Apex Decorating Co.

APEX DECORATING CO. Apex Decorating Co., Inc ., Madison Decorating Company, and Madison Coating Systems, Inc., Alter Egos and Painters and Allied Trades Dis- trict Council No.- 51, International Brotherhood of Painters and Allied Trades, AFL-CIO. Case 5-CA-15045-1, -2, -3 - 21 August 1985 DECISION AND ORDER By CHAIRMAN DOTSON AND MEMBERS HUNTER AND DENNIS On 21 December 1984 Administrative Law Judge Marvin Roth issued the attached decision. The Respondent filed exceptions and a supporting brief, and the General Counsel and the Charging Party filed answering briefs. 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 record in light of the exceptions and briefs' and has decided to affirm the judge's rulings, findings,2 and conclusions-' and to adopt the recommended Order. ORDER The National Labor Relations Board adopts the recommended Order of • the administrative law ' The Respondents have requested oral argument The request is denied as the record, exceptions, and briefs adequately present the issues and the positions of the parties 2 The Respondents have excepted 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 Products, 91 NLRB 544"(1950). enfd 188 F 2d 362 (3d Cir 1951) We have carefully examined the record and find no basis for re- versing the findings The Respondents also except to the judge's erroneous finding that Kevin Trumpower testified that he had contributed $1000 of the initial investment to start up Respondent Coating As the Respondent correctly notes. K Trumpower testified that he had contributed 57000 of the initial $10,000 investment in Coating The judge's inadvertent error, however, does not affect our conclusion that Coating is an alter ego 'of Respondent Apex and Respondent Decorating a In adopting the judge's findings, we have relied on all the factors set forth in his decision, including employer motivation , to determine that Respondent Coating is an alter ego of Respondents Apex and Decorat- ing Our colleague declines to join us in this paragraph because in her view antiunion motivation is not a sine qua non for a finding of alter ego status However, we have made no such assertion in stating our reasons for finding Respondent Coating to be an alter ego of Respondents Apex and Decorating As the facts clearly establish Respondent Coating's alter ego status, we find it unnecessary to pass upon the judge' s determination that Respondents Coating, Apex, and Decorating constitute a single em- ployer In addition, since the complaint does not allege any unlawful con- duct prior to 16 July 1982, we also find it unnecessary to pass upon the judge's conclusion that Respondents Apex and Decorating are alter egos of each other or constitute a single employer - Member Dennis does not join in the foregoing paragraph In her view, although antiunion motivation (like that demonstrated here) supports the finding of an alter ego relationship, it is not a sine qua non for such a finding' See Goodman Piping Products v • NLRB, 741 F 2d 10 (2d Cir 1984) 1459 judge and orders that the Respondents, Apex Decorating Co., Inc., Madison Decorating Compa- ny, and Madison Coating Systems, Inc., Alter Egos, Davidsonville, Maryland, their officers. agents, successors, and assigns, shall take the action set forth in the Order., DECISION MARVIN ROTH, Administrative Law Judge.'This case was heard at Baltimore, Maryland, on August 27 through 31, 1984. The charges were filed on January 17 and 24, 1983, by Painters and Allied Trades District Council No. 51, International Brotherhood of Painters and Allied Trades, AFL-CIO (the Union). The com- plaint,-which issued on July 20, 1984, alleges that Apex Decorating Co., -Inc., Madison Decorating Company, and Madison Coating Systems, Inc. (respectively Apex, Decorating, and Coating and collectively Respondents) violated Section 8(a)(1) and (5) of the National Labor Relations Act. The gravamen of the complaint' is that Respondents are alter egos and a single employer under the Act, that Coating (the only presently functioning entity among the three Respondents)' was established by Apex and Decorating as a subordinate instrument to and disguised continuation of Apex and Decorating, and that Respondents have failed and refused to abide by collect tive-bargaining agreements executed by Apex and Deco- rating, which agreements allegedly-cover the employees of all three Respondents. Only Coating filed an answer and entered an appearance in this proceeding Coating, by its answer, denied the alleged alter ego relationships and denied commission of the alleged unfair labor prac- tices. i All parties were afforded full opportunity to partici- pate, to present relevant evidence, to examine and cross- examine witnesses, to argue orally, and to file briefs. On the entire record in this case2 and from my observation of the demeanor of the witnesses, and having considered the briefs submitted by the General Counsel, the Union, and Coating, I make the following - FINDINGS OF FACT I. THE BUSINESS OF RESPONDENTS The answer admits that Apex was a Maryland corpo- ration from approximately 1964 to August 1982, that its principal. place of business was located in Upper Marl- boro, Maryland, and that it was engaged in the' business of providing painting and wallpapering services in the building and construction industry both nationally and in the Washington, D.C. metropolitan area. In response to a commerce questionnaire dated February 11, 1983, Apex stated that during the past fiscal year it received more than $50,000 from sale or performance of services to cus- tomers outside Maryland.. The answer also admits that At the outset of the hearing I denied the General Counsel' s Motion for Summary Judgment against Apex and Decorating, finding that Coat- ing's answer raised issues involving all three Respondents which preclud- ed the granting of such motion - 2 The official transcript of proceedings is corrected 275 NLRB No. 205 1460 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Decorating was a Maryland corporation from approxi- mately 1969 to approximately August 1982, that it had principal offices in Landover and Upper Marlboro, Maryland, that it was engaged in the business of provid- ing painting and wallpapering services in the building and construction industry, nationally and in the Washing- ton, D.C. area, and that during the fiscal year ending about February 1983, a representative period, Decorating performed services and sold goods valued in excess of $50,000 directly, to customers located outside Maryland. The answer further admits that since April 1982 Coating has been a Maryland corporation, that its principal office is located in Davidsonville, Maryland, that it is engaged in the business of providing painting, wallcovering, plas- tering, flooring, and vinyling services in the building and construction industry in the Washington, D.C. area, and that Coating annually performs- services and sells goods valued in excess of $50,000 directly to customers located outside Maryland. In light of these admissions, and with- out reaching the questions of alter ego status, I find that at times material Respondents were employers engaged in commerce within the meaning of Section 2(6) and (7) of the Act, that Coating has been at all times material and, is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act, and that it would effectuate the purposes of.the Act for the Board to assert its jurisdiction in this case - II. THE LABOR ORGANIZATION AND BARGAINING UNIT. INVOLVED The parties stipulated that, at - all . times material, the Union has been and is a labor organization within the meaning of Section 2(5) of the Act The Union has nego- tiated a series of collective-bargaining contracts with Painting, Decorating and, Drywall- Finishing Contractors of Washington, D.C. and Vicinity (Association), a multi- employer bargaining association, covering all journey- men and apprentices, including temporary employees employed by the signatory employers in connection with' commercial painting and drywall finishing contracts' in the Washington, D C. area In early 1981 the Union and the Association negotiated and on April 29 reached agreement on a contract which was effective by its terms through May 15, 1984. Apex was a union contractor and consequently ''a signatory contractor from the time it commenced operations Homer Trumpower, president of Apex, specifically 'authorized the Association to - negoti- ate the 1981 contract on its behalf, and -together with other'employer representatives he participated in the ne- gotiations . As will' tie' discussed, Apex acid ' De`coraimg each signed the contract `m May 1981. Tn their respective commerce , questionnaires,' Apex and Decorating 'each in` dicated that they -participated .ii coll'ective''bar'gaining with the Union through the.'A'ssociaiiori. The'fcontracf provided among `other thing's, in sum; 'that, a `signatory - employer engages in a material `breach of 'coritra'ct "by "operating 'on a'dual 'shop or d_duble`b'r'easted'basis, " (art. I); attempting to'evade or circumvent contractual obliga- tions by operating in the Washington, D C. area under the name of or' in conjunction with nonsignatory firms (art. II), and contracting out or subcontracting work'fo a ` nonsignatory firm'(arf IV). The contract further provid- ed for a union shop except where prohibited by state law,- checkoff of dues, use of the Union as the exclusive source of job applicants, and wage rates and fringe bene- fits including pension; health and welfare, industry and apprentice fund contributions The contract further re- quired each signatory employer to promptly notify the Union of every job undertaken or contracted I find that the Association was-at all times material and is an orga- nization which exists for the purpose of representing its employer-members, including Apex and Decorating, in negotiating and administering collective-bargaining con- tracts with the Union, and that such members together constitute . employers engaged in commerce within the meaning of the Act. I further find that all journeymen and apprentices, including temporary employees em- ployed by the employer-members of the-Association, in- cluding Apex and. Decorating, in connection with com- mercial painting and drywall finishing contracts in the Washington, D C metropolitan area as defined in the contract, excluding all other employees, professional em- ployees, guards and supervisors as defined in the Act, constitute a unit appropriate for the purposes of collec- tive-bargaining within the meaning of Section 9(b) of the -Act, that -at all times material the Union has been and is the exclusive collective-bargaining representative of the employees in such unit, and that the employees were covered by the 1981-1984 contract See Hi-Way Bill- boards, 206 NLRB 22 (1973), enf. denied 500 F 2d 181 (5th Cir. 1974), cited with approval in Bonanno Linen Service v. NLRB, 454- U.S 404, 411-412 (1982). Whether the employees of Coating are included in the unit and were covered by the contract is dependent on resolution of the alter ego question. III THE ALLEGED UNFAIR LABOR PRACTICES A Developments Through May 1981: Background, Operations of Apex and Decorating, Alleged Alter Ego Status of Decorating,' and Negotiations and Agreements with the Union in May 1981 Apex commenced business in 1964 as a painting and wallcovering contractor - . Shortly thereafter Homer Trumpower,=who had been an employee, became a part- ner in the corporation with one Sidney Efross. Each owned a one-half interest. From its inception Apex oper- ated as a union -firm However, Trumpower and Efross would form other corporations for the purpose of obtain- ing. other work. These corporations might work togeth- . er, e.g., one corporation would bid a job and another, would perform the work. In 1969, after prior efforts by Apex ' to 'operate -nonunion, Trumpower and Efross formed , Decorating, . adding a third partner. Homer Trumpower candidly testified that they formed Decorat- ing, in order to bid, on nonunion jobs which Apex was unable to-obtain: Apex, by Efross, expressly informed its customers that because the "painters union has elected to discontinue a preferential rate for work performed for open-shop contractors," Decorating would assume Apex's contracts with -such contractors. Apex would work only for union general contractors, and usually ob- served union wage scales and other terms and conditions APEX DECORATING CO 1461 of employment, while Decorating would perform what- ever work it could get, and paid its employees at a lower rate of pay. Therefore it is not surprising that Decorat- ing's operations led to constant friction between the part- ners and the Union In 1974 Efross sold his interest in both' firms and Homer Trumpower formed a partnership with two-other individuals In 1980, as a consequence of settlement of litigation among the partners, Trumpower became and remained the sole owner of Apex and Deco- rating. Trumpower testified that he operated both as one company. He became and remained president of Apex However, in May 1981 he designated, his son Kevin as president of Decorating, and George O'Connell, a long- time associate, as vice president.3 Kevin began working for Decorating while going to school, and gradually as- sumed greater responsibilities, principally in connection with nonunion work O'Connell began working with Homer and his corporations in 1961, and rose through the ranks from journeyman to foreman to job superin-. tendent He and Homer were personal friends. .By 1981 O'Connell was principally responsible for supervising maintenance and other work for the_ Hecht Company. Homer testified that he made Kevin president of Deco- rating because he needed him,to run the office and sign papers However, in his investigatory affidavit Homer stated that Kevin "took over" Decorating about May 1981 If Homer needed Kevin only as a glorified office manager and to sign papers, then by the same reasoning he should have also made him president of Apex. How- ever he did not For these and other reasons which will be discussed, I find that Homer had a more significant motivation for designating Kevin and O'Connell as the principal officers of Decorating. During the 1981 contract negotiations, dual shop or double-breasted operations were a major union concern. The Union proposed and the , Association agreed to clauses which permitted the Union to refuse to sign or to cancel its contract .wi'th any employer-member engaging in such practices On April 29 the_Union and the Asso- ciation reached agreement on a contract, the union mem- bership ratified the contract on May 1, and on May 3 the employers, including Homer Trumpower on behalf of Apex, came to the Union's office to, sign the contract The Union refused to. permit Trumpower to sign the contract on the grounds that Apez was conducting a dual operation, and the Union commenced picketing the office of Apex and Decorating, which was then located at 8411 Old Marlboro -Pike; Upper Marlboro, Maryland. However, the Union did riot then picket any jobs Both. sides then met at Homer's office in an effort to resolve their differences. International Representative Michael Monroe, accompanied by a• business agent, -acted- as union spokesman Homer, accompanied by Kevin, spoke on behalf of. Apex and Decorating. Monroe testified in sum as follows concerning their meetings- Monroe said that the Union would temporarily stop picketing, but re- jected Homer's request for a permanent cessation. of picketing. He asserted that the Union was picketing be- ' Homer , his wife Violet, and his son Kevin all figure significantly in this case In order to avoid confusion I will sometimes refer to them by their first names cause the Trumpowers were running a double-breasted operation in order to circumvent the Union's contract. Homer began by saying that he would soon retire, and that Kevin would be taking over all the operations. He complained, as he had before, that the Union was perse- cuting and picking on them. Monroe said that there were other employers engaged in double-breasted operations, and that he would make the, same proposal as he had with the other employers. He proposed an agreement which the Union subsequently presented in written form as follows: May 6, 1981 AGREEMENT BETWEEN MADISON DECORATING DISTRICT COUNCIL #51 (1) You will have sixty (60) days as a transition period. Within that sixty (60) days, if your men come to join the Union as a group, all Initiation Fees and Fines will be waived. The new members will only be required to pay the 1st Quarters Dues. (2) Upon submitting a list of all jobs for which Madison Decorating is already committed to per- form work, you will be allowed to finish said work in any fashion you see fit. (3) Upon signing the agreement with District Coun- cil #51, any new work bid by Madison Decorat- ing will conform to the established Union rules, wages and practices. Kevin said that some of his employees were not suffi- ciently qualified to be paid at union scale Monroe said, that it was up to the employer as to which employees would be retained, and that the less qualified painters' could be terminated immediately or on completion of nonunion jobs. Monroe said that Decorating would have to submit a list of ;lobs which were bid on a nonunion- basis before or at the time it signed the agreement with the Union, that only those jobs could be completed on a nonunion 'basis, and that all jobs bid thereafter would have to be performed under the union contract. Homer and Kevin complained that the proposals were unfair and illegal, and Homer said that he did not even want Kevin to be involved with the Union. However, they agreed to meet again with the Union. They also talked- about maintenance work which Apex or Decorating per- formed for the Hecht Company chain of department stores. Monroe said. he thought they were. assured of the work,. but Homer said,they were "getting pushed'out the door " The parties next met at Homer's office on May 6 or 7. Monroe read. and explained the proposed written, agreement . Homer asked 'why the Union needed a list of.' jobs. ,Monroe said that they needed the names in writing, that the. Trumpowers ' could not ,claim any job as non- union if it was, not on the list, and that both Apex and Decorating would be union contractors. With regard to the Hecht Company work, Monroe explained, as he had, during the Association's contract negotiations, that the', 1462 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Union could negotiate a lower wage rate for year-round maintenance arrangements . However, he did not say that employees working on Hecht jobs were not required to join the Union Kevin expressed interest in such negotia- tions. Homer and Kevin complained about and ques- tioned the proposed written agreement. However, short- ly thereafter Kevin, on behalf of Decorating, and Secre- tary-Treasurer Daniel Ager, on behalf of the Union, signed the agreement. Homer on behalf of Apex and Kevin on behalf of Decorating also signed the Associa- -tion's contract. On May 13, 1981, Homer and Kevin on behalf of Apex and Decorating executed an agreement with the Union whereby each side agreed not to file charges or institute lawsuits against each other with re- spect to any business operation or activities prior to that date. About a week later, Kevin on behalf of Decorating sent a letter to the Union, dated • May 20, the text of which read as follows: - Please find below a list of jobs which will fall under our agreement to "finish in any manner we see fit." Please realize that we have submitted many bid proposals prior to the signing of our agreement which will also fall under this list also, however, due to the large number of these jobs they do not appear on this list As these jobs develop, we will notify your office with names and addresses Medical College of Virginia Hebrew Home for the Aged DND III - Office Building Solid Waste Transfer Station George Mason University Tycon Courthouse - Transpotomac Plaza Harbor Tower Apartments-Portsmouth, Va If you have any further questions concerning this please feel free to call. It is undisputed that thereafter Decorating never notified the„ Union of any other specific jobs _ which allegedly could be completed on a nonunion basis. Homer and Kevin, in their testimony, presented ram- bling, disjointed, and incomplete versions of their meet- ings with Monroe in which, it was difficult to separate their alleged understandings (or misunderstandings) from what was actually said . Homer testified that it was his understanding, and the Union agreed, that.on_all pending jobs, the employees did not have to join the Union How- ever, this alleged understanding would be, contrary. to the plain, language of paragraph I ,of the agreement,. which provided a 60-day transition period within which the employees would join the Union as a , group, al- though Decorating could pay them at. less than union scale on pending exempt jobs. According to Kevin, the Union was not concerned about 'the accuracy or com- pleteness of the list, of such jobs. Kevin testified that Business Agent Bobby Myers; who accompanied Monroe at the May 1981 meetings, told him to just "give me something." However, Kevin admitted that on and after May 6 Myers repeatedly asked him for a list of ongoing jobs, although he subsequently attempted to' back away from this admission, asserting that Myers already knew the identity of ongoing jobs other than those listed in the May 20 letter .4•With regard to work for the Hecht Com- pany, Homer testified that under the May 6 agreement he could perform such work in any manner he wished, without even adding Hecht to the list of exempt jobs, be- cause this' was ongoing work. which the Trumpowers continued to perform so long as it was satisfactory to Hecht. However, this explanation was inconsistent with Homer's version of his discussion with International Rep- resentative Monroe According to Homer, Monroe said that he thought the Trumpowers could retain the Hecht work while paying union scale Homer disagreed, where- upon Monroe said he would take care of it because he knew "how -to handle them " If it were understood be- tween Homer and Monroe that Hecht Company mainte- nance work could be 'performed on a nonunion basis, then there would have been no need for Monroe to sug- gest to Homer that he would see to it that Hecht agreed to "compensate the Trumpowers on 'the basis of union scale Homer testified that Monroe did not say that he could negotiate a separate maintenance scale, but he was equivocal and evasive on this point. I credit Monroe's testimony concerning the May 1981 meetings The Board and the courts have held that ostensibly separate firms' may be regarded as a single employer under the Act where there is interrelation of operations, together with centralized control of labor relations, common management , and common ownership or finan- cial control. NLRB v. M. P. Building Corp., 411 F.2d 567 (5th Cir. 1969) The alter ego doctrine is an extension of the concept of single employer. Thus, two nominally separate business entities may be regarded as a single em- ployer if one is the alter ego or "disguised continuance" of the other. Southport Petroleum Co. v. NLRB, 315 U.S. 100, 106 (1942). In determining "whether two facially in- dependent employers constitute alter egos" under the Act, the Board has long held that "although each case must turn on its own facts, we generally have found alter ego status where the two enterprises have `substantially identical' [ownership], management, business' purpose, operation, equipment, customers, and supervision " Ad- vance Electric, 268 NLRB 1001, 1002 (1984) 5 In Advance Electric the Board held that in determining whether an alter ego status was present, it would consider "whether the purpose behind the creation of the alleged alter ego was legitimate or whether, instead, its purpose was to evade responsibilities under 'the Act," but' that such intent is not an essential element ofan alter ego relation- ship. Id. at 1002. However, in Alkire.v. NLRB, 716 F.2d 1014; 1020 (4th. Cir. 1983), the court, Judge Sprouse dis- 4 Pursuant to the Company's request, the Union agreed to make Myers available as a company witness However, Myers was never called to tes- tify 5 The concepts of single employer and alter ego should note be con- fused with that of "Joint employer" Under the latter doctrine, separate firms which "share, or co-determine, those matters governing essential terms and conditions of employment" of the employees involved are joint employers of those employees, regardless of whether the firms are com- monly owned, operated, or controlled NLRB v Greyhound Corp, 368 F 2d 778, 780 (5th Cir 1966) Joint employer status is not an issue in the present case APEX DECORATING CO- 1463 senting, held that in determining alter ego status when business operations are transferred, " the initial question is whether substantially the same entity controls both the old and new employer. If this control exists, then the in- quiry must turn to whether the transfer resulted in an ex- pected or reasonably foreseeable benefit to the old em- ployer related to the elimination of its labor obligations." In Alkire, the court denied enforcement of the Board's Order because the evidence failed', to demonstrate such benefit The circuit courts are not in agreement on this point. Recently' the Second Circuit Court held that the Board is not required to find union animus or intent to evade, union obligations before it can impose alter ego status Goodman Piping Products v. NLRB, 741 F.2d 10 (2d Cir. 1984). However, in light of Advance Electric, and the fact that the present case arises within the geographi- cal venue of the Fourth Circuit, I have considered em- ployer motivation in ,determining the status of both al- leged alter egos, Decorating and Coating. In Walter N. Yoder & Sons, 270 NLRB 652 fn. 2 (1984), the Board recently held. A "double-breasted" operation is one in which a contractor operates two companies, one unionized and the other nonunionized -Depending on how the companies are structured and operated, each may be a separate corporation or else both may be so interrelated that they--constitute a single employer or one may be the alter ego of the other A collec- tive-bargaining contract signed by one of the com- panies would not bind the, other if each were a sep- arate corporation, -but would 'bind the other if both constituted a single employer and the employees of both companies constitute a single appropriate bar- gaining unit or the nonsignatory company is an alter ego of the signatory company. In the present case, by reason of the time limitation period of Section 10(b) of the Act, the complaint ,does not allege any unlawful 'conduct prior to July 16, 1982, i e, more than 6 months prior to the filing of the initial charge in the present case As Decorating signed the As- sociation contract and the related agreements in, May 1981, it would not be necessary to, determine that Deco- rating, was an alter ego of Apex in order to find that Decorating was bound by, that contract. However, the General Counsel and the Union are alleging, in sum, that the formation and the subsequent, operations of- Coating Were a continuation or resumption, in new form, of the Trumpowers' prior- efforts to, avoid,-their obligations under the union 'contract through the operations of Decorating. The Company contends, by way of defense, that 'Apex and Decorating went out of business or became defunct for economic reasons. Therefore it fs ap- propriate to' consider the status and actions' of Decorat- ing as evidentiary on the ultimate question of whether Coating was the alter ego of Apex and, Decorating. I find that at least from 1980, when Homer assumed full control and ownership of the business, Apex and Decorating constituted a single employer under the Act. Respondents do not contend otherwise: Indeed, Coating virtually concedes such status, asserting (Br . 10) that "'the evidence, viewed as a whole, establishes that Homer was the moving force behind- management and labor re- lations at Apex and Decorating." I further find that Decorating was the alter ego of Apex and functioned for the purpose of obtaining nonunion ,and thereby ena- bling Apex to avoid its contractual obligations to the Union. As indicated, I have credited International Repre- sentative Monroe's testimony concerning the May 1981 meetings, including his uncontradicted testimony that Homer, in Kevin's presence, stated that he would' soon retire, that Kevin would be taking -over all the oper- ations, and that he did not 'want Kevin to be involved with the Union: I find that these statements, together " with Homer's longstanding efforts to avoid contractual obligations through alter ego operations, are evidentiary with respect to the subsequent formation, operations, and status of Coating. With regard to the May 6 agreement, I find, as testified in sum by Monroe, that the agreement meant what it said on its face, namely, that all Decorat- ing's employees would be required to join the Union within 60 days, that Decorating was required to submit a list of jobs for which it was already committed- to per- form work, and that only such jobs would be exempt from coverage of other provisions of the Association contract As Decorating never furnished, any list other than that submitted in the May 20 letter, it follows that all other Decorating jobs, whether oi- not pending as of May 6, 1981, were covered by the Association contract. I specifically find, in light, of the credited testimony of Monroe and the plain language of the May 6 agreement, that maintenance work for the Hecht Company was cov- ered by the Association contract. (The Union left open the possibility that a lower wage rate could be negotiat- ed for year-round maintenance work, but Decorating never requested such negotiations.) Interestingly, no party has addressed the question of whether the Union and Decorating could lawfully negotiate an agreement which partially exempted Decorating's operations from contractual coverage.6 The Union, Apex, and its alter ego .Decorating were all bound to a multiemployer' bar- gaining unit . Article IV, section 1, of the Association contract expressly limited the Union's-authority to nego- tiate separate agreements although its applicability to'the present situation is not clear: In Sangamo Construction Co, 188 NLRB 159, 160 (1971), the Board indicated that a union could negotiate an agreement with a member of a multiemployer 'bargainiag''association if' such conduct did' not Have a "significantly. adverse impact 'upon the in- tegrityof "the'inultiemployer' bargaining 'uriit" orwas not in de'r'ogation of the As'sociation's bargaining authority or outside the coverage ,ofi the' ultimate Association's contract." 'In "the' absence ',of persuasive evidence that such factors were present, I am inclined to resolve the doubt in favor'of,validrty of the May 6 agreement.'Ho`w- ever, the fact that the signatories were- bound to multi- ,- , r - ,.. .. 6 The meaning and legal significance of the May 6 agreement, is at issue in this case,andm-st u be considered in determining the merits of the alleged unfair labor practices in this case, e g . whether Respondents un- lawfully failed to apply the Association contract to Hecht Company maintenance ,work Therefore I must consider the validity of the May 6 agreement whether or note the parties have discussed this question 1464 DECISIONS OF NATIONAL LABOR RELATIONS BOARD employer bargaining is an additional reason' the May 6 agreement should be strictly limited to its express terms. B. The Union 's Efforts to Obtain Compliance with the Association Contract, the Formation of Coating, Alleged Alter Ego Status of Coating, and Alleged Violations of the Association Contract 1." Developments from July 1981 to the meeting in early March 1982 Beginning in July 1981, Union Business Agent Donald Caton repeatedly called the Trumpowers in an effort to .obtain compliance with the Association. contract Caton -specifically requested a list of the names of employees, so that the Union could get them signed up as required by .the contract. He -was unsuccessful. Homer promised to take care of it but never did. Kevin offered various ex- cuses, saying that he would talk to his father or that he did not, know where the records were kept. By January 1981, Kevin simply told Caton to-"get off my back." In the, meantime, Decorating was making only token ges- tures toward contract compliance. -Union and trust • fund records' indicate that Decorating made health and wel- fare fund payments for four employees in May 1981 for a total of 117 hours of work, for four employees in June 1981 for a total of 120 hours of work, and for three em- ployees in July 1981 for 48 hours of work; and submitted rio other payments for any period. The records further indicate that Decorating deducted and forwarded union dues for three or four employees for periods- of time in May, June, and September 1981, submitted reports indi- cating that there was no work in July, October, Novem- ber, and December 1981, and did not forward any other dues payments. Homer testified that as a favor to Monroe to show good faith, he put some union members on Decorating jobs and paid- them union scale and bene- fits, but did 'not pay the nonunion employees such rates or benefits Decorating's payroll records. indicate that Decorating continued to employ painters in 1982. The May 6, 1981 agreement' required that Decorating's em- ployees join the Union as a group within 60 days, wheth- er or not they were working on exempt jobs. Therefore it is evident that Decorating was failing to honor the As- sociation contract in at least this regard. The Association contract, as permitted by Section 8(f) of the Act, re- quired union membership as a condition of employment after 8 days of employment, and it is' evident from the employee income figures for 1982 that some painters worked much more than 8 days for Decorating. Deco- rating performed $194,000 worth of maintenance work for Hecht Company in 1981 and $36,000 worth in 1982, and continued to perform such work until the first week in April, but no health and welfare fund payments were submitted in connection with such jobs. Kevin Trum- power testified that Decorating performed work 'for Donohoe Construction Company in the late 1970s, but professed that he could not recall any other jobs for Donohoe. However, Keith McKinnon, Donohoe's vice president for construction operations, testified that in January. 1982 Decorating entered into a contract for $28,000 to perform services for Donohoe at the Litton Computer Services project in Reston, Virginia, and that this was the last job Decorating performed for Donohoe (Thereafter only Coating performed work for Donohoe.) The Litton job was not listed in the May 20, 1981 letter, and no testimony or other' evidence was presented which would indicate that Decorating submitted a firm bid for the work prior to May 5, 1981. Therefore it is evident that Decorating violated the Association contract by fail- ing to make health and welfare funds in connection with this job. Even Apex dragged its feet when it came to, contract compliance. Evidence was introduced which in- dicated that Apex made certain 1982 trust fund payments only after receiving complaints from the funds Unfortu- nately, the full extent of Decorating's failure to adhere to the Association contract cannot be determined from Re- spondents' records because many of those records were allegedly destroyed by a fire on October 22, 1982. It is evident that Kevin, who was aware of this limitation on the evidence which the General Counsel could present, professed selective recall in the anticipation that the General Counsel might not be able to prove violations of the Act. I find it incredible that Kevin, the president of Decorating since May, 1981, could remember jobs in the 1970s but could not remember the last job which Deco- rating performed for Donohoe in 1982. Rather, Kevin demonstrated a pattern of selective recall which pervad- ed much of his testimony. In early 1982 International Representative Monroe contacted Kevin by telephone concerning Decorating's failure to adhere to the-Association contract. Kevin did not deny that he was violating the contract. -Rather, he complained that he was being -outbid and not getting work. Monroe asked for evidence of his profit margin, but Kevin avoided answering the inquiry. Instead; Kevin went on arguing that'he could not-do business under the union contract. Monroe said that he would advise the Union to take legal action About March 1 Monroe, ac- companied by three business, agents, located Homer in his office. They complained that Homer was not living up to the contract. Homer answered that Kevin and George O'Connell were- now running things, and that they would be "nuts to live up to this agreement." Monroe asked about rumors concerning a third compa- ny. Homer answered that he did not know anything about that Monroe indicated that the Union would take legal action. Homer testified that the May 1981 meetings were the only time that the Union disagreed with the way he operated. However Homer then contradicted this assertion, testifying that in the spring of 1982 Monroe de- manded a deadline for commencement of union scale on Hecht Company -work, and also-demanded health and welfare fund payments. Homer and Kevin did not other- wise contradict Monroe's testimony concerning their contacts in early 1982 I credit Monroe. Significantly, Homer made no distinction between corporations when he claimed that Kevin and O'Connell were running things and, as will be discussed further, he knowingly and falsely concealed the existence of Coating I find that Homer's statements and actions at this time consti- tute evidence that the three Respondent corporations were in fact operated as a single business enterprise, and APEX DECORATING CO 1465 that Coating was formed as a means of evading the con- tractual obligations of Apex and Decorating. 2. The formation of Coating Coating was-incorporated as a Maryland corporation on April 30, 1982.7 The articles of incorporation indicate that George O'Connell and Mildred O'Connell (appar- ently O'Connell's wife) were the directors. 'In his investi- gatory affidavit to the Regional Office, O'Connell stated that "I first started at Madison Coating on or about April 30, 1982 to do the Hecht's job and a few other small jobs." O'Connell further stated that "at this time" he was approached by Kevin "about the possibility of going into business together " However, in his testimony O'Connell admitted that Coating came into existence as a business. entity approximately 3 months before its incorporation. O'Connell testified that in February Kevin asked to become his partner, and that in March they became part- ners. Coating's accountant, Thomas Isdainer, testified that his records indicated that Coating commenced busi- ness in February, and on February 1 commenced repay- ing loans from Homer's wife Violet. Kevin and O'Con- nell testified in sum that they each owned a 50-percent interest in Coating, although the corporation never issued any stock Homer testified that he never had any ownership interest in Coating However in June 1983, shortly after the Regional Office declined to proceed in the present case," Coating filed a 1982 Federal Corpo- rate Income Tax Return, signed by Kevin, which con- spicuously indicated that Homer and Kevin each owned a 50-percent interest in Coating. Accountant Isdainer, who signed the return as preparer, admitted, that there would be tax implications if Coating were wholly owned by members of the Trumpower family Nevertheless Is- dainer testified that the return -was based on erroneous information. According to isdainer, his associate, a Mr. Lorrash, who prepared the return, listed the ownership on the basis of the wrong notes The 1982 return was not corrected even after Coating filed its 1983 tax return in July 1984, after the General Counsel issued the present complaint Indeed, Isdainer testified that Kevin did not call the alleged error to his attention until after the Gen- eral Counsel introduced the 1982 return into evidence in the present case. Isdainer's attempt to cover up for his clients is as full of holes as the proverbial Swiss cheese. First, Lorrash, who allegedly made the mistake, was not called as a witness. Therefore Isdainer's testimony amounts to little more than hearsay Second, the purport- ed handwritten notes, on which Larrash allegedly relied, indicate by arrows that "Kevin" and "George" each owned 50 percent of Coating. Third, Isdainer admitted that he reviewed the 1982 tax return. This would mean that, in order to credit Isdainer, I would have to believe that Lorrash prepared the return and Isdainer and Kevin each reviewed it before signing, all without spotting a conspicuous error which had potential tax consequences. ' All dates hereinafter are in 1982 unless otherwise indicated 8 On May 10, 1983. the Regional Office initially declined to proceed in the present case On June 2, 1983, the Union appealed to the General Counsel from that decision On December 30. 1983, the General Counsel remanded the case for further investigation, and on June 14, 1984, sus- tained the appeal As of June 22, 1983, when the 1982 return was filed, the Trumpowers were not concerned with labor relations implications of their tax returns In a letter dated June 23, 1983, to Isdainer, Respondents' attorney in.this case indicated, that. he did not think the General Counsel would reverse the Regional Director. Therefore the Trumpowers sought the tax advantages of a closely held family corporation. However, by July 31-, 1984, when they filed the 1983 return, the situation had changed. The Internal Revenue Service probably would not com- plain if Coating's return falsely indicated that O'Connell was a 50-percent owner, as this would probably result in a higher tax. However, the potential additional tax would be considerably less than Coating's potential liabil- ity in the unfair labor practice case. As will be discussed, there is considerable additional evidence which indicates that Coating. was simply another Trumpower corpora- tion. I find that Kevin was truthful in this regard when he signed the 1982 tax-return, and that Homer and Kevin were and are the co-owners of Coating. George O'Connell, the president and ostensible found- er of Coating, did not impress me as a businessman. Con- sidering his ostensible status, he displayed a remarkable lack of knowledge concerning the' business of Coating. O'Connell testified that he ' did not know how much Coating, paid for its equipment or the location of its bank account, how Coating obtained the WSSC fob (one of its largest), or when -Violet Trumpower became Coating's bookkeeper. He testified in sum that Kevin handled these matters in addition -to selecting Coating's business loca- tion, mailing address, accountants, and attorneys, incor- porating the firm, obtaining licenses, granting promotions and pay increases, and negotiating nearly all Coating's jobs: O'Connell testified that he did not obtain any work for 'Coating other than "a couple of small 'jobs" and "Hecht stuff," i e , Hecht maintenance work. In fact, as will be discussed, it was Kevin and not George who ar- ranged for the Hecht Company to transfer the work from Decorating to Coating. O'Connell testified that he began to draw paychecks at Coating from the time he began with that corporation. However, he was unable to explain why. Coating's payroll records indicate that he began drawing paychecks in April, whereas other Coat- ing personnel began drawing paychecks in March. O'Connell displayed more knowledge concerning super- vision of field operations, i.e., the same kind of work which he performed for Apex, and Decorating O'Con- nell admitted that he spent 80 percent of his time in the field, and that his work in connection with the Hecht Company was the same as before, i.e., field supervision .O'Connell testified that Kevin "had more knowledge of how to set up a business than I did," but that O'Connell signed an application for a license to do business in Alex- andria, Virginia, because he was the president. This would be consistent with the Trumpowers' ostensible method of doing business Coating argues, in sum (Br. 10), that Homer Trumpower had a practice of designat- ing figurehead corporate officials. If so, then it would appear that Homer continued the practice when O'Con- nell became president of Coating. However, O'Connell did display sufficient knowledge concerning Coating's 1466 DECISIONS OF NATIONAL LABOR RELATIONS BOARD origins to make a damaging admission . Thus O'Connell testified as follows: - Q. Well, there came a time, as you were saying, when Homer told you about the problems he was having with the company. A. That's right. Q. What problems did he say he was having? A. He said his business was going down . He says he was, trying to keep it going. Then the union came to them and he said he was going - to sign all his men up union . So my head started going around about- what I was going to do. Q. Okay. So Homer told you that he was going to have to sign up all his men with the union , right?. A. Yeah. Q. And that's when you decided you-were going to start. Madison Coating? A. I thought of it for a while. Thought of it in my mind for a while before I did it. In sum, O'Connell admitted that Coating, was formed because the Union was pressuring Homer to operate as a union contractor: I credit O'Connell's testimony in this regard, but I do-not credit his assertion that he began Coating. It is.evident from his own admissions that he lacked the knowledge or ability to organize and run a large business such as Coating. Rather, I find that Kevin organized and functioned as the operating head of Coat- ing.-Homer and Kevin designated O'Connell as the fig- urehead president of Coating and his wife and daughter as 'nominal officers, although they did not'work in the business O'Connell assumed additional responsibilities which were commensurate with his progression in the family business, e.g., he purchased supplies, and within the limits set by Homer and Kevin, or in consultation with them ," assigned work, set pay rates for individual employees, and 'set holidays. ' As president, -O'Connell could sign paychecks. However, his responsibilities re- mained substantially that of a field superintendent.. ` - Kevin and O'Connell testified-- in- sum that they began 'Coating with an initial investment of $10,000, of which Kevin • put up $1000. and O'Connell. $3000 . Homer, Kevin, and O'Connell testified- in sum that Homer did not provide any money for the-business, and they did not indicate 'in their testimony that anyone else put -up money for the business. However,' the 1982: tax ,return,. discussed above, indicated that in 1982: Coating owed Homer $38,000. Accountant Isdainer testified: that. in fact Violet Trumpower.'loaned Coating $71,000 during-1982, but that for tax purposes Homer: and Violet were treated as a single individual . If Homer,did- not;own at least :50 percent of the voting stock of Coating, there would. have been no need to list the indebtedness on. the-tax return (presumably this was another-mistake which 'Isdainer: and Kevin overlooked when they. signed the return). Is- dainer's testimony, reflected a pattern which was,demon- strated throughout this 'hearing Whenever a document contained entries which tended to indicate that Respond- ent corporations constituted alter . egos, or a single . em- ployer, Homer, Kevin; O'Connell, or •Isdainer would simply dismiss the entry,as a;mistake, even if the alleged mistake had significant financial implications. 9 'If Homer and Violet were a single person for . tax' purposes, then the same rule could well apply to this proceeding. See Truck & Dock Services, 272 NLRB 592 fn. 2 (1984) I do not credit Isdainer . I find that the tax return meant what it said, and that Homer put up most if not all the money for Coating. Even if Violet rather than Homer put up the money, this 'would amount to little more than a dif- ference without a material distinction , in _view ,o_f Violet's significant involvement in the operations of. all three Re- spondents. Violet was chief bookkeeper, custodian of records, and for all practical purposes office manager for the three corporations, and during- 1982 she was on the payroll of all' three . corporations.' ° • Isdainer admitted that, although Violet was not an officer, she had author- ity to sign- checks for Coating, and that only Violet and Homer had access to Coating's petty cash accounts Is- dainer's testimony and records further indicated that Violet wrote substantial checks for Coating, sometimes to herself, and some of these to cover. her, personal ex- penses One check which was introduced in evidence in- dicated that Coating paid Decorating's legal expenses. All three corporations used the same accountant (Wayne Bird) to process their payrolls and generate books and records. ' - As indicated, Homer told International Representative Monroe, before Coating came into existence, 'that he would soon retire, that Kevin would soon be taking over all the operations, and that he did not want Kevin to be involved with the Union Homer's subsequent involve- ment with Coating indicated that he was using Coating as the vehicle to achieve these ends. The answer to the complaint asserts that since September 1982 Homer has been -a job superintendent for Coating., Homer testified that, after Apex and Decorating ran out of new work, Kevin and O'Connell asked him to go to work for Coat- ing, setting up and running jobs, and he agreed. Homer testified that he was not involved in hiring or firing and did not.-recommend such action, and transferred employ- ees only' if instructed to do so' Homer initially testified that he was not: even responsible for making sure that there were enough employees, at the jobsites However, after being confronted. with, his investigatory affidavit he admitted that he did in fact exercise such authority. Not- withstanding Homer's -ostensibly limited responsibilities and authority, Coating paid him more than .either Kevin or. O'Connell., Respondent's payroll records indicate, that in- 1982 they were paid as follows: ;' , . Apex Decoiatmg I ; -9 Homer, Kevin, 'and O'Connell weie called by the General Counsel as adverse - witnesses - Homer was recalled by Coating to testify' concerning meetings', with International; Representative Monroe Isdamer was Coat- ing's only other witness • ' ' . , 10 Accountant Isdainer initially testified that Violet had nothing to do with the records of Apex and Decorating However, Isdamer subsequent- ly admitted that after the October 1982 fire she told him that she would assemble Decorating's records Isdamer's testimony reflects adversely on his credibility, . , APEX DECORATING CO. 1467 Homer Kevin O'Con= Hell Coating 10,000, 25,000 21,418 Total $41,450 $41,200 $28,334 During 1983, when all three were paid only by Coating, Hothei received '$44,800, Kevin received $41,800, and O'Connell received $30,000 Homer testified that Coating initially paid him $900 per week. Although Homer osten- sibly had authority and responsibilities comparable to that of other supervisory personnel, or even less; no evi- dence was introduced to'indicate that anyone other than Kevin was paid anywhere near as much as Homer. No evidence was introduced which would indicate that O'Connell received dividends. or' other earnings which would make his income comparable to or higher than that of his ostensible partner Kevin or his ostensible em- ployee Homer. Rather, the only evidence of such earn- ings consisted of payments to Violet and Kevin. In, sum, the relative total incomes of Homer, Kevin, and O'Con- nell remained substantially unchanged throughout 1982 and 1983, even after Apex and Decorating ceased oper- ations The income figures are significant in another re- spect. Homer testified that he would shift salaries be- tween the payrolls- of Apex and Decorating, depending on their relative volume of business. It is evident that this practice continued, with the inclusion of Coating, after Coating commenced operations Homer's professed lack of involvement in personnel matters was refuted by the, testimony of former Coating employee,Charles Pam- plin and Union. Business Agent Caton. Pamplin testified that in November 1982 he inquired by telephone con- cerning a. newspaper ad for "Painters Needed " The, re- ceptionist answered "Madison," i.e., the common word in the names of Decorating , and Coating, and put "Homer" on the, phone. Homer asked for and Pamplin gave him his qualifications. Pamplin asked for $7.50 or $8 per hour. Homer immediately answered that he would give Pamplin $7 per hour to start, -and $8 per hour if he,worked out, and told .-him to report the next day to "Ron" (Foreman Ronald, Hayden) at the Shoney Inn job in'Tysons Corner, Virginia -Hayden immediately put Pamplin to. work. Thereafter Pamplin was trans- ferred to three other jobs, •once by Homer. Pamplin last worked for Coating at a job at 10th Street and Massa- chusetts Avenue in Washington, D C. On December 13 he complained to Foreman Ronald Coleman that he was assigned to helper's work They argued, and Coleman fired' him Painplin reached Homer by telephone and protested his discharge Homer said he would check with Coleman. Thereafter Homer told Pamplin that `.`he decided he couldn't go against his foreman," and told Pamplin to go to another job where Kevin would give him his final paycheck. Business Agent Caton testified that on several occasions he responded- by telephone -to newspaper ads for painters, and pretended to be a job ap- plicant. The phone number was that of Decorating, but on each occasion the receptionist -answered "Madison " The receptionist would either switch Caton to Homer or, if Homer was not in, tell Caton to call back, and on one occasion said they were not hiring. When, Homer spoke to-Caton, he asked about his experience and other information pertinent to employment Homer told Caton that he would be working for Coating, and on one occa- sion directed him to report to the Shoney job. With regard to wages, Homer told him on one occasion that "it's up, to you,", and on another occasion that "when you get to the job and go. out on the job, we'll find out what you're worth " Homer's testimony concerning these matters was vague and equivocal. Homer testified that he did not remember hinng Pamplin, but might have taken down information, but that anyone in the office could do this. He testified that the foremen did the hiring and firing and set wages, but-he admitted that they had to call the office for approval of wage increases. Homer testified that Pamplin complained to him about the cir- cumstances of his discharge, and that he answered that "the foreman handles the hiring and firing." Homer failed to explain why if he were merely a job superin- tendent with less authority than a foreman, Pamplin's protest was referred to him Homer also failed to explain why job applicants were referred to him if this was not his area.of responsibility Neither Homer nor any other witness denied that the receptionist regularly answered "Madison." Homer's lack of credibility was demonstrat- ed throughout his testimony. I credit the testimony of Pamplin and Caton. I find in light of that testimony that Homer actively participated in- the management of Coat- ing, and specifically that he had authority to and did hire,- fire, and -transfer. employees, fix wage rates, and adjust employee grievances The testimony of Pamplin and Caton is also significant in other respects Their un- contradicted testimony demonstrates that, in at least one respect, Decorating and-Coating held themselves out to the public as a single business by having their reception- ist answer the phone with "Madison.". Together with other evidence which will be discussed, -their testimony further, indicates that in fact the Respondent corporations maintained common offices with common personnel, and utilized -a common telephone, number In the meantime Kevin, -the operating head of Coating, continued to perform the same functions for Decorating which he had been performing, and.for a period of time drew salaries from both corporations.' Kevin testified that he left Decorating in April or May; i.e., several months after the formation of Coating In fact, Kevin never left Decorating, Rather, the nature of his duties changed as the'work shifted from Decorating to Coating. -As will be discussed,i Kevin on behalf of Decorating negotiated con- tracts which were'- subsequently performed by 'Coating, and arranged, the' transfer of work `from Decorating to Coating! -In 1983, long 'after, Decorating ceased oper- ations, Kevin as "president'", off Decorating and "vice president" of Apex represented 'both corporations in an interview with : the Internal Revenue Service relative to proposed, penalty" assessments (the = position taken by Kevin with- regard to the demise 'of Apex and Decorat- ing will be-discussed at a later point in this decision) Kevin admitted that for at least a month, and probably for 2 months, he drew, concurrent `salaries from Decorat- ing and Coating Kevin- testified that Homer refused to 1468 DECISIONS OF NATIONAL LABOR RELATIONS BOARD accept his resignation from Decorating, and therefore he did not resign even after becoming involved in Coating's operations. If so, this would indicate that Kevin ac- knowledged his father's ultimate authority in the business regardless of the corporate entity involved. 3. Additional evidence concerning alleged single employer and alter ego status : common premises, equipment, personnel, and supervision Throughout most or all of 1981, and until in or about August 1982, Apex., and Decorating maintained their business office at the 8411 Old Marlboro Pike location. In or about August 1982, Apex, Decorating, and, Coating moved into three adjoining trailers located in a,complex of businesses at 3354 Patuxent River Road, Davidson- ville, Maryland. Homer, Kevin, and O'Connell testified in sum that Coating never maintained an office at the Marlboro Pike location. According to O'Connell, he op- erated Coating out of his home until Coating moved into two of the three trailers at the Patuxent River Road lo- cation. The two trailers were owned by Coating, and the third, a rented trailer, was ostensibly used only by Apex and Decorating. In fact, as evidenced'by Coating's insur- ance records, Coating always shared common offices with Apex and Decorating. When Coating was formed, Kevin on behalf of Coating took out an insurance policy, effective as of March 1, 1982; which included property coverage for its premises at "8411 Old Marlboro Avenue, Upper Marlboro, Maryland." Once again, Homer and Kevin dismissed the document as a mistake. If so, then the indicated address would have constituted not merely a mistake but a possible fraud on the insurer. Kevin testified that in August 1982, pursuant to his re- quest, the-agent changed the policy to indicate the cor- rect location of Coating, namely, the Patuxent River Road location. However, this' change simply reflected the fact-that all -three corporations moved to Patuxent River Road at this time. After the October 22 fire, Coat- ing submitted a claim for its losses, including "the entire cost of 2- out of 3 trailers" (the third being rented) and the contents of all three trailers, including' records = and supplies which were specifically identified as the proper- ty of Apex .and Decorating, e.g., checks and payroll records. In a moment of candor, Homer testified that the fire destroyed the records of: Apex Decorating and Coat- ing, which were "both all the same," because "we was all operating the same, one company, so everything was together." I find- that, from its inception, Coating- shared common offices with Apex and Decorating, and that Apex and Decorating transferred their office furnishings and supplies to Coating without compensation. The shar- ing and eventual transfer to -Coating 'of. common office furnishings, equipment, and -supplies : also extended to field equipment. Business Representative Catoii - testified that he saw Apex equipment on Coating jobs; and former Coating employee Pamplin- testified that he worked with equipment marked "Apex." Homer -testified that he sold a small amount of Apex-Decorating equipment to Coat- ing, and Coating presented in evidence canceled checks from. Coating to Decorating, totaling $3750, ostensibly in payment for, such equipment. As Coating was owned and financed-by the Trumpower family, such payment would simply amount to transferring money from one pocket to another. If Homer were only interested in raising money for Apex and Decorating, then it is unlikely that he would have sold the equipment to Coating, which was either a family corporation or, as suggested by Respond- ent, a competitor Rather, these transfers of equipment, together with other evidence which will be discussed, in- dicate that Homer was intentionally promoting Coating's business at the expense of Apex and Decorating. .. As found, Homer, Kevin, Violet, and O'Connell per- formed substantially the • same functions for Coating which they had been performing for. Apex and/or Deco- rating, except that ( 1) Homer gradually reduced his day- to-day involvement in anticipation of . retirement, (2) Kevin, as Homer's son and successor, assumed prime re- sponsibility for the operation of the business, and (3) O'Connell assumed, slightly more responsibility which was commensurate with his progression in the business. These -changes would have taken place even if Coating had never been formed. The evidence further indicates that Coating inherited Apex-Decorating's employee com- plement and supervisory personnel: Respondents' person- nel records indicated that Coating began hiring in March 1982: During March and April Coating hired some 18 in- dividuals,, including supervisory personnel All of them also worked for Decorating during 1982. In sum, Coat- ing's initial complement consisted entirely of Apex and Decorating personnel. Even allowing for the fact' that employees in the construction industry may work for several-firms over the course of a year, this would be a remarkable coincidence. However-it was not a coinci- dence. O'Connell admitted in his testimony that Coating performed maintenance work for= Hecht Company, using the same employees who had been doing such work for Decorating. Homer in his testimony identified 17 individ- uals, including O'Connell, • who acted as foreman for Apex or Decorating during 1981 or 1982.' Thirteen of them worked for Coating during 1982, and Coating's payroll records indicate that 11 of them received sub- stantial - earnings from Coating during that year. Several were identified' as foremen for Coating. Indeed, as with offices, telephone service, supplies and equipment, and payment for services, the Trumpowers simply, disregard- ed corporate lines when it became too inconvenient to maintain the pretense of separate businesses. Correspond- ence from Coating to the-Hecht Company indicated that a letter dated May 13, 1982, was typed by Kevin's secre- tary -Thalia Aushereman, who was -on the payroll of Apex and' Decorating but not Coating during 1982 In the absence of contrary evidence, the inference is war- ranted,' and I so find, that Aushereman regularly per- formed, clerical services for • the Trumpowers without regard to corporate distinctions. Indeed Kevin admitted in, his testimony' that she performed work for all three corporations.- - 4. Alleged transfer of work from Decorating to Coating As discussed, Decorating began operations as a non- union . firm, and continued to operate nonunion, with- token exceptions in the case of a few union members, APEX DECORATING CO -- 1469 even after it signed the Association contract . The Gener- al Counsel , contends '(Br 8-10) that after the Union re- peatedly demanded compliance with the contract, Deco- rating passed work to Coating I shall at this point dis- cuss the alleged jobs in this category i t a. Hecht Company work I shall begin with' Respondents' Hecht Company- oper-ations, 'because' ` Coating's" operations as a large scale painting contractor began with that work , and because the testimony and -documents concerning that work which were presented in evidence are particularly illumi- nating with regard to Coating's relation to Apex and Decorating and to the reason or reasons Coating eventu- ally obtained all that work . The Hecht Company oper- ates some 14 department stores in the greater Washing- ton, `D C area. In 1979 Apex, i.e, the union firm, per- formed interior decorating at a new Hecht store in An- napolis. In 1980 Apex performed remodeling at Hecht's 'Belair store, and in 1982 at its Towson , store. The con- tract price of the Towson job was $206 ,000, which would rank that job as one of the largest jobs performed by any of Respondent corporations Apex did not per- form any other work for Hecht In 1980, Hecht ex- pressed interest in having its ' routine painting mainte- nance performed on a regular basis , by a stable crew. Victor Hares, who was then one of Homer 's partners, suggested that Hecht contract , with Decorating, i.e., the nonunion firm, which could give Hecht a more favorable rate . Hecht did so, and from 1980 through the first week of April 1982 Decorating performed the Hecht 'mainte- nance work In 1980 Decorating remodeled the Fair Oaks"store, but did not thereafter perform any work for Hecht other than maintenance . As a result of these con-- tracts Hecht became the Trumpowers ' largest customer and-a reliable and steady, source of'income. Decorating would periodically bill Hecht for the maintenance work, and Hecht - would pay the bills unless it was dissatisfied with price or performance . There is no indication that at .least until -April 1, 1982, Hecht expressed any such dis- satisfaction . On 'April 1, Decorating by Kevin sent a letter to Hecht, the text -of which was as follows- Recently our firm has become a. signed union .painting contractor in the Washington area, having signed , a. collective bargaining , agreement with Painter's District Council # 51 This action has, re- suited in a - marked increase in-the wages which, we , 'pay our employees. Therefore, the hourly rate .would have , to be- in- creased from the present--rate to $28 81 per hour We assume that this rate would not be economically " Coating asserts (Br 13) that at the hearing the General Counsel conceded that only six specific jobs were bid by Decorating but subse- quently performed by Coating This is a misstatement of the General Counsel ' s position The parties stipulated that these jobs were bid by Decorahdg and performed by Coating , However, the General Counsel did not confine its position to those jobs Indeed, there was much litiga- tion concerning Hecht Company work , which was not included on the stipulated list In view of the ostensible destruction of records in the Oc- tober 1982 fire,-the total 'number of jobs involved cannot be defined sith any degree of certainty from the present record feasible for the Hecht Company to pay, since it is nearly double the present rate of $1494 per hour ' Finally, we propose that the use of our current arrangement be terminated by your firm and that this painting work be turned over to Madison Coat- ing Systems, Inc., which is headed up by Mr George O'Connell Although we regret this loss of sales , we feel that Mr O'Connell can well serve the needs of Hecht Company. Coating began performing the Hecht maintenance work in the second week of April, using the same crew, manner of performance, and billing system as Decorat- ing, and at exactly the same rate. O'Connell continued to function as superintendent over the work In 1984 Coat- ing also performed remodeling work at Hecht's Mont- gomery Mall store. 'Homer flatly testified that Decorating did not transfer any jobs (including the Hecht work) to Coating Homer testified that when he told Hecht that he would have to pay union scale, they told him they would take away the work from him According to Homer, O'Connell then told him that his business was "shaky," and that O'Con- nell might as well do the work himself Homer testified that O'Connell then began Coating in order to take over the Hecht work, and that Homer was indifferent about the,whole matter -because he knew he had already lost the work Homer testified that he' could not remember when he spoke to the- Hecht Company, but that Coating did not then exist, and that Kevin wrote his April 1 letter, as a result of Homer's conversation with Hecht Homer's testimony is 'inherently contradictory, because Coating was formed in February, .long before Kevin wrote his letter. Homer admitted that he never paid union • scale--to the. employees who performed Hecht -maintenance work. However, in his. investigatory affida- vit Homer. told a different story, asserting that "I- could no longer afford paying the difference between what Hecht's was, paying and, union- scale." Even apart from these contradictions,, Homer's,- , explanation was' demon- strably -incredible. The ;text of -Kevin's April 1 letter plainly indicates that, it was. Kevin and not the Hecht Company which initiated the removal -of the mainte- nance work from -Decorating, =and the concurrent trans- fer of that work to Coating. Kevin made no reference to any prior conversation- between ;Homer and Hecht. Rather, the letter. indicates-that this was the first commu- nication between the Trumpowers and Hecht concerning the matter Warren-Simons,. Hecht's-divisional vice presi- dent for-construction and maintenance, who was present- ed -as a' General Counsel :witness. testified that he never told-Decorating that he was taking any work from them Although ,Kevin addressed' his letter to Hecht.-Director of Maintenance Bill Bozeman, -Simons was Bozeman's su- perior.---Thereforeif :such • a threat: were made,' Simons would; have'authorizedtit or at least 'known of and ap- proved the threat. _ . i . - - - - Kevin's April 1 letter was itself replete with false- hoods Decorating did not "recently" sign a union con- tract. Rather,, it' signed a union -contract in May 1981 The contract did • not .result in a "maiked increase" in 1470 DECISIONS OF NATIONAL LABOR RELATIONS BOARD wages paid by Decorating, because Decorating never paid union scale: Coating was not "headed up" by O'Connell . Rather, Kevin himself headed up Coating. In -an effort to justify the comparative figures which he gave Hecht, Kevin in his testimony presented a detailed analysis of how he arrived at those figures. i 2 Kevin's analysis, like Homer's testimony concerning the Hecht contract, was factually inaccurate , legally irrelevant, or a combination of both . If Coating were the alter ego of Decorating, then Coating would be obligated to maintain union conditions , including wage scales and fringe bene- fits, on all 'jobs, including Hecht maintenance work, re- gardless of Kevin's analysis of the labor costs, and re- gardless of whether this might result in loss of the work. As found, the Union indicated that it was willing to ne- gotiate a lower wage scale for maintenance work, but the Trumpowers never acted on the offer. Second, the credible evidence indicates that Hecht never expressed an unwillingness td accept union scale . Thus in 1982 Apex, the union firm , performed substantial work for Hecht, with no evident complaints from Hecht. Third, Kevin never gave Hecht the option of whether it would accept union scale if this were necessary to retain the Trumpowers' services. Rather Kevin in his April 1 letter simply presented an assumption that Hecht would not accept an hourly rate of $28 . 81 per hour, 'and proposed that Hecht utilize Coating at an hourly rate of $ 14.94 per hour. Plainly this was an offer which Hecht would not refuse. Fourth, Kevin's figures were false and blatantly misleading Kevin admitted that in arriving at those totals he added an overhead charge of 15 percent of esti- mated labor costs, regardless of actual overhead costs, and a profit margin of 10 percent, again without adjust- ment for the higher union labor costs. Kevin thereby ar- bitrarily inflated the difference between the union and nonunion rate to Hecht. Kevin also based the proposed union rate on contract wage rates and benefits for the period from May 1982 to May 1983 Kevin did not sug- gest that nonunion wage rates might also increase during this period By letter dated May 13, only 6 weeks after Coating assumed the Hecht maintenance contract, Coat- ing by "Project Manager" Kevin informed Hecht that its hourly billing rates would be increased by 9 percent. It is unlikely that Kevin would have been unaware of at least the strong possibility of such an increase when he sent his April 1 letter. The May 13 letter was also significant in other respects Under the union contract painters and paperhangers received the same rate of pay. However Coating's charge for paperhangers • was substantially higher than that for painters. Indeed Coating's charge for paperhangers ($22.41 per hour) was approximately. equal to Kevin's estimate -of total labor costs per employee under the union contract. However Kevin based his April 1 estimate of nonunion costs only on the lower 12 Earlier, Kevin testified that he was not involved in setting wage rates at Coating , that O'Connell established the pay scale, and that Kevin learned the pay scales from reading payroll sheets In light of Kevin's de- tailed analysis of the labor costs of Decorating and Coating, and Kevin's subsequent action in unilaterally increasing Coating's costs and passing the increase on to Hecht , it is evident that Kevin's assertion was false O'Connell was obviously not capable of presenting an analysis such as that presented by Kevin rate for painters . Kevin also failed to figure in O'Con- nell's wage rate, which '(as of May 13) was slightly higher than that of a paperhanger. ' b. Work performed for L. A. Hilte Associates, Inc.: the Rivertown Restaurant job in Hyb1a Valley, Virginia Terri Thurston , an office clerical employee for general contractor L. A. Hilte Associates , Inc. (Hilte) was, pre- sented as a General Counsel witness. The substance 'of her testimony is undisputed , although the parties dispute the inferences to be drawn from that testimony. Thur- ston testified and referred to Hilte records which indicat- ed as follows: On June 22 Hilte President Larry Hilte re- ceived a telephone bid from "Kevin" of "Madison Co." to perform painting and wallcovering work at the River- town Restaurant job in Hybla Valley, Virginia, for a contract price of $32,500. The memo of this call indicat- ed that Kevin's telephone number was 967-3773, but Larry Hilte subsequently scratched "out that number and replaced it with 261 -4747. Both numbers were used by Decorating. i 3 Later Hilte's project manager drafted an outline of a proposed contract between Hilte and "Madi- son Decorating," for $28,000. However, Larry Hilte made revisions in ,the proposed contract, including the price, which he changed to $29 ,500 and which became. the agreed-upon price. Larry Hilte indicated that the subcontractor was "Madison Decorating," whose tele- phone number was 967-3773. Thurston typed the con- tract in final form. However, when Thurston telephoned Decorating to obtain its mailing address she was referred to Coating at its telephone number (261-4700). Thurston mailed out the contract , which was returned as signed by O'Connell, but with the name of the subcontractor changed to Coating . O'Connell indicated in his covering letter, dated October 20, that he was president of Coat- ing, but he neglected to correct the last page of the con- tract, which indicated that he was signing as president of Decorating . The contract provided for the work to be substantially completed by December 20. Thurston testi- fied in sum that she was unaware of any distinction be- tween the two corporations, and that until O'Connell re- turned the signed contract she was under the impression that the subcontractor was "Madison Coating and Deco- rating." - Homer testified that Decorating did not transfer any jobs to Coating, and that no jobs were bid by Decorating and passed to Coating However,_ Coating failed to present any direct testimony with ,regard to the River- town Restaurant job, and specifically failed to explain how Coating obtained that work . In light of the uncon- troverted testimony of Hilte employee 'Thurston, I find that Decorating successfully bid for that work , and then, acting on its own, transferred the contract to Coating without even suggesting to Hilte that any different busi- ness operation was involved. is Kevin testified that 261 -4747 was Decorating's number, and tele- phone company records indicate that the number was billed to Decorat- ing from February i to December 13, 1982, when service was discontin- ued Kevin's April 1 letter to the Hecht Company indicated that 967- 3773 was Decorating's number Homer testified that Coating's telephone number was 261-4700 APEX DECORATING CO c. Work performed for Glen Construction Company: The American Computer & Electronics (AC & E) job Decorating performed the Tyson Courthouse job for Glen Construction Company , that job having been listed as permissibly nonunion in Decorating 's May 20, 1981 letter to the Union. On January 14, 1982, Decorating by Kevin submitted a bid to Glen for the painting and wall .coGecing 'subcontract for' the AC & E job in Gaithers- burg, Maryland. By letter dated April 28; Decorating by Kevin submitted • technical data sheets which indicated the type of materials which Decorating proposed to use on the job. As late as August 13, the Dodge Reports listed Decorating as painting subcontractor on the job.14 Nevertheless in August Coating executed a contract with Glen to perform the work for a contract price of $14,649. Coating admitted that it did in fact perform the work. Although O'Connell signed the contract, he testi- ' feed that he was not involved in the bidding, and that Kevin bid the job. Kevin did not testify as to how Coat- ing obtained the work 15 Homer testified that he told Glen that he would not be able to perform the job be- cause he lacked the money, but did not suggest who should perform the work. If in fact Decorating lacked funds to fulfill its subcontract, then the fact would have been apparent to Kevin by April' 28, when on behalf of Decorating he submitted the technical data sheets. (Homer's assertion will be further discussed in connec- tion with Coating's position as to why Decorating and Apex became defunct.) No evidence was presented which would indicate that.Coating submitted a separate bid for the job, or that Glen reopened the job for further bidding or considered other bids after Homer allegedly told them that he could not perform the work. I do not credit Homer. I find that Kevin; as the operating head of both Decorating and -Coating, transferred the awarded subcontracts from Decorating to Coating without sug- gesting to Glen that any different business entity was in- volved.16 - 14 The Dodge Reports are a commercial publication circulated among and relied upon by contractors , subcontractors, and other persons inter- ested in the building and construction industry,'which periodically lists contracts and subcontracts bid and awarded Such reports are admissible in evidence for the truth of the matters contained therein as an exception to the hearsay , rule Fed R Evid 803 ( 17), Coating argues (Br 13) that these reports have "extremely dubious evidentiary value" because they sometimes contaiii mistakes and because contractors do not always- fur- nish correct information to the publisher ' Coating 's argument might be persuasive if other testimony or documents indicated that the pertinent reports were mistaken However, at least with respect to the AC &,E job. Respondents ' own records and Homer 's testimony confirm that Decorating bid and initially obtained the subcontract - is Kevin did testify that Glen awarded two painting subcontracts on the AC & E building The first was for performance of the core,work of the base building, at thecontract price of$14,649, and the second,was.to perform work for each tenant as space was rented at a contract price of $13,641 Coating obtained both contracts 16 The subcontract, which was drafted on August 1, indicated that Coating's address was 8411 Old Marlboro Pike Homer 'testified that this must have been a mistake, because none of Respondents was located at that address at that time In fact , as found , Apex and Decorating moved from Old-Marlboro Pike to Patuxent'River•Road about-that time The contract is further evidence that fiom its inception Coating shared common offices with Apex and Decorating ' 1471 d. Work performed for W. M. Schlosser Co., -Inc.: the Washington Suburban Sanitary Commission job Andrew Schlosser of general and mechanical contrac- tor W M. Schlosser Co., Inc., who was presented as a General Counsel witness, testified in sum as follows. In February 1982 Schlosser Co. submitted a' bid for work to be performed for Washington Suburban Sanitary Com- mission at its Potomac River Water Filtration Plant project. Prior to February Schlosser discussed with Kevin a proposed subcontract for the sandblasting and painting work and Kevin indicated his bid Schlosser tes- tified that Kevin did not give the name of his company, although Schlosser assumed that Kevin represented Decorating As Coating did not then exist, Kevin must have been speaking on behalf of Apex or Decorating. On February 2 Schlosser Co. received a telephone confirma- tion of the bid from "Madison Paint & Sandblast," whose telephone number was 967-3773, i.e, Decorating's number Schlosser testified that he negotiated. only with Kevin, and that he had no prior dealings with Coating. However on August 25, after Schlosser Co. obtained the general contract, Coating by O'Connell executed a con- tract to perform the sandblasting and • painting work for $57,500. Coating stipulated in this proceeding that it per- formed the work. The work commenced in August, but WSSC's daily inspection reports indicated that Decorat- ing' was performing the work.17 Homer testified that Kevin asked him to teach sandblasting on the job, and that he also dealt with Schlosser Co concerning job problems. However, he did not testify concerning how Coating obtained the work. Although O'Connell signed the, contract, he testified that he did not know which corporation bid the job. Kevin, the key figure in this as well as the other jobs which were bid by Decorating and subsequently performed by Coating, failed to testify as to how Coating. obtained. the work. Again, there is no evi- dence, of separate bidding by Coating. Rather, the evi- dence indicates that Kevin - intentionally sought to con- ceal the distinction between the two corporations. I find, as with the other, jobs, previously discussed, that Kevin successfully bid for the work on behalf of Decorating, and then unilaterally transferred the work to Coating by the simple expedient of having his employee O'Connell sign the contract on behalf of Coating. e. Addt[lonal jobs allegedly bid by Decorating and subsequently performed'by Coating Coating- stipulated 'that-during the period from mid- May toimidlSeptember 1982 it contracted for and subse- quently` performed the following painting and related work: 'the' Textronix eastern regional. headquarters job ,for -Donohoe Construction Company -(Donohoe); the Survival ` Technology' job= in Bethesda, Maryland, for Kimmel & Kimmel, Inc.; and the Marketplace and Reston,. Virginia, headquarters office building for Manny Holtz,' Inc. Dodge .Reports- during this period indicate Business. Representative Caton testified that he came to the job to 17 .investigates complaints by employees that they were not receiving union scale, and that he was 'informed by WSSC's inspector that Decorating was the subcontractor 1472 DECISIONS OF.NATIONAL, LABOR RELATIONS BOARD that Decorating was the painting contractor on these jobs. The Textronix job is particularly significant Dono- hoe was a major source of business for Decorating.-In 1978 and 1979 Decorating performed four jobs for Don- ohoe. The last job performed by Decorating for Dono- hoe, which was negotiated by Kevin, commenced on or shortly after March 28, 1982. After obtaining the Tex- tronix -work, Coating performed six other jobs for Dono- hoe in 1983 and 1984.' Decorating also performed a major subcontracting job for Kimmel & Kimmel in 1981. Notwithstanding that - the Dodge Reports constituted prima facie evidence that Decorating was the successful bidder on the indicated jobs, Coating failed to. present -evidence which' would refute such fact. Incredibly, Kevin testified that he could - not remember whether Decorating bid on the Manny Holtz jobs, although in 1982 Kevin was primarily responsible for negotiating work for Decorating In light of the unexplained transfer of these subcontracts from Decorating to Coating, the fact that Kevin was responsible for negotiating contracts for both :Decorating and Coating in 1982, and the evi- dence concerning the jobs previously discussed, includ- ing the Hecht maintenance work, which indicate that Kevin -engaged in a pattern of transferring lucrative work from Decorating to Coating, I find that Kevin tranferred these jobs from Decorating to Coating in the same manner and for the same reason that he transferred the other jobs. 5. Coating's position concerning the demise of Apex and Decorating and concluding findings on alter ego status and alleged contract violations By September 1982 Apex and Decorating had no new jobs. to perform. They- completed those jobs which had not been- transferred from Decorating to Coating, and thereafter ceased operations. Homer, Kevin, and O'Con- nell each testified concerning the alleged reason or rea- sons for the demise of Apex and Decorating Their ex- planations were conflicting, inconsistent, and in some in- stances inherently incredible or based on events which did not or could not have caused the transfer of work from Decorating to Coating. Homer, who presumably would be in the best position to know, testified that Apex and Decorating were unable to survive in business because (1) after Decorating signed the union contract, his firms could not get work because their price was no longer competitive, and (2) Blake Construction Company owed him $200,000. Kevin testified that Apex and Deco- rating became bankrupt (although they never filed for or were placed in bankruptcy) because they were owed money, and were unable to obtain work after they signed the union contract in May 1981 According to Kevin, Decorating was finishing up some big union jobs for the Marriott Corporation, was unable to obtain new union jobs in the Washington, D C. area because union general contractors 'preferred other painting subcontractors, and could not compete pricewise in the open-shop market. "However, at another point Kevin testified that Decorat- ing was already bankrupt and selling off its equipment in 1981. In 1983 Kevin told the Internal Revenue Service that Decorating became defunct because of "large uncol- lected receivables" and "fire loss " The fire loss, which occurred on October 22, 1982, plainly had nothing to do with Decorating's loss of or failure to obtain work prior to that date. Moreover, the documentary evidence indi- cates that Coating was well insured for the loss to all three corporations As for the outstanding debt owed by Blake, that debt would be significant to the extent that it deprived Apex and Decorating of operating funds. How- ever, at a time when Apex- and Decorating were sup- posedly 'short of such funds and forced to -sell off 'their equipment, Homer and/or Violet were investing some $7.1,000 in Coating. In sum, Homer was starving Apex and Decorating while financing Coating's operations Moreover, if Decorating lacked operating funds, then it would be particularly anxious to retain the Hecht Com- pany work, which was a steady and substantial source of income and required minimal investment (Hecht provid- ed "front money" for new work, paid Decorating every 2 weeks for maintenance work, and provided a work- shop in each store for its contractors). Instead, Decorat- ing unequivocally renounced its maintenance arrange- ment and proposed to Hecht that Coating perform the work. Homer and Kevin's complaint about their professed in- ability to obtain work at union scale might be superficial- ly. appealing from an equitable (but not legal) viewpoint but for the fact that their assertions were contrary to the weight of the evidence in this case. First, Homer had for many years been running a double-breasted operation. His attempts to thereby avoid his obligations under union contracts were nothing new. Rather, Coating was simply the latest and most far-reaching effort toward that end. Second, Homer warned the'Union of his intentions when he told International Representative Monroe that Kevin would be taking over all the operations and that he did not want Kevin to be involved with the Union. Indeed, among the three principal witnesses, O'Connell came closest to the truth when he testified that Coating was formed because the Union demanded that Homer comply with the contract, although he falsely testified that Coat- ing was his idea. Third, the record is devoid of credible evidence that -Homer and Kevin tried to maintain Apex or operate Decorating on a union basis. Rather they always ran Decorating as-a nonunion contractor. Deco- rating accepted concessions from the Union and then unilaterally extended these-concessions to all of its oper- ations. Decorating never acted on the Union's suggestion that they could. negotiate a lower rate for maintenance work such as that performed for Hecht. No testimonial or documentary evidence was presented which would demonstrate that Apex or Decorating bid on •a union basis but failed to obtain -specific work. Rather, the evi- dence indicates that Decorating successfully bid for con- tracts and then passed them* to' Coating. I find that Apex and Decorating went out of business because Homer and Kevin decided that-they no longer would operate either - in whole or part as a union contractor. Therefore they, refrained from-bidding on 100-percent union jobs, and transferred other work to Coating in order to avoid the Association contract. There remains the ultimate question of Coating's status. On consideration of the evidence, I -find that APEX DECORATING CO 1473 Apex, Decorating, and Coating constituted a single em- ployer under the Act, and that Coating was the alter ego of Apex and Decorating. Therefore Coating was bound by the Association contract, and violated Section 8(a)(5) and (1) of the Act by failing and refusing' to apply the terms and conditions of that contract to its operations. All the elements of single employer and alter ego status are present. All three corporations were and are com- monlyi,owned by. the Trumpower family. Since 1980 Homer has'been the sole owner of Apex and Decorating, and Homer and Kevin are co-owners of Coating. As Homer intended to retire' and turn over the business to Kevin, this change probably' would have taken place even if they had not formed Coating. Coating ` was fi- nanced by Homer and/or his wife Violet, and Kevin ran the day-to-day operations of Coating, as he had run the operations of Decorating, with Homer retaining the ulti- mate authority so long as he remained active in the busi- ness. Violet continued to function as office manager for all three corporations. Such ownership and management within one immediate family constitutes strong indicia of a single employer and alter - ego relationship. Truck & Dock Services, supra, at fn. 2; E. G. Sprinkler Corp., 268 NLRB 1241 fn. 1 (1984), enfd. 741 F.2d 10 (2d Cir. 1984). Coating's initial personnel complement, including supervisors, consisted entirely of individuals who had worked for Apex and Decorating. George O'Connell, notwithstanding his title of""president," continued to function as a job superintendent The Trumpowers con- tinued to shift personnel and salaries from one corpora- tion to another as warranted by the workload. The three corporations shared common offices, office and field equipment, office secretary, and telephone service, and were held out to the public as a single business enter- prise. Indeed, the Trumpowers. intentionally sought to conceal or minimize the distinction between Decorating and Coating in order to assure their customers that, while there might be a change in corporate name, they were still doing business with the Trumpower family. Coating continued to engage in substantially the same business as Apex and; Decorating, namely, that of a painting and wall covering contractor in the building and construction industry. Coating, like Apex and Decorat- ing, has also performed sandblasting. Unlike Apex and Decorating, Coating has not done fireproofing, but has done some carpeting and flooring. Kevin testified that, unlike Apex, Coating is not presently doing .bonded work. He testified that Coating began with small jobs and Hecht maintenance, but "after I got there I started pursuing big jobs." However, much of the difference be- tween jobs formerly performed by Apex or Decorating and those now performed by Coating simply reflects the fact that Coating has refrained from bidding on 100-per- cent union jobs. Where the Trumpowers were able, to retain customers of Apex or Decorating under nonunion conditions, e.g., Hecht .Company, Donohoe Construc- tion, Glen Construction, and Kimmel & Kimmel, they did so by the simple expedient of transferring contracts from Decorating to Coating The Trumpowers' business purposes remained the same,.namely, to engage in the business as a painting and wallcovering contractor in the building and construction industry, to make money for themselves, and to retain the pretense of honoring a union contract while surreptitiously transferring their business to a nonunion operation. In sum, I find that Apex, Decorating, and Coating had substantially identi- cal ownership, financing, management and supervision, interrelated operations, centralized control of labor rela- tions, and common equipment and customers (except to the extent that Coating shifted and diversified its oper- ations in order to avoid union jobs and assume more nonunion work). I further find that Apex and Decorating formed Coating to carry on their operations and nomi- nally went out of business in order to evade their obliga- tions under the Association contract. Therefore I find that Apex, Decorating, and Coating constituted a single employer under the Act, and that Coating was from its inception and is the alter ego of Decorating and Apex. CONCLUSIONS OF LAW 1 Apex, Decorating, and Coating constitute a single employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 2. Decorating is the alter ego of Apex and Coating is the alter ego of Apex and Decorating. 3. The Association is a multiemployer bargaining asso- ciation. 4. The employer-members of the Association, includ- ing Apex and Decorating, are employers engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 5. The Union is a labor organization within the mean- ing of Section 2(5) of the Act. 6 All journeymen and apprentices, including tempo- rary employees employed by the employer members of the Association, including Apex, Decorating and their alter ego Coating, in connection with commercial paint- ing and drywall finishing contracts in the Washington, D C. Metropolitan area, excluding all other employees, professional employees, guards and supervisors as de- fined in the Act, constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act 7 At all times material herein, the Union has been and is the exclusive representative of the employees of Apex, Decorating, and Coating in the appropriate unit. 8. By failing and refusing to honor the collective-bar- gaining agreement between the Association and its em- ployer-members and the Uniori which was effective by its terms through May 15, 1984, and by failing to apply the terms and conditions of that agreement to their em- ployees, Respondents have violated and are violating Section 8(a)(5) and (1) of the Act. 9 The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Sec- tion 2(6) and (7) of the Act THE REMEDY Having found that Respondents have committed viola- tions of Section 8(a)(1) and (5) of the Act, I shall recom- mend that they be required to cease and desist therefrom, and from like or related conduct, and to take certain af- firmative action designed to effectuate the policies of the 1474 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Act. I shall recommend that Respondents be ordered to maintain and.give full -effect to the 1981-1984 Associa- tion • contract, and any amendments thereto and subse- quent agreements covering the unit employees, retroac- tive to July 17, 1982, a date 6 months prior to filing and service of the initial charge in this case, and.therefore the cutoff point under Section 10(b) of the Act. Esgro, Inc, 135 NLRB 285, 286 (1962) I shall recommend that Re- spondents be ordered to take such actions as are neces- sary to fulfill their contractual obligations, including but not limited to the following: Respondents shall reimburse their employees for any loss of wages and benefits they incurred- because of Respondents', failure to apply or maintain the established terms -and 'conditions of such agreements, with interest, in the manner set forth in Ogle Protection Service, 183 NLRB 682 (1970), and Florida Steel Corp., ; 231 NLRB 651 (1977) See European Parts Exchange, 270 NLRB 1244 fn. 2 (1984). Respondents shall make the contractually established payments to the various trust funds established by the collective -bargain- ing agreements In accordance 'with Board policy, the amount of interest, if any, due on such payments shall be determined at the compliance stage of this proceeding. Merryweather Optical Co., 240 NLRB 1213, 1216 fn. 7 (1979). Resporidents`shall reimburse their employees for any medical or dental bills they have paid to health care providers that the contractual -policies would have cov- ered,-'for any' premiums they may have paid to third- party insurance companies to : continue medical and dental coverage in the absence of Respondents' required, contributions, and for contributions they themselves may have made for the maintenance of- the contractual health and welfare, pension; industry, and apprenticeship funds after Respondents unlawfully discontinued or failed to make contributions to, those funds. Kraft' Plumbing & Heating, 252 NLRB'-891 fn.-2 (1980), enfd. 661 F.2d 940 (9th Cir. 1981). Reimbursement shall be with interest in the manner prescribed in Florida Steel Corp, 231. NLRB 651 (1977) See generally Isis Plumbing-Co., 138 NLRB 716 (1962). Respondents shall also be required- to. reim- burse the Union for any dues which, pursuant to dues- checkoff authorizations, they failed to deduct from em- ployees' paychecks and transmit to the Union as-required by contract, insofar as the Union has not obtained such dues directly from employees, with interest In view of the nature of employment in the building and construc- tion industry, I find that notice posting at Respondents' place of business would 'be inadequate to inform Re- spondents' present and former employees of their rights under.this decision and recommended Order. Therefore I am recommending that Respondents be further ordered to post copies of the notice at their jobsites, and to fur- nish signed copies of the notice for posting at the Union's office and meeting places. On these findings of fact and conclusions of law and on the entire record, I issue the following recommend- ed18 18 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 - ORDER The Respondents , Apex Decorating Co,-Inc, Madison Decorating Company, and Madison Coating Systems, Inc., Alter Egos, Davidsonville, Maryland, their officers, agents, successors , and assigns, shall 1'. Cease and desist from - (a) Failing or refusing to recognize and bargain collec- tively in good faith with Painters and Allied Trades Dis- trict Council No. 51, International Brotherhood of Paint- ers and Allied Trades, AFL-CIO as the exclusive bar- gaining representative of their employees in the appropri- ate unit, and failing or refusing to honor' collective-bar- gaining agreements applicable.to those employees. (b) In any like or related manner interfering with, re- straining, or coercing employees in the exercise of their rights under Section 7 of the Act. 2. Take the following affirmative action necessary to effectuate the policies of the Act. (a) Maintain and give, full effect to the collective-bar- gaining agreement between the -Union . and Painting, Decorating and Drywall Finishing Contractors of Wash- ington, D.C. and Vicinity and its employer-members, which was' effective by its terms from May 1981 through May 15, 1984, and any amendments thereto and subse- quent agreements covering the unit employees;, retroac- tive to July 17, 1982, including but not limited to: (1) making whole all unit employees for any loss of wages and benefits they incurred' because of the, Respondents' failure to apply or maintain the established terms and conditions of such agreements; (2) making the contrac- tually established payments 'to the various trust funds es- tablished by the collective-bargaining agreements , (3) re- imbursing their employees-for any expenses ensuing from the Respondents' failure to make such contributions; and (4) reimbursing the Union for any loss of dues caused by the Respondents' failure to deduct- dues pursuant to checkoff authorizations and remitting same to the Union as required by contract; all as set forth in the section of this decision entitled "The Remedy " '(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 reimbursement due (c) Post at their place of business and at each of their jobsites copies of the attached notice marked "Appen- dix."' 9 Copies of the notice; on forms provided by the Regional Director for Region 5, after being signed by the Respondent's authorized representative, shall - be posted by the Respondent immediately upon receipt and maintained for 60 consecutive days in conspicuous places including all places where notices to employees are cus- tomarily posted. Reasonable steps shall be taken by the Respondent to ensure that the notices are not altered, de- faced, or covered by any other material. is 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. Relations Board " APEX DECORATING CO 1475 (d) Sign and return to the Regional Director sufficient copies of the notice for posting by the Union, if it is will- ing, at its office and meeting halls, including all places where notices to members are customarily posted. (e) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Re- spondents have taken to comply. APPENDIX ec; . 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 violated the National Labor Relations Act and has or- dered us to post and abide by this notice. WE WILL NOT fail or refuse to recognize and bargain collectively and in good faith with Painters and Allied Trades District Council No. 51, International Brother- hood of Painters and Allied Trades, AFL-CIO as the ex- clusive representative of our employees in the appropri- ate unit, or fail or refuse to honor collective-bargaining agreements applicable to those employees. The appropri- ate unit is. All journeymen and apprentices, including tempo- rary employees employed by the employer members of Painting, Decorating and Drywall Finishing Contractors of Washington, D.C. and Vicinity, in- cluding Apex Decorating Co., Inc., Madison Deco- rating Company and their alter ego Madison Coat- ing Systems, Inc, in connection with commercial painting and drywall finishing contracts in the Washington, D C. Metropolitan area, excluding all other employees, professional employees, guards and supervisors as defined in the Act. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exercise of your right to engage in union or concerted activities, or to refrain therefrom. WE WILL maintain and give full effect to the collec- tive-bargaining agreement between District Council No 51 and the above-named contractors association and its employer-members which was effective by its terms from May 1981 through May 15, 1984, and any amendments and subsequent agreements covering the unit employees, retroactive to July 17, 1982, including but not limited to: Making whole all unit employees for any loss of wages and benefits they incurred because of our fai- lire to apply or maintain the established terms and conditions of such agreements, with interest, Making the contractually established payments to the various trust funds established by the collective- bargaining agreements, Reimbursing our employees for any expenses en- suing from our failire to make such contributions, specifically: any medical or dental bills they have paid to health care providers that the contractual policies would have covered, any premiums they may have paid to third party insurance companies to continue medical and dental coverage in the ab- sence of our required contributions; and contribu- tions they may have made for the maintenance of the contractual health and welfare, pension, indus- try, and apprenticeship funds after we unlawfully discontinued or failed to make contributions to those funds, all with interest, and Reimbursing District Council No 51 for any loss of dues caused by our failire to deduct dues pursu- ant to checkoff authorizations and remitting same to the Union as required by contract, with interest. APEX DECORATING CO, INC., MADISON DECORATING COMPANY, AND MADISON COATING SYSTEMS, INC., ALTER EGOS