Eagle Express Company1 And Buzzard Rentals, Inc.

EAGLE EXPRESS CO .501 Fred E. Fugazzi, Jr., Trustee in Bankruptcy for - Eagle Express Company' and Buzzard Rentals, Inc. and Truckdrivers, Chauffeurs & Helpers Local Union No. 100, an affiliate of Interna- tional Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America and Teamsters Local 651, affiliated With the Inter- national Brotherhood of Teamsters, Chauffeurs, Warehousemen and Heljiers of America and General Drivers, Warehousemen & Helpers Local 89, affiliated with the International Brotherhood of Teamsters, Chauffeurs, Ware; housemen & Helpers of America. Cases 9-CA- 18451, 9-CA-18462, and 9-CA-18466-1 14 December 1984 DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS HUNTER AND DENNIS On 21 October 1983 Administrative Law Judge Thomas A. Ricci issued the attached decision. The General Counsel -filed exceptions and a supporting brief, to which Respondent Buzzard Rentals filed an answering brief: Respondent Buzzard Rentals also filed exceptions and a supporting brief. . The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. The Board has considered the decision and the record in light of the exceptionsand briefs and has decided to affirm the judge's rulings, findings, 2 and conclusions as modified and to adopt the recom- mended Order as mOdified. 3 . • ,The complaint allegations pertain to incidents which occurred during January-December 1982 A petition for involuntary bankruptcy was filed against Eagle Express Company in February 1983 Eagle Express Was ad- judged a bankrupt corpOration on 22'May 1983 and Fred E Fugazzi Jr was appointed a trustee in bankruptcy thereafter 2 The General Counsel has eicepted to some of the judge's credibility findings The Board's established policy is not to Overrule an administra- tive law_ judge's credibility resolutions unless the clear preponderance of all' the relevant evidence 'convinces us that they are incorrect Standard Dry' Wall Produets, 91 NLRB 544 (1950), •enfd .188 F 2d 362 (3d Cm 1951) We have carefully examined the fecord,and find no basis for re- versing the findings ' 3 In ladopting the judge's conclusion that Respondent Eagle violated Sec ,8(a)(5) and (1) by failing to notify and bargain with the Union over the wage reduction in January 1982, we find It unnecessary to rely on his citation to Los Angeles Marine Hardware 'Co 235 NLRB 720 (1978) Fur- the'r; in adopting the judge's finding that the.partiei reached Impasse and that the Respondent thereafter was free to implement its final offer, in- cluding a reduction in wages, we find this case distinguishable from Bed- ford Farmers Codperauve, 259 NLRB 1226 (1982) In that case, the Board - found, inter aim, that the respondent violated Sec 8(a)(5) and (1) when It Implemented a unilateral reduction in employees' working hours In so doing, the Board rejected the respondent's contention that the existence of an Impasse excused this unilateral action, noting that the reduction in hours occurred several weeks pnor to the parties' first negotiating ses- suin The Board Also found that 'respondent violated Sec 8(a)(5) and (1) when, dunng negotiations, .it unilaterally, and in a manner contrary to a procedure to which the parties had tentatively agreed in a previous nego- tiating session, changed the method of computing overtime By contrast, although the Respondent herein was found to have violated Sec 8(a)(5) The judge found, inter alia, that Respondents Eagle Express Company and Buzzard Rentals, Inc. were engaged' in substantially similar business oper- ations and had ownership, employees, equipment, and customers in common. Based on these findings, the judge concluded that these companies were alter egos and thus jointly liable -for_ the unfair labor practices found in this proceeding. 'Respond- ent Buzzard has excepted to this finding. We find merit in this exception.. The facts are summarized as follows. In June 1978, Long Investment Co., of which Paul Long was president- and sole 'shareholder, purchased Eagle sExpress. Company. This company, which possessed . operating. authority from the Interstate Commerce Commission and the Kentucky Depart- ment of Transportation, operated as an intrastate!- interstate :motor carrier providing less than truck- load service between its terminals located in Ken- tucky, Ohio, and Tennessee. 4 In October 1981, Long_ formed Buzzard • Rentals, Inc. Long, who was also president of Buzzard Rentals, owned 35 percent of the shares of this company; the remain- ing shares were owned by various members of his family. The principal business of Buzzard Rentals, which was located 'in Lexington, Kentucky, was to provide equipment leasing and maintenance serv- ices to a number of motor carriers, including Eakle Express. - In addition, Buzzard Rentals, which did not possess interstate operating authority, provided some local cartage service for Eagle Express and trip leasing services to other motor carriers. In 1981, Eagle began experiencing financial diffi- culties attributable in part to Federal deregulation of the 'trucking industry. Its financial situation steadily -deteriorated' through 1982. On 17 Decem- ber 1982, after having laid off drivers at its Louis- ville, Cincinnati, and Lexington terminals, Eagle ceased freight operations. Thereafter, its assets, in- cluding its operating authority and its equipment, were reassigned to • its former owners. On 20 De- cember 1982 Buzzard began . operating in Lexington and Louisville as cartage agent for Express Serv- When It unilaterally reduced Wages in January 1982, the record shows that. reduced wages subsequently were discussed in the parties' negotiat- ing sessions and were set forth as part of the Respondent's final offer which was Implemented only after the parties reached impasse Finally, We correct the judge's inadvertent error in referring to an 8(a)(3) allega- tion at par 1 of the portion of his decision entitled- "Statement of the Case", the complaint contains no such allegation In 'adopting the judge's finding that the paities reached Impasse on 17 May 1982 and Respondent Eagle therefore did not violate the-Act when It implemented its final offer, Member Dennis finds it unnecessary to rely on the judge's discussion of when the Union 'filed unfair labor practice charges 4 At the time of purchase, there were six terminals ,Somerset, Louis- ville, Lexington, and London. Kentucky, Cincinnati, Ohio, and Knox- ville, Tennessee Terminals in London and Knoxville were subsequently sold at unspecified times in 1980 and 1981 273 NLRB No. 79 502 DECISIONS OF NATIONAL LABOR RELATIONS BOARD \ ice, Inc., an interstate trucking company which had been formed by the assignees of the defunct Eagle. In this capacity, Buzzard transported a portion of the freight previously handled by Eagle for a number of the same customers previously serviced by Eagle. . In considering the allegation that Eagle and Buz- zard were alter egos, we note first that the ,record shows that Eagle ceased operations for economic reasons unrelated to the Union. The record also shows that Buzzard existed as a separate . business entity at least 1 year prior to Eagle's demise. Fur- ther, there is no evidence that Buzzard was con- ceived or established as a "disguised continuance" for the purpose of evading Eagle's contractual obli- gations or in an effort to avoid dealing - with the union representative of its employees: In these cir- cumstances, the Board generally will find alter ego status only if the two enterprises in question have substantially identical ownership, .management, business purpose, operation, equipment, , customers, and supervision. See Crawford Door Sales -Co., 226 NLRB 1144 (1976). , _ In this case, it is clear that Eagle and Buzzard had substantially identical ownership by the Long family. Additionally, Paul Long as president of both companies was responsible for- their overall management. However, although both companies were technically involved in hauling freight, there was little similarity in their business purposes or methods of operation. Prior to its demise, Eagle employed approximately 50 drivers, held interstate operating authority, and maintained four terminals -in several States. By contrast, Buzzard, a leasing and maintenance company which provided some cartage service, employed three drivers and main- tained one facility. Further, the, record shows that Buzzard owned equipment previously owned by Eagle and that this equipment was obtained at fair market prices based on independent appraisals. Fi- nally, the record reveals that after Eagle's demise Buzzard performed freight services, for a reduced number of the same customers previously serviced by Eagle. The record, however, does not indicate what percentage of Express Service's business were former Eagle customers nor does it contain evi- dence regarding the way in which Buzzard and Eagle were organized with respect to their lower level management. In light of these circumstances, we ,find that, al- though Eagle and Buzzard had substantially identi- cal ownership and upper level management, their business purposes and methods of operation were dissimilar. We also find that the portion of Buzzard equipment previously owned by Eagle was ob- tained at fair market prices and that Buzzard per- formed freight services for only a portion of the same customers previously serviced by Eagle. Thus, we find, contrary to the judge, that the Gen- eral Counsel has not established that these compa- nies were alter egos 5 and that Buzzard is not liable for the unfair labor practices found in this proceed- ing. The judge also dismissed a portion of the com- plaint alleging that Respondent Eagle violated Sec- tion 8(a)(5) and (1) by failing to bargain over driver layoffs and use of Buzzard employees. In so doing, the judge found that the layoff at the Louis- ville terminal coincided with a decision among Louisville employees to strike. The General Coun- sel has excepted to this finding, contending that the judge erred in construing the facts as the record shows that the Louisville strike vote occurred sub- sequent to the employees' layoff. Undisputed testimony shows that in November 1982 Long began negotiating with a nonunion local cartage operator, Kentucky Transport, to provide cartage services at the Louisville terminal. Pursu- ant to these negotiations, these parties signed a contract on 10 December 1982, the day on which Eagle laid off city drivers and dockmeir employed at its Louisville terminal. Thereafter, employees voted to strike and on 13 December 1982 began picketing at the terminal. Thus, we find in agree- ment with the General Counsel that the record clearly shows that the strike vote and picketing oc- curred subsequent to the closing of the Louisville terminal and layoff of its employees. However, not- withstanding these factual findings, we agree, for the reasons set forth, infra, with the judge's deci- sion to dismiss the 8(a)(5) allegation pertaining to the layoff of Louisville employees. The pertinent complaint allegations state: [9] (c) Since late December- 1982, Respondent Eagle, at its [terminal] located at 'Louisville, Kentucky . . . laid off employeesin the [unit] described above . . . utilizing , the employees of Respondent Buzzard. (d) Respondents engaged in the acts and conduct described above. . . without the con- sent of, and without having afforded the Unions an opportunity to negotiate and bar- gain as the exclusive representative of the em- ployees. . . with respect to such acts and con- duct and without having bargained to a good faith impasse over such terms and conditions of employment. [10] By the acts and conduct described above . . . and by each of said acts, Respondents 5 See, e g, Chippewa Motor Freight, 261 NLRB 455 (1982) EAGLE EXPRESS CO 503 , have failed and refused, and are failing and re- fusing, to bargain collectively with the repre- sentative of its employees, and Respondents thereby have been engaging in unfair labor practices within the meaning of Section 8(a)(1) and (5) of the Act. The General Counsel's exclusive theory, as al- leged in the complaint and advanced at the hear- ing, was that Eagle never ceased doing business but continued to operate through its alter ego Buzzard. Thus, the General Counsel contends that, in laying off its employees and using the employees of Buz- zard without the consent of and without having af- forded the Unions an opportunity to bargain over this conduct, Eagle/Buzzard effected an unlawful transfer of unit work. However, for reasons stated above, we have determined that Eagle and Buzzard are not alter egos. There is also no evidence that employees of Buzzard or, for that matter, Ken- tucky Transport were performing the work previ- ously performed by unit employees of Eagle. We thus find that, in light of immediate events, what is involved here is not a work transfer, but rather a decision to close down operations. It is clear that when an employer decides to ter- minate or close its entire operations, once that deci- sion is made, it must afford the employees' collec- tive-bargaining representative the opportunity to bargain over the impact and effect of that decision on employees. 6 However, in examining the com- plaint, we find no mention, even in.the alternative, of a failure to bargain over the effects of Eagle's decision to close down its operations. We thus find the complaint defective as we find that, although the General Counsel is entitled to rely on alterna- tive. theories, the Respondent is also entitled to proper notice that this is being done. In this in- stance, we find that the lack of notice of a possible 'alternative theory has precluded full and fair litiga- tion of this issue. Accordingly, we shall dismiss this portion of the complaint.7 AMENDED REMEDY § , Having found that Respondent Eagle has en- gaged in certain unfair labor practices within the 6 Om Elevator Go, 269 NLRB 891 (1984), First National Maintenance Corp v NLRB, 452 U S 666 (1981) 7 Member Dennis concurs in the dismissal 'of this complaint allegation on the grounds that Respondent Eagle's decision to lay off employees re- sulted from its decision to close down operations and that the issue whether Respondent Eagle violated the Act by failing to bargain about the effects of the decision was not fully litigated The judge's remedy and recommended Order are modified to reflect Our finding that Eagle Express and Buzzard Rentals are not alter egos and that Buzzard Rentals therefore is not liable for the unfair labor prac- tices found Also the amended remedy and Order correct the judge's fail- ure to include a provision for the method of computation of backpay and interest which may be due discnmmatees meaning of the Act, we shall order it to cease and desist therefrom and to take affirmative action de- signed to effectuate the policies of the Act. Respondent Eagle shall make employees whole for all losses suffered as a result of the Respond- ent's failure to pay contractual wage rates from 11 January 1982 when the Respondent implemented wage reductions until 17 May 1982 when the Re- spondent and the Union reached impasse during negotiations for a new contract. Employees shall also be made whole for losses suffered as a result of the Respondent's failure to pay contractual cost- of-living increases on 1 April 1982. Such sums shall be computed in the manner set forth in Ogle Protec- tion Service, 183 NLRB 682, 683 (1970), with inter- est as prescribed in Florida Steel Corp., 231 NLRB 651 (1977). See generally Isis Plumbing Co., 138 NLRB 716 (1962). ORDER The National Labor Relations Board adopts the recommended Order of the administrative law judge as modified below and orders that the Re- spondent, Eagle Express Company, Somerset, Ken- tucky, its officers, agents, successors, and assigns, shall take the action set forth in the Order as modi- fied. -1. Substitute the following as paragraph 2(a). -"(a) Make whole all employees for losses suf- fered as a result of the Respondent's failure to pay employees contractual wage rates from 11 January through 17 May 1982 and failure to pay employees contractual cost-of-living increases due 1 April 1982 as set forth in the 'Amended Remedy." 2. Substitute the attached notice for that of the administrative law judge. APPENDIX NOTICE TO EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The National Labor 'Relations Board has found that we have violated the National Labor Relations Act and has ordered us to post and abide by this notice. WE WILL NOT deal directly with our employees concerning matters pertaining to conditions of em- ployment while failing to bargain in good faith with their established collective-bargaining agent, Truckdrivers, Chauffeurs, Warehousemen & Help- ers Local 100, Teamsters Local 651, and General Drivers, Warehousemen & Helpers Local Union No. 89, all affiliated with International Brother- 504 DECISIONS OF NATIONAL LABOR RELATIONS BOARD hood of Teamsters, Chauffeurs, Warehousemen and Helpers of America. WE WILL NOT reduce the wages of any of our employees while failing to bargain in good faith with their established bargaining agent. WE WILL NOT fail to pay our employees contrac- tually guaranteed cost-of-living allowances while failing to bargain in good faith with their estab- lished collective-bargaining agent. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exer- cise of ,the rights guaranteed you by Section 7 of the Act. WE WILL make whole all employees whose wages were illegally reduced by paying to them all lost wages throughout the period from 11 January to 17 May 1982, with interest, and WE WILL make whole all employees to whom we illegally denied cost-of-living increases due 1 April 1982, with in- terest. EAGLE EXPRESS COMPANY DECISION STATEMENT OF THE CASE THOMAS A. Ricci, Administrative Law Judge: A hear- ing in this proceeding was held on July 3 and August 5, 1983, at Lexington, Kentucky, on complaint of the Gen- eral Counsel against Fred E. Fugazzi, Jr., Trustee in Bankruptcy for Eagle Express Company and Buzzard Rentals, Inc., here in together called the Respondent. The complaint was issued on June 22, 1983, on separate charges filed on June 21 and June 24, 1982, by three sep- arate locals of the International Brotherhood of Team- sters, Chauffeurs, Warehousemen and Helpers of Amer- ica, herein called the Teamsters or the Union. The com- plaint alleges violations of Section 8(a)(1), (3), and (5) of the Act. An answer was filed only by Respondent Buz- zard Rentals, Inc. Briefs were filed after the close of the hearing by the General Counsel and by Respondent Buz- zard Rentals, Inc. On the entire record and from my observation of the witnesses, I make the following FINDINGS OF FACT I. THE BUSINESS OF THE RESPONDENT As set out below, Eagle Express Company and Buz- zard Rentals, Inc.' are one and the same, or alter egos, as alleged in the complaint. At all times material herein, Eagle Express, a Kentucky corporation with offices in several States, has been engaged in the interstate and intrastate transportation of freight by trucks. During the 12-month period ending in December 1982, it derived gross revenues in excess of $50,000 for the transportation of freight and commodities in interstate commerce from the State of Kentucky to points outside the State. Buz- zard Rentals, Inc, is also engaged in the transportation of freight in interstate commerce; in December 1982 it became a disguised continuance of Eagle Express. I find that the Respondent, Eagle Express Company and Buz- zard Rentals, Inc., is engaged in commerce within the meaning of the Act. II. THE LABOR ORGANIZATION INVOLVED I find that Truckdnvers, Chauffeurs kilelpers Local Union No. 100, Teamsters Local 651, and General Driv- ers, Warehousemen & Helpers Local 89, all affiliated with the International Brotherhood of Teamsters, Chauf- feurs, Warehousemen and Helpers of America, are labor organizations within the meaning of Section 2(5) of the Act. III. ALLEGED UNFAIR LABOR PRACTICES A. The Case in Brief The complaint names two companies as Respondents, Eagle Express Company and Buzzard Rentals, Inc., both in existence and doing business before the start of the events which gave rise to this proceeding. The unfair labor practices alleged can best be understood if taken in three separate parts. In January 1982 Eagle Express, then party to a continuing contract in effect with the Team- sters Union, the Charging Party here, acting unilaterally reduced the wages of all its employees in direct violation of its collective-bargaining agreement, with no regard to the existence of the bargaining representative. The first question presented therefore is: Was such action a viola- tion of Section 8(a)(5) of the Act? The contract with the Teamsters expired on March 31, 1982, and the parties met a number of times in negotiations. Despite four such sessions, Eagle Express Company was unable to persuade the Union to agree to its proposals, which in substance aimed at obtaining the Union's approval of the reduced wages it had put in effect earlier, in January In May 1982, convinced that it could never persuade the Union to accept its economic demands, the Company put its last offer in effect, in reality, continuing the reduced wages it had started in January The next question, there- fore, is: Had an impasse in bargaining been reached such as to justify the Company's action in implementing the offer the Union had persistently refused to accept? Buzzard Rentals, Inc., the other Respondent named here, came into the picture in December 1982. It had long been in the trucking business, not as a regular oper- ator but as a leasing company, as explained below it is owned and operated by the same man who owns Eagle Express The property of Eagle Express was repossessed by a creditor on December 17, 1982, and Buzzard started taking over the business that Eagle use to do The third question is: Is Buzzard Rentals an alter ego of Eagle Ex- press so that it is today liable for any obligations under the statute incurred by Eagle Express?1 I Eagle Express Co. in its own name, did not file an answer to the complaint In a sense, therefore, It could be said the unfair labor practices alleged as to It are admitted But in truth, Paul Long, the owner of both Eagle Express Co and Buzzard Rentals, Inc , was the pnncipal witness against the complaint at the hearing, and he denied all the complaint alle- gations, speaking also in defense of Eagle Express I shall therefore dis- Connnuea EAGLE EXPRESS CO B. Unilateral Action in January 1982 by Eagle Express The following facts are undisputed. Eagle Express op- erated out of three terminals, among others, in Lexing- ton, Louisville, and Cincinnati. On January 9, 1982-3 months before the union contract was due to expire— Long, the owner of the Company, gathered his Lexing- ton drivers and toldthem they would have to accept a reduction in pay—to $10 per hour and 25 cents per mile. He gave each of them a form to sign, where their signa- tures would indicate whether they accepted or rejected his offer. Long explained to them how times were hard, and that they had a choice either to agree to the reduc- tions or resign, take a voluntary leave of absence, or face a layoff. He also promised that at a later date he would hold another meeting with them to consider things fur- ther. He held a similar meeting with the drivers at the Cincinnati terminal shortly thereafter. Long told all the employees the reduced rates would be put in effect re- gardless of whether they agreed or not On January 11, 1982, the Respondent in fact put 'the reduced rates in effect throughout its terminals and continued to pay the lesser rates regularly thereafter. All this was done by Long without a word to the Union either before taking the action or when he did it. The Union first learned about the decrease in pay from the employees. That this was unilateral action, direct dealing with employees in disregard of the established bargaining agent during the terms of an effective collec- tive-bargaining agreement, ‘and therefore a straight viola- tion -of Section 8(a)(5) of the Act, could not be clearer. Friederich Truck Service, 259 NLRB 1294 (1982). As the Board said in Los Angeles Marine Hardware Co., 235 NLRB 720, 735 (1978): Notwithstanding the persuasiveness and validity of an employer's economic straits, an employer is not free, without union consent, to make midterm modi- fications in wage rates. I find the affirmative defense urged against this part of the complaint insufficient. It rests entirely upon a letter written on behalf of a trucker group to the International Brotherhood of Teamsters in February 1981 requesting reopening of the National Master Freight Agreement, which Eagle Express had individually signed. The basis for the request was that the "Motor Carrier Act of 1980 has had a significantly adverse effect on the financial structure of the trucking industry" The International's response stated Your mere assertion that the Motor Car- rier Act has a significantly adverse effect on the financial structure of the trucking industry is not proof of such fact; and until such fact is proven there cannot be any reopening of the statement." - There is nothing to indicate that whoever had made that' reopening request .of the International thereafter came forth with any evidence that in fact the Motor Car- cuss the merits of the case in full, and not be distracted by what is no more than an attempt to separate the two companies artificially The end result will be, of course, binding on the trustee in bankruptcy, who is no more than an agent tentatively of the Respondent ner Act justified any reopening of the National Agree- ment. In fact, in the fall of 1981 the International Union and the National Truckers Association met and started negotiations toward renewal of the National Agreement. Eagle Express chose to have no part of that. Instead, it withdrew from the Area Conference Truckers 'Associa- tion of which it had been a member, and decided to act alone vis-a-vis the Union. In his brief, counsel for Eagle Express repeatedly refers to Long's testimony as proof that the Respondent did request bargaining about its intent to change the con- ditions of employment during the term of the contract then in effect That testimony, in total, consists of the following: Q. (By Mr Spurlock) . did you renew your efforts with Teamsters Union to have the Agree- ment reopened? A. Yes, sir, we did. Q And was that some time during 1981? A In July—I believe in July of 1981. Such a general, conclusionary statement will not do to evade the most fundamental Board law that, when there is a contract in effect and the employer wishes to change any of its substantive terms, he is obligated to advise the union in advance, and to discuss his intentions fully and directly, before taking unilateral action. Just as proof of the commission of an unfair labor practice must be af- firmative and clear, so must an asserted, affirmative de- fense be proved by direct and substantive evidence. On this aspect of the case there is none such. I find that, by dealing with its employees directly, behind the Union's back, as it were, and by lowering their rate of pay in total disregard of the established bar- gaining agent, the Respondent Eagle Express violated Section 8(a)(1) and (5) of the Act. C. Failure to Abide by Contract Terms on April 1, 1982 Among the provisions of the contract which expired on March 31, 1982, was included the following Cost of living allowances shall be effective on Octo- ber 1, 1979, April 1, 1980, October 1, 1980, April 1, 1981 and April 1, 1982, as set forth below. On April I, 1982, Eagle Express failed to pay this in- crease in cost-of-living to its employees. I find, as alleged in the complaint, that it thereby disregarded its contrac- tual obligation without notice to the Union, changed an- other established condition of employment unilaterally, and thereby again violated Section 8(a)(5) of the Act. The argument, in defense, that because the contract had expired by the first of April the employer could dis- regard it altogether does not hold water here The lan- guage is perfectly clear, and shows the parties intended, without question, that the agreement was to hold over even after March 31 as to this particular benefit to the employees. Heheman v. E. W. Scripps Co., 661 F.2d 1115 (6th Cir. 1981). There is no question of ambiguity in this .506 DECISIONS OF NATIONAL LABOR RELATIONS BOARD case on that score, for the language of the Clause could not be clearer. Nor .do the facts support the alternative contention in the Respondent's brief that by April 1 the parties had reached an impasse in the collective-bargaining process which justified total disregard of the old contract. This unilateral action was taken only 1 week after the first bargaining session, which took place on March 25. All that had happened was that the Union had received the Company's detailed renewal contract proposal and re- sponded that it would consider it Whatever was to come later was not known then. One meeting is not enough to support a finding of impasse, even in this case. Oak Cliff-Golmati Baking Co., 207 NLRB 1063 (1973). D. Impasse in Negotiations Representatives of Eagle Express and of the three Teamsters Locals which spoke for all this Company's employees met in regular bargaining sessions on March 25, April 15, and May 7 and 17 The Company put into the hands of the Union a full proposal for renewal of the expired contract. Among its terms were the exact wages it had started paying back on January 11. There were also minor changes, but the consistent position of the Employer was that due to its economic difficulties it had fo have those economic concessions—a definite lowering of labor costs compared to the old expired agreement. As the talking went on, there were minor changes in po- sitions on both sides, but as to the true bone of conten- tion, the basic wage rates and financial costs to the Com- pany, neither party yielded an iota. As stated above, right after the May 17 meeting the Company put in effect its final offer, which had been rejected by the Union. Could the Respondent, under Board law, take such defensive action to protect its down-going business without committing an unfair labor practice? Considering all of the related, and very significant, facts, I think yes As has long been said, where a question of this kind is involved no two cases are alike, no single precedent can fix the answer to the next. Each must be evaluated in the light of those facts which bear directly upon the rational state of mind of the participants. At what point can it be said that "further meeting would have been fruitless," as the General Counsel quotes from 283 F 2d 733 (5th Cir. 1960). After the Respondent put the rejected offer in effect, the parties continued to meet and attempt to reach agreement on June 8, on August 20, September 7, and October 15. They never succeeded, especially as to the principal economic issue which had separated them from the beginning—the basic wage rates Should the Re- spondent have waited until after the fifth meeting, or the sixth, or the seventh, or the eighth before doing what its economic condition made necessary? Did it have aright to consider its needs of the moment? After all, by De- cember of that year, its property was taken over by a creditor, and in 1983 it found itself in bankruptcy! - The expired contract which this Respondent had signed conformed precisely with the Teamsters National Master Freight. The Teamsters International and the Na- tional Trucking Association had completed their renewal negotiations in February, just before the first meeting be- tween these parties. Ray Cash, who was present for the Union at those bargaining sessions, first said he did not hear Marion Winstead, the principal union spokesman, say he had no authority to agree to anything Short of the National Master Freight Agreement; then he added he did not "remember. Long, for the Respondent, testified, without contradiction, that at the first meeting, on March 25, Winstead offered the Company the Master Freight Agreement which the International had made the month before, and it is a fact he never made any other, offer to the Company until after the Company had put its last offer in effect. Indeed, even at the June 8 meeting, Winstead asked Long, again as Long testified without contradiction: "Paul, I want you to find out how soon you can restore the wages of these employees to the National Master Freight level." _At the hearing Win- stead denied having said he had no authority to deviate from the National Agreement, but in light of other facts, plus the character of his testimony on other questions raised, I cannot believe him The clearest fact on this record is that the main issue between Eagle Express and the Union was the Compa- ny's insistence upon- reducing the wage rates 2 There is no need for discoursing at length upon the fact that the Company was in financial straits: Its financial reports, re- ceived in evidence, prove that, and the matter As not dis- puted by the General Counsel. And it is equally obvious the Union knew this to be so. Yet, while talking at all times, at length, it never offered a single counterproposal to whatever the Company asked for. This brings us to the real question of this case How long may _a union delay an employer's financial retrenchment by simply talking without end? The Union kept saying it would consider the Company's proposals, and it did keep on talking about them with Long, but it never agreed and it never offered a Counterproposal. For one of the parties simply to say "it will consider" a proposal, if repeated again and again, is not really bargaining in any true sense. Even_ when, in October, long after the May events, the Union did make a counterproposal, it still held firm to its insistence on the old wage scale set out in the Teamsters National .Agreement Normally, an em- ployer asks for economic concessions to improve its fi- nancial position or to arrest a deteriorating condition. The longer the talking goes on, the greater the hurt to such a company. Here, the situation was even worse. The Company had reduced the wages 3 months earlier— illegally, it is true—because it had no alternative in order to survive. Bargaining in good faith is one thing, but uti- lizing the talking technique of negotiations as a device 2 As in most cases of this kind, the testimony of the witnesses is mixed with argument and vagaries as.to exactly what was said at the various meetings There were also received in evidence many documents ex- changed which tend to confuse the total picture But that the wage rate—as reduced by the Respondent earlier—was really what the bar- gaining. was all about, is virtually conceded by the General Counsel in his brief Long, the principal witness for the Respondent, said that at the second meeting the Company even was willing to accept all of the al- ready negotiated Teamsters . International contract if only the Local Union would accept his request for the reduced wages From the Gener- al Counsel's brief "Moreover, throughout the subsequent bargaining ses- sions in Apnl and May of 1982, Long consistently insisted that the Union agree to the wage structure implemented on January 11, 1982 " EAGLE EXPRESS CO 507 for keeping an employer from , the ,necessary steps to- wards survival is something else again. . Recognizing how, perfectly this truism applies to the case at bar, the General Counsel makes an alternative.ar- gument in support of the complaint. He says there was no impasse because there was no real bargaining, and the reason the bargaining was 'not real is .because the em- ployer was in the act of committing a continuing unfair labor practice—paying the employees less than they were entitled to under the ,expired contract. He asks: How can a part)/ be deemed to be carrying on good-faith bargaining while in , the act of committing a statutory violation? The argument jumps the gun. There was no unfair labor, practice finding as of that time; indeed, no charge was filed at all until after the impasse had occurred. And when it was, a month later, it was essentially a charge that the Company had done things unilaterally before an impasse had been reached. It was only after reconsider- ation that a second charge was filed pinpointed to the January events. This indicates strongly that whatever had , happened earlier was not in the mind of the union representatives when the, bargaining was going on. But impasse, or realizatiOn by the parties that further bargain- ing would lead nowhere, is a state of mind. Moreover, in the industrial world ,collective bargaining between the employer and the union is concerned exclusively with the money or economic conditions of employment. It is not a milieu for evaluating conduct by either party that could, or could not, be deemed unlawful by the National Labor Relations Board. All things considered, I find that the Respondent did not violate the statute when it put its last offer in effect on May 17. Accordingly, while it must make whole those employees for the reduction in pay imposed .upon them from January 11, .1982, and thereafter, the, cutoff date for such backpay. liability becomes May 17, 1982.. Similarly, while the Respondent must make whole the employees who were denied the, cost-of-living increase on April 1, 1982, and thereafter, the cutoff date for such backpay liability also becomes' May 17, 1982. „ E. Allegations of Illegal Discharges • -About December 13, 1982, the employees of Eagle Ex- press went out on strike to compel the signing of a con- tract. At the same time Long, president and owner of Eagle Express, continued his trucking :business by using what he called a cartage company, Buzzard Rentals., He was _the president of. that Company also, of which -he owned 35 percent and his family members, wife and chil- dren, owned, the rest: This is the Company called the alter ego of Eagle Express in the complaint. The com- plaint alleges that the' Respondent .laid .off" its old. em- ployees, and that such action was unlawful because the Respondent did not first talk . to the Union about its in- tention to use its alter ego instead But, in the light of all the evidence, what the General. Counsel ,really contends is that,by resorting to the cartage system, using another method to achieve its business demands, the Respondent in effect laid off the employees.3 3 From the transcript There is no allegation in the complaint that , such "lay- offs" were discriminatorily motivated and therefore vio- lations of Section 8(a)(3) of the Act. True, the employees may have been replaced by the employees of the cartage Company, but actually fired by their employer they were not. That the object of the strike was to force economic concessions by the Employer is not really' disputed here. It is not claimed this -was an unfair labor practice strike. If an employer faced with such a problem resorts to an- other company to carry on its business, even another company which is no more than a "disguised continu- ation" of his own business,' he is simply replacing eco- nomic strikers. At this point an interesting part of the testimony came from Gary Wainscott, president of the Teamsters Cincin- nati Local. Long testified that 'on December 15 he did lay off six employees, at his Cincinnati terminal because Wainscott had asked him, "can you lay these people off?" because he "was getting a lot of heat." Wainscott, as a witness, testified that on December lb oi 13, after learning of the planned strike action, he telephoned Long from a Teamsters meeting taking place in Chicago. The question was: -Did he ask' Long to lay off the people in- stead-of having them go on strike? Wainscott testified: I says, "hey,. 'I heard through the grapevine that they were going to lay them off" because the other—the other terminals had struck him then and my people didn't want to strike, you know, to be perfectly honest with you, you know, when there's $45 in it, you can get unemployment for $200 they're going to wait . He said he was going to open up a cartage company on the 13th of Decem- ber, in Louisville, Kentucky. This would put those people in Louisville, Kentucky out of work, you. know, who worked for Eagle Express. - Q. . . when you talked with him, , did you indi- cate to him that 'if he laid his people off at Cincin- nati, that that would entitle him to unemployment versus if you struck them, they wouldn't get unem- ployment9 A. That's just, common sense. Anybody knows that who's been With this industry, you know?' Q. And Your testiniony is that you told him at that point, that if he didn't lay' them off, that you were going to strike him—at Cincinnati? A. Maybe no't in those words like you said, but . I, similar to that. This was literal' admission by the union agent that he asked the Employer to lay off his people because they were going to strike anyway and would be better off fi- nancially receiving unemployment compensation benefits than standing Idle getting nothing as strikers. And that the Union called a strike at all the terminals is also proved by the affidavit of one of the members who at- „ Are you saying laying off those, people that day was 8(a)(3) as to them? MR HORNER Yes, MI, 'JUDGE RICCI What else is there alleged? MR HORNER That is about the size of it 508 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tended a meeting of all the employees at. Lexington. The affidavit of Don Waddle, from the Louisville terminal, reads. - - . I attended the union meeting on Saturday, Decem- ber 11, 1982,. at the offices of Teamsters Local 651 in Lexington, Kentucky. At this meeting we were informed by Ray Cash, Secretary Treasurer of Local 651 that Paul Long was not going to pay ,our medical insurance any more The members:of Local 651 who attended this meeting all voted to go on strike against Eagle Express. As to the contention, articulated in the General Coun- sel's brief, that the Respondent violated Section 8(a)(5) by failing lo discuss with the Union its intention to use the cartage system, it fails entirely in the light of the strike which came at that very time: I Make no finding on this record that Eagle Express diseharged anyone against his will. F.' The Alter Ego Issue - Whatever his reason, in December 1982 Long, the owner and day-to-day operator in charge of the business of Eagle Express, started to use Buzzard Rentals to do the trucking business for him. As stated, he was also, and had long been, president of that Company too, personal- ly. owning 35 percent and his family owning the rest. The witnesses kept referring to Buzzard Rentals as a cartage company As best, I understand it, this means that, instead of servicing shipping companies with its own trucks and trailers and with its own drivers, some- times the trucking company has a cartage company do the trucking 'for it. Sometimes it leases trucks from the cartage -company; sometimes it contracts for the cartage company to do the actual transportation using its own trucks And when it does that, the cartage company sometimes uses drivers of the trucking company, like Eagle Express, and sometimes does the trucking with drivers on its own payroll. Buzzard Rentals always conducted its business at Nar- din° Boulevard in Lexington Before these events in 1982 it used to purchase vehicles from Eagle Express and lease them back to that same company. This is from Long's testimony. Apparently, as owner and operator of both 'companies, he did , as he pleased, but that very ar- rangement bespeaks an absolute gingleness of identity be- tween the two companies or, as alleged, alter ego status between the two. Buzzard Rentals also serviced the vehi- cles at its own terminal, and transported freight from one Eagle Express ,terminal to another, as a_ service for Eagle. Long testified that Eagle Expres§ closed its Knoxville terminal on December 3 and its Sommerset and Louis- ville terminals on December 10 with the strike being im- minent. He continued that, for a week at the Louisville terminal, he tried to use an out-side cartage company to do his business there, but that arrangement did not work out. From then on, Long used Buzzard Rentals to do all the transportation for Eagle Express' customers. On De- cember 20, Eagle's Lexington terminal, the "hub" of all its activities, according to the witnesses, was completely vacated, and all the-- equipment, including office and freight moving tools, plus all stored freight, was -moved to the old central terminal of Buzzard. Rentals in the same city. Long Investment Company, Which Paul Long owns and which was the financial support at Eagle Ex- press, continued to do the sales work for Buzzard Rent- als.as it had always done for Eagle Express.- _ That all this was simply a continuation of the sanie business under another name is rather clear from Long's testimony, despite his attempts at evasion at the hearing. 3,• Q . . is it not accurate to -say that you resumed the freight operations using Buzzard Rental facilities on Nandino Boulevard the following-- Monday morning which would have been December' 20; 1982? ' A. We were using Buzzard facilities if We moved on the 15th, the 16th. Q'Okay, for the transportation of freight? A. For Eagle Express. • Asked had not the arrangement continued withoul interruption, Long at first- equivocated: Q. . . And you continued using that ` Nandinb Boulevard facility right up until the present? -- A. No, sir,. approximatelj, three or four weeks ago, the operation over there is just a garage again. He then admitted directly that-nothing changed between the time the move was made in December 1982 to June 1983. Buzzard Rentals just continued to -do Eagle Ex- press old business. What is also clear is that Paul -LOng continued to -con- trol the operations of the new terminal on a day-to-day basis 'as he had done before. After several times avoiding direbt answers on whether he hired and fired employees. there, he finally said: "I had some direct influence On those people thai may have been' employed or let -go, but not necessarily that I perform the hiring or the discharg- ing of employees" Had he discharged an employee named Don Draper? "I could have." As a witness for the General Cotinsel Draper testified directly that in Jan- uary 1983 Paul Long personally discharged him. Had the discharge of an employee named Don Buggs been dis- cussed with him? "As President and Chief Executive of the Company, if I was there, I would think -that that is normal." Asked had he been in charge of the new oper- ation regularly, Long answered: "Okay, in the 30 days of January, I may have been there two or three days a week for thb frequency of maybe at most, an hour. "Barry Dance, who was Eagle Express terminal manager in Lexington, continued as terminal manager for Buzzard Rentals at the same location Asked did Dance's 'new rate of paj, have to be cleared with him, Long twice simply refused to answer. - -I find that Buzzard Rentals is in fact the alter ego of Eagle Express in Board language. It all centers on Paul Long. He is the owner of both; he runs the operations of Buzzard Rentals exactly as he did that of Eagle Express; the business being carried on is exactly the same kind; and even the customers, in major part; are the same as EAGLE EXPRESS CO 509 before (some new customers were added, but that is no more than a normal occurrence in the trucking business). Sometimes supervisors were switched from the first com- pany to the next. The employees were not the same, but that aspect of the business has nothing to do with the question here For some time at least, the trucks contin- ued to bear the name Eagle Express. The former em- ployees are on strike, they are still the same company's employees, and the employer, by whatever name, is still obligated to bargain with their established representative. In sum, it is an all-in-the-family situation. A man named Michael Whitaker was the terminal manager in charge of Eagle Express terminals all over the place. When Long first bought this business, he bought it from Whitaker's mother in 1978, paying in part with promisso- ry notes. The creditor who sued and took over property belonging to Eagle Express in December 1982 was Whi- taker's mother. But Whitaker himself remained as termi- nal manager at some of the trucking terminals. He, too, uses Buzzard Rentals as a cartage company agent, and was still using it at the time of the hearing in exactly the same fashion as Eagle Express, or Long, was doing. Again, some of the customers were the same old ones, with the normal coming and going of different customers in the trucking industry. The total picture shows a con- tinuation of the same business, by the same people, but under a different name. See Denzil S. Alkire, 259 NLRB 1323 (1982); Crawford Door Sales Co., 226 NLRB 1144 (1976) That the Union represented a majority of the employ- ees of this Company in December 1982 when the strike started is not contradicted; the Respondent as then named did not even file an answer to the complaint. Indeed, the parties were actively engaged in direct nego- tiations. As the alter ego of Eagle Express Company, Buzzard Rentals is subject to the same obligation today. THE REMEDY The Respondent, meaning Eagle Express Company and Buzzard Rentals, Inc., must be ordered to undo the effects of the unfair labor practices found herein. All em- ployees of Eagle Express as of January 11, 1982, whose wages were reduced at that time must be made whole for wages lost, the cutoff date being May 17, 1982, when an impasse was reached in negotiations towards a new contract. Similarly, all employees who were denied the cost-of-living raises called for in the contract as of April 1, 1982, must be made whole for such nonpayments, again up to May 17, 1982. CONCLUSIONS OF LAW _/ 1. By dealing directly with its employees while failing to bargain in good faith with the established collective- bargaining agent, the Respondent has violated and is vio- lating Section 8(a)(1) and (5) of the Act. 2. By reducing the wage scale of its employees during the effective term of a regular collective-bargaining agreement, and while failing to bargain with the estab- lished collective-bargaining agent, the Respondent has violated Section 8(a)(1) and (5) of the Act. 3. By withholding contractually binding payments due the employees on April 1, 1982, while failing to bargain in good faith with their established bargaining agent, the Respondent has violated and is violating Section 8(a)(1) and (5) of the Act. 4. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Sec- tion 2(6) and (7) of the Act. On these findings of fact and conclusions of law and on the entire record, I issue the following recommend- ed 4 ORDER The Respondent, Eagle Express Company and Buz- zard Rentals, Inc., Somerset, Kentucky, its officers, agents, successors, and assigns, shall 1 Cease and desist from (a) Dealing directly with its employees while failing to bargain in good faith with their established collective- bargaining agent. (b) Reducing the wage scale of its employees during the effective term of a regular collective-bargaining agreement while failing to bargain with their established bargaining agent. (c) Withholding contractually binding payments due the employees pursuant to a regular contract in effect while failing to bargain in good faith with their estab- lished bargaining agent. (d) In any like or related manner interfering with, re- straining, or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act 2 Take the following affirmative action which is deemed necessary to effectuate the policies of the Act. (a) Make whole all employees whose wages were re- duced illegally, as found herein, ,and who were denied contractually binding payments, by payment to them of such sums as would have been paid absent Respondent's unlawful unilateral reduction in pay and discontinuance of contractual payments until May 17, 1982. (b) Preserve and, on request, make available to the Board or its agents for examination and copying, all pay- roll records, social security payment records, timecards, personnel records and reports, and all other records nec- essary to analyze the amount of backpay due under the terms of this Order. (c) Post at all its terminals copies of the attached notice marked "Appendix." 5 Copies of the notice, on forms provided by the Regional Director for Region 9, after being signed by the Respondent's authorized repre- sentative, shall be posted by the Respondent immediately upon receipt and maintained for 60 consecutive days in conspicuous places including all places where notices to 4 If no exceptions are filed as provided by Sec 102 46 of the Board's Rules and Regulations, the findings, conclusions, and recommended Order shall, as provided in Sec 102 48 of the Rules, be adopted by the Board and all objections to them shall be deemed waived for all pur- poses 5 If this Order is enforced by a Judgment of a United States Court of Appeals, the words in the notice reading "Posted by Order of the Na- tional Labor Relations Board" shall read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the Nation- al Labor Relations Board" 510 DECISIONS OF NATIONAL LABOR RELATIONS BOARD employees are customarily posted. Reasonable steps shall (d) Notify the Regional Director in writing within 20 be .taken by the Respondent to ensure that the notices days from the date of this Order what - steps the Re- are not altered, defaced, or covered by any other inateri- spondent has taken to comply.