Alabama Metal Products, Inc., And Its Alter Ego Delta Laminating, Inc.

1090 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Alabama Metal Products, Inc., and its alter ego Delta Laminating, Inc. and Aluminum, Brick and Glass Workers International Union, AFL- CIO, CLC, Local 250. Case 26-CA-10265 24 June 1986 DECISION AND ORDER By CHAIRMAN DOTSON AND MEMBERS DENNIS AND JOHANSEN On 16 March 1984 Administrative Law Judge Hutton S. Brandon issued the attached decision. The General Counsel filed exceptions and a sup- porting brief. The Respondent filed a brief in oppo- sition to the General Counsel's exceptions, cross- exceptions, and a supporting brief. The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. The Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge's rulings, findings, and conclusions ' and to adopt the recommended Order. ORDER The recommended Order of the administrative law judge is adopted and the complaint is dis- missed. i We agree with the judge that Delta Laminating is not the alter ego of Alabama Metal, but based only on the following rationale The tradi- tional test for the existence of alter ego status is found in Crawford Door Sales Co, 226 NLRB 1144 (1976) ("generally we have found alter ego status where the two enterprises have 'substantially identical' manage- ment, business purpose, operation, equipment, customers, and supervisors, as well as ownership") Although Delta Laminating and Alabama Metal have substantially identical ownership , they have separate management, supervision, and business purpose, as well as operation, equipment, and customers. For the reasons set forth by the judge, Chairman Dotson agrees with his colleagues that Delta Laminating is not the alter ego of Alabama Metal Contrary to the judge, we would not find Delta Laminating and Ala- bama Metal to be a single employer and therefore do not reach the accre- tion issue in dismissing the complaint Four factors must be evaluated to determine whether two companies constitute a single employer ( 1) inter- relation of the operations, (2) common management , (3) centralized con- trol of labor relations , and (4) common ownership See Radio Union v Broadcast Service, 380 U S 255, 256 (1965) Here, the judge acknowl- edged the absence of two factors , common management and centralized control of labor relations The latter factor is considered critical to a single employer finding See Western Union Corp, 224 NLRB 274, 277 (1976), affil sub nom Telegraph Workers v NLRB, 571 F 2d 665 (D C Cir. 1978), cert denied 439 U S 827 ( 1978) The remaining factors, common ownership and, assuming without deciding it exists here , interre- lation of operations, are, in our view insufficient to establish single em- ployer status. Because he agrees with the judge's finding that the Delta Laminating facility constitutes a separate appropriate unit and not an accretion to the Alabama Metal unit, Member Johansen finds it unnecessary to determine whether Alabama Metal and Delta Laminating are a single employer W. Paul Tuberville, Esq., for the General Counsel. Kenneth Milani and Hunt Cole, Esq. (Miller, Milani, Johnson & Mohler), of Jackson, Mississippi, for the Re- spondents. A. Q. Harville, of Russelville, Alabama, for the Charging Party. DECISION STATEMENT OF THE CASE HU-I-FoN S. BRANDON, Administrative Law Judge. This case was tried at Rosedale , Mississippi, on Decem- ber 12 and 13 , 1983.' The charge was filed by Alumi- num, Brick and Glass Workers International Union, AFL-CIO, CLC, Local 250 (the Union) on June 16 and amended on July 22 . The complaint issued on July 26. The complaint alleges that Alabama Metal Products, Inc.2 (Alabama Metal), and its alter ego Delta Laminat- ing, Inc . (DLI) and jointly with Alabama Metal (Re- spondents) violated Section 8(a)(1), (3), and (5) of the National Labor Relations Act by: (a) the failure to rec- ognize the Union as representative of DLI's employees and the failure to extend the Alabama Metal-Union bar- gaining agreement to DLI employees, (b) the failure of Alabama Metal to bargain with the Union over the ef- fects of its transfer of bargaining unit work to DLI, (c) the failure of DLI to recall employees laid off from Ala- bama Metal instead of hiring new employees for its oper- ation, and (d) the failure of Alabama Metal to accept and process a grievance filed by the Union with regard to the DLI operation. The single critical issue presented in the case and on which all alleged violations of the Act are hinged is whether Alabama Metal and DLI are alter egos or whether they constitute a single employer oper- ating as a single-integrated enterprise. On the entire record, including my observation of the demeanor of the witnesses, and after due consideration of the briefs filed by the General Counsel and Respondents, I make the following FINDINGS OF FACT 1. JURISDICTION Alabama Metal is a corporation with an office and place of business in Rosedale, Mississippi, where it is en- gaged in the manufacture and nonretail sale of metal cabinets. It annually ships products, goods, and materials valued in excess of $50,000 from its Rosedale facility di- rectly to points outside the State of Mississippi. Alabama Metal by its separate answer admits, and I find, that it is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. DLI is a corporation which maintains an office and place of business in Cleveland, Mississippi, where it is en- gaged in the manufacture of plastic laminated products utilized by Alabama Metal in the manufacture of its cabi- nets. Although independent jurisdictional amounts are i All dates are in 1983 unless otherwise indicated 2 The name appears as corrected by amendment of the complaint by the General Counsel at the hearing 280 NLRB No. 123 ALABAMA METAL PRODUCTS not alleged in the complaint for DLI, the record reflects that DLI provided laminating services for Alabama Metal for which Alabama Metal was billed in excess of $50,000 during 1983. I find that DLI is an employer en- gaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. The complaint alleges, Respondents in their separate answers admit, and I find that the Union is a labor orga- nization within the meaning of Section 2(5) of the Act. II. THE ALLEGED UNFAIR LABOR PRACTICES A. The History, Ownership, and Operations of Alabama Metal Alabama Metal has been engaged in the manufacturing of metal cabinets at its Rosedale facility since the late 1960s although it has gone through two changes in own- ership. Formerly known as AMPCO Associates, Inc., until a name change in August 1982, it was initially wholly owned by Chrommaloy American Corporation until 1981 when it was purchased by DKM Corporation. In July 1982, it was purchased by Federal Construction Standards, Inc. (FEDCO) and Richard Kanary, who had served as president of AMPCO beginning in April 1979. FEDCO and Kanary each owned 50 percent of the stock in Alabama Metal, and Kanary continued to serve as president and chief executive of the corporation with pri- mary responsibility for the operations of the plant. Howard Fincke, chairman of the board of FEDCO, served also as chairman of the board for Alabama Metal and had primary responsibility for marketing Alabama Metal's production. Other members on the corporation's board in addition to Fincke and Kanary are Allen Sharaway, Tony Dato, and Mike Dolen. Other officers of Alabama Metal are Haywood Britt, vice president, and Roger Holland, secretary-treasurer, who also serves as the Company's comptroller and administrative manag- er. The Union has represented the production and mainte- nance employees of Alabama Metal for several years and has been party to successive collective-bargaining agree- ments with Alabama Metal, the latest being effective from April 21, 1981, through April 20, 1984. The latest agreement contains a broad management-rights provision under which the Company retained the right, inter alia, to discontinue, transfer or subcontract any of its oper- ations; expand, reduce, combine, transfer or cease any job, job classification or operations; sell, merge, consolidate or lease its business operations or any part thereof . . . . With respect to its operations, Alabama Metal in past years maintained a woodworking department where it produced plastic laminated countertops and shelving for use in metal cabinets. The kitchen countertops are made in a process in which plastic laminate is applied to parti- cle board base through a "post formed" process in such a manner as to leave a "bullnose" or curved front edge with a curved, raised, and built up "backsplash" rear edge. The exposed sides of the countertops are then fin- 1091 ished by gluing and applying plastic "end caps." It is un- disputed that in August 1983, after determining that the kitchen countertops could be purchased from an outside supplier more economically than they could be produced in its plant, Alabama Metal ceased the countertop pro- duction. Because its action in this regard was also con- sistent with a plan to discontinue the woodworking de- partment in order to expand its metal bending facilities, as will be further detailed herein, no employees of Ala- bama Metal were adversely affected by the change in op- erations. The General Counsel makes no contention that Alabama Metal in any way violated the Act by its deci- sion to resort to an outside supplier for the kitchen coun- tertops. Alabama Metal also produced a bathroom vanity which utilized either a plastic laminated top or a marble top until 1981 when it was concluded that the vanity line was unprofitable. The line was discontinued, and the sep- arate plant facility in Rosedale which manufactured the marble tops was closed. Based on the testimony of employee Willie Wilson, the manufacture of the bathroom plastic laminated vanity top necessitated the use of a machine called a Stefani edge bander which applied precut plastic laminate to the squared-off edges of the top. Wilson acknowledged that the Stefani utilized by the Company did not operate properly, and its use was discontinued. Discontinuance of the use of the Stefani and the decision of Alabama Metal to purchase laminated tops, shelves, and other products with prefinished laminated edges was confirmed by Gloria Strotter, an employee of Alabama Metal and the Union's president for the past 6 years. Strotter credi- bly testified without contradiction that in 1978 or 1979, Alabama Metal's then Plant Manager George Clapper and then President Dave Bridges explained to her that they were having so much trouble with the Stefani edge- bander keeping it repaired that they were going to get the work done by outsiders. They added, according to Strotter, that if they were ever able to purchase a new Stefani, they would bring the work back into the plant. Strotter orally agreed to the decision of Clapper and Bridges. The record does not establish whether any em- ployees were adversely affected by the discontinuation of the edge-banded laminated work. Kanary, testifying for Respondents, did not confirm any "agreement" between the Company and the Union to return lamination work to the plant on the purchase of a new Stefani. Kanary testified that all high pressure laminate work required by Alabama Metal since he had begun his employment in 1978, except for the "post formed" kitchen countertops, had been purchased from outside suppliers. This also included laminated wardrobe doors, drawer fronts, and tops used on a "FEDCO" line of metal products starting in 1979. However, Kanary tes- tified that in the fall of 1982, an analysis was conducted by Roger Holland concerning the feasibility of Alabama Metal again producing its own edge-banded laminated products. It was determined from this analysis, which in- cluded consideration of labor rates under the union con- tract, that Alabama Metal could produce such products cheaper than it could buy them. Accordingly, a quota- 1092 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tion for the purchase of a new Stefani edge bander was obtained from Amersagg, Inc., a manufacturer of such machines, on December 10, 1982. A decision to purchase the Stefani was made some time prior to December 22, 1982, and a purchase order for the machine was issued on that date3 accompanied by a required one-third down payment of the total price which exceeded $46,000.' Consistent with its decision to purchase the Stefam and begin its own edge-banded laminating work, the Company placed an ad in local newspapers beginning December 24 for an "experienced supervisor" in lamina- tion work. However, a suitable applicant was not found and the advertised position was never filled. Strotter testified that she was told by Kanary about mid-February that a big machine had been ordered and the Company was going to try to make the FEDCO wardobe doors with it, and it was hoped it could sell such doors to other manufacturers. Kanary added that the work would create about 8 to 10 new jobs. Strotter expressed pleasure at the prospect because there were some employees on layoff at the time. 5 Kanary in his tes- timony denied the statements attributed to him by Strot- ter. Although Strotter expressed uncertainty about the date of Kanary's remarks to her, and thus such remarks could have been made earlier than mid-February, Strot- ter generally impressed me as straightforward and credi- ble. Moreover, the remarks attributed to Kanary were not inconsistent with the admitted plans of Alabama Metal existent at one time to purchase the Stefani and begin to manufacture its own edge-banded laminated products. Accordingly, I credit Strotter's testimony over Kanary's denial. Alabama Metal's plans to expand its laminating oper- ations with a new Stefani were later affected by the awarding of two Government contracts to it for the manufacture of certain cabinetry, according to Kanary. Kanary was advised of the first such contract by a letter dated December 9, 1982, although he acknowledged that the Company was probably orally advised of receipt of the contract award a few days earlier. The second con- tract award was announced by letter dated February 4, but again verbal notice of the award was probably re- ceived earlier than that date. Kanary testified that these two awards required a substantial increase in production and significantly taxed the Company's metal-bending fa- cilities. Accordingly, because Kanary and Fincke con- cluded in light of the Government contracts and the plant's metal-bending capacity, the best future prospects for the Company lay in the expansion of the metal-bend- ing facilities into the area used by the woodworking de- partment. Further, Kanary concluded that the Company "neither had the space, the people, nor the time" to con- tinue with its plans to go back into the lamination busi- 9 The decision to purchase the Stefam was not formally ratified by the board of directors until January 18 • Loans obtained from the First National Bank of Rosedale executed by Holland as secretary-treasurer of Alabama Metal for purchase of the Stefani were executed February 9, March 22, and June 14 The uncontradicted testimony of Holland revealed that the Company had laid off no additional employees during the period from December 1982 through April 1, 1983, but as of April 1, there was a total of 32 employees on layoff status. At the beginning of 1983 there were approxi- mately 135 active employees on Alabama Metal's payroll ness. Accordingly, a decision was made not to proceed with such plans. It was this decision which Kanary testi- fied prompted the formation of DLI as related below and the submission of all edge-banded lamination work to DLI. Alabama Metal did proceed with the expansion of its metal-bending facilities necessary for its production needs for the two Government contracts. Thus, by July 12, it had recalled all employees from layoff. Moreover, from the first of the year until time of the hearing, it had increased its total employee complement from about 135 employees to 212. B. The Formation, Organization, and Operations of DLI Kanary testified that on Alabama Metal's decision not to go into the "laminating business," he saw an opportu- nity to "make some money." Because he was aware of the economics of such business and knew it would be profitable, Kanary approached Fincke about joining him in establishing a laminating business, but Fincke de- clined.6 Kanary proceeded to establish DLI as a corpo- ration on February 24 and became its sole stockholder, investing $10,000 in its initial operating capital. Kanary, Holland, and Memphis Attorney William Lawson were named as directors of DLI. Kanary was established as DLI's president and Holland as its secretary-treasurer. Holland did not initially invest any money in DLI, but, subsequently, on July 1, purchased DLI stock. After incorporation, Kanary sought out David Reyn- olds, a one-time employee of Alabama Metal, and hired him on February 28 to manage and operate DLI. On March 1, Kanary leased a building for DLI's operation in Cleveland, Mississippi, about 20 miles from Rosedale. Holland made arrangements for insurance for the DLI operation and opened a bank account for DLI on Febru- ary 21 at the Valley Bank which had offices in both Rosedale and Cleveland.' The address listed on the ini- tial account card was that of Alabama Metal in Rosedale. Prior to occupying the DLI building, Reynolds spent approximately a week at the Alabama Metal plant. It is undisputed that during this period, he examined Alabama Metal's machinery and equipment which could be uti- lized by DLI, and discussed with Holland the fair market value of the equipment. Such equipment as Reynolds de- termined was needed by DLI was transferred to the DLI facility over the following 2 months. However, the pur- chase of the equipment was not completed until July 1, because, as Holland testified, Alabama Metal sought to postpone the actual sale due to tax considerations." The old unused Stefani edge-bander was among the equipment and machinery transferred to Reynolds. Reyn- olds testified, however, that it has never been used for 6 Kanary, in his testimony, indicated that opening and operating an- other facility by Alabama Metal for producing laminated products was not considered by either he or Fmcke Holland testified that the Valley Bank was chosen because of the convenience of the two offices Alabama Metal banked with the First Na- tional Bank in Rosedale 6 According to Holland, most of the transferred equipment was old and had already been fully depreciated so that any gains from the sale of the equipment was fully taxable ALABAMA METAL PRODUCTS edge-banding work at DLI, and efforts to use it after modifications as a saw were fruitless. Instead, the new Stefani initially ordered by Alabama Metal was trans- ferred to DLI and installed at DLI on its delivery by Amersagg on April 14. Under a lease agreement execut- ed July 1, DLI assumed payment of the bank note exe- cuted by Alabama Metal for the new Stefani with the first payment due July 14. Payments were made by DLI directly to the bank rather than through Alabama Metal. It is undisputed that certain employees of Alabama Metal gave technical assistance to DLI in setting up equipment and machinery at its plant. Reynolds conced- ed that Haywood Britt, vice president of Alabama Metal, Wayne Clem, and Roger Morgan, both officials of Ala- bama Metal, went to DLI to assist in instructing Reyn- olds in the operation of machinery and in adjusting ma- chinery. Reynolds related, however, that while Britt and Clem had come to DLI on more than on occasion, their total time at the plant was not more than a day for each of them. That testimony was contradicted by Johnny Allen, a former employee of DLI who was a witness for the General Counsel. According to Allen, both Clem and Britt were present at DLI a total of 8 to 10 occa- sions over a period of 3 weeks beginning around the last of April. He estimated that Clem and Britt were present for a period of 10 minutes to 3 hours on each occasion. Allen may not be regarded as a completely unbiased wit- ness because he was terminated by Reynolds in Septem- ber. Reynolds also was not unbiased, but he impressed me as honest. He also had good recall, and I credit him over Allen. Reynolds testified that he set employee wage rates for DLI as well as its hours of operation and makes deci- sions regarding the necessity for overtime work. He also testified that he determines wage increases for employ- ees, makes employee termination decisions, and other- wise sets the work rules and personnel policies for DLI without consultation with Kanary or Holland, both of whom visit the DLI plant infrequently.9 In short, it was Reynolds' testimony supported by that of Kanary and Holland that Reynolds is generally responsible for the total day-to-day operations of DLI. Reynolds hired the first employee for DLI on March 14. That employee was Stan Clem, a son of Wayne Clem, but apparently not a previous employee of Ala- bama Metal. At the same time, Haywood Britt III, a son of Alabama Metal's Haywood Britt, was hired initially on a part-time basis . According to Reynolds, two to three additional employees had been referred at Reyn- olds' request from a local employment service around May 1. At the time of the hearing, DLI employed a total of six full-time and two part-time employees, none of whom were ever employed by Alabama Metal. Reynolds testified he gave no consideration to the hiring of Ala- bama Metal employees who were on layoff status. No laid-off Alabama Metal employee ever applied for work at DLI. DLI employees have no contact with Alabama Metal employees except for the Alabama Metal truck- 9 Kanary testified that after his initial visits to DLI in connection with the setup of operations, he visited the DLI plant only about four times Holland testified he went to DLI's plant about once every 6 weeks 1093 drivers who pick up finished products from DLI about once a week. DLI began production in May. Invoice records reflect that as of the time of the hearing, about 98 percent of DLI's total work had been performed for Alabama Metal. Indeed, it had only two other minor customers, one of whom was FEDCO. Reynolds testified there are no restrictions on who DLI may do business with. He added that he had actively solicited other customers and had bid on a Government contract, but his efforts had not produced effective orders by the time of the hearing. Thus, Alabama Metal remains essentially as DLI's sole customer. According to Kanary's testimony, there is no agreement between DLI and Alabama Metal making DLI the sole source of the latter' s laminated board needs. However, Kanary further testified that Dave Con- stanzi, the purchasing agent of Alabama Metal, has standing instructions to get the laminated products through DLI so long as it can be purchased more cheap- ly through DLI. Kanary's wife, Priscilla, began working for DLI in mid-June on a part-time but daily basis. She assisted Reynolds in DLI's secretarial work. On July 1, after the filing of the charge herein, she acquired a majority own- ership interest in DLI on Kanary's transfer of 51 percent of DLI's outstanding stock to her as a gift. At the same time, Kanary resigned as the president and director of DLI, and Mrs. Kanary was installed as president and di- rector. On the same date, Holland became a shareholder in DLI through the sale of 100 shares of stock to him by Kanary. Kanary explained that his resignation from offi- cership and directorship in DLI and his replacement by his wife was made in order to obtain an advantage for DLI on Government contract bids by virtue of a prefer- ence accorded companies with female ownership. The sale of stock to Holland was consistent with Kanary's earlier offer to Holland to invest in DLI, an offer which Holland initially had deferred. C. The Union's Request to Extend its Agreement with Alabama Metal to DLI On April 25, the Union's International representative, A. Q. Harville, and the local Union's president, Strotter, went to the DLI plant in Cleveland. Harville testified that he saw and talked to Kanary in the plant, and saw Reynolds working in the plant. He also observed Hay- wood Britt working on a panel saw which had previous- ly been used at Alabama Metal.10 Harville testified he asked Kanary, who said he was the sole owner of DLI, to "recognize the contract" over at DLI and call the people back that were on layoff at Rosedale. Kanary de- clined, according to Harville, saying that if the Union was in there it would not let Reynolds work on a ma- chine as he was then doing, that DLI was going to re- quire some very skilled people, and that, under the Union's contract, it was too much trouble to shift people around to where they were needed. Harville said Kanary 10 It must be presumed that Britt and Reynolds were performing in- stallation, setup, or adjusting work because DLI was not in production at the time 1094 DECISIONS OF NATIONAL LABOR RELATIONS BOARD added that the Union would just have to file a "peti- IV. CONTENTIONS AND CONCLUSIONS tion." Harville's testimony about what transpired with Kanary was generally corroborated by Strotter. Howev- er, Strotter attributed to Harville a general request for recognition of the Union at DLI rather than a request to extend the Alabama Metal-union agreement to DLI. Kanary testified, contrary to Harville and Strotter, that Harville said "something about" signing up the DLI employees and, in response, Kanary said that was a deci- sion the DLI employees would have to make. Harville made no request to bargain over the effects of any work transfer from Alabama Metal to DLI, according to Kanary. Although Kanary denied telling Harville that the Union would have to file a petition, he admitted that he told Harville that if he wanted to represent the DLI employees, "I guess you have a vote and do whatever you have to do." Of the three witnesses to Kanary's remarks, I believe Harville was more accurate regarding what he sought from Kanary. He was more specific on this point than both Strotter and Kanary who were rather vague on what Harville was asking of him. Further, because Har- ville concedes no effort had been made to sign up DLI employees on union authorization cards at this point, it is more likely that he would have sought extension of the Alabama Metal contract to them rather than separate recognition. D. The Union's Filing of Grievances On May 2, Strotter filed a grievance under the Ala- bama Metal-union agreement in which she sought to have Alabama Metal recall its laid-off bargaining unit employees to "the new located plant in Cleveland," and pay them "for all time lost." Alabama Metal's then per- sonnel administrator, Edith Braswell , after checking with Holland and obtaining legal advice, replied to the griev- ance on May 6, stating that the grievance form was being returned to the Union because the matter did not constitute a "grievance within the meaning of' the col- lective-bargaining agreement , and because it pertained to matters "not covered" by that agreement. Further, Bras- well's reply asserted the matter did not invole "a dispute involving this company." A second grievance on the subject was filed by Strot- ter on May 12, this time specifically setting forth the arti- cles of the collective-bargaining agreement allegedly breached and claiming that the Company had assigned bargaining unit work to persons outside the bargaining unit. The grievance sought as a remedy the assignment of such work to bargaining unit employees and payment to appropriate unit employees any wages and benefits lost. Braswell responded to the second grievance on May 17, repeating essentially the response to the first filed grievance. The Union, through Harville, replied to Bras- well's second response by letter dated May 23, to Hol- land, saying it was dissatisfied with the disposition of the grievance and requested a meeting to discuss the griev- ance. The record shows no reply by Holland to the letter or any further discussion of the grievance between the parties. A. Arguments of the General Counsel The General Counsel argues that DLI is either the alter ego of Alabama Metal or the two constitute a single employer under the Act. To support the alter ego argu- ment, the General Counsel points to the substantially identical ownership of the two corporations by Kanary and the common management of the two concerns through Kanary and Holland. The common business pur- pose, operations, equipment, and the alleged lack of a true arm's-length relationship between the two entities are also cited as establishing the fact that DLI is simply the "disguised continuance" of Alabama Metal. Finally, in this regard, the General Counsel asserts that record evidence reveals an avowed purpose of the creation of DLI was to allow Alabama Metal to avoid its obligation under its collective-bargaining agreement with the Union. With respect to the single-employer contention, the General Counsel argues that the common ownership and management of the two Companies, the almost com- plete interrelationship of operations, and the common control of labor relations policy as exercised by Kanary dictate a finding that DLI and Alabama Metal constitute a single employer under the Act. The General Counsel's further arguments with regard to the alleged violations of Section 8(a)(1), (3), and (5) flow from the alter ego or single-employer status of the two corporations. Thus, the 8(a)(5) allegation is premised on the principle that an alter ego has the obligation to recognize and bargain with the Union and to apply and honor the terms of an existing collective- bargaining agreement. Wintz Motor Freight, 265 NLRB 922 (1982). An additional basis for the 8(a)(5) allegation, the General Counsel contends, is found in Alabama Metal's failure to give notice and opportunity to bargain to the Union over the effects on its employees of the establishment of DLI. While acknowledging the right of Alabama Metal under the management-rights clause of its agreement with the Union to "determine the number, locations, and types of plants and operations, including the right to move or close the business or any part thereof," the General Counsel contends this does not waive the Union's right to bargain over the effects of such action. The final 8(a)(5) allegation stems from Alabama Metal's refusal to process the Union's grievance on the failure to recall laid-off Alabama Metal employees to DLI. According to the General Counsel, citing U.S. Utilities Corp., 254 NLRB 480, 486 (1981), the refusal to process the grievance, in light of the alter ego/single-em- ployer relationship between the two Companies, consti- tutes a refusal to bargain in good faith. The 8(a)(3) allegations of the complaint are essentially derivative of the 8(a)(5) allegations. In short, the actions of Alabama Metal in establishing DLI to avoid its bar- gaining obligations resulted in discrimination not only against its employees who were then on layoff status, but also those employees of DLI who failed to receive wage rates under the union contract to which they were enti- tled. The General Counsel seeks a make-whole remedy for the 8(a)(3) violation. ALABAMA METAL PRODUCTS B. Arguments of Respondents Respondents' primary defense is bottomed on their contention that even assuming that the two corporations herein are a "unified employer," the employees of DLI may not properly be accreted to the Alabama Metal bar- gaining unit to make them a part of that unit and the col- lective-bargaining agreement applicable to them. Re- spondents go on to argue that, in any event, the two cor- porations are not a single employer and DLI is not the alter ego of Alabama Metal. It is further argued that Alabama Metal had no duty to bargain over the effects of a transfer of work to DLI because no work was in fact transferred. In this regard, it is pointed out that the work which DLI performed for Alabama Metal, i e., providing the edge-banded laminated products, had been produced by outside suppliers since 1979. With respect to the 8(a)(3) allegation, Respondents argue that no discrimination occurred because there was no violation of Section 8(a)(5). Moreover, it is contended that there was no proof that any laid-off Alabama Metal employee applied or sought employment at DLI. Finally, in regard to the refusal to process the Union's grievance, Respondents argue that the refusal to process a single grievance does not constitute a violation of the Act except when such refusal is tantamount to a repudi- ation of the existing collective-bargaining agreement. Here, it is pointed out that there was no evidence that Alabama Metal refused to process any grievance other than the one in issue herein. C. Analysis and Conclusions The National Labor Relations Board and courts have sometimes blurred the distinction between alter ego and single-employer concepts. However, separate tests have been stated for each. Thus, the Board has stated that an alter ego relationship will be found when the two con- cerns have "substantially identical management, business purpose, operations, customers, and supervision as well as ownership," although the absence of identical owner- ship does not preclude the finding of alter ego status. Crawford Door Sales Co., 226 NLRB 1144 (1976). The controlling criteria for determining single-employer status are the "interrelation of operations, common man- agement, centralized control of labor relations, and common ownership." Radio Union v. Broadcast Service, 380 U.S. 255, 256 (1965); South Prairie Construction Co. Y. Operating Engineers Local 627, 425 U.S. 800 (1976); Gerace Construction, 193 NLRB 645 (1971). Not all the criteria need be shown to establish single-employer status. Blumenfeld Theatres Circuit, 240 NLRB 206 (1979). Although the tests for alter egos and single employers are similar, they are not identical. The absence of "cen- tralized control of labor relations" in the alter ego crite- ria is due to the fact that the alter ego concept is normal- ly applied in situations in which the alleged alter ego has succeeded in point of time to the operation in issue so that the alter ego is simply a "disguised continuance of the old employer." NLRB v. Southport Petroleum Co., 315 U.S 100, 106 (1942). Under such circumstances, there are no simultaneously existing entities over which 1095 centralized control of labor relations may be exercised. In addition, the Board has also held that another factor which must be considered in determining the existence of alter ego status in a given case is "whether the purpose behind the creation of the alleged alter ego was legiti- mate or whether, instead, its purpose was to evade re- sponsibilities under the Act." Fugazy Continental Corp., 265 NLRB 1301 (1982), enfd. 725 F.2d 1416 (D.C. Cir. 1984). An employer found to be an alter ego of another is bound by any collective-bargaining agreement executed by the other. See NLRB P. Tricor Products, 636 F.2d 266, 269-270 (10th Cir. 1980); E. G. Sprinkler Corp., 268 NLRB 1241 (1984). When single-employer status is found, one of the employers in the relationship may be responsible for remedying an unfair labor practice of the other. Majestic Molded Products v. NLRB, 330 F.2d 603, 607-608 (2d Cir. 1964). However, each employer in a single-employer relationship is not necessarily bound to a collective-bargaining agreement executed by only one. South Prairie Construction Co., supra. In such situations as in cases involving separate divisions of the same employ- er, the extension of the collective-bargaining agreement to the nonsignatory employer is determined under the accretion doctrine. See Weatherite Co., 261 NLRB 667 (1982). In determining accretion issues, a fundamental concern is to "assure employees- the fullest freedom in exercising their rights guaranteed by the Act." Melbet Jewelry Co., 180 NLRB 107, 109 (1969). Accordingly, the Board fol- lows a restrictive policy in finding an accretion because it forecloses the employees' basic right to select their bargaining representative. Ibid. Although not conceding that DLI and Alabama Metal are either alter egos or a single employer, the two con- tend that such issue is immaterial and that the case may be decided on accretion principles. The General Counsel, on the other hand, sees no accretion issue and relies solely on a finding of alter ego or single employer to support the violations alleged. In this regard, the General Counsel also points to elements in the case which she contends reflect a specific intent on the part of Respond- ents to evade the Alabama Metal-union agreement through the formation of DLI. Because of the different consequences flowing from the finding of whether the two corporations involved are alter egos or a single employer, it is logical and analyti- cally necessary to determine the alter ego and single-em- ployer issues before considering the accretion issue which Respondent argues must be considered first. The accretion doctrine presumes a single or joint employer status and can have no application outside such a rela- tionship. Further, the case relied on by Respondents Food & Commercial Workers Local 576 (R & F Grocers), 267 NLRB 891 ( 1983), in urging that the accretion issue may be decided first is, I conclude, inapposite. In that case, the alter ego or single-employer issue was raised in the context of a union's defense to an 8(b)(7)(C) com- plaint allegation. The Board majority found it unneces- sary to reach the alter ego or single-employer issue, de- ciding instead that in any event the employees of the 1096 DECISIONS OF NATIONAL LABOR RELATIONS BOARD picketed employer could not have constituted an accre- tion to the previously existing unit represented by the union so as to legalize the union's picketing. Thus, the alter ego or single-employer issue was not critical to the result in that case. It is critical here, however, for if DLI is the alter ego of Alabama Metal, then DLI is bound by the Alabama Metal-union bargaining agreement, and the accretion issue is irrelevant. Turning to the issue of whether DLI is the alter ego of Alabama Metal, it is initially clear that there has been no cessation of operations by Alabama Metal. Indeed, there has been no cessation even of a portion of any op- eration of Alabama Metal carried on during the term of the present collective-bargaining agreement. Thus, there appears to be no basis for a finding that DLI is a "dis- guised continuance" of Alabama Metal because there has, in effect, been no discontinuance. Moreover, con- trary to the arguments of the General Counsel, I find the evidence is insufficient to establish any subterfuge on the part of Alabama Metal generally or Kanary specifically in establishing DLI. There is no significant evidence of union animus on the part of Alabama Metal. There is no evidence of an unfair labor practice history on the part of Alabama Metal. Nor is there any significant evidence that the establishment of DLI was designed to thwart or evade the bargaining agreement with the Union. Indeed, all actions taken by Alabama Metal have been wholly consistent with Kanary's claim that the decision to grant the edge-banded work to DLI was based on economic considerations. Had Alabama Metal simply desired to avoid application of the bargaining agreement to such work, it could have continued to purchase such work from outside suppliers as it had been doing under its broad management-rights clause in the bargaining agree- ment. Even Strotter's credited testimony regarding Kanary's comments about installing a new machine and recalling laid-off workers is wholly consistent with the intent to have the edge-banded laminated work performed under the union agreement. With this background, reversal of the decision to do the lamination work "in-house" is only understandable in light of the award of the two new Government contracts and the decision to expand the metal-bending work into the plant area where the lam- ination would have been performed. The subsequent de- cision to contract out the lamination work for the kitch- en countertops is also in keeping with the decision to dis- continue the woodworking operations in favor of metal- bending expansion. The recall of all laid-off Alabama Metal employees by July and the substantial increase in Alabama Metal's employee complement thereafter all fully support Kanary's contention regarding the econom- ic purposes for the action taken. The General Counsel suggests that Kanary's motiva- tion to avoid the Union's agreement may be gleaned from the testimony of Alabama Metal employee Willie Wilson, who testified that in late February or early March he heard Kanary tell an unidentified individual whom he was escorting through the plant that in 6 months the entire operation (refernng to the woodwork- ing operation) would be moved to Cleveland. Kanary conceded in his testimony that he frequently took visi- tors through the plant but could not recall making the remark attributed to him by Wilson. I do not credit Wilson. Wilson's memory with respect to the timing of the alleged remark was not particularly impressive. Moreover, he gave conflicting affidavits to the Board re- garding the alleged remarks indicating in the first that Kanary specifically referred to Cleveland, but omitting any reference by Kanary to Cleveland in his second affi- davit. Finally, it is to be noted that the entire woodwork- ing line was not in fact moved to Cleveland or anywhere else although the lamination of the kitchen countertops was contracted to a firm in Memphis, Tennessee. As further evidence of motivation, the General Coun- sel relies on remarks attributed to Kanary at DLI by Strotter and Harville, already credited herein, on April 25. Such remarks in response to the Union's request to extend the bargaining unit agreement to DLI were obser- vations by Kanary that the Union would oppose Reyn- olds working on a machine and would present obstacles to the free transfer of employees within the plant to per- form the work. However, although these observations may reveal Kanary's belief regarding the effects of the extension of the contract to DLI's employees, it does not establish that DLI was created to avoid such impact. The Board has held that even a statement of intent to operate an alter ego on a nonunion basis does not in itself preclude the finding that an alter ego was set up for eco- nomic reasons or otherwise establish that the creation of the alter ego was to avoid any existing collective-bar- gaining agreement binding on the original employer. See Tricor Products, 239 NLRB 65 (1978), enfd. 636 F.2d 266 (10th Cir. 1980). Considering all the foregoing, and the record as a whole, I find that the creation of DLI was not prompted by Alabama Metal's desire to avoid the collective-bar- gaining agreement. In the absence of the establishment of a subterfuge in the creation of DLI, and because DLI did not succeed to any specific production operations being performed by Alabama Metal employees at the time of DLI's establishment, i i I conclude DLI was not a device to drain off bargaining unit work. Because both Companies here are simultaneously existing, and because I have concluded that DLI was not created to bleed off bargaining unit work in an effort to evade the collective- bargaining agreement, I find that the application of the alter ego concept in the instant case is inappropriate. There remains the single-employer issue . It is quite clear that Alabama Metal and DLI have substantially the same, although not identical, ownership. Kanary has half ownership in the former and until July 1, 2 weeks after the filing of the charge herein, had full ownership of the latter. Although Kanary's half ownership does not give him controlling interest in Alabama Metal, it is undis- puted that he has as complete control of the manufactur- 11 The General Counsel argues that the fact that Alabama Metal was not making edge-banded laminated products at the time DLI was formed is immaterial, and that it is more significant that Alabama Metal had once done such work and intended to resume it I deem it more significant that Alabama Metal had not made edge-banded laminated products in 4 years and that its intent to resume the work was changed only by intervening economic considerations ALABAMA METAL PRODUCTS ing operation as is consistent with full ownership. More- over, even after the July transfer of DLI stock to his wife, Kanary retained beneficial ownership of DLI. Fur- ther, the two entities initially shared at least two officers and directors, Kanary and Holland. I conclude that there is sufficient commonality of ownership in the two entities to meet the ownership criteria of the single-employer test. Common ownership, however, is not determinative when common control is not shown. United Telegraph Workers v. NLRB, 571 F.2d 665, 667 (D.C. Cir. 1978). It appears that centralized control of labor relations is the single most significant indicia of single-employer status for it reflects "operational integration." See Air-Vac In- dustries, 259 NLRB 336 (1981); Arundel Corp., 252 NLRB 397, 399 (1980); Parklane Hosiery, 203 NLRB 597, 612 (1973). In the case sub judice Kanary who controlled the labor relations policy of Alabama Metal retained ulti- mate control of the labor relations policy at DLI. How- ever, he had delegated to Reynolds all responsibility con- nected with the operation of DLI. Reynolds' credible testimony was uncontradicted that he had all authority to hire employees, to promote them, to set their wage rates, and to make appropriate wage adjustments. There is no evidence that Kanary restricted Reynolds' author- ity in this regard in any respect. Reynolds testified that he reached his decision on these matters independent of Kanary. The General Counsel contends that substantial common control of labor relations of the two corpora- tions was demonstrated by Kanary's refusal to recognize the Union as the representative of DLI's employees. Kanary's rejection of recognition of the Union at DLI would reflect control of the most basic labor relations policy, union recognition, and would thus indicate cen- tralized control. See Operating Engineers Local 627, 518 F.2d 1040 (D.C. Cir. 1975), modified on other grounds 425 U.S. 800 (1976). However, based on the testimony of Harville, Harville was not seeking independent recogni- tion of the Union at DLI, but was specifically requesting extension of the Alabama Metal agreement to the DLI employees. Thus, in rejecting the extension, it is not clear that Kanary was responding as a formulator of labor policy for DLI as opposed to the formulator or ad- ministrator of labor policy of Alabama Metal rejecting the Union's contention that the contract should be ex- tended. In view of this ambiguity and because "poten- tial" as opposed to "actual or active" is insufficient to es- tablish centralized control of labor relations, Gerace Con- struction, supra, I must conclude the record does not es- tablish a significant degree of actual centralized control of labor relations to constitute the two concerns here a single employer. As earlier noted, not all four of the single-employer criteria need to be present in order to establish that two entities constitute a single enterprise. So the absence of centralized control of labor relations is not fatal to the General Counsel's single-employer contention. The inter- relation of operations and the common management cri- teria remain to be considered. With respect to common management, it has already been noted that Reynolds has the sole responsibility for managing DLI. The testimony 1097 of Kanary and Holland that they visited the plant infre- quently subsequent to the beginning of its operations was not contradicted. Thus, for the great majority of time, Reynolds was the only one present at the DLI plant who could operate it and manage it. I conclude that the ele- ment of common management is therefore missing in the instant case. In the usual Board case involving interrelation of oper- ations of alleged single employers, the evidence reveals that the employees for the employers work in the same building and share in producing parts and products, and the employers have offices in the same facility with one employer taking care of clerical needs of the other or otherwise furnishing needs or services for the other. See, e.g., Mastell Trailer Corp., 258 NLRB 1234 (1981); Stoll Industries, 223 NLRB 51 (1976). In the instant case, all that can be said is that the employees of the two corpo- rations shared in the making of the same end product. The other factors are not present. However, because Alabama Metal retains title to the raw materials on which DLI works, the relationship between the two cor- porations from an operation standpoint is much closer than that of a simple subcontracting relationship. More- over, because Alabama Metal for all practical purposes is, and has been, DLI's sole customer and because DLI was created to provide edge-banded laminated parts for Alabama Metal at a lower cost than regular suppliers, there is a mutual dependency between the two concerns. Indeed, DLI would doubtless cease to exist without Ala- bama Metal's business and support. This mutual depend- ency is more akin to the relationship between divisions of the same corporate entity and, I conclude, is indica- tive of a single-employer relationship. It has also been said that single-employer status de- pends on all the circumstances of each case , and single- employer status is characterized by an absence of an "arms'-length relationship found among unintegrated companies." Operating Engineers Local 627 v. NLRB, supra at 1045-1046. The transactions between the two entities in the instant case, I conclude, were not at full arms' length. DLI was allowed to install and operate ma- chinery and equipment previously owned and ordered by Alabama Metal without any specific written agreement with respect to terms until July 1, after the charge in the instant case was filed. Further, payments were not re- quired on the equipment except for the Stefani for a full 3 months after July 1. There was no charge for equip- ment usage prior to July 1, although DLI had begun production in May. There was no rental fee charged DLI for the Stefani edge-bander, even though DLI had had possession of the Stefani for approximately 3 months before it was required to make any monthly payments. Moreover, because the lease for the Stefani was renew- able monthly at the option of Alabama Metal, Alabama Metal retained effective control over DLI's continued existence, for without the Stefani DLI could not operate. These factors, in addition to the fact that Alabama Metal freely lent technical and advisory assistance to DLI in setting up its operations, clearly reveal more than the normal relationship between contractors of equal status. I conclude that in total, the support through equipment 1098 DECISIONS OF NATIONAL LABOR RELATIONS BOARD and advice, and favorable financing arrangements all re- flect a less than "arms'-length relationship" between Ala- bama Metal and DLI. Although the issue is a close one, considering the record as a whole and specifically the substantial identity in ownership between Alabama Metal and DLI, the close operational relationship between the two concerns, and because the creation of DLI was through less than total arm's-length transactions, I conclude that the Gen- eral Counsel has established a prima facie case that the two corporations share sufficient identity, one with the other, to constitute them as a single-employer and inte- grated enterprise. I further conclude that Respondents have not rebutted the General Counsel's case in this regard. The existence of a single-employer relationship is not diapositive of the allegations of the violations set forth in the complaint. As previously indicated, there was no duty to bargain with the Union on the part of DLI and no duty to extend the Alabama Metal-union agreement to DLI unless it employees constituted an accretion to the Alabama Metal unit. South Prairie Construction Co., supra. If Alabama Metal has nevertheless managed to es- tablish on a nondiscriminatory basis a separate appropri- ate unit involving the DLI operation, there is no legal prohibition in what it has accomplished. Arundel Corp., supra. It is at this point that the accretion issue must be resolved. Generally, the elements considered in determining single-employer status apply in considering accretion issues. See Bryan Infants Wear Co., 235 NLRB 1305, 1306 (1978). Notwithstanding the single-employer status above, however, there are a number of factors present in the instant case which militates against a finding of ac- cretion. First, there is no common bargaining history in- volving the two corporations because DLI is a new entity. But the work performed by the employees at DLI was identical to that which had been performed by em- ployees of Alabama Metal a few years earlier. Moreover, it was similar to the lamination work being done on kitchen countertops at Alabama Metal at the time DLI began its operations. At the time of the hearing, howev- er, except for cutting kitchen countertops to size and end-capping them, Alabama Metal employees were no longer involved in lamination work. Only DLI remains engaged in lamination work. Although potential control of the manufacturing oper- ations of both Alabama Metal and DLI is found in one man, Kanary, as a practical matter, the actual control of DLI in its day-to-day operations is possessed by Reyn- olds. Reynolds makes all decisions with respect to hiring, discharging, and setting the wages of DLI employees. The DLI employees are under the sole supervision of Reynolds, who, insofar as this record shows, and I con- clude, possesses sole autonomy for the day-to-day oper- ations of the plant. The DLI plant is 20 miles from the Alabama Metal plant. There is no interchange of em- ployees between the two plants which are 20 miles apart, nor is there any record of contact between the employ- ees of the two plants except for the Alabama Metal truckdriver who picks up laminated products at the DLI facility on a weekly basis. Considering all the foregoing, and viewing the matter in light of the Board's concern to "assure employees of fullest freedom in exercising their rights guaranteed by the Act," I conclude that the DLI facility constitutes a separate appropriate unit. It follows that the DLI facility is not an accretion to the Alabama Metal unit, and that neither Alabama Metal nor DLI violated Section 8(a)(5) and (1) of the Act through their failure to extend the Alabama Metal-union agreement to the DLI facility. I find that there was no obligation on the part of Alabama Metal to bargain over the effects of the establishment of DLI and the performance of edge-banded laminated work by it. It also follows that in the absence of any ob- ligation to extend the contract to DLI, there was no ob- ligation on the part of Alabama Metal or DLI to recall laid-off Alabama Metal employees for employment at DLI. Accordingly, and because there is no independent evidence establishing that DLI discriminatorily denied employment to laid-off employees of Alabama Metal, I conclude that the 8(a)(3) allegation of the complaint must be dismissed. Finally, and again because it has been found herein that the Alabama Metal-union collective- bargaining agreement did not extend to DLI's employ- ees, Alabama Metal did not violate Section 8(a)(5) and (1) of the Act in refusing to further process the Union's grievance over the failure to extend the collective-bar- gaining agreement to DLI. CONCLUSIONS OF LAW 1. Alabama Metal Products, Inc. and Delta Laminat- ing, Inc. constitute a single-integrated business enterprise and/or a single employer within the meaning of the Act at all times material. They are employers engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 2. Aluminum, Brick and Glass Workers International Union, AFL-CIO, CLC, Local 250 is a labor organiza- tion within the meaning of Section 2(5) of the Act. 3. The following employees of Alabama Metal Prod- ucts, Inc. constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act: All production and maintenance employees includ- ing truckdrivers, lead persons, and regular part-time employees, but excluding all other employees such as all office clerical employees , shipping clerks, pro- fessional employees, technical employees, toolmak- ers, apprentice toolmakers, draftsmen-chemist, and the moldmaker, guards, foremen, assistant foremen, and supervisors as defined in the Act. 4. At all times material, Aluminum, Brick and Glass Workers International Union, AFL-CIO, CLC, Local 250 has been the exclusive collective -bargaining repre- sentative of all employees employed in the unit found ap- propriate in paragraph 3 above for the purpose of collec- tive bargaining within the meaning of Section 9(a) of the Act. 5. Notwithstanding the conclusion that Alabama Metal Products, Inc. and Delta Laminating, Inc. are a single employer, the employees of Delta Laminating , Inc. do ALABAMA METAL PRODUCTS not constitue an accretion to the unit of Alabama Metal's employees set forth in paragraph 3 above. 6. Alabama Metal Products, Inc. and Delta Laminat- ing, Inc. did not violate Section 8(aX5) and (1) of the Act by refusing to extend the Alabama Metal -union col- lective-bargaining agreement to the employees of Delta Laminating, Inc. 7. Alabama Metal Products, Inc. did not violate Sec- tion 8(aX5) and (1) of the Act by refusing to bargain with the Union with regard to the effects of movement of work to Delta Laminating, Inc., which had formerly been done by employees of Alabama Metal Products, Inc., and Alabama Metal Products , Inc. did not violate Section 8(aX5) and (1) of the Act through refusing to process further grievances filed by the Union with regard to the movement of such work. 1099 8. Alabama Metal Products, Inc. and Delta Laminat- ing, Inc. did not violate Section 8(aX3) and (1) of the Act in refusing to recall from layoff status employees of Alabama Metal Products, Inc. for employment at Delta Laminating, Inc. On these findings of fact and conclusions of law and on the entire record, I issue the following recommend.. ed"s ORDER The complaint is dismissed in its entirety. 12 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.