be penalized by hav- ing those earnings deducted from gross backpay where the respondent did not make similar overtime opportuni- ties available. EDP Medical Computer Systems, 293 NLRB 857, 858 (1989). However, we do not think that policy applies where a respondent made 40 hours of work available, and the discriminatee worked 40 hours or less during any given week at an interim employer but received “overtime” or premium pay for some of those hours. We agree with the Respondents that, in light of the circumstances, Tangy’s interim earnings should re- flect a 40-hour workweek, but at a straight-time rate only. To the extent that Tangy received higher pay than he would have received for a normal 40-hour week, those earnings should not be counted against him—i.e., should not offset gross backpay—because he is entitled to re- ceive the benefit of working a longer day or unusual hours. Thus, on remand, Tangy’s interim earnings are to be adjusted in keeping with these principles where Tangy worked four 10-hour days but the compliance officer calculated his interim earnings on the basis of a 32-hour workweek. Additionally, where Tangy worked fewer than 40 hours per week, but some of those hours were paid at an overtime, premium, or shift differential rate, interim earnings are to be adjusted as though Tangy worked 40 hours at a straight-time rate. Second, in another “overtime” related exception, BEI and DLB argue that Tangy’s interim earnings must be increased to account for overtime wages paid by interim employers because Tangy had also worked overtime for DLB. In offsetting interim earnings, the Board’s policy is that like hours are offset from like hours. See Re- gional Import & Export Trucking Co., 318 NLRB 816, 818 (1995); NLRB Casehandling Manual (Part Three) Compliance Section 10542.3. Because the Board’s Or- der granting partial summary judgment set quarterly gross backpay at 520 straight-time (regular) hours, only 520 straight-time hours can be used to offset gross back- pay. In addition, contrary to the Respondents’ argument, there is no evidence that Tangy actually earned overtime at DLB. Tangy’s DLB paystubs are in evidence, and they do not reflect any overtime. Accordingly, we adopt the judge to the extent that he found that any overtime Tangy earned at an interim employer, by working over 40 hours per week, should not be included as interim earnings to offset gross backpay. Third, BEI and DLB argue that Tangy’s interim earn- ings must be increased to account for workers’ compen- sation payments totaling $2495 that Tangy received in the fourth quarter of 1995 and for union wage supple- ments that brought his workers’ compensation up to a full 40 hours per week in the first quarter of 1996 ($429/week for 9.8 weeks).68 Tangy admits that he re- ceived $2495 in workers’ compensation payments, and Respondents’ Exhibit 13 (“Notice of Compensation Pay- ments” from Michigan’s Department of Labor) shows a $2495 payment in 1995. The compliance officer testified that she “would have added in” the $2495 for the fourth quarter of 1995, but not the union supplement. Tangy’s paystubs from the fourth quarter of 1995 show regular time earnings of $10,184.64, but appendix A to the judge’s decision reflects fourth quarter interim earnings of $11,123.48, obviously not a $2495 differential. Again, because we do not have the underlying calcula- tions, it is unclear to us how the Regional Office treated those workers’ compensation payments. The Board’s policy is to treat the portion of workers’ compensation payments that recompense for “lost wages” as deductible interim earnings, but not the portion that is reparation for physical injury. American Mfg. Co. of Texas, supra, 167 NLRB at 523; Local 418, Sheet Metal Workers, 249 NLRB 898, 903 (1980); J. S. Alberici Construction Co., 249 NLRB 751, 753 (1980). Here, we are unable to de- termine whether the workers’ compensation payments were included in Tangy’s interim earnings in the fourth quarter of 1995, and, if so, whether they were properly allocated between lost earnings and injury reparation components. Thus, on remand, we direct that those workers’ compensation payments be properly allocated,69 and that Tangy’s fourth quarter 1995 interim earnings include that portion attributable to lost earnings, if that portion has not previously been included.70 As to the Respondents’ argument regarding the union wage supplements, NLRB Casehandling Manual (Part 68 Tangy injured his knee while employed with Triangle Electric. The Respondents argue that backpay should be tolled for the period Tangy could not work due to this injury. Although, as stated above, backpay is generally tolled if a discriminatee is unable to work for 3 days or more owing to an injury, an exception applies if the unavail- ability for work results from an injury suffered during interim employ- ment. NLRB Casehandling Manual (Part Three) Compliance, Sec. 10546.4, citing American Mfg. Co. of Texas, 167 NLRB 520, 522–523 (1967); accord: Big Three Industrial Gas, 263 NLRB 1189, 1200 (1982), overruled on a different issue concerning concealment of in- terim earnings in American Navigation Co., 268 NLRB 426, 427 (1983). 69 See United Supermarkets, 287 NLRB 394, 395 (1987) (where re- cord did not disclose allocation of workers’ compensation payments attributable to lost earnings, Board remanded to determine proper allo- cation). 70 See Colorado Forge Corp., 285 NLRB 530, 544 (1987) (where unclear whether workers’ compensation payments had been included in employee’s quarterly interim earnings, amounts were to be included if they had not already been, with provision that if no agreed-upon resolu- tion, disputed amount was to be placed in escrow with issue to be re- solved at a supplemental hearing). D. L. BAKER, INC. 537 Three) Compliance, Section 10542.1 states the applicable rule. That section provides that unearned income and collateral benefits are not offset from gross backpay. Unearned income is defined as “income derived from any source other than an employment relationship.” Col- lateral benefits are “any form of assistance not based on employment or a return of service by the recipient.” Un- ion strike benefits are collateral benefits if they are “given without condition.” Thus, the Board has held that money received from a union should be deducted from gross backpay where the amounts received constitute wages or earnings resulting from employment or a “re- turn of service” (for example, picketing), but unearned income and collateral benefits are not interim earnings. United Enviro Systems, 314 NLRB 1130, 1131 (1994). The burden of proving that monetary amounts are wages rather than collateral benefits is on the respondent. Rice Lake Creamery Co., 151 NLRB 1113, 1131 (1965), enfd. as modified 365 F.2d 888 (D.C. Cir. 1966). The Re- spondents have not met their burden here. See, e.g., John T. Jones Construction Co., 349 NLRB No. 119, slip op. at 7 (2007). Finally, BEI and DLB argue that Tangy’s interim earn- ings must be increased to account for the Union’s “ille- gal” payments to Tangy in return for his testimony at hearing. As discussed above, we reject the Respondents’ attempt to have us include, as interim earnings, advances made by the Union to Tangy equal to wages lost while testifying at the hearing, repayable from Tangy’s back- pay award. 4. Tangy’s expenses (deductions from interim earnings) The judge adopted the General Counsel’s expenses claim, which is the same under both the “alternate” and the “revised” calculations. In so doing, the judge re- jected the Respondents’ argument that Tangy assumed a nomadic lifestyle and thus was not entitled to expenses incurred in seeking and maintaining out-of-town work. DLB filed cross-exceptions arguing that the judge erred in rejecting the Respondents’ argument and allowing Tangy to recover such expenses. We agree with the judge that Tangy is entitled to recover reasonable ex- penses incurred in seeking and maintaining out-of-town work.71 As the judge found, Tangy searched for work 71 DLB also contended that Tangy should not be allowed to recover all of the claimed expenses because the receipts in the record did not add up to the amounts claimed. DLB states, without transcript citation, that Tangy testified that he kept all of his lodging receipts, and urges a reduction in expenses because those receipts total less than the amount claimed (DLB’s exceptions, attachment 5). But there is a flaw in DLB’s premise. Tangy testified, for example, that the receipts he pro- vided to the compliance officer for lodging in 1stQ/94 were the only receipts he had for lodging, but that is not the same thing as saying that he kept all of his lodging receipts. To the extent that there were incon- outside the area either when he could not find work in the area or when he thought better or higher paying work was available outside the area. In such circumstances, the Board has recognized a discriminatee’s right to search for work outside the geographical market where a respondent operates. Glover Bottled Glass Corp., 313 NLRB 43, 43 (1993), enfd. 47 F.3d 1230 (D.C. Cir. 1995), cert. denied 516 U.S. 816 (1995). Indeed, the Board has specifically recognized that the “ambulatory, practically nomadic, history” of discriminatees in the construction industry may be acceptable. Fis- chbach/Lord Electric Co., 300 NLRB 474, 477 (1990), affd. sub nom. NLRB v. Electrical Local 112, 992 F.2d 990 (9th Cir. 1993). BEI and DLB also excepted and cross-excepted, re- spectively, and argued that, by adopting the General Counsel’s expenses calculations, the judge erred by al- lowing Tangy to recover all of his mileage costs. The Respondents argue that the judge failed to consider the compliance officer’s testimony that only increased mile- age costs over and above what would have been incurred by Tangy working for DLB are properly included in in- terim expenses. According to the Respondents, because the General Counsel has the burden of proof, and be- cause the General Counsel failed to separately break out Tangy’s “commuting” miles to DLB, all mileage costs should be excluded. We remand this limited aspect of Tangy’s expenses claim. In testifying, the compliance officer agreed with BEI that only those miles over and above Tangy’s nor- mal commute to DLB should be added as expenses. The General Counsel stated that the claim for mileage ex- penses is limited to mileage costs incurred by Tangy when searching for work and traveling to and from out- of-town employment. Respondent’s Exhibit 84 shows the number of miles claimed by the General Counsel with a corresponding dollar amount per quarter, which does not appear to “credit” the Respondents for miles Tangy would have commuted to the Respondents’ place of business. Additionally, the compliance officer’s tes- timony was equivocal regarding how she calculated Tangy’s mileage expenses. However, although we agree sistencies between receipts and amounts initially claimed by Tangy on his claimant expense and search for work report forms, we note that the General Counsel’s revised calculations in large measure reconciled those differences. DLB’s own comparison shows the difference be- tween admitted receipts and claimed expenses to be just over $1000. Although we strive for accuracy, we also observe that Board precedent allows a claimant whose testimony is credited to recover expenses even in the absence of supporting receipts or an explanation as to why re- ceipts are unavailable. Webco Industries, 340 NLRB 10, 10 fn. 4 (2003) (citing Coronet Foods, Inc., 322 NLRB 837 (1997), modified on other grounds 158 F.3d 782 (4th Cir. 1998)). DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 538 that the burden of proof is on the General Counsel to prove expenses, we do not agree that some confusion surrounding the calculations mandates exclusion of all mileage costs, as the Respondents would have it. There- fore, on remand, we direct that Tangy’s mileage ex- penses reflect only those costs over and above what Tangy would have incurred working for, and commuting to and from, DLB. VII. FUND CONTRIBUTIONS The judge adopted the General Counsel’s calculations of fund contributions through the third quarter of 1994, consistent with his findings that liability for fund contri- butions ceased upon contract repudiation, and that repu- diation occurred on October 5, 1994.72 The General Counsel’s calculations of fund contributions due Tangy are attached to the posthearing brief as appendix G, and are based on the General Counsel’s alleged May 28, 1997 repudiation date. BEI excepts, essentially arguing that the number of gross hours worked for calculating benefit fund contribu- tions should be reduced because Tangy did not work all of the hours listed under the category “hours worked” in section VII of the judge’s decision. BEI also argues that the hours associated with willful losses of interim earn- ings should be deducted from gross fund contribution hours. We find no merit in those exceptions. Gross con- tribution amounts are based on the same number of “hours worked” used to calculate gross backpay (which the Board’s summary judgment Order conclusively found to be 520 hours per quarter); thus, for every hour of gross backpay, there is 1 hour of fringe benefits con- tributions. Just as gross backpay represents what Tangy would have earned had DLB not violated the Act, gross fund contributions represent the amount of fringe benefit contributions that DLB would have paid on Tangy’s be- half had DLB not unlawfully terminated him. Gross backpay is, of course, reduced by interim earnings; but the amount of gross fund contributions is reduced by the amount of fund contributions made by interim employ- ers. Hence, we reject BEI’s argument that the gross number of fringe-benefit hours should be reduced be- cause of the judge’s findings with respect to hours worked or not worked by Tangy with interim employ- ers.73 However, we note that because we have now 72 The judge found that the loss to the funds after the end of the third quarter but before repudiation (October 1–5) was de minimis. 73 The Respondents might have argued that interim employer contri- butions should be imputed consistent with the interim employer earn- ings that the judge imputed where Tangy unjustifiably quit substantially equivalent interim employment. But even if we were to thus construe the Respondents’ argument, and find that they properly excepted on that basis, it would make no difference here because the first quarter for found an earlier repudiation date than did the judge, the Respondents’ liability for contributions to the respective funds terminates after the first quarter of 1994. VIII. ADDITION OF HAMCI AS PARTY On a special appeal, the Board reversed the judge’s denial of the General Counsel’s motion to amend the CS to join HAMCI as a party on an alter-ego theory. HAMCI filed three cross-exceptions, arguing that (1) the joinder deprived it of due process, (2) the judge’s denial of the Respondents’ motion to stay the proceedings while the special appeal was pending eliminated HAMCI’s right to confront and cross-examine witnesses, and (3) the judge erred in remanding the issue of HAMCI’s de- rivative liability because, having found that Barry has no individual liability, the issue is moot. We find no merit in those three cross-exceptions, the first two because the judge’s bifurcation and remand Order provided a de facto continuance, giving HAMCI time to prepare its defense, and the third because, given our finding regarding Barry’s individual liability, a remand as to HAMCI’s derivative liability is proper. IX. ORDER OF SEVERANCE AND REMAND As summarized above in the overview section of this decision, Judge Wilks bifurcated this compliance pro- ceeding and issued an Order of Severance and Remand. In his order, the judge remanded to the chief administra- tive law judge, for assignment to another judge, the is- sues of (1) HAMCI’s derivative liability, (2) the make- whole remedy for the Respondents’ bargaining unit em- ployees, and (3) the make-whole remedy for individuals who lost work due to the Respondents’ failure to comply with the hiring hall provisions in the 8(f) agreement. The General Counsel and the Union except, arguing that the Board’s summary judgment Order precludes any further litigation relating to paragraphs 17, 18, 19, and 24 of the CS, and therefore the judge erred in failing to make find- ings regarding gross backpay, interim earnings, and net backpay (as well as the corollary issue of fringe benefit contributions) due the Respondents’ unit employees (CS paragraphs 17, 18, and 19), and regarding gross backpay due the hiring hall claimants (CS paragraph 24). The judge’s order also appears to remand the issue of the temporal scope of the Board’s remedy, even though the judge denied the Respondents’ joint motion in limine that sought, in part, to limit the Board’s remedy to those employees hired after August 7, 1993.74 DLB contends which there are imputed interim earnings is second quarter 1996—long after the contract repudiation date we have found of March 31, 1994. 74 In denying the motion on the record, the judge stated that he saw nothing in Judge Ladwig’s decision, the Board’s Order, or the Fourth D. L. BAKER, INC. 539 that the judge erred in ruling that DLB employees hired prior to August 7, and alleged hiring hall claimants, are included in the Board’s remedial order. We adopt the judge’s Order of Severance and Remand with the following clarifications. First, regarding the Respondents’ bargaining unit employees, we find that it is premature to issue a final order because, as discussed in Section II, above, we have found that the summary judgment Order did not settle whether certain of DLB’s employees were supervisors or office workers excluded from the unit. That issue is among those to be resolved on remand. We reaffirm, however, that the judge cor- rectly ruled that the Board’s underlying Order covers DLB employees hired prior to August 7, 1993.75 Second, we find merit in the General Counsel’s argu- ment that a grant of summary judgment on fringe benefit contributions for the Respondents’ bargaining unit em- ployees (CS par. 20) logically follows from the Board’s grant of summary judgment on gross backpay for those employees (CS par. 17). However, inasmuch as we find it premature to issue a final order given the open supervi- sory and office worker issues, we decline to issue a final order mandating fringe benefit contributions at this time. We emphasize, however, that in any final order issued upon remand, the amounts for those of Respondents’ employees found on remand to be included in the bar- gaining unit shall be as alleged in CS paragraph 20, as shown on General Counsel’s Exhibit 1(c), as amended at the hearing. Third, regarding the hiring hall claimants, the General Counsel and the Charging Party seek findings solely as to gross backpay. We reaffirm that the gross backpay due hiring hall discriminatees was conclusively resolved by the Board’s grant of summary judgment on CS para- graph 24. Accordingly, we find that the judge erred in remanding issues related to CS paragraph 24. We will modify the judge’s order of severance and remand ac- cordingly. ORDER OF SEVERANCE AND REMAND The National Labor Relations Board adopts the judge’s Order of Severance and Remand as modified below and orders that these cases be remanded to the chief adminis- trative law judge for assignment to another judge to re- solve the issues set forth by the judge (as modified), and for further proceedings consistent with this Supplemental Decision and Order Remanding: Circuit’s decision that would allow him to limit the remedy as argued by DLB. 75 The Board Order required Respondent, “[f]or the period beginning August 7, 1993, [to] make whole its employees in the bargaining unit . . . .” 317 NLRB at 347. Delete from paragraph 2 of the judge’s Order of Sev- erance and Remand the reference to paragraphs 24(a)–(i) of the compliance specification. Brenda Valentine Harris, Esq., for the General Counsel. J. Raymond Sparrow Jr., Esq. (Shumate, Kraftson & Sparrow, P.C.), of Reston, Virginia, for D.L. Baker Inc. t/a Baker Electric. Michael E. Avakian, Esq. (The Center on National Labor Pol- icy, Inc.), of North Springfield, Virginia, for Daniel L. Baker, individually. Steven Frei, Esq. (Hall & Sickels, P.C.), of Reston, Virginia, for Baker Electric, Inc., and Maggie Barry, individually. Declan C. Leonard, Esq. (Martin, Arif, Petrovich & Walsh), of Springfield, Virginia, for Herndon Animal Medical Center, Inc. 1 Brian A. Powers, Esq. and Keith R. Bolek, Esq. (O’Donoghue & O’Donoghue), of Washington, D.C., for the International Brotherhood of Electrical Workers, Local 26. SUPPLEMENTAL DECISION, ORDER OF SEVERANCE, AND REMAND STATEMENT OF THE CASE I. UNDERLYING LITIGATION THOMAS R. WILKS, Administrative Law Judge. Pursuant to a compliance specification and notice of hearing which issued on February 26, 1999, this matter was tried before me in Washing- ton, D. C., on June 12, 13, 14, and 30; July 17, 18, 19, 21, and 31; August 1, 2, 3, 4, 14, 16, 17, 18, 28, and 30; September 7, 8, 11, 12, 13, 25, 26, 27, 28, and 29; October 2, 4, 5, 6, 23, 24, 25, 26, and 31; and November 1, 2, 3, 15, and 16, 2000. The transcript of these proceedings amounted to 6732 pages and a voluminous amount of documentary evidence. As noted in footnote 1, above, Herndon Animal Medical Center, Inc. (HAMC or Herndon) had a very limited participation in this phase of the proceeding and filed no brief. The General Coun- sel; the Charging Party International Brotherhood of Electrical Workers, Local 26 (the Union); and the Respondent, D. L. Baker, Inc. (DLB); the Respondent Daniel L. Baker individu- ally (Dan Baker); the Respondent Baker Electric, Inc. (BEI); and Maggie Barry individually (Barry), all were represented by 1 The case caption is amended to reflect the joinder as a party Re- spondent to this proceeding, Herndon Animal Medical Center, Inc., by Board Order of October 11, 2000, which granted the General Counsel’s motion to appeal my ruling of August 3, 2000, which had denied the General Counsel’s motion at trial for such joinder. On Tuesday, Octo- ber 24, 2000, counsel for Herndon Animal Medical Center, Inc. (HAMC or Herndon) entered his appearance on the record and subse- quently made several motions on the record, some of which would have resulted in a continuance of the proceedings. I denied those motions that would have necessitated a continuance and proceeded with the litigation, which at that time was the presentation of the original Re- spondents’ evidence. As will be explained hereafter, I had already decided to bifurcate the litigation. I granted Herndon’s alternate re- quest to defer litigation of the amended compliance specifications which relate to its alleged derivative liability premised upon the indi- vidual liability of Maggie Barry, its manager and sole stockholder, and its status as an alleged alter ego of the “Respondents.” HAMC subse- quently filed a written answer. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 540 their separate, respective counsel and were provided reasonable opportunity to adduce relevant and material evidence. All of the Respondents filed joint motions as they did a joint brief, except Herndon, of course, which filed no brief. The original unfair labor practice charge was filed against DLB in December 1993 and January 1994. Complaints against DLB issued on February 7 and March 7, 1994, and later were consolidated. Trial was held before Administrative Law Judge Marion C. Ladwig on October 3 and 4, 1994. His decision issued on December 21, 1994. Exceptions were filed by DLB. As recited in Judge Ladwig’s decision, the precipitating fac- tor for the first charge came about in late 1993. DLB had oper- ated since the early 1970s as a nonunion electrical contractor who hired union and nonunion electricians. In late 1993, a recently hired union employee, Michael Tangy, started cam- paigning for representation by the Union. His discharge on December 1, 1993, was found by Judge Ladwig to have vio- lated Section 8(a)(1) and (3) of the Act. Judge Ladwig found that shortly after his discharge, the Union discovered “in its dormant files of about 300 inactive contractors, Section 8(f) prehire agreements that [DLB] had failed to honor.” Judge Ladwig found that from 1976, by virtue of its assent to the Na- tional Electrical Contractors Association (NECA) as its bar- gaining agent, DLB had bound itself to the NECA-Union Inside Wireman Master Agreement and succeeding agreements.2 He further found that without notice to the Union, DLB had de- cided not to honor the agreement and succeeding agreements negotiated by NECA, from which DLB never withdrew its bargaining assent, and to operate as a nonunion contractor “without discovery by the Union until September 1993” when Union Agent Charles Graham, who had become assistant busi- ness manager/organizer in July 1992, discovered the name of D. L. Baker in its files of inactive contractors and thereupon, by letter, requested “recognition and compliance with the prehire agreements.” DLB did not respond to the letter and Judge Ladwig found that it had not given timely notice to NECA or the Union to terminate the agreement. In discussing whether the unfair labor practice charge was timely filed, Judge Ladwig found that it was timely filed because the Company “failed to sustain its burden of showing that the Union was on ‘clear and unequivocal notice’ that the Company was operating nonunion, reneging on its commitment that when it began hiring employ- ees it would call the Union for referrals and operate as a union contractor, abiding by the provisions of the master agreement.” He stated: “I also find that the Company’s conduct and non- compliance with the 8(f) prehire agreements was not suffi- ciently ‘bald’ to put the Union on notice of its intent to repudi- ate the agreements.”3 Judge Ladwig proceeded to find as fol- lows: I therefore find, as alleged in the complaint, that since August 7, 1993 (6 months before service of the charge on 2 Judge Ludwig noted that the Union had jurisdiction over about 180 contractors in three counties in Virginia, five counties in Maryland, three counties in West Virginia, and in the District of Columbia. 3 Judge Ladwig further found that “there was no reason for [the Un- ion] to suspect that Baker was reneging on his promises and operating nonunion.” February 7, 1994), the Company has failed and refused to adhere to the terms of the 1993–1997 NECA–Union Inside Wireman master agreement, violating Section 8(a)(5) and (1) of the Act. I also find that since December 9, 1993, when the Company failed to respond to the Union’s De- cember 8, 1993 letter, the Company has refused to recog- nize the Union as bargaining representatives of the em- ployees in the appropriate unit . . . violating Section 8(a)(5) and (1). Judge Ladwig’s recommended remedial order provided, inter alia, for reinstatement and backpay to Tangy, a cessation of refusing to recognize and bargain with the Union, and cessation of its noncompliance with the hiring hall provisions and terms and conditions of employment in the current NECA–Union Inside Wireman Master Agreement; and an offer of full and immediate employment to “individuals on the Union’s out-of- work list who, since August 7, 1993, were denied an opportu- nity to work for the Respondent because of its failure and re- fusal to comply with the hiring hall provisions in the current NECA–Union Inside Wireman master agreement.” Judge Ladwig further recommended that DLB: . . . for the period beginning August 7, 1993, make whole its employees in the bargaining unit, as well as those individuals who were denied an opportunity to work, for losses suffered as a result of its failure and refusal to adhere to the master agreement; reimburse them for any expenses ensuring from its failure to make the required contributions to the benefit funds; and make whole the benefit trusts funds for losses suf- fered. . . . Thus, Judge Ladwig’s proposed remedial order provided for three categories of discriminatees, i.e., Tangy, DLB’s own em- ployees, and an unknown number of whom he called the hiring hall discriminatees. Judge’s Ladwig’s order provided for no terminal date for this backpay liability. On May 8, 1995, the Board issued a brief decision which af- firmed Judge Ladwig’s findings and conclusions and which adopted his recommended remedial order. Baker Electric, 317 NLRB 335 (1995). In that Decision, the Board explicitly re- jected DLB’s argument to the Board based upon James Luter- bach Construction Co., 315 NLRB 976 (1994), that it was not bound to the current NECA–Union Inside Wireman Master Agreement because it had only committed itself to the agree- ment in effect at the time it signed the Letter of Assent–A in 1976. The Board, inter alia, ordered DLB to comply with the exclusive hiring hall provisions and other terms and conditions of employment in the “current NECA–Union Inside Wireman master agreement.” On January 8, 1997, in an unpublished decision, the United States Court of Appeals for the Fourth Circuit enforced the Board’s Order in its entirety. NLRB v. Baker Electric, Case 95–1377 (4th Cir. 1977). Although the fourth Circuit noted that the Board applied John Deklewa & Sons, Inc., 282 NLRB 1375 (1987), which the Fourth Circuit has thus far refused to adopt, nevertheless the court found that the result did not change under its precedent as set forth in Clark v. Ryan, 818 F.2d 1102 (4th Cir. 1987), which held that an 8(f) contract must D. L. BAKER, INC. 541 be honored until repudiated. Deklewa held that it must be hon- ored until its termination date. Baker Electric, Case 95–1377, slip op. at 6 fn. 3. The court added that DLB was bound to the NECA-Union Inside Wireman Master Agreement by virtue of the delegations of authority and the renewal clauses contained in the agreements. Id. at 6–7 fn. 4. DLB’s failure to revoke its delegation of authority to NECA resulted in the Company being bound to the NECA–Union Inside Wireman Master Agreement. Id., slip. op. at 8. By granting the Board’s petition for enforce- ment, the Fourth Circuit granted the Board’s Order requiring DLB to comply with the current NECA–Union Inside Wireman Master Agreement. The court rejected DLB’s argument that it had repudiated the 1976 agreements by 16 years of “notorious” nonunion opera- tors. The court, in so doing, noted that in Jim McNeff, Inc. v. Todd, 461 U.S. 260, 270 fn. 11 (1983), the Supreme Court rec- ognized that certain specific acts would effect the repudiation of a prehire contract. The Fourth Circuit Court further ob- served that “[u]nder McNeff and Clark, however, acts sufficient to repudiate the prehire agreement require at least that the Un- ion have some form of notice of the inconsistent conduct.” It cited Judge Ladwig’s findings that DLB “succeeded in operat- ing nonunion without discovery by the Union until 1993” and “[t]here was no reason for [the Union] to suspect that Baker was reneging on his promises and operating nonunion” and held that the judge’s findings were supported by the record evidence and were not controverted by DLB. Accordingly, it rejected DLB’s argument that its conduct prior to September 1993 was sufficiently “notorious” to repudiate the contract. Moreover, it went even further to find that “. . . prior to this action [DLB] did not revoke NECA’s authority, and by virtue of that authority, DLB was bound to the succeeding agreements including the current agreement” and that “because . . . [DLB] never effectively repudiated the § 8(f) agreement, it may be held liable for breaching its term.” II. THE COMPLIANCE SPECIFICATION The Regional Director for Region 5 conducted an investiga- tion as to backpay and moneys due by DLB. During that inves- tigation, an investigative subpoena was issued which led to the extensive enforcement proceeding in the United States District Court in Alexandria, Virginia.4 The compliance specification issued on February 26, 1999, and alleged that Respondent BEI was an alter ego of DLB, by virtue of their common management and supervision, having a common labor policy, having shared premises and facilities, interchanging personnel, and by holding themselves out to the public as a single-integrated business enterprise. The compli- ance specification also alleged that BEI was a successor of DLB under Board law and that under either an alter ego or successor theory, BEI would be jointly and severally liable for the obligations of DLB. The compliance specification further asserts that the Respondents Dan Baker and Maggie Barry di- verted the corporate funds of DLB and BEI to themselves and are, therefore personally liable for DLB’s Board obligation. 4 There are many references to those proceedings in the record in this case, in reference to petitions to revoke subpoena arguments. The compliance specification asserts that all named Respon- dents are jointly liable for DLB’s failure to apply the terms of the 8(f) agreement from August 7, 1993,5 through May 28, 1997, when DLB repudiated the agreement.6 The compliance specification asserts that DLB, BEI, Dan Baker, and Maggie Barry individually are responsible for implementation of the court-enforced Board order to make an unconditional offer of reinstatement to discriminatee Michael Tangy and to make him whole for any losses he suffered because of his unlawful termi- nation by DLB beginning December 1, 1993, to the present date.7 The compliance specification sets forth the Respondents’ li- ability for backpay due to the employees of DLB for its failure to apply the wage rates and fringe benefit contributions pursu- ant to the agreement with the IBEW from August 7, 1993, to May 28, 1997. It further alleges their joint and several liability for backpay from missed earning opportunities due to approxi- mately 175 employees, and expense claims to certain other employees who should have been referred to work from the Union for DLB from August 7, 1993, to May 28, 1997, but for DLB’s failure to abide by the collective-bargaining agreement’s referral provisions. The General Counsel explicitly concedes in the brief, and by virtue of its pleading that the termination date of the Respon- dents’ contractual obligations occurred prior to the expiration date set forth in the contract, that it is seeking enforcement of the remedial order as enforced under the court order and under Fourth Circuit precedent, not under the Board’s Deklewa deci- sion. The May 28, 1997 date is a date of a letter sent by the Respondents which the General Counsel argues constitutes the first effective notice of repudiation of the 8(f) successor agree- ment then current. The letter itself reiterates the Respondents’ contention that it had previously given notice of repudiation by virtue of its manifested conduct. The Union agues alternatively that a somewhat later date, the actual expiration date, should mark the expiration of contractual liability as per the Deklewa decision. III. SUMMARY JUDGMENT After the Respondents filed answers, the General Counsel moved for partial summary judgment as to the allegations in paragraphs 17, 18, 19, 24, and 32 of the compliance specifica- tion. The Board granted the motion for partial summary judg- 5 The Board’s Order, enforced by court judgment, established the beginning of the backpay period as August 7, 1993. 6 By order dated October 11, 2000, the Board granted counsel for the Acting General Counsel’s Special Appeal and Motion to Amend the Compliance Specification to add Herndon Animal Medical Center, Inc. (HAMC) as a Respondent individually and severally liable in this case based on record evidence that HAMC, at all times material through April 4, 2000, the sole proprietorship of Respondent Maggie Barry, was now an incorporated entity of which Barry is the sole stockholder. 7 On the record on September 28, 2000, the Respondents made an unconditional offer of reinstatement to Michael Tangy without preju- dice to their defense that a valid reinstatement offer had been made July 17, 1997, and Tangy waived his right to reinstatement. The General Counsel asserts that the Respondents are jointly and severally liable for backpay due to Tangy from December 1, 1993, through September 28, 2000. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 542 ment in its Supplemental Decision and Order issued on January 19, 2000. Baker Electric, 330 NLRB 521, 522 (2000). More specifically, the Board found that the Respondents failed to provide “appropriate supporting figures of alternative calcula- tions” and, therefore, admitted the allegations set forth in para- graphs 17 through 19, which set forth the computational formu- las and amounts of gross backpay, interim earnings, and net backpay due the Respondent DLB’s own employees; paragraph 24, which sets forth formula and calculations on the gross backpay due the hiring hall employees; and paragraph 32, which establishes the formula and calculations of gross back- pay due to discriminatee Michael Tangy. The Board also held: The Respondents also deny liability for the backpay period set forth in the compliance specification, including the allegations in paragraphs 17, 18, 19, 24, and 32 on the ground that the Respondent, D.L. Baker, Inc., t/a/ Baker Electric, repudiated the collective-bargaining agreement in September 1993, shortly after the backpay period com- menced. In the underlying case, however, the Board and the court of appeals specifically found that the Respondent had never effectively repudiated the agreement.7 Thus, the Respondents’ argument that backpay tolls in September 1993 has already been rejected and may not be relitigated in this proceeding. Viola Industries, 316 NLRB 424 (1995); Artic Framing, Inc., 313 NLRB 798 (1994). ______________ 7 317 NLRB at 346; NLRB v. D.L. Baker, t/a Baker Electric, unpublished opinion at 8. The compliance specification alleges that effective repudiation occurred on May 28, 1997, subsequent to the Board and court orders, and adopts that date as the termina- tion of the backpay period. The Board then remanded the proceeding for a hearing to take evidence concerning the remaining allegations of the compli- ance specification. IV. THE TRIAL; MOTIONS; ORDERS; AND BIFURCATION The trial of this matter commenced in Washington, D.C., on June 12. Prior to the opening of trial, I had notified the chief judge of my irrevocable intention to retire at the end of the calendar year. The June 12–14, 2000 sessions of this proceed- ing dealt entirely with cross-petitions to revoke subpoena duces tecum served on all parties by all parties for immense amounts of documents, most particularly the Respondents’ records. Compliance production of documents was set for June 30. At that time, it was the joint consensus of all parties that about 200–225 witnesses would be called to testify as to the issues pertaining to discriminatees other than Tangy, e.g., the Respon- dents’ employees and 175 persons who were deprived of pay and benefits by virtue of the Respondents’ noncompliance with the hiring hall pay and benefits provisions of the NECA–Union Inside Wireman Master Agreement. The parties deliberated and agreed upon a mutually convenient trial schedule to ac- commodate trial and other trial schedule conflicts. I stated my desire to complete litigation by September 2000 and informed the parties that their schedule was unacceptable. Accordingly, I ordered a trial schedule of alternate week litigation commenc- ing July 17. It was the consensus that we would be finished with litigation by the end of September, but I included October trial dates in my trial schedule order as a precaution. The par- ties anticipated only brief examination of discriminatees other than Tangy. By August 28, 2000, we had not finished Tangy’s testimony, which itself consumed 3 weeks, because of the Respondents’ extensive examination as to his employment search and em- ployment record of over 20 interim employees over a 7-year period. Only one hiring hall discriminatee of over 177 ex- pected witnesses testified, i.e., Terry Cox. His testimony con- sumed virtually the whole August 18 session. I had already concluded that I would not be able to retire by the end of the year. I agreed to the chief judge’s request to work beyond the end of the year, after closing the trial before the end of the year, and to issue my decision soon after the first of the New Year. By August 28, it had become clear that if I were to preside over the entire litigation, this would be an im- possibility. For personal reasons, I could not postpone my retirement further. I explained the situation to the parties and announced my decision to bifurcate the proceeding. I decided to retain litigation of compliance specifications relating to Tangy, his reinstatement and backpay, the successor/alter ego/individual liability issues, and the issue of contract repudia- tion raised by the Respondents to be discussed more fully here- after. I announced my intention to litigate these issues and to close the hearing, accept briefs on those issues, and to issue a supplemental decision as to those issues and an order remand- ing the remaining compliance specification issues to the chief judge for assignment to another judge. The alternative—a sub- stitution of a judge immediately or, at trial’s end, to write a decision—was suggested to the parties but was declined. Bi- furcation was agreed as a more acceptable management of the trial. The Respondents indicated that it would be advantageous to retain the contract repudiation issue in the first part of the bifurcated proceeding because if it was to be determined that a much earlier contract repudiation occurred than that alleged in the specification, litigation would be immensely shortened. The contract repudiation issue was raised by the Respondents, who insisted that repudiation by virtue of its conduct occurred at the end of 1993 despite the Board and court findings cited above. Early in the trial, the Respondents filed with me a motion in limine, which requested a preliminary finding by me that notice of contract repudiation occurred by virtue of DLB’s open and notorious conduct after September 1993 or, later, when the answer was filed to the unfair labor practice charges that al- leged unlawful refusal of recognition and noncompliance with the NECA–Union Inside Wireman Master Agreement. By order entered in the record on July 17, 2000, I denied the Re- spondents’ motion essentially on grounds of res judicata and issue preclusion. At that time, I observed on the record that the court’s reference to nonrevocation of NECA’s bargaining au- thority “prior to this action” might mean the Appellate Court action. The Board issued its order on September 8, 2000, which denied the Respondents’ special permission to appeal my order. However, the Board stated therein that the Respondents were not precluded from introducing evidence of contract repu- diation subsequent to October 4, 1994, the last day of trial be- D. L. BAKER, INC. 543 fore Judge Ladwig. Clearly, the Board defines “this action” to mean the unfair labor practice proceeding, and I accepted that definition and afforded the Respondents the opportunity to adduce evidence of post-October 4, 1994 facts to support its contention that the Union was or should have been on notice that it was the Respondents’ intent to refuse to recognize the Union and to repudiate the entire contract by virtue of DLB’s conduct or other circumstance. With respect to the joinder of HAMC to the proceeding by Board Order issued after the Respondents had commenced their defense, I decided to relegate litigation of that issue to the bi- furcated subsequent proceeding. By that time, it was evident that HAMC, by Board Order, had been recognized as having the right to adduce evidence and “to cross-examine witnesses.” The Union and the General Counsel had served subpoena duces tecum upon HAMC and were prepared to seek a reopening of their case dependent upon documentation produced. It was my intent to close the litigation before me before year’s end. I had denied the motion to join HAMC as an unnecessary encum- brance of an already enormous litigation. My rationale, as expressed in the record. was that the assets of HAMC were to be sought pursuant to the individual liability of Maggie Barry, its sole stockholder. I suggested that the General Counsel ac- cess the entire stock of HAMC held by Barry in ancillary pro- ceedings in satisfaction of any debt Barry might be individually liable for in consequence of this proceeding. The General Counsel and the Union rejected that alternative procedure. The record is burdened with a variety of motions and orders relating to the Respondents’ attempts to ameliorate the plain and literal language of the partial summary judgment as to gross backpay and the General Counsel’s amendment to the specification to comport with evidence adduced at trial as to Tangy’s interim earnings and expenses. I denied the former and granted the latter. Moreover, I ruled that the General Counsel’s amendments as to specific sums regarding expenses and interim earnings did not permit the Respondents to escape the partial summary judgment by filing an expansive amended answer to the entire specification. Briefs were filed by the parties by deposit in the U.S. mail or other delivery service on December 22, 2000. I suppose the length of these briefs are proportionate to the mass of testimo- nial and documentary evidence, i.e., the Union, 182 pages; the General Counsel, 92 pages, excluding appendices; the Respon- dents’ joint brief (exclusive of HAMC), 127 pages with a com- pendium of graphs, charts, summaries, etc., of almost equal length. I may grumble at their length, but I admit they were all very well written and assisted me enormously in focusing upon the facts and issues. For this, I am grateful. Inasmuch as the briefs approximate proposed findings of facts and conclusions, I have incorporated portions of them in this decision, some- times modified, particularly as to undisputed factual narration. However, all factual findings herein are based upon my inde- pendent evaluation of the record.8 8 The General Counsel’s unopposed motion to correct the transcript, which was attached to the brief, is granted. On the entire record, including my observation of the de- meanor of the witnesses, and after considering the briefs filed by the parties, I make the following. FINDINGS OF FACT I. WITNESSES AND CREDIBILITY Dan Baker is one of the three original directors of DLB. The other two directors, including his first wife, Holly Baker, re- signed at some date prior to the specification period.9 Dan Baker was and is the operational manager of the day-to-day electrical service business of DLB and that of BEI. His testi- mony is hampered by a resentful, hostile demeanor which ac- companied guarded, evasive, and inconsistent responses. He admitted to a total lack of recollection to significant areas of the corporate nature of DLB, his relationship to it, the sale of assets from DLB to BEI, and his relationship to the sale and to BEI. Most of his testimony was rendered as an adverse witness, which he endured for virtually an entire week. His forgetful- ness, Dan Baker attributed to the personal trauma he endured of having a successful business become encumbered with debts primarily to the US. Internal Revenue Service. He admonished persistent counsel that no matter how often certain questions were asked, he had no recollection of those events. On this point, he was very convincing. However, understandable or not, it undermined him as a credible and accurate witness. Maggie Suzanne Barry is a professional licensed veterinarian of 21 years’ experience and the sole proprietor of Herndon Animal Medical Center, which was incorporated in May 2000. She was employed by DLB in about 1978 for a few months, performing unspecified general duties. She became personally close to Dan Baker, whom she had known for 20 years, and, prior to their marriage, cohabited with him at her home in Pur- cellville, Virginia, during the times material herein. Subse- quently, the title became either a joint or tenancy by the entire- ties after their marriage in mid-1996. She became the sole stockholder, resident agent, and a director of BEI after the 1995 sale of assets. Her testimony was lengthy but not as extensive as that of Dan Baker. She was, however, although guarded and hardly spontaneous, much more forthcoming and detailed as an adverse witness. I credit her recollection of facts wherever it conflicts with that of Dan Baker, but, because of her lack of complete confidence and certitude in recollection, I credit any conflicting documentation. Similarly, I discredit Dan Baker where it conflicts with documentary evidence. Two employees, Antonio Petty and Ramadhani Abdulbarr, testified concerning the successorship issue. They were con- vincing, spontaneous, forthcoming, and apparently disinterested in the outcome. Wherever their testimony conflicts with Dan Baker or Maggie Barry, I credit them unless otherwise noted. Charles Chuck Graham, the Union’s assistant business man- ager/organizer, testified with respect to certain aspects of Tangy’s attempted reinstatement in 1997 and also as an adverse witness with respect to the contract repudiation issue. Again, understandable or not, I found him to be a bitterly resentful and antagonistic adverse witness. He appeared to backtrack in 9 Holly Baker presumably resigned at about the time of their divorce, prior to Daniel Baker’s marriage to Maggie Barry in mid-1996. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 544 friendly examination from more candid, unqualified responses that were elicited by persistent cross-examination. I was con- vinced that his initial admissions are more truthful than those qualifications elicited later. More will be discussed regarding his testimony hereafter, particularly in the contact repudiation section of this decision. The Respondents qualified as an expert financial small busi- ness advisor Jerome Baker, the son of Dan Baker, who had been employed by DLB as a project manager and who, after obtaining his professional and graduate degrees, inter alia, in law and business administration and establishing his small business clientele, succeeded BEI’s accountant and financial advisor service. I overruled the Union and the General Coun- sel’s objections to his qualification as expert witness, none of which ran to Jerome Baker’s familial relationship to the parties. I found him to be a convincing and generally straightforward, responsive, dispassionate, convincing witness. The Respondents elicited the testimony of Phyllis Chorazy, a certified public accountant who provided accounting service and financial management advice to DLB up to the sale of as- sets. Her testimony was complemented by Tax Attorney Coro- neos, who specialized in small business corporate reorganiza- tion and corporate restructuring and/or assets sales in Virginia since 1976. Both Coroneos and Chorazy testified clearly, con- vincingly, and I find credibly, as to the facts leading up to and including the 1995 sale of assets. With respect to any inconsis- tencies between their testimony and that of either Dan Baker or Barry, I credit Chorazy and Coroneos. Their conclusions were attempted to be rebutted by the General Counsel’s witness, Richard Booth, a University of Maryland law professor whose expertise in the area of business planning taxation, corporate finance, etc., was not challenged. As a witness, he was also clear, precise, dispassionate, and disinterested in the results of the proceeding. A few other witnesses testified, including the regional com- pliance officer, Elizabeth Tursell. Their testimony will be dis- cussed where necessary hereafter. Finally, the most exhaustive testimony was given over a bro- ken period of 15 trial days in August and September, scattered over the course of the General Counsel’s case, by the discrimi- natee, Michael Tangy. In his own way, Tangy’s demeanor was as poor as that of Dan Baker. He was variously a grudging, reluctant, antagonis- tic, evasive, and impatient witness, especially in adverse ex- amination.10 The General Counsel protested that the Respon- dents were engaging in an unduly exhaustive examination that victimized the long-suffering witness. However, the extensive nature of the examination was the consequence of Tangy’s own diverse employment by over 20 different employees over a 7- year period of time and by his detailed daily journals and check receipts of interim employment and expenses, some of which surprised the General Counsel and caused revisions to the specification after he testified. The counsel for the General Counsel stressed the financial hardships endured by Tangy, and 10 At one point in cross-examination, Tangy became so agitated that he literally threw into the air his wristwatch, with which had been fid- dling throughout the examination. he himself acted extremely put upon to testify in a proceeding that was seeking a supposedly desired reinstatement and a very significant amount of backpay for him. As other witnesses, such as Barry, were accommodated as to the dates of their testimony, a break was accommodated to Tangy so that he could keep an “out of town” commitment.11 Finally, not too long after the counsel for the General Counsel commented on the financial hardship suffered by Tangy who had been missing work, it was discovered in adverse cross- examination that the Union had agreed to “subsidize” Tangy for wages lost due to his testimony in the proceeding which was reimbursable from any backpay that might be awarded. He testified that this arrangement was worked out with Union Agent Graham at a time when Tangy claimed he was about to “go broke.” He placed the agreement time just before his Au- gust 2000 out-of-town commitment, which turned out to be a 2- week vacation trip to Ireland. After Tangy’s return from Ireland, he testified the entire ses- sions of September 8, 11, 12, 13, 26, 27, and 28 under the Un- ion’s reimbursement plan that covered about one-half of the 15 days that he testified.12 It is not clear whether the agreement retroactively covered his first 7 days of testimony. It is not clear how Tangy could afford this Irish vacation if he was in- deed “going broke.” He practically admitted that his presence at trial was conditioned upon the receipt of the union subsidy. The Respondents argue that the reimbursable subsidy consti- tutes a payment for testimony contrary to Federal court policy, citing Hamilton v. General Motors Corp., 490 F.2d, 223, 229 (7th Cir. 1973), and Federal criminal statutes, citing 18 U.S.C. § 201(c)(2) and (3); Golden Door Jewelry Creations, Inc. v. Loyds Underwriters Non-Marine Assn., 865 F.Supp. 1516, 1522–1526 (S.D. Fla. 1994), affd. 117 F.3d 1328, 1355 fn. 2 (11th Cir. 1997). Citing this authority, the Respondents argue that Tangy’s entire testimony should be excluded. It is not clear what such total exclusion would do for the Respondents’ burden of proof as to interim earnings, diminution of interim earnings by work avoidance, etc., which rests entirely on Tangy’s testimony. Tangy’s gross backpay is admitted. Clearly, Tangy is due some amount of backpay. The subsidy is arguably distinguishable from payment for testimony whereby a witness receives in return for testimony something of value which he would not otherwise be due. Here, Tangy is in receipt of an advance of backpay due. Although it can be argued that any future backpay actually obtained for him may be specula- tive as to amount, I am not inclined to strike Tangy’s entire testimony. However, I am in agreement that this subsidy must necessarily be evaluated when considering his credibility, which will be discussed hereafter. 11 The trial itself proceeded with other witnesses as agreed to by the Respondents. 12 His direct examination started and was finished on August 2, 2000. Cross-examination started on August 2 and continued on August 2–4 and 14–17. D. L. BAKER, INC. 545 II. THE LIABILITY OF BEI AS A SUCCESSOR EMPLOYER AND/OR ALTER EGO A. General Statement of Law Successorship is a highly complex issue. The successorship analysis is “primarily factual in nature and is based upon the totality of the circumstances of a given situation.” Fall River Dyeing Corp. v. NLRB, 482 U.S. 27, 43 (1987). A new em- ployer is a successor if there is “substantial continuity” between the enterprises. Fall River, 482 U.S. at 43. Substantial continuity exists when the new company has “acquired substantial assets of its predecessor and continued, without interruption or substantial change, the predecessor’s business operations.” Golden State Bottling Co. v. NLRB, 414 U.S. 168, 184 (1973). “The essential inquiry is whether opera- tions . . . remain essentially the same after the transfer of own- ership.” International Union of Electrical Radio & Machine Workers (IUEW) v. NLRB, 604 F.2d 689, 694 (D.C. Cir. 1979). The analysis “is undertaken with an emphasis on the employ- ees’ perspective.” Fall River, 482 U.S. at 43. The analysis is further complicated because: the real question in each of these “successorship” cases is, on the particular facts, what are the legal obligations of the new employer to the employees of the former owners or their rep- resentative. The answer to this inquiry requires analysis of the interests of the new employer and the employees and of the policies of the labor laws in light of the facts of each case and the particular legal obligation that is at issue. . . . There is, and can be, no single definition of “successor” which is appli- cable in every legal context. A new employer, in other words, may be a successor for some purposes and not for others. Howard Johnson Co. v. Detroit Joint Board, 417 U.S. 249, 262–263 at fn. 9 (1974). To determine where a “substantial change” has occurred, courts and the Board consider: whether the business of both employers is essentially the same; whether the employees of the new company are doing the same jobs in the same working conditions under the same supervisors; and whether the new entity has the same produc- tion process, produces the same products, and basically has the same body of customers. [Fall River, 482 U.S. at 43 [cita- tions omitted].] Fall River, supra, dealt with the successor’s bargaining obli- gations. Golden State, supra, dealt with the liability of a suc- cessor for the predecessor’s unfair labor practice. A bona fide purchaser of a business who has knowledge of the seller’s unfair labor practices at the time of the purchase and who continues the business without interruption or substantial change in operations, employee complement, or supervisory personnel has joint and several liability for remedying the seller’s unfair labor practices. Golden State Bottling Co. v. NLRB, supra. “Unlike successorship for bargaining purposes, this obligation does not require that a majority of the succes- sor’s employees be former employees of the predecessor and also does not turn on whether those employees are represented by a union.” Bell Glass Co., 293 NLRB 700, 707 (1989), enfd. 983 F.2d 1073 (7th Cir. 1992). See also Greyhound Taxi Co., 292 NLRB 267, 268 (1989); St. Mary’s Foundry, 284 NLRB 221, 221 fn. 4 (1987); Commercial Forgings Co., 315 NLRB 162 (1994). The successor’s liability includes the backpay and reinstatement of employees terminated in violation of Section 8(a)(3) of the Act. Bell Glass, 293 NLRB at 707. The re- quirement that the successor have knowledge of the predeces- sor’s violations is satisfied if an individual serves as principal of both businesses. Id. at 708. In determining whether one employer is the alter ego, or the “disguised continuance,” of another employer, the Board fo- cuses on whether “two enterprises have ‘substantially identical’ management, business purpose, operation, equipment, custom- ers and supervision, as well as ownership. Advance Electric., 268 NLRB 1001, 1002 (1984); Crawford Door Sales Co., 226 NLRB 1144 (1976). The Board also considers as a factor to be considered, but not an essential factor, whether the creation of the alleged alter ego was legitimate or was merely an attempt to evade the employer’s responsibilities under the National Labor Relations Act (the Act). Advance Electric, 268 NLRB 1002 (1984); Fugazy Continental Corp., 265 NLRB 1301 (1982), enfd. 725 F.2d 1416 (D.C. Cir. 1984). However, no single factor is controlling; and the Board can find an alter ego rela- tionship even in the absence of one or more factors, including identify in ownership. Metro Foods, Inc., 289 NLRB 1107, 1117 (1988). Substantial identity of ownership may be found where ownership resides in members of the same family. Crawford Door Sales Co., supra. Thus, “where two entities are virtually indistinguishable but for the difference in ownership of the entities by members of the same family, substantially identical ownership is established.” Cofab, Inc., 322 NLRB 162, 163 (1996). As the Union correctly notes, “actual common control is more significant than a change in ownership,” citing and quot- ing Sobeck Corp., 321 NLRB 259, 267 (1996). See also Rogers Cleaning Contractors, Inc., 277 NLRB 482, 488 (1985), enfd. 813 F.2d 795 (6th Cir. 1987), cited by the General Counsel where the predecessor company’s sole owner and total manager dominated the successor company’s management but held no ownership in it. Given the factual nature of the Board’s alter ego analysis, “each case must turn on its own facts.” Crawford Door Sales Co., supra. B. Facts 1. DLB As set forth in Judge Ladwig’s decision, Dan Baker carried on the business of Baker Electric, of which he was sole proprie- tor. DLB subsequently incorporated on July 29, 1976, and ultimately Dan Baker became the sole stockholder and director. He was also DLB’s business manager, financial manager, and its day-to-day operation manager. He decided upon its labor relations, employment policies, and employee terms and condi- tions of employment. At first, Dan Baker started out as an electrical contractor providing service work. Gradually, new construction and renovation project work accounted for the preponderance of DLB business. DLB performed work for general contractors and corporate clients in the Washington, D.C., and the adjacent and nearby counties in Maryland and DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 546 Virginia out of a condominium office-warehouse unit on Tyco Road in Vienna, Virginia, owned by Dan Baker. In 1994, Jerome Baker commenced working as a DLB project manager responsible for internal office work and informational exchange between DLB and its field foremen. Jerome Baker had already possessed an Electrical Engineering degree, and it was DLB’s plan that he would eventually assume control of DLB upon Dan Baker’s retirement. Thereafter, he pursued a business man- agement oriented course of studies to compliment his electrical background, as well as a law degree. However, to the date of the trial, Dan Baker retained sole authority to hire DLB em- ployees. DLB operated at a satisfactory profit level until the onset of certain circumstances in 1993. Dan Baker had hired an estima- tor who had bid on certain Fairfax County School jobs. Those contracts involved projects beyond DLB’s operational capacity and set forth a completion date by the end of summer. For DLB, what had ordinarily constituted a 1-year job became a 4- month job. In consequence, the relationship between the esti- mator and Dan Baker deteriorated, and the estimator resigned. Solicitations were made to key DLB employees to work for a competitor that had hired the former DLB estimator. The Fairfax County School authorities overseeing the con- struction work informed Baker that they had heard reports that DLB was in financial trouble and, accordingly, withheld pay- ments to DLB. The DLB Federal tax return for 1993 revealed that the corporation’s liabilities exceeded its assets by $67,922. Previously, Dan Baker and Barry made undocumented no- interest, short-term loans to DLB. Over the course of time and corporate disbursements to Dan Baker, DLB’s debt to Dan Baker evolved into a debt of $18,906, which Dan Baker owed DLB at the end of 1993. On another front, Dan Baker was faced with the siphoning off of talented employees to union jobs, which hindered his manpower resources. Baker testified that the employees were aware of DLB’s problems and that it was “not very difficult to understand when the Union comes in and takes all the employ- ees off the jobs, the things that had been going on a regular basis, and they saw what was going on.” Dan Baker found it difficult to keep the business viable. In late 1993, he ceased paying employee payroll taxes to the IRS in order to continue paying employees wages due to them. He hoped eventually to repay the IRS. In December 1993, Tangy, an employee of 4 months’ em- ployment at DLB, was discharged for trying to organize em- ployees for the Union. As described in Judge Ladwig’s deci- sion, the late 1993 organizing drive led to Graham’s discovery of DLB’s past commitment to the NECA–Union Inside Wire- man Master Agreement and Graham’s subsequent demands upon DLB. Unfair labor practice charges were filed in the underlying cases on December 27, 1993, and January 31, 1994 (amended February 25). Complaints were issued on February 7 and March 17, 1994, and consolidated on May 19, 1994. At the onset of 1994, more economic gloom settled upon DLB’s business fortunes. Barry, by now cohabiting with Dan Baker, made undocumented interest-free loans to DLB to en- able it to meet capital needs, including the employee payroll. On March 4, she lent DLB $5000, and again $500 on March 5. She held no DLB employment status at that time. Dan Baker continued to make undocumented loans to DLB. He personally raised $33,000 which he lent to DLB on January 21, 1994, which now raised DLB’s debt to him by $38,500. Concurrent with the downward spiral of DLB finances in early 1994, the IRS aggressively sought recovery of the unpaid payroll taxes, both from DLB and Dan Baker individually. Chorazy advised Dan Baker to terminate the business and to declare bankruptcy. He declined that advice. He sought for- bearance from DLB suppliers who were unpaid for past sup- plies. Contrary to Chorazy’s advice, Dan Baker obtained an early distribution from his own pension fund in the amount of $242,642 in June 1994 in order to infuse money into DLB. Because of penalties and the resultant increase of his own in- come by virtue of the early distribution, consequently higher income box bracket and higher personal income tax to be paid, and other adverse consequences, Dan Baker was only able to infuse about $90,000 of about the resulting $110,000 into DLB, some of which went to pay back taxes owed by it. In 1994, the maximum DLB debt to the IRS was about $150,000. Chorazy negotiated a payment plan with the IRS whereby the agency agreed not to levy upon DLB equipment or bank accounts, provided DLB complied with a weekly payment schedule. On December 1, 1994, Judge Ladwig issued his decision. In early 1995, a new IRS agent became involved and aggressively de- manded total repayment. Chorazy frantically negotiated an IRS retreat, explaining that the IRS action could result in business closure and loss of work for the employees. She held intense negotiations with the IRS as to what DLB had to do to avoid closure of its business. In April 1995, she had referred Dan Baker to Tax Attorney Tas Coroneos, whom she had dealt with for 15 years and whom she had consulted about DLB’s dire situation. Coroneos consulted with Dan Baker and Chorazy. Coroneos was concerned that the IRS trust fund portion of the DLB payroll tax liability might, upon failure of DLB payment, impose a 100-percent penalty upon a “responsible party” who might be construed by the IRS to be Dan Baker individually, and who might conceivably be required to pay the trust fund portion of the payroll tax. In consulting with Baker and Chorazy, Coroneos determined “that it looked like this organization had viability, if we just get some procedures in line to pay the payroll taxes. . . .” Coroneos, in conjunction with Chorazy, was retained to de- sign a strategy that would help eliminate Dan Baker’s and DLB’s tax liability to the IRS. The plan developed by Coro- neos and presented to Chorazy and Dan Baker involved two phases. First, Coroneos would make sure that DLB became and remained current with respect to its present due and owing payroll taxes. Once that was accomplished, Coroneos advised Baker and Chorazy that he would use a transaction plan that he had used successfully before meeting Baker and one that he had used since the DLB transaction. He would arrange for the in- corporation of a new entity that would purchase the assets of DLB. Coroneos presented this plan to Chorazy and Baker, and it was agreed that it would be implemented. It is undisputed that this entire plan was the creation of Coroneos. His testimony was credible clear and uncontradicted that Chorazy, Baker, and D. L. BAKER, INC. 547 Barry had never heard of the design before, and I credit him. In describing how the transaction would work, Coroneos de- scribed to Chorazy and Baker that the new corporation would have to pay fair compensation and fair consideration for the assets of the old corporation. It was imperative, Coroneos testified, that there be no fraud involved in the transaction because it would be and was scruti- nized by the IRS. He was aware that the seizure of assets was “imminent” from discussions with the IRS. On May 5, 1995, the IRS had issued a “Notice of Intent to Levy” to DLB in re- sponse to DLB’s failure to pay its payroll taxes for the years of 1993, 1994, and 1995. The notice provided that the IRS would levy $151,354.02 from DLB’s accounts if the outstanding pay- roll taxes were not satisfied by a particular date. In fact, IRS agents appeared at Tyco Road and seized certain DLB vehicles while Coroneos was on vacation. He negotiated a release upon his return. On May 8, 1995, the Board issued its Decision and affirmed the findings and conclusions of Judge Ladwig. As discussed, supra, the Board issued a three-part remedial order requiring DLB to make whole its employees, out-of-work union members who should have been referred to DLB’s jobs, and Michael Tangy. In response to questioning as to whether he was aware of the Board’s Decision, Dan Baker testified, “I was aware that we lost, if that’s what you mean.” Coroneos testified that the purpose of an asset sale to a new corporation was intended not only to satisfy the tax liabilities, but also: It was designed to offer a new entity so that Dan could prac- tice his profession as an electrician without being encumbered by the IRS debt and other debt that I didn’t necessarily know about. I mean, knew individually about. Coroneos concluded that the IRS would not pursue DLB and Dan Baker individually, but rather would write off the trust fund obligation of DLB as long as the new corporation would pay it off. He testified. . . . they have a purchase agreement that says all the assets are brought, and they determine that it was fair consideration. So, there’s nothing—I mean there’s no point in going after the whole liability. Coroneos was not aware of and not concerned with the other non-IRS debts of DLB. Dan Baker was aware of the Board’s Decision. Later, on November 22, 1995, according to the un- contradicted testimony of Antonio Petty, when told by Petty of the presence of Graham at the jobsite of BEI in Northern Vir- ginia, Baker told him not to worry about it because they (the Union) could not touch him because he no longer owned the Company. In cross-examination, Baker insisted that the Board’s reme- dial order was a concern that he felt was dwarfed by the more imminent threat to the viability of DLB, i.e., the IRS. Chorazy and Coroneos were unaware of the potential debt that might be due under the May 8 Board Order. 2. BEI Prior to incorporation, Chorazy and Coroneos solicited Barry to purchase or to invest money in DLB. She testified that after obtaining negative third-party advice, she declined the invest- ment as a poor risk. Coroneos and Chorazy next broached to her the idea of creating a new corporation owned by her to continue the electrical business that would enable Dan Baker “to continue his profession” as its operations manager by pur- chasing DLB’s assets. Coroneos advised her of the validity of this approach, conditional, however, upon a legitimate and arm’s length transaction. Coroneos at no time considered any other prospective purchaser of DLB assets, and there is no credible, persuasive evidence that any other solicitations were made. Barry responded affirmatively. She, of course, as a past creditor and because of her close relationship, must have had even more awareness of DLB operations than she was willing to admit in her testimony. She is a successful and intelligent businessperson in her own right. As time-to-time creditor, she certainly would have wanted some information as to prospects of repayment of her prior loans. She testified that when origi- nally solicited by Coroneos and Chorazy to invest more money, she investigated DLB’s prospects by consulting knowledgeable third parties. Barry testified, however, that she “had been around DLB” and, from her own past experience, had knowl- edge about DLB operations, its customer base, and business potential, free from IRS and supplier debt liability. She con- cluded that she knew enough about DLB to conclude that a purchase of its assets, good will, employment core, and cus- tomer base would be successful, particularly if some types of operations were cut back, with Dan Baker, as she characterized him, as the “driving force” of the new corporation. Barry warily admitted her personal knowledge of a “con- flict” arising from union attempts to organize DLB employees. She admitted awareness of Judge Ladwig’s decision finding that DLB committed unfair labor practices, but she could not even estimate the date of this awareness. She testified, “Again, I don’t know if I was aware of that at the time of this negotia- tion [for purchase of DLB assets]—it has been several years.” I find it inconceivable that given her business experience, her close relation to Dan Baker, her familiarity with DLB opera- tions, and her tendency to independently evaluate DLB finan- cial status before even considering ownership of or investment in it, that she would not have extensively inquired into the de- tail of all actual and potential debts and liabilities of DLB. She was admittedly aware of supplier debt liabilities. I find it in- conceivable that she was not aware of Judge Ladwig’s decision and did not consider the remedial implications of his recom- mended order on or about the time his decision issued, and certainly at the time she was investigating potential ownership of investment into DLB. I find it equally inconceivable that Dan Baker would not have volunteered to her information about Judge Ladwig’s decision and the Board’s Decision and Order and its potential adverse financial impact upon DLB, even assuming a more imminent threat of closure by IRS debt collection. Barry decided to accept Coroneos’ proposed stratagem. Coroneos prepared the corporate documents and Chorazy ar- ranged financial matters. It was decided to name the new busi- DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 548 ness Baker Electric, Inc., and Coroneos prepared and filed the Articles of Incorporation for Baker Electric, Inc. Barry felt strongly that because DLB had such a good reputation for do- ing quality work in the industry, that if she was going to start a new business, there was real value attached to Baker Electric, Inc. if able to use virtually the same name. This was an intan- gible goodwill term based upon a 21-year existence. Barry believed that it was important to maintain continuity and to ensure that customers knew if the Company was bidding on jobs, it would be there to perform those jobs. Coroneos also believed that it was important to “keep the work going” by transferring DLB’s ongoing projects to the new corporation so that corporation could continue those operations without inter- ruption. DLB had ongoing projects and employees on these projects that no one wanted to lay off. Baker Electric, Inc. (BEI) was incorporated on May 17, 1995. BEI adopted DLB’s “well-recognized” logo, with a “B” in blue writing enclosed in a yellow circle with “Baker Elec- tric” in yellow and blue writing. BEI continued to use the sta- tionery of DLB because it already had “Baker Electric” on it as well as the logo. Since BEI’s incorporation on May 17, 1995, Maggie Barry has been the sole shareholder. According to BEI’s initial Arti- cles of Incorporation prepared by Coroneos, Dan Baker was the initial director of BEI and resident agent; when Barry discov- ered this, she objected. On May 18, 1995, Baker resigned his position as director and, on the same date, Barry elected herself as the sole director at the first meeting of shareholders of Baker Electric.13 While minutes of this meeting were introduced into the record, the record does not contain any other minutes of BEI directors meetings. Barry claimed that there were minutes of the directors meetings; however, she did not know where her copy of the minutes was kept. Bylaws and a stock certificate were also prepared. Coro- neos, Chorazy, and Dan Baker commenced the process of set- ting a price on the assets. Chorazy had contacted individuals and companies to assist with valuing the assets, including vehi- cles, office equipment, materials, and supplies. Appraisals were conducted and prepared, and Coroneos completed the purchase agreement setting forth the terms of the asset sale from DLB to Baker Electric, Inc. The final appraisal was pro- vided by DLB itself on May 16, 1995, and covered accounts receivable. Once completed, the appraisals were attached to and became a part of the purchase agreement. Coroneos testi- fied that it was his intent that this transaction be arm’s length, bona fide, and legitimate in all respects because all parties in- volved knew that it would receive severe scrutiny from the IRS. The value for the assets of DLB was placed at $138,000. The various assets purchased are described in the purchase 13 There is evidence that individuals other than Dan Baker served as directors or officers of BEI at varying times. For example, DLB’s accountant signed the BEI stock certificate as the secretary-treasurer of BEI. Chorazy did not occupy that position after May 19, 1995. Chorazy could not recall her roll in BEI, although she admitted signing the stock certificate in GC Exh. 49. In addition, Barry testified that her mother, Leah Hovinetz, served as secretary although she had no official duties. In addition, Barry’s brother, Scott Sanders, presently serves as “secretary.” His role, however, is limited to providing “union” advice. agreement. The only liabilities explicitly assumed by BEI in the transaction were the outstanding loans on the trucks being purchased from DLB. Barry made a loan to BEI for the $138,000 and the transaction was completed. The main source of funds used by Barry to purchase the assets of DLB came from refinancing her home in Purcellville where she and Dan Baker resided. BEI’s initial banking account was at Nations Bank. The ac- count was transferred to Crestar. BEI has maintained an active banking account from its creation to present day. All BEI financial matters are conducted through the Com- pany’s bank account. When BEI began its business operations, Barry hired the services of a certified public accounting firm, Cacciapaglia & Masterbrook (C&M), to give her advice regard- ing the accounting and business aspects of BEI. They assisted Barry with establishing all accounting mechanisms for the payment of payroll taxes, income taxes, state matters, and all business filings that were necessary. BEI provided C&M with whatever financial information it asked for, including payroll records and income and expense information for Baker Electric, Inc. so all accounting could be done. With regard to the actual operation of the day-to-day activi- ties of the business, Barry delegated those to Baker who had extensive experience in running jobs and handling electricians, as well as dealing with the customers. Her expertise was that of a professional licensed veterinarian. Her management of HAMC was demanding upon her time, i.e., 50- to 55-hour workweeks. HAMC employed 10 to 12 employees in the summer season. Her time spent at BEI varied from two to three visits a month for about normally an hour’s visit but sometimes a 5–6 hour visit. Barry maintained a sort of general oversight of BEI’s fi- nances. Dan Baker solicited all the new work but consulted with Barry who reviewed the reputability of the customer. Otherwise, Barry had no experience in estimating jobs that require electrical expertise. She did this by checking with other contractors that BEI had ongoing relationships with concerning the potential new customer, consulting with people in the trades, and in certain instances speaking to supply houses. She also worked closely with the accountant regarding payment of payroll taxes and insuring currency of accounts payable and receivable. It was not her desire to be involved in the day-to- day operations of the business of BEI; she knew that was Dan Baker’s strength. As she admitted, Dan Baker became the “driving force” of BEI. He spent as much time managing and directing its operations as she did the same for HAMC. Dan Baker hired, fired, and supervised electricians employed at the jobsites. Barry maintained some unspecified oversight of DLB clerical employees, apparently, a remote oversight. She made recommendations of some kind regarding office person- nel. Dan Baker supervised the daily business management at the same Tyco Road office-warehouse, which he owned as BEI’s landlord. Dan Baker decided on the number of employ- ees to be hired, he paid the employees, he signed their pay- checks as she signed all checks issued by BEI, and paid all the bills. The telephone and fax numbers remained the same at Tyco Road. To the world at large, except for the addition of “Inc.” to the name, there was little apparent change after the D. L. BAKER, INC. 549 sale of assets. No notice was sent to customers. However, Barry found it necessary to inform creditors and vouch for BEI’s sound credit. There was no disruption in ongoing work. New work con- tinued in the same service area. Almost half of DLB employ- ees employed in the 1995 second quarter ending June 30 were employed by BEI in the same quarter. According to the credi- ble testimony of the two employees who testified, there was virtually no change in term and conditions of employment and, in the absence of any public announcement, no indication of any kind of change whatsoever, except for the name on their paycheck. Barry testified that she and Dan Baker jointly developed the employment policies for BEI by updating the policies already in place for DLB and adapting policies used by Barry in her own business at HAMC. Barry testified that the former officer manager of HAMC John May, now the current BEI officer manager, assisted in the development of the employment poli- cies for BEI. Barry identified four separate employment poli- cies relating to company policies and procedure for all employ- ees, to procedure for all foremen, for electricians and appren- tices, and a change in start time effective November 13, 1998, as the entire complement of BEI employment policies. Barry testified that the policies of BEI employment policies. Barry testified that the policies directed to all employees and to fore- men are currently in effect. Aside from an employment policy relating to change in start time effective November 13, 1998, Barry could not recall any changes in the employment policies jointly developed by her and Dan Baker in 1995. The employ- ment policies directed to all employees and to foremen are substantially similar to the employment policies in effect for DLB’s sole electrician, Michael Tangy, hired in 1997. Barry testified that upon the transition from DLB to BEI, she insisted that BEI maintain the apprenticeship program that was in place for DLB employees in which they are enrolled in the electrician DLB apprenticeship program held through the Fair- fax County Public Schools. Electrician apprentice Abdulbarr described his participation in the apprenticeship program in his testimony. He testified that Dan Baker enrolled the apprentices in the program at the beginning of the school year. Employees were required to pay for the course either by payroll deduction per pay period or employees could directly pay to Dan Baker. Upon successful completion of the semester courses, Dan Baker reimbursed the employee the full amount of tuition. Abdulbarr testified that there were never any changes in the apprenticeship program during the time he was enrolled from 1993 through 1996. BEI continued to use suppliers that DLB had relied upon, some of which continued to bill under the same service account number. As to the customer base, it is clear from Barry’s tes- timony that she recognized that DLB had a strong customer base and reputation that she intended to continue and develop that base, albeit with some area of retrenchment. The evidence supports the conclusion that BEI did so. DLB remained a corporate existence to this date. With few if no employees, Dan Baker engaged in the limited DLB work of fulfilling obligations of service work to satisfy its debt to a supplier and to perform limited service work. Dan Baker’s essential relationship to BEI was recognized in the form of his reimbursement. As BEI landlord, he was reim- bursed by direct payments in the form of BEI corporate dis- bursements directly to the holder of the mortgage of the Tyco Road facility for which Dan Baker held title.14 Dan Baker was reimbursed again by corporate disbursements, i.e., BEI checks signed by him to cover expenses of some of his personal vehi- cles used part of the time by BEI, including the entire expense of automobile insurance for these vehicles. These checks were issued directly to the insurer and other creditors. Dan Baker used his personal credit card to make purchases of supplies and services for BEI, for which BEI issued corporate check dis- bursements to reimburse him.15 BEI checks issued to these creditors covered materials and services for BEI as well as personal expenses. The auto insur- ance was entirely absorbed by BEI. Under DLB, Baker had enjoyed an identical privilege. Shortly after his 1996 marriage to Barry, Dan Baker became joint titleholder to the Purcellville, Virginia home for which the two mortgage notes were used as security by Barry to purchase the assets of DLB and to infuse money into BEI for operational expenses. The infusion of the money into BEI was referred to by Jerome Baker as interest- free loans, not capital investment. Chorazy had similarly treated Dan Baker’s infusions of money as interest-free, un- documented loans and not capital investments. The loans of Barry to BEI, like Dan Baker to DLB, were not documented and were memorialized only by recordation into an accounting record of disbursements and receipts which referred to these monies received as loans and disbursements as repayments of loans as sort of a revolving account similar to other expenses they incurred on behalf of BEI. Thus, on or shortly after mid 1996, Dan Baker became jointly titled to real property which had provided for the birth and continued blood flow of BEI. Barry received no formal compensation from BEI, as Dan Baker had received none for DLB. Similarly, Barry’s and Dan Baker’s receipt of BEI disbursements in excess of the so-called loans, i.e., cash infusions for operating expenses, were referred to in its accounting record of receipts and disbursements as “compensation.” Dan Baker received no formal salary from BEI until January 2000, and no written lease was drawn for the Tyco Road property until 1998 and then only upon the advice of the accountant, admittedly for appearances of propriety. The lease was backdated to 1995. C. Analysis The foregoing facts establish that BEI is the same employing business as DLB, i.e., same manager, same work, same work area, same headquarters, substantially similar employees, sub- stantially same customers, suppliers, etc. Actually what oc- curred was a change in stock ownership and an imposition of loose financial oversight by the new corporate owner. Other- 14 The Respondents’ witnesses, Jerome Baker and Chorazy, de- scribed the arrangement as a “ triple net lease” and, they testified with- out contradiction, not unusual, i.e., taxes, assessments, and mortgage payment are paid by the lessee directly to the mortgage holder. 15 Barry, who received no formal compensation, was also reimbursed in a similar manner for partial use of her vehicles and personal credit cards for corporate use. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 550 wise, BEI is the fruition of Coroneos’ goal, i.e., a means to allow Dan Baker to continue work as he had before but without the imminent crushing debt to the IRS and other unknown debts. The only factor that need be found for Golden State Bottling to be fully applicable and for liability to be imposed upon BEI for DLB’s unfair labor practices is knowledge of same by BEI upon acquisition of the business by virtue of asset sale. Dan Baker clearly had knowledge of DLB’s unfair labor practices. I find that his relationship to BEI is not that of a mere manager. He is its “driving force.” His continued career is the reason for its existence. Except for Barry’s corporate ownership and remote financial oversight, Dan Baker is BEI for all real intents and purposes. He provides office-warehouse space it uses as headquarters and, as landlord, is reimbursed by payment by DLB directly to his mortgage company. Use of his personal vehicle is charged to BEI and reimbursed by corporate disbursements. He was, by virtue of cohabitation with Barry, I find, a necessary confidante of Barry, the new corporate owner. Without Dan Baker, BEI would be nothing. In view of his overwhelming control of BEI operations and his financial and personal relationship to BEI, I find, that in reality he is its silent partner and, therefore, with Barry, a principal of BEI. Cf. Bell Glass Co., supra at 706. Accordingly, I impute Dan Baker’s knowledge of DLB unfair labor practices, the adjudication and remedial orders thereof, to BEI of which Dan Baker was liter- ally a principal for 1 day. Furthermore, I find disingenuous Barry’s attempted testimo- nial denial of knowledge. Actually, she did not categorically deny knowledge of Judge Ladwig’s adjudication on or before the DLB asset purchase. She simply avoided the issue by claiming lack of recall of when she did become aware of it. Because of the factors noted above, including her relationship to Dan Baker and DLB, I conclude that she was his business confidante before BEI ever existed and her knowledge of DLB unfair labor practices prior to the asset sale must be inferred. I find that with that knowledge and the knowledge of DLB’s conflicts with the Union, she had the obligation to inquire fur- ther into the matter as she had investigated DLB’s financial liability status prior to the asset purchase. See Bell Glass Co., supra at 708. Accordingly, I find that BEI is liable jointly and severally for DLB’s unfair labor practices as its successor with knowledge of the unfair labor practices. With respect to the issue of whether BEI is a disguised con- tinuance or alter ego of DLB, the fact that the two entities, as noted above, are virtually indistinguishable except for different ownership and some remote financial oversight by the new corporate share owner, would compel a finding of disguised continuance/alter ego status under Board precedent except for the ownership factor. However, for the same reasons I have found BEI to be a liable successor, I also find it to be an alter ego, particularly in view of the dominance of its operational management by Dan Baker and the propinquity in relationship to him of his cohabiting, intimate confidante, spouse-to-be, and owner of his domicile, Barry. With respect to the factor of intent to evade obligations im- posed by the Board’s pending remedial order, I conclude that even if it were not a factor and the sole intent was to evade IRS back tax liability, the same conclusion must be had under Board precedent cited above. Moreover, Coroneos effectively admit- ted that although the primary debt that focused his attention and the purpose of the stratagem of sale of assets to the new corpo- ration was the crushing debt liability to the IRS, the elimination of any other debt that threatened the viability of DLB was also a minor factor. Thus, although the immediate object was to escape from the imminent demise threatened by IRS remedial action, a reasona- bly foreseeable consequence was also escape from the pending, potential, unliquidated debt of uncertain proportion that was gradually but certainly descending upon DLB in consequence of Judge Ladwig’s decision. As the General Counsel points out, although there is a lack of uniformity in the circuit courts as to the necessity of unlaw- ful motive, the Fourth Circuit applies a “reasonably foreseeable benefit test.” That court holding that given the factor of iden- tity of control in both entities, “. . . the inquiry must turn to whether the transfer resulted in an expected or reasonably fore- seeable benefit to the old employer related to the elimination of its labor obligations.” It stated further that whether obtaining that benefit was a motive for the transfer, “or was a reasonably foreseeable effect, the result represents a disguised continuance of the old employer.” The court stated that such conclusion holds even where “the employer may intend no evasiveness or subterfuge.” It so held because the ultimate consequence is that the employer would otherwise obtain an economic benefit at the expense of national labor relations policies: Alkire v. NLRB, 716 F.2d 1014, 1020–1021 (4th Cir. 1983). Accordingly, I find that BEI is an alter ego and disguised continuance of DLB and, as such, jointly and separately liable for its unfair labor practices and the remedy thereof. III. INDIVIDUAL LIABILITY A. General Statement of Law In White Oak Coal, 318 NLRB 732 (1995), the Board adopted the following two-pronged test, derived from Federal common law and applied in NLRB v. Greater Kansas City Roofing, 2 F.3d 1047 (10th Cir. 1993), for piercing the corpo- rate veil to impose personal liability on a shareholder: Under Federal common law, the corporate veil may be pierced when (1) there is such unity of interest, and lack of respect given to the separate identity of the corporation by its shareholders, that the personalities and assets of the corporation and the individuals are indistinct, and (2) ad- herence to the corporate form would sanction a fraud, promote injustice, or lead to an evasion of legal obliga- tions. When assessing the first prong to determine whether the shareholders and the corporation have failed to main- tain their separate identities, we will consider generally (a) the degree to which the corporate legal formalities have been maintained, and (b) the degree to which individual and corporate funds, other assets, and affairs will have been commingled. Among the specific factors we will consider are: (1) Whether the corporation is operated as a D. L. BAKER, INC. 551 separate entity; (2) the commingling of funds and other as- sets; (3) the failure to maintain adequate corporate records; (4) the nature of the corporation’s ownership and control; (5) the availability and use of corporate assets, the absence of same, or undercapitalization; (6) the use of the corpo- rate form as a mere shell, instrumentality or conduit of an individual or another corporation; (7) disregard of corpo- rate legal formalities and the failure to maintain an arm’s length relationship among related entities; (8) diversion of the corporate funds or assets to noncorporate purposes and, in addition, (9) transfer or disposal of corporate as- sets without fair consideration. When assessing the second prong, we must determine whether adhering to the corporate form and not piercing the corporate veil would permit a fraud, promote injustice or lead to an evasion of legal obligations. The showing of inequity necessary to warrant the equitable remedy of piercing the corporate veil must flow from misuse of the corporation form. Further, the individuals charged per- sonally with corporate liability must be found to have par- ticipated in the fraud, injustice, or inequity that is found. The Fourth Circuit Court in Alkire v. NLRB, supra at fn. 5, compared the analysis of alter ego status to that of piercing the corporate veil.16 This analysis for imposition of alter ego status is similar to the standard employed to pierce the corporate veil of a subsidiary corporation and hold its owner(s) liable for the debts of that subsidiary. In corporate law, as in the labor field, the alter ego doctrine is an equitable principle designed to prevent an entity from doing injury and then escaping responsibility by hiding behind a corporate shield. See Plumbers & Fitters, Local 761 v. Matt J. Zaich Const. Co., 418 F.2d 1054 (9th Cir. 1969). Application of the doctrine in corporate law rests upon control by the parent and misuse of that control that causes an injury by the subsidiary. Wrongdoing by the parent need not amount to plain fraud or illegality, but the injured party must show some connection between its injury and the parent’s im- proper manner of doing business. See, e.g., DeWitt Truck Brokers v. W. Ray Flemming Fruit Co., 540 F.2d 681 (4th Cir. 1976); Krivo Indus. Supply Co. v. National Distill. & Chem. Corp., 483 F.2d 1098 (5th Cir. 1973); Certain-Teed Products Corp. v. Wallinger, 89 F.2d 427 (4th Cir. 1937). Without that connection, even when the parent exercises domination and control over the subsidiary, corporate separateness will be recognized. Plumbers & Fitters, Local 761, supra. The Fourth Circuit Court would insist upon proof of a causal connection between an abuse of the corporate form and the injury alleged. The Union and the General Counsel argue that in applying the first prong of the White Oak test, 16 In AAA Fire Sprinkler, Inc., 322 NLRB 69, 74 (1996), the Board held that it would no longer apply an alter ego test in deciding whether to pierce the corporate veil to reach assets of otherwise protected indi- viduals. In that case, shell corporations were created to evade union obligations, and corporate resources were exploited for individual gain. . . . the Board often follows the flow of money in and out of a corporation as well as the formalities of the underlying trans- actions. See Reliable Elec. Co., 330 NLRB 714, 714–715, (2000); Bufco Corp., 323 NLRB 609, 628–629 (1997), enfd. 147 F.3d 964 (D.C. Cir. 1998); Genesee Family Restaurant and Coney Island, Inc., 322 NLRB 219, 229–230 (1996), enfd. without op., 129 F.3d 1264 (6th Cir. 1997). The Union argues further: If an individual freely lends or withdraws funds from the cor- poration, without supporting the documentation or other indi- cia of an arm’s length relationship, then the corporation’s separate identity is blurred with the individual’s identity, pro- viding strong evidence in support of the first prong of the White Oak Coal standard. Reliable Elec. Co., 330 NLRB [714, 714–715]. The General Counsel and the Union argue that the Board has found a blurring of corporate and individual identities where corporate funds paid for the individual’s personal home mort- gage, rent for personal residence, or personal expenses and where the distinction between corporate and individual ex- penses is blurred by payment of employees with personal ac- count checks, or corporate use of personal credit cards or per- sonal vehicles, or by personal use of corporate property. West Dixie Enterprises, 325 NLRB 194 (1997); enfd. 190 F.3d 1191 (11th Cir. 1999); Genesee Family Restaurant, supra. As noted by the Union and the General Counsel, the Board will also evaluate the appropriateness and adequacy of the cor- poration’s capitalization, citing AAA Fire Sprinklers, supra (see fn. 15, above); and Hawk of Conn., 319 NLRB 1213, 1223 (1995).17 In Fire Sprinklers, a paltry $10,000 startup fund was the consequence of a less than arm’s length stock sale. The Hawks case involved an alter ego issue. The capitalization of an insignificant amount of money with no immediate revenue led the administrative law judge to infer that another source of expected capital was an individual whom he found to be a “partner” or “owner.” The General Counsel and the Union argue that specific intent of fraud or wrongdoing is not essential to establish the second prong of the White Oak test, citing Reliable Electric, supra; Bufco Corp, supra; West Dixie Enterprises, supra, and DeWitt Truck Brokers, Inc., supra, for the principle that it is sufficient that the evidence establish that conduct by individuals has the “natural, foreseeable, and inevitable consequence” of diminish- ing the corporation’s ability to satisfy the Board’s remedial order. The Respondents acknowledge the White Oak precedent but point out that White Oak explicitly adopted the Kansas City Roofing two-prong test, cited above. They argue that the cor- porate form is a “construct of the law” designed to encourage investment by individual insulation from liability, which insula- 17 For application of Federal common law cited by the Union and the General Counsel, see also Alman v. Danin, 801 F.2d 1 (1st Cir. 1986); DeWitt Truck Brokers, Inc. v. W. Ray Flemming Fruit Co., 540 F.2d 681 (4th Cir. 1976) (burden of proof on attacker of corporate protec- tion). DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 552 tion “is the norm, not the exception,” citing and quoting NLRB v. Deena Artware, 361 U.S. 398, 402–403 (1960). The Re- spondents argue: In extreme circumstances, however, the law may dis- regard the corporate form. In these extreme circumstances the purpose of ignoring the corporate form is to reach the personal assets of an owner or a controlling shareholder of a corporation in order to satisfy the corporations debts and liabilities. However, the corporate veil should be pierced only reluctantly and cautiously. NLRB v. Greater Kansas City Roofing, 2 F.3d 1047 (10th Cir. 1993), citing Cascade Energy & Metals Corp. v. Banks, 896 F.2d 1557, 1578 (10th Cir. 1990), cert. denied, 498 U.S. 849 (1990). The piercing of the corporate veil is something reserved for circumstances where some impropriety or injustice is evi- dence. If any general rule can be laid down, in the present state of authority, it is that a corporation will be looked upon as a legal entity as a general rule, and until suffi- cient reason to the contrary appears; but, when the no- tion of legal entity is used to defeat public conven- ience, justify wrong, protect fraud, or defend crime, the law will regard the corporation as an association of persons . . . The corporate veil may not be pierced ab- sent a showing of improper conduct. 1 Charles R.P. Keating & Gail O’Gradney, Fletcher Cy- clopedia Corporations, Sec. 41 at 603 (1990 ed.).. Other recognized authorities are in agreement with the general rules of recognizing the corporation form. “Gen- erally, a corporation is a legal entity . . . and such legal en- tity may not be disregarded except where equitable con- siderations require piercing the corporate veil.” 18 Am. Jur.2d Corporations, Sec. 44 at 843–44 (1985). See also 18 C.J.S. Corporations Sec 10 at 277 (1990). The Respondents further quote the following language of Kan- sas City Roofing: The “separate corporate identity” prong is meant to determine whether the stockholder and the corporation have maintained separate identities. There are strong public policy reasons for upholding the corporate fiction. Where stockholders follow the technical rules that govern the corporate structure, they are entitled to rely on the protections of limited liability that the corporation affords. In determining the personalities and assets of the corporation and the stockholders have been blurred we consider (i) the degree to which the corporate legal formalities have been maintained, and (ii) the degree to which individual and corporate assets and affairs have been com- mingled. [Emphasis added.] [Kansas City Roofing, supra at 1052.] The Respondents further argue that the Kansas City two-prong test requires a causal connection between the disregard of cor- porate separateness and the claimed injustice, quoting it: It should be emphasized that the showing of inequity necessary to satisfy the second prong must flow from the misuse of the corporate form. The mere fact that a corpo- ration commits an unfair labor practice, or breaches a con- tract, or commits a tort, does not mean that the individual shareholders of the corporation should personally be li- able. To the contrary, the corporate form of doing busi- ness is typically selected precisely so that the individual shareholders will not be liable. It is only when the share- holders disregard the separateness of the corporate iden- tity and when that act of disregard causes the injustice of inequity or constitutes the fraud that the corporate veil may be pierced. [Emphasis in original.] Kansas City Roofing, supra, at 1053, citing Bangor Punta Operations, Inc. v., Bangor & Aroostook R.R., 417 U.S. 703, 713 94 S.Ct. 2578, 2584 (1974). The Respondents argue that the General Counsel has failed to carry the burden of proof imposed upon it by Kansas City Roofing, supra, and White Oak, supra. See also DeWitt Truck Brokers, Inc., supra. The Respondents argue that DLB and BEI, despite financial informalities and superficial appearance of assets commingling, have both maintained a de facto separateness whereby individ- ual assets, expenses, and disbursements have been carefully accounted for and memorialized pursuant to advice from their accountants and financial advisors upon which hey relied in good faith. The Respondents argue that the mass of documen- tation introduced into evidence by the General Counsel and the Union may appear superficially damning because documents reveal that the personal expenses of Dan Baker and Barry were paid for by corporate disbursements from their respectively owned corporations.18 The Respondents argue, however, that the facts demonstrate that DLB and BEI followed normal practices of small, closely- held Virginia corporations as confirmed by undisputed expert testimony. They argue that there has been maintained a distinc- tion between personal expenses incurred on behalf of the corpo- ration and personal expenses unrelated to corporate business. With respect to the latter, corporate disbursements for these were treated as compensation to the individuals and/or repay- ments of loss and identified and recorded as such in its corpo- rate ledgers. The General Counsel and the Union argue that the corporate disbursements of DLB and BEI disclosed a lack of regard for corporate formalities and constituted a commingling of assets that permitted Dan Baker and Barry to divert corporate funds for their personal use to the extent that it debilitated, or at least tended to debilitate, the ability of both corporations to comply with the Board’s remedial order. They argue that Dan Baker and Barry intentionally kept the corporations at the brink of impoverishment for this purpose by putting in and taking out 18 As the Union appropriately points out, if the status of corporate disbursements and liabilities documentation, or lack thereof, is so con- fused that critical questions are raised, it’s the Respondents’ burden to clarify that confusion. Bufco, supra at 627–628; Genesee Family Res- taurant, supra at 230; Bernard Engineering Co., 295 NLRB 226, 238 fn. 53 (1989). D. L. BAKER, INC. 553 money in sort of a revolving charge account or line of credit, or “piggy bank.”19 The Union actually refers to it as pilfering. The Union and the General Counsel allege that BEI was un- dercapitalized and that the sale of assets was not a bona fide arm’s-length transaction but was contrived as a means of not only evading IRS obligations but also the Board’s remedial order. The Respondents argue that the assets sale was not calcu- lated to avoid existing obligations, “but rather to resolve them,” rather than to succumb to an IRS levy and a closure of business and bankruptcy. The Respondents argue that there is no evi- dence of corporate looting or diversion of assets to avoid any obligations, nor evidence that BEI has been unable to meet any of its financial obligations. It argues that the facts demonstrate that Barry has done all she was capable of doing to insure the success of BEI by repeatedly infusing cash into its operation. It points out the undisputed fact that, as evidenced by BEI’s 1999 tax return, it reached its soundest and most successful financial position since its creation. Finally, the Respondents argue that assuming the lack of full compliance with all corporate formalities and commingling of corporate funds with Barry’s personal assets, there is no proof that the violation of corporate form is causally connected to any “fraud or injustice to the Union.” The Respondents conclude: As was stated best by the NLRB in [Riley Aeronautics Corp., 178 NLRB 494, 501 (1969)]: [t]o require [the individual] to make good the corpora- tions’ backpay liability out of [her] personal funds would operate to defeat the very purpose of [her] incorporating the business to escape individual liability. If the corpo- rate funds are insufficient to meet the backpay obliga- tion, the Board’s recourse is that of a ‘creditor’, which includes enforcing the claim in insolvency or bankruptcy proceedings. B. Facts 1. Money in—money out As evidence of commingling of assets, the General Counsel has adduced undisputed evidence of a history of “loans” from Dan Baker, Barry, and her sole proprietorship HAMC to DLB, and from Barry to BEI. The loans were all undocumented as to duration and manner of repayment or other terms. DLB loans were not authorized in accordance with its bylaws. According to the credible testimony of Professor Booth, the indicia of a bona fide loan transaction is the comparability of its terms to that accorded third pay creditors, i.e., maturity dates, payment schedules, default provisions, etc., or, at the very least, a form note or IOU—all of which are absent herein. DLB’s accountant since 1980, Phyllis Chorazy, explained that she prepared a general ledger report in 1994 that reflected Dan Baker’s loans to DLB and receipt of DLB disbursement by Dan Baker or to a third party for Dan Baker individually. She 19 Compare, Bufco Corp., supra at 629, where it was found that the corporation was alternately transfused with money and alternately “bled” to the point calculated to keep it barely alive. did not consider Dan Baker’s and Barry’s periodic personal, undocumented infusions of money into DLB as equity invest- ments but as unwritten personal notes payable, from which she recorded deductions, according to DLB disbursements, to or on behalf of Dan Baker and Barry individually. This note payable increased and decreased periodically. To mid-1994, Chorazy relied upon monthly records provided by Dan Baker as well as his verbal identification of DLB disbursements (he issued the checks) as personal or corporate expenses. She received no records from him from mid-1994 until the assets sale. Professor Booth testified that without documentation of such transaction, other than after-the-fact cancelled DLB banks and ledger reports, it was impossible to conclude whether the per- sonal infusion of cash were bona fide loans or were equity in- vestments. He testified that if these “loans” were in fact in- vestments of capital, they may have been improper, if not inva- lid, under pertinent Virginia statutes. He explained that at times disbursements to shareholders are made (dividends), the corporate assets must exceed liabilities. However, in this case, there is no evidence, one way or the other, whether Dan Baker or his accountant even applied the assets-liabilities balance test in approving the disbursements. Because Chorazy considered the cash infusion as loans, she and Dan Baker did not even consider application of the balance test. Barry continued in the same manner of in-and-out “loans” and disbursements with respect to BEI as Dan Baker and DLB had practiced. Her loans, unlike Dan Baker’s, were undocu- mented, unfettered by terms of repayment, and interest-free. She explained that it made no sense for her to charge interest to herself.20 Jerome Baker, like Chorazy, testified that Barry’s cash infu- sions were treated as loans to BEI, starting with the original $138,000 used for the assets purchase.21 Similarly, BEI dis- bursements to her (by way of checks issued by Dan Baker) were made for noncorporate expenses, but her personal ex- penses were treated as loan repayments. By the end of calendar year 1999, Barry owed BEI $18,857.87 in consequence of these disbursement for noncorpo- rate expenses. However, Barry continued thereafter to infuse money or, as she characterized it, make “short term” undocu- mented term-free loans to cover BEI payroll shortfalls, and she continued receiving corporate disbursements as loan repay- ments and/or compensation, treating it as sort of a revolving line of credit-debit source; Booth termed it “a personal piggy bank.” The documentation of these “loans” and loan repay- ments or loans from BEI to Barry (or compensation to her), consist of after-the-fact memorializations and unclear, informal, haphazard confusing records. Again, according to Professor Booth, a question arises as to whether these were good-faith loans or capital investments and the subsequent disbursements improper disbursements of capital. 20 I credit this forthright admission by Barry over any inconsistent documentary evidence in the record. 21 At one point in his testimony, Jerome Baker referred to the $138,000 as “capitalization” of BEI. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 554 2. Undercapitalization Clearly capital investment is what enables a corporation to meet it expenses and to keep alive. According to the Respon- dents, Dan Baker and Barry infused money into their respective corporations that were loans and not capital investments. Thus, in the absence of these undocumented loans, both corporations could not have survived. DLB could not pay its tax bill, a nor- mal business expense, without these loans and, indeed, loans were needed for payroll shortfalls. Similarly, BEI, as Professor Booth testified, had in effect Barry’s loan of $138,000 as its total capitalization, which he testified is inappropriate under Virginia corporate law. Like Dan Baker and DLB, Barry found it necessary to infuse periodic loans into BEI to enable it to meet its normal business expenses, including payroll obliga- tions. Barry conceded that she and BEI continually exchanged loans and disbursements for the “capital needs of the company” and to alleviate cash flow crises.22 The entire $138,000 was used to purchase DLB assets which included certain hard assets somewhat dubiously appraised, and goodwill, the difference between that appraisal and $138,000. The figure of $138,000 seems to have been arrived at as the amount of money necessary for DLB to pay its debts. After paying DLB for assets and goodwill, BEI had no operating capital. Barry could not explain how BEI managed to operate in the early weeks of its existence before Barry made another “loan” to it on July 16, 1995. C. Analysis I conclude that the evidence reveals that both DLB and BEI were undercapitalized prior to 1999, particularly if Dan Baker’s and Barry’s cash infusions were considered to be loans and not capital investments. Professor Moore conceded, however, that with a gross profit of $637,000, which he called “huge,” and retained earnings of $137,211 for 1999, BEI must have had adequate capitalization for that year. As noted elsewhere, both corporations issued checks to cover not only the so-called repayment of loans from the individuals but also for their personal expenses by direct payment to the creditor. There is an area of disputed expenses which were charged for corporate expenses but which is claimed by the General Counsel and Union to be bereft of corporate benefit. Some of these involve payments for items seemingly, but not conclusively, related to the building of the Purcellville home but which would not appear related to DLB’s normal business. Dan Baker was unable to adequately explain these disburse- ments. There was corporate expenditure for Jerome Baker’s gradu- ate education. According to Chorazy and Jerome Baker, this can arguably be characterized and claimed as a business ex- pense under IRS rules. I find it unnecessary to recite and evaluate the area of alleged improper corporate disbursements for personal needs because the admitted and undisputed corpo- rate disbursements to third-party creditors of Dan Baker and 22 Although there is unrebutted testimony that similar type short- term loans are common in such crises, it is nonetheless a factor the Board evaluates in applying the White Oak test in the foregoing cited precedent. Barry, who used their personal credit on behalf of their corpora- tions, for legitimate expenditures on behalf of the business establish more than sufficient evidence of a disregard for corpo- rate formalities, a commingling of assets, and blurring of identi- ties required under the White Oak first-prong test, notwithstand- ing the legitimacy of a triple net lease and sporadic short-term loans common in small closely-held Virginia corporations un- der unspecified conditions. I find that the very loose ledger accounting of inflow and outflow does not satisfy compliance with arm’s-length corpo- rate formality. Chorazy, for example, admitted that she relied entirely on Dan Baker’s reports, often without documentation, in making distinctions as to what was or was not a corporate expense. BEI’s after-the-fact record recordation raises more questions than answers and, at best, revealed a confusion that BEI was obliged to but did not fully explain. A closer issue raised herein is whether the facts of this case satisfy the requirements of the second prong of the White Oak test. The General Counsel and the Union claim that BEI’s crea- tion was to avoid DLB debts, including the potential liability under the Board’s Order. I agree with the Respondents, and I fully credit Dan Baker, that his vastly predominant concern at that time was to satisfy the demands of the IRS and to save his business from closure. The creator of BEI and the asset sale medium, Coroneos, was not concerned with the non-IRS debts. His invention did not avoid debts but rather confronted and accommodated the IRS debt. There is no evidence that the IRS or any other debt was evaded. The analysis as to whether the corporate veil should be pierced is, I agree with the Respondents, an extraordinary rem- edy. I find it to require a more stringent criteria than establish- ing BEI as an alter ego/disguised continuance of DLB. I find insufficient evidence that the misuse of the corporate form was intended to defraud or to evade the potential liability under the Board’s remedial order. Dan Baker had been operat- ing DLB in the same loose manner long before Tangy was hired. There is no evidence that the abuse of corporate formali- ties tended to defraud any creditor or evade any debts. Rather, his infusion of personal money in a manner asserted to be an abuse of corporate formalities actually resulted in satisfying his creditors and kept the business operating and the electricians employed until the IRS fiasco. I find that the cause of his in- ability to satisfy the IRS is not shown to have been a conse- quence of an abuse of the corporate form. I find insufficient evidence that he grossly exploited the assets of DLB for his personal gain and that this exploitation is what caused DLB’s final crises, even assuming some minor inappropriate dis- bursement to him personally. Dan Baker did at times become a debitor to DLB by virtue of the disbursements to him. But an overview of the entire history reveals that Dan Baker, by virtue of his infusion of personal funds, was DLB’s rescuer and not its exploiter. Barry’s relation with BEI carried on in the same fashion as DLB’s disguised continuance. Barry’s financial contributions kept the corporation viable. There is no evidence that it failed to meet its expenses when due because of a looting of its assets. I find insufficient evidence that Barry purposely, or by foresee- D. L. BAKER, INC. 555 able or inevitable consequence, kept BEI’s at death’s door by virtue of alternately infusing money into it as either loans or capital and accepting loan repayment and compensation from it, sometimes in the form of inappropriate disbursements. As the Respondents point out, BEI’s financial fortunes had improved to the extent that 1999 was its most prosperous year. I find insufficient evidence that rather than the vicissitudes of opera- tional success or failure, the abuse of the corporate form by Barry, by intent or by foreseeable inevitable consequence, threatened the satisfaction of its debts to business creditors or future satisfaction of a potential unliquidated debt under the Board’s remedial order. Accordingly, I find it inappropriate to pierce the corporate veil to find either Dan Baker or Barry personally liable for any debt that might be due under the Board’s Order. IV. CONTRACT REPUDIATION A. General Statement of Pre-Deklewa Law The Union sets forth in its argument in the brief a general statement of relevant precedent, which parallels that of the General Counsel and is reasonably accurate as far as it goes and generally comports to a great extent with that cited by the Re- spondents: It is well settled that Section 8(f) of the Act allows un- ions and employers to enter into prehire agreements in the construction industry. Prehire agreements are voluntary agreements, and, prior to Deklewa, either party could re- pudiate the agreement. Clark v. Ryan, 818 F.2d 1102, 1107 (4th Cir. 1987). The burden of proving repudiation falls on the party making the claim that it repudiated the prehire agreement. International Assn. of Iron Workers, Local 103 v. Higdon Constr. Co., 739 F.2d 280, 282. In order for an employer to effectively repudiate the agreement, it must communicate notice of that repudiation to the union or benefit trust funds. Industrial TurnAround Corp. v. NLRB, 115 F.3d 248, 255 (4th Cir. 1997); Clark, 818 F.2d at 1106. In Industrial TurnAround, the Fourth Circuit found that effective notice of repudiation occurred when the employer sent a letter to the union stating that the employer was terminating the letter of assent and re- pudiating the collective-bargaining agreement. 115 F.3d at 255. Likewise, in Clark, the court found effective no- tice of repudiation when the employer verbally told a trus- tee of a benefit trust fund, which was trying to enforce the agreement, that the employer was withdrawing from the agreement. Clark, 818 F.2d at 1106. While the Fourth Circuit addressed written notice in Industrial TurnAround and verbal notice in Clark, the court subsequently suggested that “acts sufficient to repu- diate the prehire agreement require at least that the Union have some form of notice of the inconsistent conduct.” NLRB v. Baker Elec., Case No. 95-1377, slip op at 6. In making that assertion, the court cites Jim McNeff, Inc. v. Todd, 461 U.S. 260 (1983); and Clark. In McNeff, the Su- preme Court noted that the employer “never manifested an intention to void or repudiate the contract.” 461 U.S. at 270. The court did not decide, however, whether that manifestation of intent could be shown by sending notice to the union, engaging in conduct that was overt and com- pletely inconsistent with contractual obligations or filing a representation petition. Id. at 271 fn. 11. In Clark, the Fourth Circuit found that an employer’s verbal communi- cation of its withdrawal from the agreement, which was communicated to the trustee of a benefit fund seeking to enforce the agreement, would constitute repudiation if the employer was engaged in the construction industry and the agreement was, in fact, a prehire agreement. 818 F.2d at 1106–1107. The court remanded the case for a determina- tion as to when the employer repudiated the agreement. Id. at 1107.113 Under either decision, the notice must “manifest an intention to void or repudiate the contract” and must be directed at the Union. McNeff, 461 U.S. at 270–271 & fn. 11; Clark, 818 F.2d at 1106–1107. While written or verbal communication can provide the union with notice of an employer’s intent to repudiate an agreement, an employer’s conduct does not necessarily have the same effect. In addressing an employer’s claim that it repudiated a prehire agreement by its conduct, the courts have found that an employer’s mere noncompliance with the contract does not manifest intent to repudiate the agreement. See Trustees for Alaska Laborers-Constr. In- dus. Health & Sec. Fund v. Ferrell, 812 F.2d 512, 518 (9th Cir. 1987); Local 257, Intl. Bhd. of Elec. Workers v. Grimm, 786 F.2d 342, 346 (8th Cir. 1986); Higdon Constr. Co., 739 F.2d at 282–283; Chicago Dist. Council of Car- penters Pension Fund v. Skrede, 542 F.Supp. 634, 638 (N.D. III. 1983). Instead, the noncompliance must be so “bald” and “notorious” as to give the Union notice of the employer’s repudiation of the agreement, not merely its noncompliance with the agreement. The determination of whether an employer’s conduct is so bald and notorious as to constitute repudiation must be based on a review of all the facts in the record. Whether it is attempting to prove repudiation by writ- ten letter, verbal communication or course of conduct, the employer cannot meet its burden by simply saying in this proceeding that it has repudiated the agreement. See Teamsters Local Union 745 v. Braswell Motor Freight Lines, Inc., 428 F.2d 1371, 1374 (5th Cir. 1970) (rejecting employer’s claim it cancelled collective bargaining agreement by filing answer and other court filings alleging agreement never existed); Thelin v. Mitchell, 576 F.Supp. 1404, 1408 (N.D. III 1983) (rejecting employer’s claim that it repudiated agreement by filing an answer in the case). The legal precedent requires the employer to estab- lish an affirmative act that would convey its intention to repudiate the prehire agreement to the union. Skrede, 542 F.Supp. at 638. _______________ 113 On remand, the district court found hat the employer was still bound to the prehire agreement under Deklewa. Clark v. Ryan, Civ. A. No. 83–852-R, 1989 WL 517501 (W.D. Va.). That decision was not appealed to the Fourth Circuit. In Industrial TurnAround, supra at 254, citing Clark, supra at 1109, and McNeff, supra, the court stated: “An employer may DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 556 repudiate a Sec. 8(f) agreement by providing notice to the Un- ion.” It found that such notice need not comply with the termi- nation provision set forth in the agreement. In Clark, supra at 1107, the court states that in the event a prehire agreement ex- isted, the company “. . . would have been able to repudiate the agreement by providing notice to the union. See Overhead Door, 681 F.2d at 9 and fn. 38. Section 8(f) imparts a flexibil- ity to collective-bargaining agreements; its purposes are best served by requiring simply that notice to repudiate be sufficient under the circumstances.” The Union and General Counsel argues that “mere noncom- pliance” does not manifest an intent to repudiate the agree- ment.” However, even a casual reading of the cited precedent would necessitate a modification of that statement to a more accurate one that a failure of full compliance, partial compli- ance, or noncompliance with one provision of the contract does not necessarily manifest repudiation intent. For example, in Trustees for Alaska Laborers—Constr. Indus. Health and Sec. Fund, supra, the court found that failure to make monthly pen- sion payments did not, in itself, constitute repudiation of the entire contract. The court cautioned, however, that it might do so if accompanied by an employer’s conduct, which was highly inconsistent with intent to fulfill contractual obligations. Board precedent cited by the General Counsel for the same argument must be similarly qualified because those cases did not involve total or even pervasive noncompliance, but rather involved a failure to fully comply with some contract provisions. A. L . Underground, 302 NLRB 467 (1991) (which involved a 10(b) issue, and Adobe Walls, 305 NLRB 25 (1991). None of the precedent cited by the General Counsel and Un- ion hold that repudiation may not be manifested by a pervasive noncompliance with all or most vital areas of the agreement, especially within the context of conduct inconsistent with ad- herence to the contract as a whole. The Respondents counters with citation of precedent that such circumstances may indeed be found sufficient to constitute a manifest intent of total agreement repudiation sufficient to constitute notice to the un- ion. Carpenters Southern California Admin. Corp. v. J. L. M. Constr. Co., 809 F.2d 594, 599 (9th Cir. 1987) (complete non- compliance); International Bhd. of Electr. Workers v. KBR Electric, 812 F.2d 495 (9th Cir. 1987); NLRB v. Drywall, 974 F.2d 1000, 1004 (8th Cir. 1999); Wyoming Laborers Health & Welfare Plan v. Morgen & Osgood Constr. Co., Inc., 850 F.2d 613, 623 (10th Cir. 1988); Contractors, Laborers, Teamsters & Engineers Health & Welfare Plan v. Harkins Constr. & Euip. Co., 733 F.2d 1321, 1327 (8th Cir. 1984). The common thread in all of this precedent is that the issue of repudiation must be resolved by the factual configuration in each case. B. Facts The basic factual background has been set forth in the over- view portion of this decision. Because of the Board’s Order upholding my ruling that the issue of contractual repudiation prior to the hearing before Judge Ladwig was not to be reliti- gated in this proceeding, I restricted the Respondents greatly as to introduction of pre-October 5, 1994 factual evidence. I agree with the General Counsel that the issue is excluded by res judi- cata or, more precisely, issue preclusion by virtue of the Deci- sion of the Board and the court. I do not agree that the Respon- dents are precluded from relying upon evidence adduced before Judge Ladwig or the state of the record of the proceeding be- fore him to shed light upon, to explain, or to understand the factual configuration existing on and after October 5, 1994, as to whether the Respondents’ conduct had constituted manifest intent of contract repudiation sufficient to put the Union upon notice on or after that date. I do not construe such reference as a relitigation of the issue of pre-October 5, 1994 repudiation. At trial, I emphasized that the Respondents were afforded the right to show repudiation on or after October 5 by evidence of facts occurring on or after that date. However, I conclude that such evidence must necessarily include the Union’s perception of DLB’s contractual obligation intent on and after October 5, 1994. With respect to the pleadings in the underlying proceeding, the Respondents may be precluded by res judicata from reliance on those pleadings to establish effective notice of repudiation at the time of unfair labor practice charge, complaint issuance, or answer thereto. A reading of those pleadings might arguably lead a reasonable person to conclude that DLB had refused to recognize the Union and had held itself to be not bound by the prehire agreement. However, that argument was not raised until this proceeding. I conclude that those pleadings and the underlying proceeding itself, as well as subsequent proceedings and pleadings, may be relied upon by the Respondents to prove that a sufficiently bald manifestation of contract repudiation evolved and existed in the Union’s perception, either immedi- ately after Judge Ladwig’s closing gavel fell on October 4, 1994, or some time thereafter—but many years before the May 1997 letters of reiterated repudiation. It was stipulated at the trial herein that knowledge of the con- tent of all pleadings, motions, or all legal matters served upon the Union’s legal counsel may be imputed to the Union. It is undisputed and conceded that Charles Graham before, during, and at all times after the proceeding before Judge Ladwig, was the Union’s responsible agent for organization, contract nego- tiations, and prosecution of unfair labor practices, including the underlying proceeding at which he testified. As a result of testimony, documentary evidence adduced, and statements of position at that trial, Judge Ladwig made the findings described above, including DLB’s operation as a non- union contractor for many years and the Union’s attempt to organize DLB, which it considered a nonunion contractor. Evidence was adduced at that trial in an attempt to prove that DLB’s conduct was sufficient to prove manifest notification of contract repudiation. Judge Ladwig, the Board, and the court disagreed and found that it had not been so bald and openly notorious. However, that position was clearly maintained by the Respondents at the trial and complemented the Respon- dents’ answer to the underlying charge. It is an arguable point whether the pleadings themselves con- stituted effective constructive repudiation. The proceeding before Judge Ladwig itself added further factual dimension. In his subsequent decision, Judge Ladwig found that DLB violated the Act by not recognizing the Union by the fact that it “. . . has failed and refused to adhere to the terms of the 1993–1997 D. L. BAKER, INC. 557 NECA–Union Inside Wireman master agreement.” The whole tenor of Judge Ladwig’s decision was that the facts adduced at his hearing revealed that DLB had operated as a nonunion con- tractor and had evaded the master agreement entirely, i.e., com- plete noncompliance. His order, inter alia, called for DLB to cease and desist from refusing to recognize the Union and to comply with the terms and condition of employment of the agreement. What conclusions did the Union come to as a result of expo- sure to the same evidence introduced, and positions taken, by the Respondents at the trial even before briefs were received? It is highly improbable that the Union needed to read the Re- spondents’ brief before it formulated a firm perception of DLB’s attitude toward compliance with the agreement in any way, manner, shape, or form. The Union, i.e., Graham, no later than October 5, 1994, certainly had come to a fixed perception of DLB’s agreement compliance intent. As noted above, Graham’s testimonial demeanor was very poor. He lacked conviction and failed to convince. Unlike friendly examination, his constant evasions, fidgeting, throat- clearing, and other body language in adverse examination pre- vented me from acquiring any assurance of reliability and accu- racy of his testimony. Initially, in examination as an adverse witness, he admitted that DLB had refused to use the union hiring hall and had not paid union wage scale and benefits obligated by the agreement. Then he claimed that he could not recall when he had first come to that awareness. Next, he claimed that he had not known what wages DLB had paid the bargaining unit employ- ees. He was then asked upon what basis he had concluded that DLB had not been paying contractual wages and benefits, hav- ing had no knowledge of what DLB paid unit employees. Gra- ham responded that because DLB was not paying working dues and trust fund installments, he was therefore palpably not abid- ing by the contract. He was asked when he first learned that DLB was not paying working dues or making trust fund pay- ments and answered October 5, 1994. When asked why he therefore did not file a grievance under the contract, Graham answered: . . . he wouldn’t abide by the agreement. He would have thrown the agreement in the trash. Graham then admitted his awareness on October 5, 1994, that DLB was not using the union hiring hall referral procedure or abiding by the contract. After some reflection, Graham at- tempted to retract this astounding admission, claiming again that he did not know the date of his awareness that DLB was not paying contractual wages and benefits. At this point in his adverse examination, Graham appeared to be agonizing in self- contemplation. Union counsel leapt to Graham’s rescue with the proposed stipulation, which was joined by all parties, i.e., that at all times on or after October 5, 1994, Local 26 knew that DLB and its alter egos were not in compliance with the 1993– 1997 IBEW-NECA NECA–Union Inside Wireman Master Agreement and sought to compel compliance by the institution of the underlying proceedings. Union counsel had objected to the Respondents’ persistent examination of Graham on the ground that there was no dispute that the Union was unaware of DLB’s contractual noncompliance. The General Counsel joined in by stating on the record that by virtue of the underly- ing charge, Judge Ladwig’s decision, the Board decision, and Court Opinion finding a violation of Section 8(a)(5) of the Act by DLB’s “refusal to adhere to the terms of any Inside Wire- man Agreement,” is why we were now in litigation. Accord- ingly, at that point, the General Counsel and the Union ap- peared to be taking the position that persistent examination of what Graham knew and when he knew it was not relevant. In continued adverse examination, Graham testified: (BY MR. AVAKIAN:) Q. Mr. Graham, with respect to your understanding on October 5, 1994 that D. L. Baker, Inc. was not complying with the contract with regard to paying trust fund— making trust fund contributions, paying working dues, or taking referrals from the Union hiring hall, isn’t that con- duct completely inconsistent with what union signatory employers should be doing with regards to their obliga- tions to Local 26? A. The—Yeah—well, it’s my understanding that Baker was violating the collective bargaining agreement. And if you’re violating, or course, you’re not doing what’s right. At that point, upon another uproar of objections from the Un- ion and General Counsel, the witness was excused while I ruled upon objections. Upon his return, Graham gave a confusing response as to whether DLB complied with any provision of the agreement on or after October 5, 1994. At one point, when questioned as to DLB’s nonforwarding of union dues as obliged by the agreement, Graham testified: No, he wasn’t complying with the bargaining agreement so he wasn’t doing anything except— The exception, Graham insisted, was that DLB was somehow in compliance with article 1.01 of the agreement which sets forth requisite criteria for timely written notice termination. According to Graham’s reasoning, since DLB never complied with the requirements necessary for timely written notification, he was somehow complying with article 1.01. Now, it appears, coming full circle again, Graham admitted awareness as of October 5, 1994, that DLB had complied with only one contractual provisions and that can be defined as compliance only with the most tortuous rationalization. As if that were not enough, the Respondents’ counsel persisted: (BY MR. AVAKIAN) Q. I just want to make sure I understood your testi- mony completely. The remainder of the provisions of the contract—it’s your knowledge or understanding that D. L. Baker, Inc., or Baker Electric, Inc. has not been complying with those terms? A. He won’t comply to them [sic]. There’s been legal action and he still won’t. There was an unfortunate but unavoidable hiatus in Gra- ham’s testimony, which provided him with a 17-day interlude to reflect upon his testimony. In continued adverse examina- tion, when pressed to admit awareness that he had been aware DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 558 on and after October 5 that DLB had engaged in conduct incon- sistent with an intent to honor the contractual obligations, Gra- ham evaded. He kept repeating “no they weren’t complying with the agreement” but refused to characterize such conduct as inconsistent. He claimed at one point that he did not know the definition of the word “inconsistent.” He attempted to retract his last admission made in the preceding session. He testified that he had reconsidered his testimony during the hiatus and he now thought that perhaps, maybe, DLB had been in compliance with other parts of the agreement. He suggested that the man- agement’s-rights clause and jurisdiction clause might have been complied with. In examination by the General Counsel who asked him again whether he knew what wages DLB had paid, he answered, “No, not really,” with complete absence of con- viction. Counsel for the General Counsel then led him to a couple of relatively minor contract provisions to which Graham obligingly testified that he had no knowledge of DLB noncom- pliance. As stated earlier in this decision, I found Graham to be a most unconvincing and disingenuous witness. I completely disregard his hedging qualifications, retractions, and evasions. I find more credible and convincing his admission that as of October 5, when Judge Ladwig’s final gavel fell, the Respon- dent, i.e., DLB, by virtue of its prior conduct, the pleadings in the underlying proceedings, the proceeding before Judge Lad- wig, and the evidence and statements of positions thereat, re- fused to recognize the Union and engaged in pervasive non- compliance with the agreement, including all vital contract provisions, thereby manifesting a bald intent to repudiate the entire NECA–Union Inside Wireman Master Agreement. Sub- sequent briefs, motions, etc., filed with Judge Ladwig, the Board, and the court merely reinforced what the Union was well aware of on October 5, 1994, i.e., DLB had repudiated the agreement, had no intention to abide by its terms, and was act- ing a manner totally inconsistent with any intent to do other- wise. I conclude it was not necessary that DLB engage in the redundancy of using the magic word of “repudiation” in any other written or oral communication thereafter. Accordingly, I find that DLB had, by virtue of its bald con- duct and in the factual configuration existing as of October 5, 1994, effectively repudiated the 8(f) prehire agreement, and the Union clearly understood as much. Therefore, I find that DLB’s liability and its successor/alter ego BEI’s potential li- ability for losses due to contractual noncompliance terminated on October 5, 1994.23 V. THE TANGY REINSTATEMENT—SECOND TERMINATION A. General Statement of Law The relevant legal principles were set forth by the Board as follows: A reinstatement offer to a discriminatee must be spe- cific, unequivocal, and unconditional in order to toll back- 23 I find it unnecessary to evaluate other evidence of Graham’s post- October 5, 1994 knowledge, such as his alleged awareness of nonunion DLB advertisements for unit electrician jobs or other conduct after October 5, 1994. However, wherever any credibility resolution is in- volved, I discredit Graham. pay. See, e.g., Holo-Krome Co., 302 NLRB 452, 454 (1991), enf. denied on other grounds 947 F.2d 588 (2d Cir. 1991), rehearing denied 954 F.2d 108 (2d. Cir. 1992); L. A. Water Treatment, 263 NLRB 244, 246 (1982); and Standard Aggregate Corp., 213 NLRB 154 (1974). It is the employer’s burden to establish that it made a valid of- fer of reinstatement to the discriminatees. L. A. Water, su- pra, at 246–247. For a reinstatement offer to be valid, it must have sufficient specificity to apprise the discrimina- tee that the employer is offering unconditional and full re- instatement to the employee’s former or a substantially equivalent position. Standard Aggregate, supra at 154. [Adsco Mfg. Corp., 322 NLRB 217, 218 (1996).] Very recently, the Board again alluded to these principles in the evaluation of whether a valid offer of reinstatement was made to returning discriminatee strikers when it quoted Adsco and expanded: In addition, the Board does not evaluate a discriminatee’s re- ply to a reinstatement offer until the respondent proves that the offer is a valid one, i.e., consistent with the principles above. See, e.g., CleanSoils, Inc., 317 NLRB 99, 110 (1995); Consolidated Freightways, 290 NLRB 771, 772–773 (1988), enfd. as modified 892 F.2d 1052 (D.C. Cir. 1989), cert. de- nied 498 U.S. 817 (1990). [Tony Roma’s Restaurant, 325 NLRB 851, 852 (1998).] With respect to returning striker discriminatees, the Board elsewhere had held that where the respondent therein did not make valid offers of reinstatement to them, the Board could not “appropriately inquire into the reasons certain strikers had re- fused to report to work on the reporting date.” Domsey Trading Corp., 310 NLRB 777 (1993). As the Union correctly observes: An employee who accepts reinstatement to a non-equivalent job with the employer is under no obligation to retain that po- sition. Alaska Pulp Corp., 326 NLRB [522, 532] (1988); Glover Bottled Glass Corp., 313 NLRB 43 (1993); enfd. 47 F.3d 1230 (D.C. Cir. 1995), cert. denied 516 U.S. 816 (1995); Newport News Shipbuilding & Dry Dock Co., 278 NLRB 1030 (1986). Those cases again deal with the adequacy of reinstatement of- fers to returning striker discriminatees which, of course, are judged by same stringent standards as applied to other adjudi- cated discriminatees who are entitled to reinstatement. In the Alaska Pulp case, the Board cited Glover and New- port. Those cases involve the discriminatees’ voluntary termi- nation or discharge from nonsubstantially equivalent interim employment by a third party employer. In Alaska Pulp, the Board reasoned that if a discriminatee’s termination from non- equivalent third-party employment does not constitute a willful loss of employment, then it should not do so when a discrimi- natee accepts and later quits or is discharged from non- substantially equivalent employment accepted from the respon- dent employer. Any uncertainties or ambiguities in any com- pliance related issues are resolved against the adjudicated wrongdoer, Ferguson Electric Co., 330 NLRB 514, 516 (2000), D. L. BAKER, INC. 559 citing Kansas City Refined Helium Co., 252 NLRB 1156–1157 (1980). The Respondents do not dispute the above-cited precedent, but rather argue a factual defense. The Respondents argue that Tangy was tendered a valid offer of reinstatement by DLB which he did not accept in good faith. It is argued that Tangy accepted reinstatement at DLB only to test DLB’s good faith and, after having been assigned a job, he finished it on the sec- ond day and abandoned DLB to return to interim employment elsewhere, which, in fact, he never intended to nor did sever. Accordingly, the Respondents argue that having abandoned his DLB job, and having failed to report back to work in person or by telephone, Tangy was suspended. The Respondents further argue that DLB, having then learned that Tangy had effectively remained in the employ of another contractor during his rein- statement at DLB and knowingly violated DLB’s policy against dual employment, justifiably discharged him. B. Facts A letter signed by Dan Baker, as president of and on behalf of “D. L. Baker, Inc.,” dated July 17, 1997, was forwarded by U.S. certified mail to Tangy and received by him on July 24. The letter contained an offer of “unconditional, immediate, and full reinstatement” to his former position with “D. L. Baker, Inc.” or, if not available, the next substantially equivalent posi- tion. The letter requested written or telephonic acceptance and set a reporting date at Tyco Road headquarters of DLB and, of course, BEI, on Monday, August 4, 1997, at 6:30 a.m. Tangy, then employed as a full time jobsite electrician by un- ion contractor Heller Electric, Inc., first consulted union repre- sentative Chuck Graham, having faxed the DLB letter to him. Graham encouraged Tangy to accept the offer in order to or- ganize the Respondents’ employees. Tangy thought it over for a few days. He testified that he decided to return to DLB em- ployment to organize the employees for the Union, to accept a steadier employment at DLB, to escape sporadic employment at Heller Electric, Inc., and to become a key employee at DLB. This judgment was arrived at despite the fact that Tangy had 4 months’ work experience at Heller, which was a month longer than at DLB, and that he had been employed there continuously during those 4 months. Tangy telephoned Graham from the Heller jobsite mobile of- fice trailer and told him of his decision. Graham prepared a letter of acceptance for Tangy and faxed it to him at the Heller trailer from which Tangy faxed it to DLB. Tangy testified that he did so pursuant to the approval of Heller’s acting foreman, Tony DeMichael, whom he notified that he was terminating his Heller employment to return to DLB. Tangy testified that he telephoned Dan Baker on August 1, after having sent the fax acceptance to verify his acceptance, and that he spoke with him for about 5 minutes but they admit- tedly did not discuss Tangy’s concern about steady employ- ment. Tangy admitted that prior to August 1, he was made aware that DLB intended to reinstate him at his December 1993 wage rate of $13 per hour. Tangy admitted that before finally accepting the DLB rein- statement on August 1, he informed Graham that he did not want to accept reinstatement at the $13 hourly wage rate, which was about $11 less per hour than the Heller Electric union con- tract rate. Tangy was asked in adverse examination whether he told Graham that he would accept Dan Baker’s offer only “to see if Baker would take you back, because you couldn’t afford working there.” He responded, “true” and that he “might have” said that. On August 4, Tangy reported for duty at Tyco Road at 6:30 a.m. as directed. He was presented with employment docu- ments, which he filled out. Those multiple documents con- sisted of DLB employment policies including, upon penalty of discharge, a prohibition against “moonlighting” or employment with another contractor while employed by DLB. Included in one of these documents was a requirement that if he did not have a DLB job to report to, he must report to the Tyco Road office at 6:30 a.m. Tangy admitted that he was aware of those policies, having read the documents. One of the policies stated that “[T]he Company as a job shop, works on a project-by- project basis, and there is no guarantee of continuous employ- ment.” Tangy testified that he read that policy but it caused him no concern and he did not discuss with Dan Baker as to how steady DLB employment might be. Tangy asked about a pay raise. Dan Baker told him to renew his request when he had produced his electrician’s license. This was an unprece- dented condition. On August 4, Tangy was set to perform service work at Maurice Electric, a Washington, D.C. area supplier of electrical materials. At this time, of course, DLB was a mere shadow of its former operation that continued on in the disguised form of BEI, its successor and alter ego. The service work sporadically performed for Maurice Electric was done as fulfillment of a preceding preassets sale obligation. DLB maintained no other ongoing work. Dan Baker suggested in rather vague testimony that he had considered taking on a large project in Norfolk, Virginia, with Tangy in mind, on or about the time he contem- plated recalling Tangy. The Norfolk project, which DLB disre- garded as impractical, clearly exceeded DLB’s capacity and Dan Baker clearly intended that Tangy be reinstated as a DLB employee, and not as a BEI employee, who were at that time engaged in ongoing projects. DLB, in fact, employed only one electrician for that quarter year, i.e., Tangy. The parties quibble as to whether service work at Maurice Electric constituted equivalent employment. The Union and General Counsel argue that it was not, because Tangy had never performed service work for DLB and had never worked alone at a DLB jobsite. However, DLB never did maintain a “service electrician” classification and had employed electri- cians in service work at the same jobsites where Tangy had worked in 1993 on new or restoration work as Tangy admitted. The evidence fails to show that his service work at Maurice involved any different skills, tools, or work task functions than he had performed in 1993 for DLB in new or restoration con- struction. The Maurice job ended early in the morning of August 5. Tangy testified that he started the work at 6:30 a.m. and, since it became apparent that he would finish very quickly, he tele- phoned the DLB Tyco Road office at 6:30 a.m. to obtain his next assignment. He testified that no one answered, that he DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 560 tried again at 7 a.m. when he completed his Maurice Electric work, and again no one answered. Tangy testified that he then referred to a DLB communication procedure sheet and called a variety of designated numbers but was only able to make con- tact with Dan Baker’s home answering machine. He testified that he left a message on it wherein he asked for his next as- signment. Tangy testified that at about 8:30 a.m., he telephoned the Tyco Road office and this time an unidentified female voice answered. Without any foundation testimony, Tangy character- ized that person as a “secretary.” According to Tangy, he told her of his need to contact Dan Baker for another assignment. Tangy’s hearsay testimony as to what that unidentified voice told him was offered into evidence, not for the truth of the ut- terance but merely as an utterance upon which Tangy took subsequent action. Thus, by itself, it is not probative evidence that Dan Baker, in fact, was given Tangy’s message, that Baker informed the “secretary” to tell Tangy that there was no further work for him and that he should go home to await contact from Dan Baker. The testimony was received as evidence that this is what the “secretary” who answered the Tyco Road Telephone told him on August 5. Tangy testified that he felt that this instruction “made no sense” because in his 22 years’ experience, he had never had downtime between assignments. Yet, he had testified that he sought reinstatement to avoid sporadic work. His own work history diaries for a 7-year period reveal that downtime is not that uncommon. In any event, despite his conclusion that the “secretary’s” instructions made no sense and was contrary to DLB’s reporting policy, he complied and nether reported to Tyco Road nor tried to contact Dan Baker, but instead he awaited contact from Baker. On August 5, Tangy did not go home after he left Maurice Electric. Instead, he reported to work at Heller Electric as soon as he could. At Heller Electric, he resumed work as though he had not ever quit. There is no record in Heller’s files of any interruption in Tangy’s employment status at Heller, which commenced on March 31, 1997, and ended on January 6, 1998. Tangy received a full day’s pay from Heller Electric for Au- gust 5. There is no termination slip in Heller Electric’s record to actually reflect Tangy’s termination, which is its usual pro- cedure. However, William Heller, its owner and manager, testified that it is not uncommon for union electricians em- ployed by him to quit and return quickly, with no record of hiatus in certain circumstances. One such example occurs when a new job falls through. This has occurred in the past despite its noncompliance with union hiring hall regulations. Tangy testified initially that he had considered his Heller Electric employment severed. Then, in cross-examination, he strangely characterized the brief time he spent at DLB’s Mau- rice Electric job on August 5 as a “vacation” from his Heller job. Tangy explained that economic need caused him to get back to Heller Electric as soon as he could on August 5. Dan Baker claims to have communicated with Heller Elec- tric on August 5 in order to ascertain Tangy’s whereabouts and was informed Tangy was employed there.24 Dan Baker made no attempt to telephone Tangy at his unlisted boarding home telephone. Contrary to Tangy, Dan Baker testified that Tangy failed to list his telephone in his employment documents. However, the Respondents, with no clear explanation, were unable to produce that particular document. Somehow, that extremely critical document was lost, despite the successful retention of other employment documents favorable to DLB’s position. I must credit Tangy on this point. Graham testified that in August or September 1999, he had learned that Tangy had returned to the employ of Heller Elec- tric after he “quit” his employment at DLB. He testified that Tangy told him he had “quit” his DLB job because there was no work for him. By letter dated August 6, 1997, DLB notified Tangy of his suspension pending a decision to terminate. The letter ac- knowledged that Tangy had, in fact, telephoned the DLB office on August 5, at 9 a.m. It asserted that he had been instructed, inter alia, to report back later that day or to leave a telephone number where he could be reached for “the next available job.” It asserted that having failed to follow these instructions or to leave messages as to his whereabouts, and his “failure to oth- erwise follow Company policies,” he was suspended. A deci- sion date was set for Monday, August 11, and he was invited to provide a written explanation.25 Why it was such an alleged dereliction of duty or act of dis- loyalty, when there was no work available for Tangy for any foreseeable time by DLB, is unexplained. Dan Baker’s August 6 letter corroborates Tangy’s claim to have at least called the Tyco Road office on the morning of August 5. Also, by virtue of that letter, DLB conceded that someone in that office who answered the telephone was authorized to give Tangy instruc- tions. There is a dispute as to what that person instructed. Tangy’s testimony is uncontradicted as to what that person instructed, as the Respondents did not adduce contradictory testimony. Accordingly, I must credit Tangy. Upon consultation with the Union, a response letter was pre- pared by its attorney which set forth Tangy’s version of the facts as he has testified herein and which was faxed to DLB on August 11. Tangy telephoned Dan Baker on August 11 to inquire whether Baker had his August 5 and 6 timesheets necessary for his paycheck. They had a conversation in which Tangy admit- tedly informed Dan Baker that he had been employed by Heller Electric prior to accepting DLB reinstatement and was em- ployed there on August 11. It is Tangy’s uncontradicted testi- mony that Dan Baker expressed surprise that Tangy would want to give up employment at a higher paying union contrac- tor and that if he had a union contractor job, he ought to stick 24 Since Tangy had finished his work at Maurice Electric and there was no other work available for him, it is unclear why Dan Baker felt the need to track down Tangy at Heller Electric, Inc. 25 Of course, even if DLB did not know Tangy’s home telephone number, by the afternoon of August 5, it knew he was working at the Heller jobsite and could obviously be reached there. Dan Baker made no such attempt to do so because DLB had no other work then available for Tangy. The August 6 letter failed to explicitly refer to a “moonlighting” violation. D. L. BAKER, INC. 561 with it. It is undisputed that Dan Baker did not offer any DLB job assignment to Tangy during that conversation nor, as DLB manager, could he have done so. As manager for BEI, he, of course, would have been able to use Tangy on ongoing BEI jobs. He offered none to Tangy. On August 15, 1997, Tangy received DLB’s termination let- ter. The causes given therein were a reassertion of the policy violations set forth in the August 6 letter and violation of com- pany policy by accepting work from Heller Electric on August 5, by failing to report to work, and by failing to notify DLB of his “whereabouts” without requesting time off. The question that naturally arises and which was never answered is time off from what, since DLB had no other ongoing work. C. Analysis From the foregoing facts, the Respondents challenges the bona fides of Tangy’s acceptance of DLB’s reinstatement offer and argues that he never really wanted reinstatement and volun- tarily abandoned his job. The facts raise a very strong suspi- cion, if not an inference, that Tangy, at the very least, was not delighted at the prospect of returning to DLB, especially for a $13 hourly wage rate, and that he did so solely at the behest of the Union for organizing purposes. The facts arguably support a suspicion, if not an inference, that both Tangy/Union and DLB were putting each other to the test. The question is then, who failed the test or, put another way, who bluffed whom? Tangy’s motivation, the bona fides of his acceptance, and the issue of his failure to appear need not be evaluated because I conclude that the Respondents, i.e., DLB and BEI, its alter ego and disguised continuance, did not even make a facially valid offer of reinstatement to Tangy.26 DLB and BEI were required to offer reinstatement to Tangy. Clearly, only DLB did so. The offer amounted to a mere 1-1/2 day job. By limiting Tangy to DLB pickup work, it isolated him from the Respondents’ other employee organizing targets. BEI could not have logically offered reinstatement to Tangy without conceding at least its successorship relationship, which it has continued to deny. The letter, signed by Dan Baker as DLB manager on DLB stationery, then explained to Tangy as consisting of service work and, as explained in the policy statement, work which was subject to short-term duration and not available on a consistent basis. As the facts of the reinstatement conditions unfolded and manifested themselves to Tangy, even if he had not been privi- leged to reject the offer as facially invalid, which I find he could have done so, I further find that he would have been justi- fied in terminating the DLB job as it was not substantially equivalent to his 1993 DLB job. A substantially equivalent job in 1997 would have been a job at BEI. Furthermore, the hourly wage rate of $13 in itself renders DLB’s reinstatement offer invalid. The thrust of the remedial order is to restore Tangy to the same or substantially equivalent job and the same pay he would have been receiving had he remained in the Respondents’ employ in 1997. Such remedy is 26 As noted above, I do credit Tangy as to his account of the tele- phone conversation. I also credit him as to the listing of his telephone number in the reemployment document. not satisfied by payment of the 1993 wage rate if the facts demonstrate that Tangy would have been given wage raises subsequent to December 1993. C. F. Airfreight, Inc., 276 NLRB 481, 483 (1985). AVJ Graphics, Inc., 282 NLRB 277 fn. 1 (1986). Dan Baker conceded that he regularly grants wages to good electricians who remain in his employ. Judge Ladwig found Tangy’s work quality to have been considered by Dan Baker to be good. Clearly, Tangy would have been granted raises in his wage rate. If there is any possible doubt of it, that doubt, as noted above, must be resolved against the wrongdoer. Accordingly, I find that DLB’s offer of reinstatement was inva- lid and that Tangy’s intentions and motivations of acceptance, and his subsequent termination, even if considered voluntary, do not prejudice his right to such valid offer and, in its absence, continued backpay.27 VI. THE TANGY BACKPAY A. General Statement of Law A fine summation of pertinent legal precedent has been set forth recently by Administrative Law Judge George Aleman whose rulings, findings, and conclusions were adopted by the Board in United States Can Co., 328 NLRB 334, 337 (1999): It is well-settled that the finding of an unfair labor practice is presumptive proof that some backpay is owed, and that in a compliance proceeding the sole burden on the General Counsel is to show the gross amounts of backpay due, that is the amounts the employees would have re- ceived but for the employer’s unlawful conduct. NLRB v. Mastro Plastics Corp., 354 F.2d 170, 178 (2d Cir. 1975); Basin Frozen Foods, 320 NLRB 1072, 1074 (1996). In determining the appropriate formula for arriving at gross backpay figures, the Board is vested with a substantial de- gree of discretion inasmuch as it is impossible to arrive at precise figures because the discriminatees were not em- ployed during the backpay period. Canterbury Educa- tional Services, 316 NLRB 253, 254 (1995), citing NLRB v. Brown & Root, 311 F.2d 447 (8th Cir. 1963). Any for- mula which approximates what discriminatees would have earned had they not been discriminated against is accept- able if it is not unreasonable or arbitrary in the circum- stances. La Favorita, Inc., 313 NLRB 902 (1994). When a respondent disputes the accuracy of the gross backpay figures in a compliance specification or the premises upon which they are based, it must in its answer “specifically state the basis for such disagreement, setting forth in detail the respondent’s position as to the applicable premises and furnishing the appropriate figures.” A failure to ade- quately explain its denial of matters over which it is pre- sumed to have knowledge shall result in the allegation in question being deemed admitted as true, and will preclude a respondent from presenting evidence to refute said alle- gations. See Rule 102.56(b) of the Board’s Rules and Regulations. 27 As found above, Tangy should have been paid the NECA–Union Inside Wireman Master Agreement rate applicable in December 1993, which was far in excess of $13. See further discussion below regarding gross backpay due Tangy. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 562 Once the gross backpay amounts are established, the burden shifts to the employer to establish facts that would negate or mitigate its liability. NLRB v. Maestro Plastics, 354 F.2d 170 (2d Cir. 1965), cert. denied 384 U.S. 972 (1966). In short, the burden is on the employer to show, through a preponderance of credible evidence, Browning Industries, 221 NLRB 949, 951 (1975), that no backpay is owed or that what is alleged to be owed should be dimin- ished because the discriminatee was unavailable for work, or neglected to make reasonable efforts to find interim work. Inland Empire Meat Co., 255 NLRB 1306, 1308 (1981), enfd. mem. 692 F.2d 764 (9th Cir. 1982). It should be noted, however, that a backpay claimant is not held to the highest standard of diligence in seeking interim employment, but is only required to have made reasonable exertions. Thus, an employer does not satisfy its burden showing that no mitigation took place because the claim- ant was unsuccessful in obtaining interim employment, by showing an absence of a job application by the claimant during a particular quarter or quarters of a backpay pe- riod, or by showing the claimant failed to follow certain practices in his job search, e.g., reading and responding to job advertisements in newspapers. S.E. Nichols of Ohio, 258 NLRB 1, 11 (1984). Finally, any uncertainties or am- biguities must be resolved against the wrongdoer whose conduct made such doubts possible. Teamsters Local 469 (Coastal Tank Lines), 323 NLRB No. 23 [210] (1997). With these principles in mind, I now address the issues at hand. B. Gross Backpay Tangy’s backpay entitlement runs from the date of his dis- charge on December 1, 1993, to the date of a stipulated valid offer and rejection on September 28, 2000.28 The Respondents argue that the gross backpay alleged in the specification is conditionally premised upon the union contract wage rate and that such premise is invalid if it is found that repudiation occurred not in 1997, but in 1994. The General Counsel argues that the issue of gross backpay is res judicata in consequence of the Board’s Supplemental Decision and Order of January 2000, which granted partial summary judgment. The Board found that the Respondents had, by virtue of their defective answers, admitted paragraphs 17, 18, 19, 24, 23, and 32 of the compliance specification “with respect to formulae and calculations of gross backpay for all claimants and interim earnings and calendar quarter backpay for claimants who worked for the Respondent D. L. Baker, Inc. t/a/ Baker Elec- tric.” The Board then ordered the Regional Director to issue a notice of hearing “. . . which shall be limited to the taking of evidence concerning the remaining allegations of the compli- ance specification.” Paragraphs 32(a)–(e) sets forth the formula for calculation of Tangy’s gross backpay and, by incorporation by reference in exhibit R, the wages he would have received had he been con- tinuously employed by the Respondents, as adjusted by wage 28 The stipulation was made without prejudice to the Respondent’s position as to the August 4, 1997 reinstatement. rate increases set forth in the Inside Wiremen agreement. Thus, the General Counsel argues that, regardless of their answers as to the repudiation date of the agreement, the Respondents, nonetheless, are deemed to have admitted that Tangy would have been paid at the contract rate had he not been discharged up to the tolling of his backpay in September 2000. Exhibit R set forth gross backpay for calendar quarters up through the fourth calendar quarter of 1998. It was amended at hearing to encompass calendar quarters up to September 2000. I must agree with the General Counsel that the Board Order of January 2000 is clear on its face, unconditional, and not lim- ited to gross backpay formula. Rather, it holds that Tangy’s gross backpay as calculated in the specification is admitted, without qualification, and is not a litigable issue before me. The Respondents argue that their answers contesting the con- tract repudiation date necessarily preclude an admission that Tangy would have been paid the union contract rate subsequent to October 5, 1994, at the latest. It certainly would have been logically consistent for the Respondents to have denied that allegation in paragraph 32. But they did not do so. By virtue of a defective answer, the Respondents admitted that Tangy would have continued on at the contract rate. Furthermore, continued payment of Tangy at the contract rate and an earlier repudiation of the contract are not mutually exclusive concepts nor would it be a contradiction in terms. The Respondents may or may not have done so. They have not denied in their answers that they would have continued to pay him as an individual those higher wages for reasons unrelated to contract compliance as a whole. As found above, Tangy certainly would have been granted some raises above the $13 rate at which he had been employed, even apart from considera- tion of DLB’s obligation to have paid him the much higher Inside Wiremen agreement rate in December 1993. Assuming, arguendo, the contract rate would not have been given to Tangy, he subsequently would have received higher than $13. It is an open question what that amount would have been, as it is an open question whether the Respondents would have re- duced Tangy’s pay upon agreement repudiation in October 1994 had it complied with the agreement prior to that date. All doubts, as noted above, must be resolved against the wrongdoer in the interest of a vindication of public policy. Accordingly, I must find that Tangy would have continued to be paid the applicable contract rate, notwithstanding contract repudiation as a whole. I further conclude that in the absence of any evidence that the Respondents would have reduced Tangy’s pay in the period subsequent to its admission, i.e., fourth quarter 1998, and to what extent it would have been cut, I must find that the same formula and calculation premised upon the contract rate beyond the fourth quarter of 1998 is rea- sonable and appropriate, even if the argued specification calcu- lation terminated as of that quarter. In any event, the Respon- dents’ defective answer admits the appropriateness of the Gen- eral Counsel’s formula, calculations, and the premise for the calculation, i.e., continued payment to Tangy of Inside Wire- men agreement wage rates. Accordingly, I find that the gross backpay due Tangy is ap- propriately set forth in the General Counsel’s calculation as that D. L. BAKER, INC. 563 premised upon the Inside Wiremen agreement up to the tolling of backpay in September 2000. C. Mitigation 1. Overview The Respondents assert that Tangy failed to mitigate his loss of backpay by willfully concealing or misstating interim earn- ings in his mandatory reports to the compliance officer, by quitting interim employers, by avoiding nonunion employers, and by losing work opportunity through habitual sleep-related tardiness. The Respondents also allege that the calculation of interim employment earnings by the compliance officer failed to include interim overtime employment. As noted above, it is the Respondents’ heavy burden to prove by a preponderance of credible evidence that the gross backpay should be diminished because of the discriminatee’s failure to mitigate damages by failing to make reasonable efforts to do so. United States Can Co., supra. The Respondents rely virtually entirely on documents subpoenaed from Tangy including, inter alia, his diary-type journals, his telephone logs, paychecks, and a 14-day tediously oppressive, persistent, grueling adverse ex- amination of Tangy as to his month-by-month, even week-by- week, effort to find and keep interim employment with about 20 employers over a 7-year period of time. As noted above, Tangy’s demeanor gives rise to much concern. However, given this massive assault upon his credibility, it is understandable how his patience must have been pushed to the limit, resulting in his disconcerting demeanor and seeming desire to be free of litigation that was to his benefit. The Respondents have argued that his entire testimony be struck because of his acceptance of union reimbursement for wages lost due to testifying about midway through his testimony. However, without his testi- mony, the Respondents would have virtually no evidence with respect to their mitigation defense.29 Tangy’s meticulously detailed daily journals produced the ammunition for the Respondents’ attack upon his search for and maintenance of employment efforts. In these journals and in his testimony, Tangy was very forthcoming. It is he who dis- closed his terminations, his tardiness, his voluntary quits of employment, etc. Had he been less candid and less detailed in his journals, the Respondents would have been hard pressed to prolong his examination beyond a few fruitless days. As I noted above, Tangy’s demeanor was far from reassur- ing. However, based upon my observation of him as a witness for almost 15 days of testimony, I conclude that he was a basi- cally honest and responsive witness with respect to his attempts to find and keep interim employment and as to his expenses for same. 2. Willful concealment In microscopic examination of Tangy’s 7-year employment search and maintenance history with almost 20 employers, the Respondents discovered some incidents when Tangy failed to include some interim earnings in his obligatory quarterly re- 29 For the reasons stated earlier, and because Tangy’s testimony was elicited for his own benefit and not the Union’s direct benefit, I would not strike his entire testimony because of this reimbursement. ports to the compliance officer. I find that these incidents are isolated, involve extremely brief periods of interim employ- ment, and involve relatively insignificant, if not trivial amounts of earnings. In one instance, Tangy listed a higher paying employment which actually overlapped into an employment period at a lower paying job resulting in his reporting more earnings than he had actually received. Tangy’s reporting delinquencies were discovered during ad- verse examination of Tangy as to his diaries, bank checks, and other records subpoenaed by the Respondents. Based upon information thus elicited by the Respondents, the General Counsel was constrained to amend the specification to increase expenses that Tangy failed to report accurately and also to re- flect an over-reporting of interim earnings, as well as some minor under-reporting of interim earnings. Clearly, Tangy’s reporting lapses, which were against his own interests, were not willful but were obviously inadvertent. I conclude that those few isolated nondisclosures of brief periods of interim earnings were also inadvertent and not willful.30 3. Interim employment; reasonable search for work; work avoidance; and retention of work a. Facts The Respondents argue, citing Ferguson Electric Co., supra, that Tangy was obliged to follow his regular method of seeking employment after his discharge that he had followed prior to his DLB employment, which had included nonunion employ- ers. The Respondents argue further that Tangy had quit his employment at several employers and, therefore, back payment be tolled because the General Counsel failed to prove that those jobs were burdensome or more arduous in some way. Tangy primarily relied on the Union’s referral system for in- terim employment. He also resorted to out-of-town IBEW locals. He utilized union publications and a network of fellow electricians for word-of-mouth work opportunities. He resorted to out-of-town work when local work was not available. He registered at various state employment agencies. Tangy quit his first interim employment at Fishbach & Moore, Inc. in West Virginia on August 11, 1994, to seek local work. That job entailed lodging and travel expenses. He quit the U.S. Postal Service job in June 1995 that paid $10.54 per hour, and a job at Northside Electric in June 1995 that paid only 80 percent union wage scale, to seek higher paying union scale. He succeeded after a few days. Following 43 weeks of em- ployment at Triangle Electric in Detroit, Michigan, Tangy quit on June 19, 1996, to return home to Waldorf, Maryland, to search for local work. There is a hiatus in the Triangle Electric employment. On one occasion, with his foreman’s permission, he returned to Maryland to retrieve necessary clothing. From May 31 through June 11, he returned to Waldorf, Maryland, during which period he did some local work but during which he also rejected available local work opportunity for personal 30 Some such employment was at nonequivalent work that he would not have been obliged to accept and from which he could properly have quit, e.g., U.S. Post office mail-sorting employment. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 564 reasons, e.g., maintenance on a townhouse he owned.31 The General Counsel concedes that for the second quarter of 1996, Tangy’s interim earning offset must be increased to account for 48 hours of rejected available local work. Tangy obtained substantially equivalent local employment at American Combustion on August 1, 1996, which was repre- sented to him to be a 4-week job. However, friction developed and after a confrontation between him and the foreman over the quality of his work performance, not moving 300 pounds of metal fast enough, and/or his tardiness, he quit 1 week before the project was supposed to end. On August 29, he obtained a union hiring hall referral to a job at Truland Systems Corp. at the Pax River Navel Base, which started on September 3 and which is conceded to be substantially equivalent employment. Tangy quit that job on October 11, 2 weeks prior to its actual conclusion. Tangy testified that he quit that job to avoid a pos- sible transfer to a football stadium job, which would necessitate substantial overtime hours. Tangy testified such overtime would interfere with extensive rehabilitation therapy necessi- tated by a knee injury he had suffered when employed at Trian- gle Electric. He was unemployed for 6 weeks thereafter. There is no evidence that the stadium job actually came to fruition or that Tangy actually would have been offered that work. There is no evidence that any other work was available for Tangy after the conclusion of all work at the Pax River jobsite. How- ever, Tangy could have worked 80 additional hours in the 3d quarter of 1996 if he had stayed on the Pax River job, which should be added to the interim earnings offset. On January 12, 1998, Tangy applied for work through Tradesmen International, which subsequently referred him to a job on February 19, 1998. Thereafter, on March 27, Tangy, for unknown reasons, requested that Tradesmen put him on its inactive status. However, there is no evidence that substantially equivalent work was available through Tradesmen or anywhere else. When employed at Delta Electric for $16 per hour, Tangy left that job to obtain a union referral which actually resulted in higher paid employment with a union contractor. The next calendar quarter involving a voluntary termination occurred in the second quarter of May 2000. Tangy was em- ployed by Gleeson Electric from September 28, 1999, through May 12, 2000. He quit on May 12 to travel to Michigan to look for work despite the fact that he had no job waiting for him there. As the General Counsel concedes, he voluntarily in- curred the loss of 40 hours of substantially equivalent local employment, which increases his interim earnings offset by 40 hours. The record reflects instances of small increments of time, too numerous to discuss herein, when Tangy willfully incurred the loss of interim earnings by tardiness, early work departures, and brief absences for personal reasons, including a desire for more sleep. Contrary to the General Counsel and the Union, I find that these willful and grossly negligent work avoidances neces- sitate an increase to the interim earnings offset claimed by the General Counsel in the backpay specification, as amended at trial. 31 Tangy was domiciled in a boarding house. The Respondents argue that a further increase in interim earnings offset is due for periods of time Tangy had been dis- charged from three interim jobs for tardiness or absenteeism— Electrical Corp. of America, July 1995; Valid, March 1999, AVA Electric, July 1999—and for a layoff from Varco/Marc in June 1999 for medical reasons. The layoff from Varco/Marc was the consequence of medical problems arising from a carpal tunnel syndrome condition that arose as the result of previous interim employment. Those medical problems did not prevent Tangy from subsequently seeking and obtaining equivalent with J. E. Richards. Thus, his condition did not remove him from the labor market for a significant time. In any event, he would not have suffered the injury had he not been forced to seek interim employment because of his unlawful discharge. On July 9, 1999, Tangy was discharged from AVA for fail- ing to report in to work for 1 day, July 8, having worked 8-hour days from June 28 to July 7. The Respondents did not adduce evidence as to whether Tangy had been on notice that a failure to appear for work for 1 day would result in his discharge. The remaining discharges were premised upon tardiness or absen- teeism. It is unclear from the record precisely the remaining duration of the jobs and the extent of interim employment that was lost because of these terminations. On about a half-dozen occasions, Tangy declined job refer- rals from the Union.32 In September 1995, he turned down a 6- week referral in order to obtain a longer term employment, which he did in fact obtain in Michigan for a period of almost 10 months. A declined referral in August 1996 resulted in the acceptance of another referral on the same date to Truland Electric. Tangy declined a referral on March 12, 1997, but the Respondents failed to elicit from Tangy the reasons for his action. Tangy turned down two referrals on March 25, 1997, i.e., Central Intelligence Agency headquarters in McLean, Virginia, and a jobsite at the Federal Triangle in downtown Washington, D.C. He did so because he claimed that parking facilities were unavailable or inadequate and traffic was intolerable. Examina- tion of Tangy did not seek to and did not establish that substan- tially equivalent inconveniences existed at DLB jobsites. Un- der Board law, I am constrained to resolve all doubts in Tangy’s favor. On March 27, 1997, Tangy declined a referral to Marlin Electric because of the overtime involved. However, he re- turned to the union hiring hall and immediately obtained a re- ferral to 43 weeks of steady employment at Heller Electric, thereby resulting in no willful loss of earnings. On April 2, Tangy declined a referral but he could not recall the circum- stances. The Respondents failed to establish that the referral was to a substantially equivalent job of any significant duration. Again, any doubts must be resolved in Tangy’s favor. On April 6, Tangy turned down a job referral to an Ashburn, Virginia jobsite because he was ill with flu-like symptoms. The Re- spondents again failed to establish that the job was for any sig- 32 It is unnecessary to discuss referrals to jobs that were manifestly nonequivalent, e.g., out-of-state jobs requiring lodging away from home. D. L. BAKER, INC. 565 nificant duration. On April 19, 1999, he obtained a referral to Varco/Marc which he accepted. b. Analysis Based upon the entire history of Tangy’s work search and work retention record, I must find that except for the limited areas specifically noted above, the Respondents have failed to prove that he willfully avoided substantially equivalent work or had culpably failed to retain substantially equivalent work. The Respondents erroneously equate substantially equivalent em- ployment to the wage scale and benefits actually paid to Tangy by DLB in December 1993. However, had it not been for DLB’s adjudicated unlawful conduct, Tangy would have been paid not a mere $13 per hour but the very much higher union contract rate of $21.45, with successive raises as well as having had all union contract fringe benefits. To impose upon Tangy an obligation to seek and retain jobs paying significantly less than the union wage scale and/or without union contract bene- fits, would be to allow the Respondents to profit by DLB’s unlawful conduct. Accordingly, I find that Tangy’s obligation was to seek and retain the substantially equivalent employment that DLB would have afforded him in December 1993 had it not violated the Act. Accordingly, despite the fact that Tangy had sought and ob- tained nonunion jobs before his DLB employment, I find that he was not obliged to search out such employment that was not substantially equivalent to what he was due at DLB. Further- more, after his discharge, since he was not obliged to accept non-equivalent employment in the first place, he was free to quit such employment and was not culpable if discharged from same. Newport News Shipbuilding, supra; Alaska Pulp Corp., supra. If anything, Tangy’s reliance and focus upon union contractor employment increased his prospect of obtaining greater interim earnings rather than diminishing it. The Re- spondents adduced no independent evidence of any substance to demonstrate that actual employment for any specific period of time was available to Tangy which was lost to him because of his lack of reasonable diligence. The Respondents even failed to establish with any certainty the specific amount of work that actually occurred at most of the jobsites from which Tangy quit or was discharged. With respect to voluntary termination, before the burden of proof shifts to the General Counsel to show that the job was burdensome or arduous or that quitting was reasonable, the Respondents must prove that such interim employment was substantially equivalent. Minette Mills, Inc., 316 NLRB 1009, 1010 (1995). Even if an equivalent job is involved, a discrimi- natee is free to quit if it is unprestigious, annoying, or disrup- tive to his private life. Newport News Shipbuilders & Dry Dock Co., supra, at 1033. With respect to employment at Fishback & Moore in Clarks- burg, West Virginia, and Triangle Electric in Detroit, Michigan, this was not equivalent employment for the obvious reason that it entailed living away from home with incurred lodging and travel expenses. U.S. Postal Service work is patently not equivalent work. I find that Tangy was justified in leaving his Northside Electric out-of-town job which paid only 80 percent of equivalent wages due him to seek out and find a higher pay- ing job 3 days later. With respect to American Combustion, it is unclear form the record just what part absenteeism played in the deterioration of Tangy’s relationship with his foreman. Again, Tangy gets the benefit of the doubt since the Respondents failed to clear it up. I conclude that a hostile working relationship is sufficient justi- fication for Tangy to have quit and does not constitute an un- reasonable reason to quit nor does it constitute a willful loss of earnings. With respect to the abandonment of Tradesmen as a job referral source, there is no evidence that any actual equiva- lent work was available through it or elsewhere at that period of time or that Tangy willfully avoided any actual substantially equivalent employment opportunity. A mere discharge from substantially equivalent interim em- ployment of itself does not constitute a willful loss of employ- ment. The Respondents must show deliberate or gross miscon- duct by the discharged employee to prove willful loss of em- ployment. Minette Mills, Inc., supra at 1010; Ryder System, 302 NLRB 608, 610 (1991), enfd. 983 F.2d 705 (6th Cir. 1993). I conclude that Tangy’s lack of punctuality and absenteeism was not proven so gross as to constitute a willful intention to incur a loss of equivalent employment by “courting discharge.” Basin Frozen Foods, 320 NLRB 1072, 1077 (1996). Newport Newport News Shipbuilding, supra at 1030 fn. 1. I further con- clude that there is a lack of probative evidence as to the actual impact the early termination of these jobs had upon his interim earnings. With respect to Tangy’s failure to accept certain job referrals from the union hiring hall, the Respondent not only has the burden of proving that the jobs were substantially equivalent (not just with respect to wage rate) but that Tangy’s conduct was unjustifiable. Newport News Shipbuilding, supra at 1033. I find that the Respondents have not met that burden of proof for the reasons set forth above. Further, the Respondents have not proven that the jobs declined were substantially equivalent other than wage rate, that they actually commenced, the dura- tion of the job, and what amount of earnings were lost by Tangy’s nonacceptance of those referrals. 4. Overtime as offset The compliance specification set forth interim earnings cal- culated from Tangy’s paycheck stubs from interim employers for every quarter for the entire backpay period. These stubs distinguish overtime earnings from regular or “straight” time earnings. As the General Counsel observes in the brief: Board law establishes that in offsetting earnings from interim employers, like hours are offset from like hours. Only interim earnings based on the same number of hours as would have been available at the gross employer is offset against gross back pay. United Aircraft Corp., 204 NLRB 1068, 1073– 1074 (1973); E. D. P. Medical Computer Systems, 293 NLRB 857, 858 (1989). I agree with the General Counsel that, by virtue of the Board’s Order granting summary judgment that accepted the calculation of only regular hours for gross pay Tangy would have earned at DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 566 DLB, the compliance officer properly excluded any interim overtime as offset to interim earnings. 5. Expenses Expenses that a discriminatee incurs in searching for and maintaining interim employment beyond what he would have incurred in employment at the gross employer must be sub- tracted from the interim earnings offset, e.g., travel, lodging, telephone, food, etc. Aircraft & Helicopter Leasing, 227 NLRB 644, 649 (1976); UARCO, Inc., 294 NLRB 96, 102 (1989). The General Counsel seeks expenses offset to the interim earnings based upon receipts for expenses incurred in the search for and maintenance of work stipulated into evidence, as well as telephone logs and bills. The compliance officer testi- fied that she calculated lodging expenses from Tangy’s quar- terly questionnaire submitted to her during the investigation, as well as receipts produced at trial pursuant to the Respondents’ subpoenae. Where there was a discrepancy between the re- ported amount and the receipts in evidence, she calculated the higher amount and resolved all doubts in favor of Tangy. I conclude that she acted properly. Based upon Tangy’s gener- ally cooperative and candid, if not pleasant, demeanor in pro- ducing and explaining his journals and receipts, I credit his testimony. See Coronet Foods, Inc., 322 NLRB 837 (1997). The General Counsel also seeks the differences in union dues assessed upon Tangy by out-of-town local unions and that which was assessed by the Charging Party Union, as evidenced by paycheck stubs. The General Counsel in the brief withdraws all claims for out-of-town meals expenses inasmuch as Tangy candidly admitted in adverse examination that he most likely spent as much money upon food when employed locally as he did when employed out of town. The totality of interim em- ployment expenses now claimed is $17,464.55, down from about $25,000 originally claimed in the original compliance specification in consequence of evidence adduced at trial. The Respondents challenge the claim for Tangy’s out-of- town lodging expenses and related expenses, claiming that he, by choice, took on a “nomadic” lifestyle. I find that the record fails to support that position. Tangy maintained his residence in Maryland and returned there for such necessities as renewing his driver’s license and maintaining a townhouse. He rented a room in a boarding house in Maryland and was a registered Maryland voter. Tangy credibly testified that he traveled out of state to seek jobs became of the dearth of local employment. I find that he is entitled to lodging, laundry, telephone, travel, mileage, higher union dues, highway tools, and medical ex- penses incurred as a result of out-of-town interim employment as claimed by the General Counsel. I reject the Respondents’ argument that Tangy voluntarily took up a so-called nomadic lifestyle and, therefore, should bear the brunt of expenses entailed in out-of-town work. The Respondents ignore the fact that Tangy was put in the position of hunting for work wherever he could because of DLB’s unlawful conduct. Having forced Tangy into a work search, the Respondents have little standing to criticize Tangy for seeking out and accepting nonequivalent, out-of-town work, notwith- standing inherent additional expenses, including return visits to his residence in Maryland. The Respondent have failed to prove that by doing so, Tangy willfully avoided substantially equivalent local work that was clearly available at known em- ployers for a reasonably certain period of time for which fully equivalent pay, benefits, and fully equivalent conditions of employment would have been afforded with some degree of certainty. Accordingly, I find that the General Counsel’s ex- penses claim, as set forth in the brief by calendar quarters, for lodging, transportation, telephone, union dues and other inci- dentals expenses necessary to seek and maintain interim em- ployment is fully warranted. D. Conclusions I find that the calendar quarter calculations set forth in ap- pendix F of the General Counsel’s brief as an alternative pro- posed remedy comport with my conclusions above and with my independent review of the record. I hereby adopt those calcula- tions in my findings and incorporate it in this decision as ap- pendix A.33 I find that for the entire backpay period, Tangy is due a net backpay of $85,407.66, after having subtracted net interim earnings of $249,514.24 ($266,978.74 interim earnings minus $17,464.55 expenses) from a gross backpay he would have earned at the Respondents of $331.430.40. I also find that he is due $217.35 for medical expenses incurred in interim employ- ment in the first quarter of 1996.34 VII. FUND CONTRIBUTIONS Compliance specification paragraph 37 and its subsections set forth a claim for payments into seven benefits funds that were obliged to have been made by the Respondents on behalf of Tangy during his period of employment under the terms of the NECA–Union Inside Wireman Master Agreement for the period up to its repudiation, which it is claimed by the General Counsel in the specification to be May 28, 1997. The funds are designated in the agreement as Welfare Trust Fund (Welfare Fund), article VII; Pension Trust Fund (Pension Fund), article IX; Individual Account Fund (IAF), article XII; Joint Appren- ticeship and Training Committee (JATC), article VII; Labor Relations Cooperation Fund (LMCF), article XIX; and National Labor-Management Cooperation Fund (NLMCF), article XVIII; and National Electrical Benefit Fund, article VI. As found above, the contract was repudiated as of the com- mencement of October 5.35 The record evidence supports the General Counsel’s calculations in the brief as to what the Re- spondents should have paid to the remaining funds on Tangy’s behalf. I fix the termination period of this debt as the third quarter of 1994. I consider the loss in the fourth quarter of 1994 to be de minimis. Accordingly, based upon the record evidence and my findings as to interim earnings, I find that the 33 The Union and the General Counsel, contrary to my findings, would not add to interim earnings offset those numerous “minute in- crements” of worktime lost by Tangy due to persistent tardiness or early departures. The alternate remedy does calculate an offset. 34 This figure of net backpay is substantially lower than a claim, at one point in the trial, for over $121,000 in net backpay. The General Counsel in the brief seeks a net backpay claim of $95,278.21 35 The LMCF and NLMCF funds are not applicable to 1993–1994. D. L. BAKER, INC. 567 Respondents DLB and BEI owe the following amounts to the respective funds: HOURS WORKED GROSS WELFARE FUND INTERIM EMPLOYER CONTRIB. NET WELFARE DUE 4th Qtr./93 160 $ 257.60 $ 90.17 $ 167.44 1st Qtr./94 520 837.20 707.60 126.61 2d Qrt./94 520 837.20 682.64 154.56 3d Qrt./94 520 837.20 747.04 90.16 $ 538.77 HOURS WORKED GROSS PENSION FUND INTERIM EMPLOYER CONTRIB. NET PENSION DUE 4th Qtr./93 160 $ 128.00 $ 44.80 $ 83.20 1st Qtr./94 520 416.00 351.60 64.40 2d Qrt./94 520 416.00 339.20 76.80 3d Qrt./94 520 416.00 371.20 44.80 $ 269.20 HOURS WORKED GROSS IAF FUND INTERIM EMPLOYER CONTRIB. NET IAF DUE 4th Qtr./93 160 $ 272.00 $ 95.20 $ 176.80 1st Qtr./94 520 884.00 747.15 136.85 2d Qrt./94 520 884.00 720.80 163.20 3d Qrt./94 520 884.00 788.80 95.20 $ 482.05 HOURS WORKED GROSS JATC FUND INTERIM EMPLOYER CONTRIB. NET JATC DUE 4th Qtr./93 160 $ 24.00 $ 8.40 $ 15.60 1st Qtr./94 520 78.00 65.93 12.08 2d Qrt./94 520 78.00 63.60 14.40 3d Qrt./94 520 78.00 69.60 8.40 $ 50.48 HOURS WORKED GROSS NEBF FUND INTERIM EMPLOYER CONTRIB. NET NEBF DUE 4th Qtr./93 160 $ 104.00 $ 36.40 $ 67.60 1st Qtr./94 520 338.00 285.68 52.33 2d Qrt./94 520 338.00 275.60 62.40 3d Qrt./94 520 338.00 301.60 36.40 $ 218.73 On these findings of fact and conclusions of law and on the entire record, I issue the following recommended36 36 If no exceptions are filed as provided by Sec. 102.46 of the Board’s Rules and Regulations, the findings, conclusions, and recom- mended Order shall, as provided in Sec. 102.48 of the Rules, be ORDER The Respondents, D. L. Baker, Inc. t/a Baker Electric and its alter ego and successor, Baker Electric, Inc., their officers, agents, successors and assigns, shall individually or jointly pay to Michael Tangy $85,407.66 net backpay due him and $217.35 for medical expenses incurred during interim employment, with interest to be computed in the manner prescribed in New Hori- zons for the Retarded, 283 NLRB 1173 (1987), minus tax with- holdings recognized by State and Federal laws, and shall pay the appropriate fringe trust funds, as obliged under the applica- ble NECA–Union Inside Wireman Master Agreement, moneys due them as found above in this decision with interest to be computed in the manner set forth in New Horizons for the Re- tarded, ibid. Finally, with respect to the remaining unresolved backpay specification issues, I issue the following. ORDER OF SEVERANCE AND REMAND For the reasons set forth above, I sever and remand to the chief administrative law judge for assignment to another judge: 1. To resolve the issues of the make-whole remedy for the Respondents’ “employees in the bargaining unit, as well as those individuals who were denied an opportunity to work, for any losses suffered as a result of [their] failure to abide by the applicable NECA–Union Inside Wireman Master Agreement,” including all required fringe benefit contributions as well as any expenses that were incurred from the failure to make contribu- tions; compliance specification, paragraphs 16, 17(a)–(i); 18, 19, and 20(a)–(e); 2. To resolve the issues of the Respondents’ noncompliance with the hiring hall provisions of the applicable NECA–Union Inside Wireman Master Agreement and the make-whole rem- edy for individuals who suffered loss of work opportunity and other losses in consequence thereof; compliance specification, paragraphs 21, 22(a)–(b), 23(a)–(k), 24(a)–(i), 25, 26, 27, 28, 29(a)–(g), 30, and 39(a)–(g); 3. To resolve the issues of the derivative liability of Hern- don Animal Medical Center, Inc., raised by virtue of the Board’s October 11, 2000 order granting General Counsel’s August 1, 2000 motion to amend the compliance specification (GC Exh. 169), amended paragraph 9 insofar as it alleged that Daniel L. Baker diverted to himself assets of Herndon Animal Medical Center, Inc. “in an effort to render the Respondents insolvent and make them incapable of fulfilling their obliga- tion”; amended paragraph 39 insofar as it alleges that Herndon Animal Medical Center, Inc., is “individually and jointly and severally liable” with the Respondents for the make-whole remedy; and the following added paragraphs 40 through 44 only as they pertain to Herndon Animal Medical Center, Inc.: 40. At all material times prior to April 4, 2000, Hern- don Animal Medical Center has been owned by Maggie Barry, a sole proprietorship, doing business as Herndon Animal Medical Center. adopted by the Board and all objections to them shall be deemed waived for all purposes. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 568 41. On April 4, 2000, the Herndon Animal Medical Center formally became a corporation and was thereafter known as Herndon Animal Medical Center Inc. (Respon- dent Herndon.) 42. At all material times, Maggie Barry has held the position of Registered Agent and Owner of Respondent Herndon and has been a supervisor of Respondent Hern- don within the meaning of Section 2(11) of the Act and agent of Respondent Herndon within the meaning of Sec- tion 2(13) of the Act. 43. At all material times, Respondent D.L. Baker and Maggie Barry have engaged in the commingling of Re- spondents D.L. Baker, Baker, Herndon, Daniel L. Baker and Maggie Barry’s assets. 44. Based on the conduct described above in Para- graph 40, Respondent Herndon is an alter ego to Respon- dents and thus jointly and severally liable for remedying Respondent D.L. Baker’s unfair labor practices, including the payment of backpay, interest and other relief required by the Board’s Order as enforced by the Court. It is recommended that the remanded portion to these cases be designated Cases 5–CA–24131A and 5–CA–24190A. APPENDIX A Case Name: D.L. Baker, Inc. t/a Baker Electric, Case Nos: 5–CA–24131, et al., Employee: Michael Tangy Regular H ours Wage Rate Calendar Quarter Gross Backpay Calendar Quarter Interim Earnings Calendar Quarter Interim Expenses Calendar Quarter Net Interim Earnings Calendar Quarter Net Backpay Calendar Quarter Medical Expenses 4thQ/93 160 $ 21.45 $ 3,432.00 $ 1,809.60 $ 364.15 $ 1,445.45 $ 1,986.55 $ - 1stQ/94 520 $ 21.45 $ 11,154.00 $ 7,203.92 $ 820.39 $ 6,383.53 $ 4,770.47 - 2dQ/94 520 21.45/21.70 11,190.00 9,233.20 268.18 8,965.02 2,224.98 - 3dQ/94 520 21.70 11,284.00 8,597.60 637.25 7,960.35 3,323.65 - 4thQ/94 520 $ 21.70/22.20 $ 11,617.60 $ 3,839.60 $ 300.51 $ 3,539.09 $ 8,078.51 $ - 1stQ/95 520 $ 2.20 $ 11,544.00 $ 10,656.00 $ - $ 10,656.00 $ 888.00 $ - 2dQ/95 520 22.20/22.70 11,624.00 8,013.41 1,900.08 6,113.33 5,510.67 - 3dQ/95 520 22.70 11,804.00 7,412.28 2,945.14 4,467.14 7,336.86 - 4thQ/95 520 $ 22.70/23.20 $ 11,964.00 $ 11,123.48 $ 3,164.06 $ 7,959.43 $ 4,004.58 $ - 1stQ/96 520 $ 23.20 $ 12,064.00 $ 7,714.47 $ 999.42 $ 6,715.06 $ 5,348.95 $ 217.35 2dQ/96 520 23.20 12,064.00 13,645.44 2,114.88 11,530 56 533.44 - 3dQ/96 520 23.20 12,064.00 10,32880 1,296.47 9,032.33 3,031.67 - 4thQ/96 520 $ 23.20/24.05 $ 12,227.20 $ 7,490.32 $ 1,320.89 $ 6,169.43 $ 6,057.77 $ - 1stQ/97 520 $ 24.05 $ 12,506.00 $ 4,522.40 $ 1,196.18 $ 3,326.22 $ 9,179.78 $ - 2dQ/97 520 24.05 12,506.00 13,259.10 - 13,259.10 - - 3dQ/97 520 24.05 12,506.00 11,498.00 - 11,498.00 1,008.00 - 4thQ/97 520 $ 24.05 $ 12,506.00 $ 11,844.00 $ - $ 11,844.00 $ 662.00 $ - 1stQ/98 520 $ 24.05 $ 12,506.00 $ 4,520.70 $ 43.40 $ 4,417.30 $ 8,028.70 $ - 2dQ/98 520 24.05 12,506.00 0,697.93 - 10,697.93 1,808.07 - 3dQ/98 520 24.05 12,506.00 11,887.80 - 11,887.80 618.20 - 4thQ/98 520 $ 24.05 $ 12,506.00 $ 12,842.40 $ - $ 12,842.40 $ - $ - 1stQ/99 520 $ 24.05 $ 12,506.00 $ 8,448.00 $ - $ 8,448.00 $ 4,058.00 $ - 2dQ/99 520 24.05 12,506.00 8,688.34 93.56 8,594.78 3,911.22 - 3dQ/99 520 24.05 12,506.00 1,948.00 - 11,948.00 558.00 - 4thQ/99 520 $ 24.05 $ 12,506.00 $ 13,764.00 $ - $ 13,764.00 $ - $ - lstQ/00 520 $ 24.05 $ 12,506.00 $ 13,650.00 $ - $ 13,650.00 $ - $ - 2dQ/00 520 24.05 12,506.00 12,290.00 - 12,290.00 216.00 - 3dQ/00 512 $ 24.05 $ 12,313.60 $ 10,050.00 $ - $ 10,050.00 $ 2,263.60 $ - 14192 $ 331,430.40 $ 266,978.79 $ 17,464.55 $ 249,514.24 $ 85,40766 $ 217.35