Elevator Sales And Service, Inc.

ELEVATOR SALES & SERVICE 627 Elevator Sales and Service, Inc. and Local Union No. 5, International Union of Elevator Con- structors Kencor, Inc. and Local Union No. 5, International Union of Elevator Constructors. Cases 4-CA- 13124 and 4-CA-13151 19 February 1986 DECISION AND ORDER BY MEMBERS JOHANSEN, BABSON, AND STEPHENS On 19 March 1985 Administrative Law Judge Irwin H. Socoloff issued the attached decision. Re- spondent Kencor filed exceptions and a supporting brief, and the General Counsel and the Charging Party filed briefs in opposition to Kencor's excep- tions and cross-exceptions and supporting 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 the record in light of the exceptions and briefs and has decided to affirm the judge's rulings, findings, and conclusions and to adopt the recommended Order.' ORDER The National Labor Relations Board adopts the recommended Order of the administrative law judge and orders that the Respondent, Elevator Sales and Service, Inc., and its alter ego Respond- ent Kencor, Inc., Broomall, Pennsylvania, its offi- cers, agents, successors, and assigns, shall take the action set forth in the Order. ' Respondent Kencor has requested oral argument The request is denied as the record, exceptions, and briefs adequately present the issues and the positions of the parties. Joel H. Levinson, Esq., for the General Counsel. Patricia H. Jenkins, Esq., Media, of Pennsylvania, for Re- spondent Elevator Sales and Service, Inc. Edward C. German, Esq., Edward T Bresnan, Esq., and Frederick C. Hanselmann, Esq., of Philadelphia,.Penn- sylvania, for Respondent Kencor, Inc. Sally M. Armstrong, Esq., of Washington, D.C., for the Charging Party. DECISION STATEMENT OF THE CASE IRwIN H. SocoLoFF, Administrative Law Judge. On charges filed on August 6 and 19, 1982, by Local Union No. 5, International Union of Elevator Constructors (the Union) against Elevator Sales and Service, Inc. and Kencor, Inc. (the Respondents) the General Counsel of the National Labor Relations Board, by the Regional Di- rector for Region 4, issued an order consolidating cases and consolidated complaint dated September 30, 1982, al- leging violations by Respondents of Section 8(a)(5), (3), and (1) and Section 2(6) and (7) of the National Labor Relations Act (the Act). Respondents, by their answers, deny the commission of any unfair labor practices. Pursuant to notice, trial was held before me in Phila- delphia, Pennsylvania, on February 24, April 4 through 7, and May 24, 1983, at which the General Counsel, the Charging Party, and the Respondents were represented by counsel and were afforded full opportunity to be heard, to examine and cross-examine witnesses, and to in- troduce evidence. Thereafter, the parties filed briefs which have been duly considered. On the entire record' in this case, and from my obser- vations of the witnesses, I make the following FINDINGS OF FACT 1. JURISDICTION Respondent Elevator is a Pennsylvania corporation, which was engaged, until mid-1982, in the installation, service, and repair of elevators from a facility located in Upper Darby, Pennsylvania. Respondent Kencor is a Pennsylvania corporation engaged in the service and repair of elevators from a facility located in Broomall, Pennsylvania. During the year preceding trial in this matter, each Respondent sold goods and performed serv- ices, valued in excess of $50,000, outside of the Common- wealth of Pennsylvania. I find that Respondent Elevator and Respondent Kencor are employers engaged in com- merce within the meaning of Section 2(2), (6), and (7) of the Act. II. LABOR ORGANIZATION International Union of Elevator Constructors and its Local No. 5 are labor organizations within the meaning of Section 2(5) of the Act. III. THE UNFAIR LABOR PRACTICES A. Background Respondents are companies incorporated, owned, and operated in the Philadelphia, Pennsylvania, and New Jersey areas by members of the Kennedy family. Until it ceased business operations, about July 1982, Respondent Elevator, as noted, engaged in the construction, mainte- nance, and repair of elevators and employed elevator constructor mechanics and helpers. In 1969, it recog- nized the International Union of Elevator Constructors and its Local No. 5 as the collective-bargaining repre- sentative of those employees. At that time, the parties agreed to be bound by the terms of the 1967-1972 con- tract between the International Union and National Ele- vator Industry, Inc. (NEII), a nationwide multiemployer bargaining association composed of employers that man- ufacture and service elevators.2 In 1976, Respondent El- ' C.P. Exh 1 is received in evidence 2 NEII and the International Union bargain on a nationwide basis. 278 NLRB No. 94 628 DECISIONS OF NATIONAL LABOR RELATIONS BOARD evator became a member of NEII and, by virtue of that association, was bound by the agreement negotiated by the International Union and NEII, effective July 1977 to July 1982. Respondent Kencor was incorporated in 1981 and, during the first half of 1982, the Kennedy family phased out the operations of Respondent Elevator and began op- eration of Respondent Kencor as an elevator service and repair business employing elevator constructor mechan- ics and helpers. Respondent Kencor has not honored the 1977-1982 agreement or its successor which runs from July 1982 until July 1987. In the instant case, the General Counsel contends that Respondent Kencor is the alter ego of Respondent Ele- vator and that Respondents violated Section 8(a)(5) and (3) of the Act by repudiating the contracts negotiated by the International Union and NEII. It is further urged that Respondents violated Section 8(a)(5) by refusing to furnish information requested by the Union concerning the relationship between Respondents . Respondents deny that the one is the alter ego of the other and assert, therefore, that Respondent Kencor is not bound by the agreements between the International Union and NEII. They further contend that the charges were untimely filed and that, in any event, Respondent Elevator with- drew from NEII prior to the start of negotiations for the 1982-1987 contract. B. Facts3 In January 1971 John F. Kennedy, who had previous- ly run an elevator business as a sole proprietorship, rear- ranged same under corporate form and began operation of Respondent Elevator. At that time, Kennedy was elected president and treasurer of Elevator ; his wife Mar- garet was elected vice president ; his sons Richard and James Donald were elected vice presidents, and his daughter Maureen was elected secretary . Ownership in the corporation was as follows: Mr. and Mrs. John F. Kennedy 510 shares (51 percent) Richard Kennedy 200 shares (20 percent) James Donald Kennedy 200 shares (20 percent) Maureen Kennedy Geyer 90 shares (9 percent) John F. Kennedy ran the day-to-day affairs of Respond- ent Elevator while Richard and James Donald per- formed elevator repair services and Maureen did the bookkeeping and secretarial work of the Company. On December 20, 1975, Maureen Kennedy Geyer married William Muesham and, on January 3, 1977, William a The factfindings contained herein are based on a composite of docu- mentary and testimonial evidence introduced at teal. Where necessary to do so, credibility resolutions have been set forth , infra. In general, I have viewed with suspicion the testimony of Richard Kennedy, president of both Respondents, and Maureen Muesham, the secretary and bookkeeper of Respondent Elevator and the treasurer and bookkeeper of Respondent Kencor, in view of their demeanor as witnesses, the lack of internal con- sistency in their respective testimony, and the inherent improbability of certain of the testimony of each. Muesham began employment with Elevator as an expe- diter and as the general manager. John F. Kennedy died on September 9, 1978. He left his stock in trust for the benefit of his wife and another daughter, who was institutionalized, naming as trustee a Father Flynn. Thereafter, Richard was elected president of Respondent Elevator. In the ensuing years, Richard Kennedy attempted, unsuccessfully, to buy his mother's interest in the business. By 1981, Richard, James Donald, Maureen, William Muesham, and their cousin Donald W. Kennedy decided to leave Elevator and form Respond- ent Kencor. Prior to the death of John Kennedy, on August 25, 1977, Southeast National Bank approved a $75,000 loan and a $25,000 working capital line of credit for Elevator. Collateral for the loans included the personal guarantees of Richard, James Donald, Maureen, and their spouses; a security interest in the accounts receivable, equipment, inventory, furniture, and fixtures of Elevator; and a judg- ment for $75,000 against Elevator's Upper Darby, Penn- sylvania building. Although John F. Kennedy was still, officially, the chief executive officer of Respondent Ele- vator, Richard Kennedy signed the loan agreements as president. In July 1979 Industrial Valley Bank and Trust Compa- ny granted a $175,000 loan to Elevator, the proceeds of which were used to pay money owed to suppliers and to the Internal Revenue Service. Collateral for the loan in- cluded the personal guarantees of Richard, James Donald, Maureen, and their spouses and security inter- ests in Elevator's inventory, accounts receivable, equip- ment, and its Upper Darby, Pennsylvania real estate. Respondent Kencor was incorporated ' in July 1981. Twenty-five percent ownerships were given to Richard Kennedy, James Donald Kennedy, Donald W. Kennedy, and to Maureen and William Muesham jointly. All except Donald W. Kennedy and William Muesham were owners of Respondent Elevator and all five individuals had been employed by that Respondent for some years. The record does not establish whether $1000, for the capital stock of the new Company, was ever paid. How- ever, Richard Kennedy testified that he made deposits into Kencor accounts, in late 1981, which were, or may have been, personal contributions. Richard Kennedy was elected president of Kencor, James Donald Kennedy and Donald W. Kennedy were elected vice presidents, Maur- een Muesham was elected treasurer, and her husband William Muesham was elected secretary. The five owners and officers form Respondent Kencor's "manage- ment council." In November 1981 Elevator was forced to sell its building in order to pay back taxes to the Internal Reve- nue Service. To perform at closing, Elevator needed ad- ditional funds for the payment of debts secured by liens and judgments. Thus, Richard Kennedy testified, both he and Maureen borrowed $5000. They lent the $10,000 to Respondent Kencor which, in turn, lent it to Respondent Elevator. According to Kennedy's testimony, he and Maureen did not wish to make the loans directly to Ele- vator because they knew, in view of Elevator's financial condition, that there would be no hope of repayment. ELEVATOR SALES & SERVICE 629 Kennedy did not explain why Kencor had any better reason to make such loans to Elevator. In any event, Kennedy testified, Kencor, about November 5, 1981, exe- cuted demand notes evidencing the two $5000 debts to himself and Maureen and calling for the payment of in- terest. Those notes, purportedly signed by Richard Ken- nedy on behalf of Kencor, were not produced at trial. It is undisputed that Respondent Kencor has made no pay- ments, of either principal or interest, to Richard and Maureen. Respondent Elevator, by Richard Kennedy, executed two $5000 notes, calling for payment of 14-per- cent interest, in favor of Respondent Kencor. One of the notes was forgiven in November 1982 in exchange for two trucks owned by Elevator.4 The second note is still outstanding and neither principal nor interest has been paid on it. By an agreement dated November 2, 1981 , Respondent Elevator agreed to convey to Respondent Kencor 62 of its customer accounts (maintenance and service con- tracts), effective May 1 , 1982. In consideration, Respond- ent Kencor assumed liability for the outstanding balance of $32,000 owed by Elevator to Southeast National Bank. That loan, as noted, had been guaranteed by Rich- ard, James Donald, Maureen, and their spouses, all of whom re-executed personal guarantees, pledging their homes. In addition, Donald W. Kennedy, who was not a guarantor of the loan to Elevator, became a guarantor of the assumed loan. The Elevator -Kencor agreement was signed by Richard Kennedy, acting for both the seller and the buyer. It was drafted, for Kencor, by William Muesham, at a time when he was still on Elevator's pay- roll. Professional appraisal of the fair market valued of the transferred customer accounts was not obtained. Nor was the advance approval of the customers sought, some of whom did not allow Kencor to service their elevators after' the May 1 transfer date, necessitating renegotiation of those service contracts. At least 17 of the 62 trans- ferred contracts were subject to an annual rebidding process. On January 4, 1982, Respondents executed an agree- ment under which Elevator agreed to sell its entire in- ventory to Kencor in exchange for the assumption by Kencor of Elevator's debt to Industrial Valley Bank and Trust Company which then had an outstanding balance of $132,000. New personal guarantees, pledging their homes, were executed by Richard, James Donald, Maur- een, and their spouses. In addition, Donald W. Kennedy, who was not a guarantor of the loan to Elevator, became a guarantor of the assumed loan and he pledged his home. Closing took place on April 20, 1982. A physical inventory was not performed at the time of transfer. While Richard Kennedy, in his testimony, insisted that, in fact, the fair market value of the transferred inventory was about $132,000, he conceded that, regardless of the worth of the transferred inventory, it was to be sold to Kencor for assumption of the $132,000 debt since the family members were personally liable for payment of that debt. The Elevator-Kencor agreement was signed by Richard Kennedy and- Maureen Muesham on behalf of Elevator and by Richard Kennedy and William Mue- sham for Kencor. On January 1, 1982, Richard Kennedy formally an- nounced his intention to leave Elevator, effective May 5, 1982. He testified that earlier he had informed his mother Margaret: I told her that I was going to take as much of the business as I could and she felt that I stole the busi- ness-we stole the business. It was not very easy. I told her that I was tired of having 100 percent of the liabilities and the pressures, and no ownership- no majority stockholder. I didn't have the benefits of having a company-not that I would want Ele- vator because it was apparent at this time that maybe Elevator wasn't going to succeed. Kennedy further testified that between January 1 and May 5 while still on the Elevator payroll he solicited the Elevator customers on behalf of Kencor. Kennedy told customers that the family was forming a new company. In certain cases, Kencor, by Richard Kennedy, began to perform service work for customers during the January to May ,period. Kennedy testified that he used his own tools and, apparently, Elevator's inventory. Maureen Muesham, who also remained on Elevator's payroll until May 5, performed the bookkeeping work for Kencor during the months preceding May 5. On that date, she became an employee of Kencor but, nonetheless, contin- ued to handle Elevator's bookkeeping work. Although, as noted, the contractual closing date for the exchange of inventory was April 20, Kencor did not complete remov- al of the inventory from Elevator premises5 until July. During the interim, Kencor did not pay a storage fee to Elevator. Indeed, during this period, as Elevator wound down its service business, and Kencor moved into full operation, the two Companies, apparently, shared use of the inventory. While Elevator was, and Kencor is, in the business of servicing and repairing elevators, Richard Kennedy, in his testimony, distinguished the functions of the two Companies in the following mannner. Elevator, unlike Kencor, did construction work, while Kencor, unlike Elevator, has branched out into the field of building systems maintenance. However, Kennedy conceded that, as of the time of trial, 1 year after Kencor commenced operations it had no contracts, and had re- ceived no fees, for nonelevator building maintenance service work. On the other hand, Kencor has performed at least one construction job. Further, Kennedy testified, in late 1979 or early 1980, Elevator made the decision to get out of construction work because it was losing money in that area. Accordingly, Elevator withdrew its outstanding construction bids, but completed work on contracts already awarded. Construction billings for Ele- vator, which were at, $1,148,926 in 1980, declined to $558,577 in 1981 and to $51,180 in 1982. During the same period, Elevator's, billings for service and repair work re- mained relatively constant, about $500,000 per year. Re- 4 Respondent Elevator also owned three other vehicles, two of which are now used by Respondent Kencor 5 After sale of its building, Elevator continued to occupy the premises for 1 year as a lessee 630 DECISIONS OF NATIONAL LABOR RELATIONS BOARD spondent Elevator, in its service and maintenance work, utilized form contracts covering either full service or oil, parts, and grease service. Kencor utilizes the same con- tracts. Richard Kennedy and Maureen and William Muesham officially left Elevator and joined Kencor on May 5, 1982. A few days earlier, on May 1, one of the following form letters was sent to the Elevator customers, both those that were included in the 62 purchased accounts and those that were not: Gentlemen: Let us take this opportunity to introduce our- selves. Kencor, Inc. is a company engaging in total building systems maintenance, specializing in build- ings six stories and under. However, the heart of our business is elevators, just as the elevator is the heart of your building. We are incorporated in Pennsylvania, and licensed to do business in New Jersey. Effective May 1, the elevator maintenance con- tract formerly held by Elevator Sales and Service, Inc., has been purchased by Kencor. We regret the circumstances that made this necessary, however, we eagerly look forward to seeing you in the future. We fully realize the potential trauma that accom- panies such a transition, but-we can assure you that there is no need for concern. Your equipment will be maintained by highly skilled, and competent technicians. Consequently, you can be assured that you will receive high quality service at a reasonable price. Kencor was founded by Richard Kennedy, who was formerly chief executive officer of Elevator Sales, and Service. As you know, the Kennedy family has three generations' experience in the ele- vator business. Experience of this kind cannot be discounted. If you have any questions, please call us immedi- ately at 215-353-6459. Welcome to the Kencor family. Very truly yours, Kencor, Inc. Maureen Kennedy Muesham Treasurer TO ALL OUR VALUED CUSTOMERS: We are pleased to announce that your elevator maintenance contract with Elevator Sales & Serv- ice, Inc. was purchased by Kencor, Inc. to be effec- tive May 1, 1982. All terms, conditions of the existing contract remain unchanged. We look forward to continuing harmonious rela- tionships. Very truly yours, Kencor, Inc. Richard A. Kennedy In 1982, Elevator billed some 142 customers pursuant to a full-service contract or a parts, oil, and grease con- tract. Kencor billed some 127 of these 142 former Eleva- tor customers, during 1982, for performance of the same services. Of the 127 customers, 108 were billed by Kencor on the next month following the last Elevator billing, that is, without interruption in the monthly bill- ing cycle. Kencor billed 18 former Elevator customers following a 1-to 3-month interruption in billing during which time the customer was persuaded to accept the switchover to Kencor. One customer was not billed until 9 months after the last Elevator billing. Kencor contin- ued the former Elevator billing rates. In all, Kencor serviced some 176 customers during its first year of oper- ation, about 150 of which were formerly customers of Elevator. As noted, Elevator ceased to function in July 1982. At that time, it had three unfinished construction projects including one for the installation of an elevator at build- ing 57 of the Navy Yard. Richard Kennedy testified that, because the Kennedy family members were personally liable for completion of the Navy Yard job, Kencor de- cided that it would complete the work previously begun by Elevator. This was done in July 1982. According to Kennedy's testimony, Kencor received oral permission from the Navy to assume this otherwise unassignable contract of Elevator's. However, he conceded that Ele- vator and Kencor failed to comply with contractual re- quirements for subcontracting. There was no written agreement between Elevator and Kencor concerning Kencor's completion of the job. Indeed, it is interesting to note that, while Kennedy testified that an employee named Kevin Ahern helped complete the job for Kencor, Ahern testified that all of his work on the Navy Yard job was performed for Elevator. Kencor submitted a bill to Elevator, for work in com- pleting the Navy Yard project in September 1982. Rich- ard Kennedy testified that he does not know whether or not Elevator ever paid this bill. Maureen Muesham testi- fied that Kencor received payment through a complicat- ed procedure that can only be explained by an account- ant. What is clear on this record is that the proceeds for completion of the project, $13,420, were sent to Elevator which used the entire sum to make payment of taxes due the Internal Revenue Service.6 The following is a list of all employees of Respondent Kencor, from its inception to the date of trial: Name Starting Date Richard Kennedy 5/5/82 Maureen Mueshani 5/5/82 William Muesham 5/5/82 Margaret Kennedy 5/5/82 Donald W. Kennedy 6/30/82 6 The Navy's check to Elevator was endorsed by Maureen Muesham "For deposit only, Elevator Sales & Service," then stamped "Kencor, Inc.," and deposited into a Kencor account . Muesham then wrote a check to IRS, drawn on a Kencor account, for the same amount. A letter was sent to IRS, on Kencor stationery, along with the check, instructing IRS to credit the amount to Elevator. ELEVATOR SALES & SERVICE 631 James Donald Kennedy 6/30/82 Kevin Ahern 6/30/82 Craig Geyer 6/30/82 Richard McBride 7/14/82 Joseph Nardelli 8/4/82 Edwin Yeager 4/14/82 Richard Kennedy, as noted, was the president and chief executive officer of Respondent Elevator and trans- fered to the same position at the same salary at Kencor. Maureen Muesham, who was the corporate secretary and performed the bookkeeping duties for Respondent Elevator, became the corporate treasurer at Kencor where she performs the same bookkeeping duties at the same salary. William Muesham was, officially, an expedi- tor and general manager for Respondent Elevator. Mue- sham is trained and experienced in the field of labor rela- tions and there is record evidence showing that he per- formed personnel functions for that Respondent. At Kencor, he holds the position of corporate secretary and also performs personnel functions. Muesham's starting salary at Kencor was the same as that previously earned at Elevator. Margaret Kennedy, a vice president of Ele- vator, holds no corporate position at Kencor. At Eleva- tor, she received a weekly salary of $90 per week for performance of part-time clerical functions. She was paid the same salary, for performance of the same duties, at Kencor. James Donald Kennedy was a vice president of Elevator and a salaried management employee who also performed bargaining unit work. At Kencor, he is also a vice president and salaried, management employee who performs mechanics work. hen he transfered from Ele- vator to Kencor, he continued to receive the same salary. Donald W. , Kennedy performed bargaining unit work for Elevator at'an hourly rate. At Kencor, he is a vice president and continues to perform mechanic work. At the time of transfer, he was paid at the same hourly rate previously received at Elevator. Kevin Ahern worked as a full-time employee of Elevator doing bar- gaining unit work at an hourly rate. He switched to Kencor to do the same work at the same rate of pay. Craig Geyer, Maureen ' Muesham's son, was a periodic full-time hourly employee of Elevator. He switched to Kencor and-received the same hourly rate. Joseph Nar- delli and Richard McBride were, when hired to do me- chanical work by Kencor, former employees of Elevator who had performed bargaining unit work. Edwin Yeager, an hourly employee of Kencor, never worked for Elevator. While there is a "management council" at Kencor made up of the five owners, Kencor, like Elevator, is run by Richard Kennedy. He is assisted, with respect to labor relations matters, by William Muesham. The man- agement council appears to be a ratifying body which meets, informally, once per month. No minutes are kept of those meetings. At inception, until time of trial, the basement of Maureen Muesham's home served as Kencor headquarters. On August 19, 1981, Respondent Elevator sent a letter to NEII, withdrawing from that association and inform- ing it that "`NEII is no longer authorized to represent El- evator Sales & Service, Inc. in any future bargaining." Elevator did not send to Local 5, or to the International Union, a copy of its withdrawal letter and neither NEII nor Elevator provided written notice of this matter to the Local or the International. The subject was refer- enced in a December 21, 1981 letter from Elevator to the International, concerning a grievance, and stating that "You may be aware of the fact that we have withdrawn from NEII, effective August 19, 1981." On February 4, 1982, the International Union received from NEII an up- dated membership list which did not include the name of Elevator. The International Union notified NEII in October 1981 of its desire to enter into negotiations for a new contract to cover the period July 1982 to July 1987. Ac- cordingly, meetings were set for December -2 and 3, 1981, in Washington, D.C. John Russell, the secretary- treasurer of the International, testified that negotiations began on that date. James Walker Jr., manager of labor relations for NEII, termed the December 2 and 3 meet- ings as preliminary to actual negotiations but he also tes- tified that the purpose of those meetings was "to begin negotiations, to establish ground rules, to highlight some of the issues we would be discussing in negotiations to come." Walker further testified that, at the meetings, each side proposed many contractual changes including wage rates and overtime provisions. Written proposals were not exchanged until February 16, 1982. Final agree- ment on a new contract was reached on July 8, 1982. Richard Kennedy testified that, in September 1981, Robert Williams, Local 5's business manager, in the course of discussion of a grievance, told Kennedy that Williams knew that Elevator was no longer a member of NEII. Kennedy attributed a similar statement to George Koch, vice president of the International Union, alleged- ly made in December 1981. As stated at footnote 2, I found Kennedy an unreliable witness and I discredit his testimony in this regard and I credit the forthright deni- als of Williams and Koch. Kennedy further claimed that significance should be attached to the fact that, in the fall of 1981, the Union dealt directly with him on a griev- ance matter, rather than dealing with' NEII. According to Kennedy, the normal pattern for handling of disputes between Local 5 and Elevator had been, theretofore, to "go through NEII." Kennedy's testimony in that regard is undermined by documentary evidence. There is record evidence showing that Robert Wil- liams had heard rumors by late 1981 or early 1982 that Respondent Elevator would become a nonunion business. However, he credibly testified that he did not learn of the existence of Respondent Kencor until March 1982, when he saw a bid, on Kencor stationery, containing Richard Kennedy's name. It was not until July 1982 that Williams received a report of actual; work being per- formed by Kencor. At that time, members of Local 5 re- ported to him that nonunion employees were installing an elevator at building 57 of the Navy Yard. Williams visited the Navy Yard and observed equipment and ma- terials marked with the name of Respondent Elevator. On July 6, Williams sent a letter to Kennedy, stating: It has come to our attention that your company is or may be in violation of the ' current agreement 632 DECISIONS OF NATIONAL LABOR RELATIONS BOARD between the National Elevator Industry, Inc., and the International Union of Elevator Constructors, by reason of the operation by your company or its principals of another company called Kencor, Inc., or by the performance of work which would other- wise be performed by your company. We believe that there is or may be a violation among other things, of Articles II, III, IV, V, VI, IX, X, XI, XII, XIII, XVIII, XIX, and XXII of the Standard Agreement. Kencor, Inc. is presently performing services pre- viously performed by your company with your em- ployees. In addition, we believe that there is a con- nection between your company and Kencor, Inc., either financially or through management personnel, or both, and we believe that the object of creating Kencor, Inc., was to circumvent the provisions of the Standard Agreement. The purpose of this letter is to request informa- tion needed by the union in order to evaluate whether a violation of the contract has occurred, and whether a grievance should be filed. To this end, we would appreciate your preparing answers to the following questions: 1. What positions in Kencor, Inc. are held by each officer, shareholder, director or other manage- ment representative of your company? 2. State the name of each person who has a func- tion related to labor relations for your company and for Kencor, Inc. 3. Do Kencor, Inc. and your company share any services such as clerical, administrative, bookkeep- ing, managerial, drafting, estimating, and bonding? If the answer is yes, please specify the nature and extent of the shared services. 4. What services including clerical, administra- tive, bookkeeping, managerial, drafting, estimating and bonding are performed for Kencor, Inc., by or at your company. 5. What supervisory functions are performed by supervisory personnel of your company over em- ployees of Kencor, Inc.? 6. What insurance or other benefits are shared in common by employees of your company and em- ployees of Kencor, Inc.? , 7. Do Kencor, Inc. and your company share any equipment, tools, vehicles or supplies? If the answer is yes, please specify the nature of the materials so shared and the extent to which such materials are shared. Please submit this information within ten days of the receipt of this letter so that we can properly evaluate whether to file a grievance concerning this matter. No response was received by Williams. On August 19, 1982, Williams sent letters to Respondent Elevator and Respondent Kencor stating that Respondents were bound by the terms of the agreement negotiated by the International Union and NEIL and complaining of Re- spondents' failure to apply the terms and conditions of the agreement. Neither Respondent replied to those let- ters. C. Conclusions 1. Statute of limitations Respondents contend that the complaint allegations are time-barred by virtue of Section 10(b) of the Act. Sec- tion 10(b) provides that a complaint shall not issue based on unfair labor practices which occurred more than 6 months prior to the filing of charges with the Board. In this case, Respondents assert, Elevator withdrew from the multiemployer bargaining association more than 6 months before the charges were filed on August 6 and 19, 1982. Therefore, according to this argument, neither Respondent may be found to have committed an unfair labor practice by refusing to honor the 1982 to 1987 agreement, reached in July 1982. Also, Respondents argue, record evidence shows that the Union knew of the existence of Respondent Kencor for more than 6 months before it filed charges. Accordingly, it is urged, allegations that Kencor repudiated either the 1977 to 1982 contract or the 1982 to 1987 agreement are time- barred. As shown, agreement on the new contract was reached on July 8, 1982. Thus, even assuming that a withdrawal from the multiemployer bargaining group oc- curred more than 6 months before the charges were filed, the complaint allegations are not time-barred. For, it is the refusal to execute and apply the agreement nego- tiated by the multiemployer association; not the purport- ed withdrawal from group bargaining, which triggers the 10(b) limitations period. Preston H. Haskell Co., 238 NLRB 943 (1978), enf. denied 616 F.2d 136 (5th Cir. 1980). I also reject Respondents' contention that the complaint is time-barred because the Union knew of the existence of Kencor for a period longer than 6 months before its charges were filed. Rumors aside, the Union did not learn of Kencor until March 1982. Kencor did not hire its first employee until April of that year. The Union did not learn of actual work being performed by Kencor until July 1982. All of those pivitol events oc- curred within the 10(b) limitations period which did not begin to run until the Union learned that work was being performed contrary to the terms of the applicable con- tract. Al Bryant, Inc., 260 NLRB 128 (1982). 2. Withdrawal from the Association Absent mutual consent, or unusual circumstances, withdrawal of an employer from a duly established mul- tiemployer bargaining unit can be effected only by an unequivocal written notice to the union expressing a sin- cere intent to abandon the multiemployer unit and pursue negotiations on an individual employer basis. Such written notice must be given prior, to the com- mencement of negotiations. Retail Associates, Inc., 120 NLRB 388 (1958); Callier's Custom Kitchens, 243 NLRB 1114 (1979), enfd. in part 630 F.2d 595 (8th Cir. 1980). As shown in the statement of facts, Respondent Eleva- tor sent a letter to NEII, withdrawing from that Associa- tion, on August 19,,1981. However, it is undisputed that ELEVATOR SALES & SERVICE. 633 written notice was not sent either to the International Union or to Local 5. Even were I to find that the refer- ence contained in the December 21, 1981 letter from Ele- vator to the International or the fact that Elevator's name did not appear on the NEIL membership list re- ceived by the International on February 4, 1982, was suf- ficient written notice of intent to abandon the multiem- ployer unit, I would nonetheless conclude that the notice was untimely. For the parties commenced negotiations, looking toward a new agreement; on December 2 and 3, 1981, when, by preagreement, they met face to face and each side proposed many contractual changes including wage rates and overtime provisions. It is not determina- tive of this issue that written proposals were first ex- changed some 2 months later as the parties, generally, disclosed their bargaining demands on December 2 and 3. See Carpel Co., 226 NLRB 111 (1976), enfd. 560 F.2d 1030 (1st Cir. 1977), cert. denied 434 U.S. 1065 (1978). 3. Alter ego; refusal to honor the contracts; request for information While there is some difference in shareholder configu- ration, both Respondent Elevator and Respondent Kencor are closely held corporations owned and operat- ed by members of the Kennedy family. Richard Kenne- dy, as chief executive officer, ran the business of Re- spondent Elevator and now runs the business of Re- spondent Kencor. Both at Elevator, and at Kencor, Ken- nedy has received the assistance of his brother-in-law, William Muesham, with respect to labor relations matters and, of his sister, Maureen Muesham, with respect to bookkeeping, billing, banking, and bill paying. Historically, Elevator engaged in elevator construction work and in the service, maintenance , and repair of ele- vators. However, some 2 years or more before Kencor began operations, Elevator decided to phase out its con- struction work while continuing with its service work. It carried out that decision . Kencor, too, is engaged in the service, maintenance, and repair of elevators. It uses the same form contracts previously used by'Elevator and, es- sentially, services the same customers , at the same rates, using the same inventory, and much or all. of the same equipment previously used by Elevator. The individuals employed by Kencor are, with but one exception, former employees of Elevator. Indeed, for the most part, those individuals simply transfered payrolls and continued to perform the same functions at the same rates of pay. As shown in the statement of facts, during the transi- tion period, employees of Respondent Elevator per- formed unpaid services for Respondent Kencor. Later, those on the payroll of Kencor performed services for Elevator without remuneration. In particular, Richard Kennedy, while still president of Elevator, solicited its customers for Kencor and performed mechanical serv- ices for some of those customers as an agent of Kencor. Maureen Muesham performed bookkeeping and related functions for Kencor, while on Elevator's payroll, and for Elevator, while on Kencor's payroll. Of even greater significance, the two Respondents engaged in a series of financial transactions that were not arm's length bona fide business dealings but, rather, were the product of a family business undergoing a paper reorganization. Thus, Kencor purchased 62 of Elevator's customer accounts without independent appraisal of the value, if any, of the purchased accounts. Kencor purchased Elevator's inven- tory, again without independent appraisal of its value. In both cases, the consideration for the transaction was as- sumption by Kencor of those debts of Elevator for which the family members were personally liable. Simi- lar considerations motivated Kencor to lend money to Elevator that, the family members knew, Kencor had no hope of recovering. Notes were drawn and passed among Elevator, Kencor, and the family members, but principal and interest went unpaid . Kencor stored its in- ventory on Elevator premises and paid no rent. Elevator sold vehicles to Kencor without appraisal of their value. Kencor completed a construction job, begun by Eleva- tor, for which it received no payment . It did so because the same family members who owned and ran Elevator, and then owned and ran Kencor, were personally re- sponsible for completion of the project. The record evi- dence also suggests a commingling of the assets of the two Companies and of the family members and a lack of new capital invested ,in the new enterprise. In light of the common ownership, management, oper- ation, and control by members of the Kennedy family of the two Respondents , their common business purpose, customers, and employees and the significant business transactions between them which were not at arm's length or bona fide dealings, I find that the changeover from Elevator to Kencor was, simply , the paper reorga- nization of a family business. I conclude that Respondent Kencor is the alter ego of Respondent Elevator. Since Elevator's withdrawal from NEU was not com- municated to the International Union, or to Local 5, before commencement of negotiations with respect to the 1982 to 1987 contract, Elevator, indisputably bound by the terms of the 1977 to 1982 contract, is also bound by the terms of the 1982 to 1987 agreement. Its alter ego, Kencor, is also obligated to abide by the terms of those agreements. By refusing to recognize the Union and honor the contracts, Respondents violated Section 8(a)(5) of the Act.7 Respondents further violated Section 8(a)(5) of the Act by refusing to furnish the information requested by the Union- on July 6, 1982. Where, as here, a union has shown the probable relevance of information regarding an employer's relationship with another company to pos- sible circumvention of contractual requirements , the em- ployer is obligated to furnish the information. Boyers Construction Co., 267 NLRB 227 (1983). IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of Respondent set forth in section III, above occuring in connection with their operations de- scribed in section I, above, have a close, initimate, and substantial relationship to trade, traffic, and commerce among the several States and tend to lead to labor dis- T In view of my disposition herein, I need not decide whether Re- spondents also violated Sec. 8 (a)(3) of the Act by the same conduct. 634 DECISIONS OF NATIONAL LABOR RELATIONS BOARD putes burdening and obstructing commerce and the free flow of commerce. V. THE REMEDY Having found that Respondents have engaged in cer- tain unfair labor practice conduct in violation of Section 8(a)(5) and (1) of the Act, I shall recommend that they be ordered to cease and desist therefrom and to take cer- tain affirmative action designed to effectuate the policies of the Act. CONCLUSIONS OF LAW 1. Respondents Elevator Sales and Service, Inc. and Kencor, Inc. are employers engaged in commerce, and in operations affecting commerce, within the meaning of Section 2(2), (6), and (7) of the Act. Respondent Kencor, Inc. is the alter ego of Respondent Elevator Sales and Service, Inc. 2. International Union of Elevator Constructors and its Local Union No. 5 are labor organizations within the meaning of Section 2(5) of the Act. 3. All elevator constructor mechanics and all elevator constructor helpers employed by Respondents and by members of National Elevator Industry, Inc. constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. 4. At all times material herein the Union has been, and is now, the exclusive representative of all employees in the aforesaid bargaining unit for the purposes of collec- tive bargaining within the meaning of Section 9(a) of the Act. 5. By refusing to recognize and bargain with the Union, as the exclusive representative of the bargaining unit employees, concerning rates of pay, wages, hours, and other terms and conditions of employment, and by refusing to adhere to the terms- of the July 9, 1977 to July 8, 1982 agreement' between National Elevator In- dustry, Inc. and International Union of Elevator Con- structors, and its successor agreement, Respondents have engaged in unfair labor practice conduct within the meaning of Section 8(a)(5) of the Act. 6. By refusing to furnish the Union with the informa- tion requested by it on July 6, 1982, Respondents have engaged in unfair labor practice conduct within the meaning of Section 8(a)(5) of the Act. 7. The aforesaid unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. On these findings of fact and conclusions of law and on the entire record, I issue the following recommend- ed8 ORDER The Respondent, Elevator Sales and Service, Inc., and its alter ego Respondent Kencor, Inc., Broomall, Penn- sylvania, their officers, agents, successors, and assigns, shall 6 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 1. Cease and desist from (a) Refusing to bargain collectively concerning rates of pay, wages, hours, and other terms and conditions of em- ployment with International Union of Elevator Con- structors and its Local Union No. 5 as the exclusive bar- gaining representative of its employees in the appropriate unit. (b) Refusing to adhere to the terms of the collective- bargaining agreements between National Elevator Indus- try, Inc. and International Union of Elevator Construc- tors covering the periods July 1977 to July 1982 and July 1982 to July 1987. (c) Refusing to furnish the Union with the information requested by it on July 6, 1982. (d) In any like or related manner interfering with, re- straining, or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act 2. Take the following affirmative action necessary to effectuate the policies of the Act. (a) On request, bargain with the Union as the exclusive representative of all employees in the aforesaid appropri- ate unit with respect to rates of pay, wages, hours, and other terms and conditions of employment. (b) Adhere, retroactively, to the terms of the 1977 to 1982 and the 1982 to 1987 agreements between National Elevator Industry, Inc. and International Union of Ele- vator Constructors. (c) Furnish the Union with the information requested by it on July 6, 1982. (d) Make the unit employees whole for any losses they may have suffered as a result of the refusal to adhere to the 1977 to 1982 and the 1982 to 1987 agreements, with interest thereon to be computed in accordance with Flor- ida Steel Corp., 231 NLRB 651 (1977). See generally Isis Plumbing Co., 138 NLRB 716 (1962). (e) Preserve and, on request, make available to the Board or its agents, for examination and copying, all payroll records, social security payment records, time- cards, personnel records and reports, and all other records necessary to analyze the amount of backpay due under the terms of this Order. (f) Post at their Broomall, Pennsylvania facility copies of the attached notice marked "Appendix."9 Copies of the notice, on forms provided by the Regional Director for Region 4, after being signed by the Respondent's au- thorized representative, shall be posted by the Respond- ent immediately upon receipt and maintained for 60 con- secutive days in conspicuous places including all places where notices to employees are customarily posted. Rea- sonable steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material. (g) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Re- spondent has taken to comply. 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 Nation- al Labor Relations Board" shall read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board " ELEVATOR SALES & SERVICE 635 APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT refuse to bargain collectively concern- ing rates of pay, wages, hours, and other terms and con- ditions of employment with International Union of Ele- vator Constructors and its Local Union No. 5, as the ex- clusive bargaining Representative of our employees in the appropriate bargaining unit consisting of all elevator constructor mechanics and all elevator constructor help- ers employed by us and by members of National Eleva- tor Industry, Inc. WE WILL NOT refuse to adhere to the terms of the col- lective-bargaining agreements between National Elevator Industry, Inc. and International Union of Elevator Con- structors covering the periods July 1977 to July 1982 and July 1982 to July 1987. WE WILL NOT refuse to furnish the Union with the in- formation requested by it on July 6, 1982. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exercise of the rights quaranteed you by Section T of the Act. WE WILL, on request, bargain with the Union as the exclusive representative of all employees in the appropri- ate unit with respect to rates of pay, wages , hours, and other terms and conditions of employment , and WE WILL adhere, retroactively, to the terms of the 1977 to 1982, and the 1982 to 1987 agreements between National Ele- vator Industry, Inc. and International Union of Elevator Constructors. WE WILL furnish the Union with the information re- quested by it on July 6, 1982. WE WILL make employees whole for any losses they may have suffered as a result of our refusal to adhere to the terms of the 1977 to 1982 and the 1982 to 1987 con- tracts, plus interest. ELEVATOR SALES AND SERVICE, INC. AND KENCOR, INC.