Carthage Sheet Metal Co., Inc. And Sheet Metal Products, Inc., Alter Egos

CARTHAGE SHEET METAL CO. 1249 Carthage Sheet Metal Company, Inc. and Sheet Metal Products, Inc., Alter Egos and Local Union No. 36, Sheet Metal Workers Interna- tional Association, AFL-CIO. Cases 17-CA- 12051 and 17-CA-12187 30 November 1987 DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS JOHANSEN AND 'BABSON On 19 February 1985 Administrative Law Judge Harold A. Kennedy issued the attached decision. The Respondents filed exceptions and a supporting brief, the Charging Party filed cross-exceptions and a brief, and the General Counsel filed a brief an- swering Respondents' exceptions. The General Counsel additionally filed a motion for the Board to take judicial notice of posthearing bankruptcy proceedings to which the Respondents and the Charging Party filed supplemental 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, briefs, and motion and has decided to affirm the judge's rulings, find- i The Charging Party has excepted to some of the judge's credibility findings. The Board's established policy is not to overrule an administra- tive law judge's credibility resolutions unless the clear preponderance of all the relevant evidence convinces us that they are incorrect Standard Dry Wall Products, 91 NLRB 544 (1950), enfd. 1118 F.2d 362 (3d Cit. 1951). We have carefully examined the record and find no basis for re- versing the findings We note that no exceptions have been filed to the judge's dismissal of the allegation that the Respondents violated the Act through the 13 Oc- tober 1983 remarks of Patricia Fasken to Harold Barkley We also correct the following inadvertent errors by the judge- (1) under the heading "Decision," in the last paragraph, the sentence begin- ning "In addition, the General Counsel asserts that Respondents violated Section 8(aXl) of the Act by terminating Harold Barkley " should be corrected to reflect that Barkley's termination is alleged to violate Sec 8(a)(3) and (1), (2) in the next sentence of the same paragraph , the refer- ence to "laying off Bradley" is corrected to reflect that Barkley was laid off; (3) under the heading "Background and Undisputed Matters," par 17, the sentence "Carthage submitted fringe benefit reports and contribu- tions for December 1984 but none thereafter," should be corrected to re- flect that Carthage ceased submitting fringe benefit reports and contribu- tions for periods after December 1983; (4) under the testimony of Ray Fasken, par 20, the reference in the second sentence to "general contrac- tor, Don Edwards" should be corrected to read "general contractor, Don Crawford, (5) under the testimony of Ray Fasken, par 32, Harold Tin- dell is incorrectly referred to as Harold Lindell in the second sentence, (6) under the testimony of Patricia Fasken , par. 5, the sentence beginning "For her share of Carthage stock she received !35000 worth of equip- ment," is corrected to reflect that Patricia Fasken received $1500 in cash from Carthage and $5000 worth of equipment in eschange for her Carth- age stock, (7) under the testimony of Patricia Fasken , par 18 , the tran- script quote - "Q You explained that to them? A Yes" should be fol- lowed by " ", indicating a break in the transcript testimony, (8) under the testimony of Harold Tindell, par 9, the sentence beginning "Contrary to what is asserted by Fasken in a letter dated March 9, 1983" is corrected to reflect that Fasken's letter was dated 22 March 1983; and (9) under the testimony of Wayne Darrow , par 1 , the transcript quote "And he asked each of us individually what we thought of why Tex was fired" should be followed by the quote that "And I don't remember him ings,' and conclusions2 as modified, to modify his remedy, and to adopt the recommended Order as modified. The facts are more fully set forth in the judge's decision. The Respondent, Carthage Sheet Metal Company, Inc. (Carthage) is a residential and com- mercial heating, cooling, and ventilating contrac- tor. For many years Carthage has authorized the Sheet Metal Contractors of Southwest Missouri Area (SMACNA), a multiemployer bargaining as- sociation, to bargain on its behalf with the Union for a succession of collective-bargaining agree- ments. It is undisputed that SMACNA and the Union entered into successive commercial agree- ments in 1973, 1976, 1978, and 1981, that Carthage executed these agreements, and that, until April 1982, Carthage apparently adhered to and com- plied with the contracts' terms. 3 In April 1982, during the term of the l July 1981 to 30 June 1984 Union-SMACNA contract, Carth- age hired a nonunion sheet metal employee and re- tained the services of a second employee who re- signed from the Union. This use of nonunion labor prompted three Carthage employees to quit in Feb- ruary 1983 and the Union to file a March 1983 grievance protesting Carthage's hire of employees not covered by the Union-SMACNA contract. Following an arbitration award sustaining the Union's grievance, Carthage's Section 301 suit to saying anything making a comment or anything At that time I told Tm- dell that I was dropping out of the union, and I don't remember him saying anything, making a comment or anything." These corrections do not affect the outcome of our decision. We further correct the judge's statement that "Having found that an alter ego and single employer status existed between Carthage and Sheet Metal it is inappropriate to inquire into the propriety of a unit that in- cludes employees of both companies In any event, I find that the bargaining unit represented by Local 36 has included employees of Re- spondent Carthage, Respondent Sheet Metal and employees of other em- ployers which had authorized SMACNA to bargain on their behalf with Local 36" We agree with the judge's finding that inasmuch as the Re- spondents are alter egos and a single employer, their employees consti- tute an appropriate unit See, e g., Samuel Kasoff & Sons, 269 NLRB 424 (1984), Watt Electric Co, 273 NLRB 655 (1984) We reject his further finding that a SMACNA-wide unit is appropriate A multiemployer unit is contrary to the single employer unit we held would normally be appro- priate in the construction industry (John Deklewa & Sons, 282 NLRB 1375 (1987)), and is unsuppported by record evidence that a SMACNA- wide unit satisfies the traditional community -of-interest test. 2 We grant the General Counsel's unopposed motion to take judicial notice of Carthage's posthearing bankruptcy proceedings. We also note that, following issuance of the judge 's decision, the United States Bank- ruptcy Court, Western District of Missouri, Southern Division denied Carthage's petition to reject its collective-bargaining agreements with the Union on 30 May 1985 The United States District Court for the Western District of Missouri, Southern Division enforced this Order on 12 Sep- tember 1985, as did the Eighth Circuit on 12 May 1986. Accordingly, and inasmuch as the Bankruptcy Court dismissed Carthage's Chapter 11 petition, without prejudice, on 12 May 1986, we find Carthage's bank- ruptcy petition irrelevant to these proceedings and do not rely on the judge's analysis under NLRB v Bildisco & Bildisco, 465 U.S 513 (1984) a In addition, the Union and SMACNA executed a residential agree- ment in 1977, which was renewed on its 1979 expiration Carthage appar- ently also adhered to the provisions of this agreement 286 NLRB No. 119 1250 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD vacate that award, and the Union's unfair labor practice charges, the parties executed a 27 Septem- ber 1983 settlement agreement resolving their dis- putes. Under the terms of this settlement, inter alia, all existing agreements between Carthage and the Union were terminated as of 15 February 1983; ef- fective 27 September 1983 Carthage bound itself both to the terms of the 1981-1984 contract and to the successor contract negotiated between SMACNA and the Union; and Carthage was not required to become or remain a SMACNA member. It is uncontroverted that at the time the settle- ment agreement was executed, a majority of Carth- age employees did not belong to the Union. Nor was such majority status reestablished any time prior to either 7 February 1984 when Carthage no- tified the Union that it was withdrawing recogni- tion, or to 30 May 1984, when Carthage informed the Union and SMACNA that it was terminating any existing agreement it might have with the Union and withdrawing from future multiemployer bargaining. On 10 April 1984 the Union wrote Carthage, protesting its actions, and stating that by the terms of the 27 September 1983 settlement agreement, Carthage was bound by the next collec- tive-bargaining agreement negotiated by the Union and SMACNA. The judge found that at the time the 1981-1984 Union-SMACNA agreement was executed by Carthage a majority of its employees belonged to the Union. The judge therefore determined that a 9(a) bargaining relationship existed between the parties at that time, which relationship was pre- sumed to continue for the duration of that agree- ment.4 NLRB v. Iron Workers Local 3 (Higdon), 434 U.S. 335 (1978). The judge further found that the February-to-September 1983 hiatus in the 1981- 1984 agreement did not convert this 9(a) relation- ship into an 8(f) relationship because this hiatus was incorporated into the parties' settlement agree- ment merely to protect Carthage from any backpay liability to the fringe benefit funds. On these bases, the judge found that Carthage violated Section 8(a)(5) and (1) of the Act by failing to recognize the Union or abide by the terms of the 1981-1984 agreement. While we agree with the judge that Respondent Carthage was bound to the terms of the 1981-1984 Union-SMACNA agreement, and further find that Carthage was similarly bound to the terms of the successor Union-SMACNA agreement,5 we do so for the following reasons. In John Deklewa & Sons, 282 NLRB 1375 (1987), the Board overruled R. J. Smith Construction Co., 191 NLRB 693 (1971), enf. denied sub nom. Oper- ating Engineers Local 150 v. NLRB, 480 F.2d 1186 (D.C. Cir. 1973), abandoned the conversion doc- trine, and modified unit scope rules in 8(f) cases. The Board decided to apply the following princi- ples (at 1377-1378): (1) a collective-bargaining agreement permit- ted by Section 8(f) shall be enforceable through the mechanisms of Section 8(a)(5) and Section 8(b)(3); (2) such agreements will not bar the processing of valid petitions filed pur- suant to Section 9(c) and Section 9(e); (3) in processing such petitions, the appropriate unit normally will be the single employer's employ- ees covered by the agreement; and (4) upon the expiration of such agreements, the signato- ry union will enjoy no presumption of majori- ty status, and either party may repudiate the 8(f) bargaining relationship. Deklewa further held that "[i]n light of the legis- lative history and the traditional prevailing practice in the construction industry, we will require the party asserting the existence of a 9(a) relationship to prove it."e Under those principles, even though an employer authorizes a multiemployer association to act as its collective-bargaining representative, a union cannot claim conversion of the 8(f) relation- ship to full 9(a) status unless it can prove that it achieved such status among its employees on a single-employer basis . Such showing is accom- plished only by traditional means, i.e., Board elec- tion or voluntary recognition based on a prior demand for recognition supported by a showing of majority employee support .7 Under Deklewa, we find that the General Coun- sel and the Charging Party Union, while asserting that Respondent Carthage is bound to recognize the Union under Section 9(a), have failed to estab- lish that the relationship between Carthage and the Union is anything other than an 8(f) relationship. There is no substantiated claim, nor any evidence, that a Board election was held or that there was a demand for and voluntary grant of recognition to the Union at any time premised on a showing of support for the Union among a majority of Carth- age's employees. s Additionally, because we adopt the judge's single employer/alter ego findings, Respondent Sheet Metal similarly was bound to these agree- 4 Based on this finding, the judge concluded that Carthage's 30 March ments. 1984 notice to the Union and SMACNA that it would no longer be in- 6 Id . at 1385 fn 41 volved in multiemployer bargaining was immaterial 7 Id at 1385 CARTHAGE SHEET METAL CO. 1251 Thus, as the evidence shows that Carthage is en- gaged in the construction industry, and that it en- tered into its contractual relationship with the Union at a time when the Union's majority status had not been established, we find that its relation- ship with the Union is governed by Section 8(f) of the Act. Applying Deklewa to these Facts, we agree with the judge's conclusion that Carthage violated Sec- tion 8(a)(5) and (1) of the Act in February 1984 when it withdrew recognition from the Union and repudiated that contract's terms. In reaching this decision, we rely on the fact that, as of February 1984, Carthage was bound to the terms of the 1981-1984 Union-SMACNA agreement by virtue of its execution of the 8(f) contract." Alternatively, even were we to find, as Respondent Carthage contends, that the 1981-1984 contract was abrogat- ed by the terms of the 27 September 1983 settle- ment agreement and replaced by a clearly 8(f) agreement, Carthage's repudiation of its contractual obligations under this settlement agreement similar- ly violates Section 8(a)(5) and (1). 'See, e.g., Ken Hash Construction, 283 NLRB 822 (1987). Further, in agreement with the judge, we find that Carthage's 30 March 1984 withdrawal of bar- gaining authority to SMACNA did not relieve it of its obligations to comply with the terms of the 1981-1984 contract or the successor Union- SMACNA agreement. Thus, even assuming that Carthage's 30 March withdrawal of bargaining au- thority from SMACNA satisfied the requirements of timely and unequivocal written notice both to this multiemployer bargaining group and the Union, such withdrawal was rendered ineffective regarding Carthage's obligation to comply with the above contracts by the terms of the parties volun- tarily executed 27 September 1983 settlement agreement. This settlement agreement clearly bound Carthage to the terms of the 1981-1984 con- tract as well as to the successor Union-SMACNA agreement. Under the Deklewa principles, therefore, the 1981-1984 agreement, as well as the successor con- tract negotiated by SMACNA and the Union, were "binding, enforceable, and not subject to unilateral repudiation by the Respondent."9 Carthage's obli- 8 Deklewa, supra The judge found, and we agree, that the settlement agreement provided for a hiatus in the 1981-1984 contract merely to safe- guard Carthage from any liability to the fringe benefit funds for the period of 15 February until 27 September 1983 Even were we to fmd, however, as argued by Respondent Carthage , that this break in the con- tract effectively extinguished all the parties' obligations under the 1981- 1984 contract, such that the 27 September 1983 settlement created an en- tirely new 8(f) agreement, it would not affect our holding under Deklewa 9 Deklewa, supra at 1389 See also Ken Hash, supra gation under Section 8(a)(5) is, however, of a limit- ed nature. Thus, beyond the terms of the 1981- 1984 agreement and the successor agreement to which it is bound, the Union enjoys no continuing presumption of majority status, Carthage is not compelled to negotiate or adopt successor agree- ments, and Carthage is free to repudiate the 8(f) bargaining relationship. Therefore, we find that Carthage violated Section 8(a)(5) and (1) of the Act only to the extent that it repudiated the 1981- 1984 contract and the successor Union-SMACNA agreement prior to their expiration. We shall limit the make-whole remedy accordingly. CONCLUSIONS OF LAW 1. Respondents are employers engaged in com- merce within the meaning of Section 2(2), (6), and (7) of the Act. 2. Local Union No. 36, Sheet Metal Workers International Association, AFL-CIO is a labor or- ganization within the meaning of Section 2(5) of the Act. 3. Respondent Carthage Sheet Metal Company, Inc. and Respondent Sheet Metal Products, Inc. are alter egos and a single employer for the pur- pose of the National Labor Relations Act. 4. All sheet metal workers employed by Carth- age Sheet Metal Company, Inc. and its alter ego, Sheet Metal Products, Inc., but excluding clerical employees, guards, and supervisors as defined in the Act, constitute a unit appropriate for collective bargaining within the meaning of the Act. 5. By repudiating its 1981-1984 collective-bar- gaining agreement with the Union and withdraw- ing recognition from the Union prior to the expira- tion of this collective-bargaining agreement and the successor agreement negotiated by SMACNA and the Union, the Respondents violated Section 8(a)(5) and (1) of the Act.10 6. The unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. THE REMEDY Having found that the Respondents engaged in certain unfair labor practices, we shall order that they cease and desist and take certain affirmative action designed to effectuate the policies of the Act. We shall order the Respondents to make whole, as prescribed in Ogle Protection Service, 183 NLRB 682 (1970), any employees for losses they io We agree with the judge that the union-security provision of the 1981- 1984 agreement and the successor contract, if applicable, is not to be applied to Respondent's employees working in Kansas, a right-to-work State 1252 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD may have suffered as a result of the Respondents' failure to adhere to the 1981-1984 Union- SMACNA agreement, and the successor agreement negotiated by SMACNA and the Union, with in- terest to be computed in the manner prescribed in New Horizons for the Retarded. 11 In view of the rules set forth above, we shall not extend the make-whole remedy for noncompliance with the provisions of the 1981-1984 contract and with the successor Union-SMACNA contract beyond the expiration date of that successor con- tract. The Respondents would have been privileged to withdraw authorization from SMACNA to bar- gain on its behalf with the Union for a new con- tract, and it was only obligated to adhere to the 1981-1984 agreement and its successor contract until their expiration. Further, on such withdrawal of authorization, the Respondents would have been privileged to withdraw recognition from the Union and implement unilateral changes on the expiration of the successor contract. ORDER The National Labor Relations Board orders that Respondent Carthage Sheet Metal Company, Inc., Carthage, Missouri, and Respondent Sheet Metal Products, Inc., Pittsburg, Kansas, their officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Withdrawing recognition during the term of a collective-bargaining agreement from Local Union No. 36, Sheet Metal Workers International Association, AFL-CIO as the exclusive collective- bargaining representative of the Respondents' em- ployees in the following appropriate unit: All sheet metal workers employed by Carth- age Sheet Metal Company, Inc. and its alter ego Sheet Metal Products, Inc., but excluding 11 In accordance with our decision in New Horizons for the Retarded, 283 NLRB 1173 (1987), interest on and after 1 January 1987 shall be computed at the "short-term Federal rate" for the underpayment of taxes as set out in the 1986 amendment to 26 U.S C § 6621 Interest on amounts accrued prior to 1 January 1987 (the effective date of the 1986 amendment to 26 U S C § 6621) shall be computed in accordance with Florida Steel Corp, 231 NLRB 651 (1977) Because the provisions of employee benefit fund agreements are van- able and complex, the Board does not provide at the adjudicatory stage of this proceeding for the addition of interest at a fixed rate on unlawful- ly withheld fund payments Therefore, any additional amounts owed with respect to the health and welfare fund and pension plan shall be deter- mined in accordance with the procedure set forth in Merryweather Optical Co., 240 NLRB 1213, 1216 fn 7 (1979) The Respondents shall also reimburse their employees for any expenses ensuing from their failure to make contributions to various funds estab- lished by the 1981-1984 and successor collective-bargammg agreements between the Union and SMACNA Kraft Plumbing & Heating, 252 NLRB 891 fn 2 (1980), enfd 661 F 2d 940 (9th Cir 1981) Because it is unclear what, if any, sheet metal work Respondents per- formed from May 1984 until the expiration of the contract succeeding the 1981-1984 agreement, we leave to compliance the issue of Respondents' liability during this period clerical employees, guards, and supervisors as defined in the Act. (b) Refusing to adhere to the terms of the 1981- 1984 collective-bargaining agreement and successor Union-SMACNA contract, prior to the expiration of these agreements. (c) In any like or related manner interfering with, restraining, or coercing employees in the ex- ercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action neces- sary to effectuate the policies of the Act. (a) Comply with the terms and conditions of the 1981-1984 collective-bargaining agreement, and the successor agreement negotiated by SMACNA and the Union, including making the appropriate trust funds, employees, and the Union whole in the manner prescribed in the remedy section of this de- cision. (b) Make whole employees covered by the 1981- 1984 contract and its successor agreement, in the manner set forth in the remedy, for any losses they may have suffered as a result of the Respondents' failure to adhere to these agreements until their ex- piration.12 (c) Preserve and, on request, make available to the Board or its agents for examination and copy- ing, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary to analyze the amount of backpay due under the terms of this Order. (d) Post at its facilities in Carthage, Missouri, and Pittsburg, Kansas, copies of the attached notice marked "Appendix."13 Copies of the notice, on forms provided by the Regional Director for Region 17, after being signed by the Respondent's authorized representative, shall be posted by the Respondent immediately upon receipt and main- tained for 60 consecutive days in conspicuous places including all places where notices to em- ployees are customarily posted. Reasonable steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material. 12 The 1981-1984 collective-bargaining agreement provided for em- ployer contributions to an industry promotion fund As industry promo- tion funds are permissive, nonmandatory subjects of bargaining, it is not an unfair labor practice for an employer unilaterally to discontinue its contributions to such a fund See F.M.L Supply, 258 NLRB 604 fn 3 (1981), Finger Lakes Plumbing Co, 254 NLRB 1399 (1981). Accordingly, we shall not require the Respondents to make contributions to this fund under the 1981-1984 contract or the successor agreement 18 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." CARTHAGE SHEET METAL CO. 1253 (e) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Respondent has taken to comply. APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The National Labor Relations Board has found that we violated the National Labor Relations Act and has ordered us to post and abide by this notice. WE WILL NOT, during the term of the 1981-1984 collective-bargaining agreement or its successor agreement, repudiate those agreements and with- draw recognition from Local Union 36, Sheet Metal Workers International Association, AFL- CIO as the exclusive representative of our employ- ees in the following appropriate unit: All sheet metal workers employed by Carth- age Sheet Metal Company, Inc. and its alter ego Sheet Metal Products, Inc., but excluding clerical employees, guards, and supervisors as defined in the Act. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exer- cise of the rights guaranteed you by Section 7 of the Act. WE WILL make our employees whole for losses they have incurred, with interest, because of our failure to abide by the terms and conditions of the 1981-1984 and successor collective-bargaining agreements with the Union, and WE WILL pay the contractually agreed-upon trust funds in the amounts of the contributions that we failed to make on behalf of our employees, with interest. CARTHAGE SHEET METAL COMPANY INC. AND ITS ALTER EGO, SHEET METAL PRODUCTS, INC. Donald B. Zavelo, Esq., for the General Counsel Donald W Jones; Esq., of Springfield, Missouri, for the Respondents. James I. Singer, Esq., of St. Louis, Missouri, for the Charging Party Union. DECISION HAROLD A. KENNEDY, Administrative Law Judge. This case, which arose out of charges filed on February 21 and April 15, 1984, by Local Union No. 36, Sheet Metal Workers International Association , AFL-CIO and a complaint thereafter issued on April 10, 1984, by the National Labor Relations Board 's Regional Director for Region 21, was heard by me on June 18-22, 1984, in Joplin, Missouri.' The complaint alleges that Respondent Carthage Sheet Metal Company, Inc. (Carthage) and Sheet Metal Prod- ucts, Inc. (Sheet Metal) are alter egos and a single em- ployer within the meaning of the National Labor Rela- tions Act (Act). The complaint avers that both corpora- tions are engaged in the production, sale, and installation of sheet metal products. Ray Fasken and Patricia Fasken, who are husband and wife, are alleged to be agents and/or supervisors, presumably of both Respondents, at all times material. According to the complaint, Respond- ent Carthage has a facility in Carthage, Missouri, and in the fall of 1983 "Respondent Sheet Metal was established by Respondent Carthage as a subordinate instrument to and a disguised continuation of Respondent Carthage." The complaint asserts that the two corporations are af- filiated businesses, having common ownership, manage- ment, facilities, and equipment. The complaint states that the two corporations provide services for, and make sales to, each other, interchange personnel, and hold themselves out as a single business enterprise. The complaint also alleges that Sheet Metal Contrac- tors of Southwest Missouri Area (the Association or SMACNA) is an organization of employers that negoti- ates and administers collective-bargaining agreements. According to the complaint, Respondents have author- ized the Association to bargain for Respondents, and Re- spondents have agreed to be bound by the agreements negotiated by the Association. The complaint avers that the Union is the exclusive bargaining representative of Respondents' employees and has been recognized as such by Respondent.2 Specifically, the complaint makes the following charges: 1. Respondents violated Section 8(a)(1) and (5)3 of the Act by: (a) Failing and refusing to recognize the Union as the exclusive collective-bargaining agent for employees at the Pittsburg, Kansas facility since about October 7, 1983. (b) Withdrawing recognition of the Union during the term of the exclusive collective-bargaining agreements with the Union with respect to employees at the Pitts- burg facility since about October 7, 1983. (c) Failing and refusing to abide by and adhere to col- lective-bargaining agreements with the Union with re- spect to employees at the Pittsburg facility since about October 7, 1983. i The complaint was amended by the Regional Director on April 13, 1984, and again on May 23, 1984 Certain corrections in the transcript are noted and corrected 2 The complaint defines the bargaining unit as including unit A and unit B employees. Sec 8(a) makes it an unfair labor practice for an employer- (1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7. (5) to refuse to bargain collectively with the representatives of his employees, subject to the provisions of section 9(a) 1254 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD (d) Failing and refusing to abide by and adhere to the collective-bargaining agreements with respect to employ- ees at the Carthage facility since about February 7, 1984. (e) Failing and refusing to furnish the Union "by letter" with answers to 25 questions (set forth in par. 10), which information allegedly "is necessary for, and rele- vant to, the Union's performance of its function as the exclusive collective-bargaining representative of Re- spondents' employees."4 2. Respondents, acting through their agent Patricia Fasken at the Carthage facility, threatened its employee with more onerous working conditions and loss of em- ployment benefits because of the employee's membership and support for the Union and thereby violated Section 8(a)(1) of the Act. In addition, the General Counsel asserts that Respond- ents violated Section 8(a)(1) of the Act by terminating Harold Barkley because of his membership in, and activi- ties on behalf of, the Union. The Charging Party Union argues that Respondents violated Section 8(a)(3) by laying off Bradley "after transferring all of the work, equipment and customers" to Sheet Metal Products. Background and Undisputed Matters Carthage is a contractor engaged in the installation of heating, cooling, and ventilating systems. Carthage was originally incorporated in Missouri as Stewart Heating and Air Conditioning, Inc. in 1961 . Two employees of Stewart Heating, Ray Fasken and Earl Barker, bought the Company in 1971, and changed the name to its present name. Until around 1980 Ray Fasken and his wife Patricia owned one-half of the shares of Carthage, and the other half was owned by Barker and his wife Alta. Sometime after purchasing Carthage, the Faskens and the Barkers organized a Missouri corporation known as Carthage Home Heating and Air Conditioning Com- pany (Home Heating) and operated it on a nonunion basis out of a building in Carthage, Missouri, next door to Respondent Carthage's facility. Ray Fasken and Earl Barker were the principal officers of Carthage, while Pa- tricia Fasken and Alta Barker were the principal officers of the nonunion concern. In September 1981, the Fas- kens bought out the Barkers' interest in Carthage, and the Barkers bought out Faskens' interest in Home Heat- ing. Since that time the Barkers have operated Home Heating as a nonunion concern next door to the Carth- age facility. Carthage has had a collective-bargaining relation with Local 36 or its predecessor for a number of years.5 Copies of collective-bargaining agreements received in evidence indicate they were negotiated between the Union and the Association. After an Association official had signed an addendum to each of the negotiated con- tracts, a union business representative would obtain sig- natures of individual contractors, including a representa- tive of Carthage. 4 The Union's request sought information bearing on the relation be- tween Carthage and Sheet Metal 5 Local 36 Business Representative Harold Tmdell testified that since 1976, when Local 146 was dissolved, Local 36 has represented "construc- tion" workers Before that time Local 146 represented both workers in construction and "production shops." Local 36's geographic jurisdiction, according to the agreements in evidence (G.C. Exhs. 7A, 1981-1984; 8A, 1978-1981; 9A, 1976-1978; and 10A, 1973-1976), covers 25 counties in Southwest Missouri. Each of the agree- ments contains a page on which two circles have been drawn around each of the cities of Joplin and Spring- field, Missouri. The smaller circle in each case was drawn on a radius of 40 miles, and the larger circle was drawn on a radius of 60 miles. Such circles were drawn to delineate "free zones"; employees working within the 40-60 mile radius of each of the cities would not receive travel pay.6 In April 1982, at a time when the Faskens were the sole owners of Carthage, Mark Simpson was hired by Carthage to work as a nonunion employee. (Simpson had previously worked for Carthage as well as the nonunion Home Heating concern. He had previously been a "resi- dential" member of the Sheet Metal Workers Union.) About the same day Union Business Representative Tin- dell came to the Carthage facility to discuss the dis- charge of Karl "Tex" McDaniel that had occurred the previous day. Ray Fasken met and discussed McDaniel's discharge and other problems, including the hiring of nonunion workers by Carthage. Among those present were Simpson and Wayne Darrow, both of whom had come to oppose the Union, as well as John Howell, who was to be named the new shop steward. Fasken left the meeting, as requested, and allowed Tindell to speak to Carthage's employees on Carthage's premises. Simpson was also asked to leave the meeting, but Darrow, who had also once been a "residential" union member, re- mained.7 Tindell left Respondents' facility without speaking fur- ther with Fasken.8 Simpson and Darrow continued to work for Carthage thereafter without any problem until early 1983. 8 In the meantime two others, Edward Na- varro and Steve Anderson, were employed by Carthage, who did not join the Union. One day in mid-February 1983 union members John Howell, Harold "Bud" Barkley, and Frank Navarro, fol- lowing a meeting held with Business Representative Tin- dell at a nearby coffeeshop, reported to Fasken that they would have to leave if Carthage continued to employ the 6 Business Representative Tmdell testified that free zones were created at the request of the contractors Employees working within the first circle would receive no expense money at all If they drove their cars and worked in the area falling between the first and second circle they would be paid $8 "gas money " The contractors in the Springfield area had "a complete radius," but until 1978 the free zone for contractors in the Joplin area was limited because the circles for the area were not ex- tended into the nearby States of Kansas, Oklahoma, and Arkansas. In 1978, at the request of contractors, representatives of the International Union and Locals in Kansas, Oklahoma, and Arkansas met and agreed to allow contractors to work within a free zone territory that extended into the three other States 7 Tindell denied that Darrow told him that he was dropping out of the Union, but conceded that Darrow said he would go with Fasken if Fasken closed his doors Tindell said Darrow was suspended by the Union for nonpayment of dues in August 1982 8 Fasken testified that Howell stated after the meeting that he had got it worked out with Tindell to leave the Carthage operation alone "as long as we dust kind of keep a low profile with these nonunion people." Tindell and Fasken dispute whether the Union was aware that the nonunion workers were employed by Carthage prior to February 1983. CARTHAGE SHEET METAL CO. 1255 four nonunion workers then on the payroll. Fasken re- sponded that he could not fire the nonunion men, and the three union workers quit.' o On February 22, 1983, the Union wrote Carthage stat- ing that it had learned that the Company had hired em- ployees without utilizing the Union's hiring hall proce- dure and had announced that it would not pay fringe benefits for certain employees. In March 1983 the Union filed grievances to which Carthage responded that Busi- ness Representative Tindell had orally agreed to Carth- age hiring two nonunion workers, Carthage also claimed that the Union had violated the contract "by pulling the three union members from our employment." A griev- ance hearing was held before a National Adjustment Board (without Fasken in attendance), and an award was made against Carthage. Thereafter Carthage filed an action in a state court to set aside the award. The lawsuit was later transferred to a Federal district court, at the re- quest of the Union, which then filed certain counter- claims. In July and September 1983 the Union filed charges with the NLRB against Carthage, and the Regional Di- rector for the Board's Region 17 issued a complaint, dated September 8, 1983, alleging that Carthage had failed to make contributions on its nonunion workers after about January 26, 1983. A settlement meeting was held at the Springfield, Mis- souri airport on September 9, 1983. Thereafter, following certain telephone conversations and an exchange of let- ters between the attorneys for the Union and Carthage, a settlement was reached effective September 27, 1983 (G.C. Exh. 22). The settlement called for, among other things, the dismissal of the NLRB complaint, withdrawal of the arbitration award, and dismissal of the pending liti- gation between Carthage and the Union. Carthage was not required to pay any back wages, but the Company was required to reinstate Harold Barkley. The settlement agreement provided for a break in the co'llective-bargain- ing agreement between February 15, 1983, and the time of the settlement. As finally adopted, paragraphs 1 and 2 of the statement read (G.C. Exh. 56): 1. All prior agreements between Carthage and Local 36 are agreed to be mutually rescinded, effec- tive as of February 15, 1983. Carthage and "Local 36", however, hereby agree to adopt and do hereby adopt the agreements attached hereto as Exhibits A and B as modified by Exhibits C, D and E and as modified herein, effective October 1, 1983, or such earlier date as this is signed by both parties and notice thereof is communicated to both parties. 2. Carthage agrees to be bound by all terms and conditions of employment contained in the next Collective-Bargaining Agreement between Local 36 and the Southwest Missouri Chapter of the Sheet Metal Contractors' Association (herein the "Chap- ter") which replaces Exhibit A, but Carthage shall not be required to be a member of said Chapter. In the event that Carthage does not become or remain 10 Barkley, the only current union member to testify , said he walked off for fear of being fined. a member of the Chapter, then hourly dues which Carthage would not be paying to the Local Indus- try Fund or the International Industry Funds, in ad- dition to the wage rates specified in the agreements hereby adopted. Carthage agrees to remain bound by Exhibit B at least for the term of the successor agreement to Exhibit A. Between February 15 and September 23, 1983, Carth- age had employed Mark Simpson, Wayne Darrow, George Leishing, Steve Anderson, and Ed Navarro. About September 23, 1983, Fasken shut down Carthage's operation." Around the time that the September 27, 1983 settlement was reached, Fasken met with Carthage employees, then working for the Company, on at least two occasions. Fasken told them of the settlement and explained that the employees would have to join the union. After one of the meetings, Fasken consulted with the company attorney and two types of forms were de- vised to enable the men to indicate whether they wished to quit their employment with Carthage or continue on with the firm as "financial core" employees. Two em- ployees, George Leishing and Steve Anderson, signed the financial core forms under date of October 5, 1983 (G.C. Exhs. 23(d) and (e)), and three employees, Mark Simpson, Ed Navarro, and Wayne Darrow signed the resignation forms (G.C. Exhs. 23(a), (b), and (c)).12 Thus, Carthage was left with two employees, and a third, Barkley, later joined the Company about October 10, 1983, in accord with the settlement agreement that had been reached. Ray Fasken's wife, Patricia, was upset over the settle- ment as she was opposed to the Union. The day after the September 27, 1983 settlement was reached, Patricia de- cided to set up and operate Respondent Sheet Metal Products, Inc. out of a building located in Pittsburg, Kansas, approximately 25 or 30 miles from Carthage, Missouri . 13 Patricia and her husband, Ray, drove to Pittsburg where she, through her husband, leased a building and opened a bank account, depositing two checks, one for $1500 drawn on Carthage's account and 11 Fasken testified that he did so because the Company was between jobs and that he was "tied up in meetings and litigation " 12 Each of the resignation forms, which are undated but were made effective September 27, 1983, reads- It is my understanding that the company has signed a Collective-Bar- gaining Agreement with Sheet Metal Workers ' Local 36 which would require that I join the Union within eight days in order to continue working for the company Because I do not wish to join the Union, I am hereby submitting by resignation from Carthage Sheet Metal Company, effective September 27, 1983. The financial core form reads in part- I do not wish to join the Union, and I do not wish to sign an appli- cation for membership in the Union. I desire to exercise my rights to refuse to do that, and to refuse to sign a Union dues and fees check- off authorization form However, I do want to keep my job with the company, and in order to do so, to the extent required by law, I will pay the uniformly required dues and fees to the Union to the extent necessary to keep my job. 13 It was stipulated that Pittsburg is located within 15 miles of the State of Missouri Patricia testified that she decided on September 28, 1983, to start the company She indicated she chose Pittsburg because it was a "nice size town," that Kansas is a right-to-work state, and out of Local 36's jurisdiction 1256 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD the other for $400 drawn on Ray's and her joint ac- count.14 It was decided between the Faskens that a lock former, brake, and glue-spraying equipment belonging to Carthage should be transferred over to Sheet Metal in return for the transfer of Patricia's interest in Carthage to Ray Fasken. t 5 Patricia resigned all offices in Carthage and organized Sheet Metal as a separate Kansas corpora- tion.16 She is the sole owner and officer of that corpora- tion. While setting up Sheet Metal's shop in Pittsburg, the men inquired of Patricia concerning employment at Sheet Metal. She hired Simpson, Darrow, and Ed Na- varro, indicating to them that her company would be nonunion.'' Sheet Metal paid the three employees the same wages they had received at Carthage but without any fringe benefits. Additional employees were employed by Sheet Metal subsequently (see G.C. Exhs. 39 and 40). Carthage employees George Leishing, a service techni- cian, and Gwen Slater, secretary, have helped Patricia from time to time. In addition, Sheet Metal pays Carth- age owner Ray Fasken $200 monthly to do bidding work for Sheet Metal. Simpson assigns work to Sheet Metal employees, but there is little on-the-job supervision. As previously indicated, Sheet Metal has used equipment previously owned by Carthage. Sheet Metal has borrowed money from Carthage, and Carthage has borrowed money from Sheet Metal. When Sheet Metal has needed money, Ray Fasken has bor- rowed on Carthage's line of credit at the Bank of Carth- age and deposited the money in Fasken's joint account so Patricia could write checks on it. The loans have not been in writing, and no interest has been charged. Sheet Metal and Carthage have purchased materials from the same suppliers. Both firms had used the same accountant and the same insurance agency. Fasken submits bids for his own firm as well as for Pa- tricia's. He does not submit bids for both companies on the same project. Which company he bids for is based on who the competitors are for the particular job. Sheet Metal has completed some jobs started by Carthage em- ployees. The Carthage payroll (G.C. Exh. 25) indicates Carth- age employees resumed work during the week ending October 13, 1983. Harold Barkley returned to work at that time in accord with the September 27 settlement agreement. Barkley threatened to quit at the end of the week, but Ray Fasken persuaded him to stay on.' 8 1* Ray actually met with the building owner and negotiated the lease of the building 15 Sheet Metal has used other equipment owned by Carthage , includ- ing two trucks that were leased to the former on November 1, 1983, (G C Exh 26). Carthage replaced certain other items turned over to Sheet Metal by a lease arrangement. 16 Sheet Metal's incorporation papers were filed with the State of Kansas on or about October 7, 1983 17 The W-2 forms signed by these employees are dated October 7, 1983 is Barkley testified that Patricia was at the Carthage facility on Octo- ber 13 and told him "we can never be friends" as long as he was a member of the Union. He said she told him that changes were being made at Carthage (e g , no coffeebreaks, telephone use limited to emer- gencies). He complained to Ray about the lack of tools available and then learned of the Pittsburg operation from Fasken . Fasken told him, Barkley said: "I will get you the tools to work with, and he says back when I was Carthage submitted fringe benefit reports and contribu- tions for December 1984 but none thereafter. On Febru- ary 7, 1984, Fasken sent a letter (G.C. Exh. 27) to Union Business Representative Tindell advising him that Carth- age was withdrawing from the "pre-hire Collective Bar- gaining Agreements with your organization" for lack of majority support, asserting that "we believe that a suffi- cient time has not elasped to enable your organization to obtain a free and coerced majority support among the employees." Thereafter, the Union addressed a letter (G.C. Exh. 29, dated February 13, 1984) requesting detailed information concerning the ownership and operating of Sheet Metal. Carthage's attorney suggested in reply that a meeting be held in his office in Springfield in an effort to resolve all the Union's questions . The Union's response noted that charges had already been filed and asked that the re- quested information be furnished in writing. On April 11, 1984, Carthage Attorney Jones, responding to a letter of Tindell dated April 10, advised that Carthage was filing a Chapter 11 Reorganization Petition, and by a later letter, dated April 27, 1984, Jones again suggested that a meeting be held in his office at which time "any and all information which you may require" would be made available.19 The Evidence Nine witnesses testified, six for the General Counsel and three different witnesses for Respondent. One wit- ness called by the General Counsel, Ray Fasken, owner of Carthage Sheet Metal Co., was recalled as a defense witness, and another witness for the General Counsel, Harold Tindell, business representative of Local 36, was recalled by the Union as a rebuttal witness. Lawrence Ray Fasken is the president, secretary, and treasurer of Carthage Sheet Metal Co. (Carthage) and has held the position of president for approximately 3 years. Fasken testified that the type of work Carthage employees performed involved working on heating, cool- ing, and ventilation systems as well as the installation of these systems. Fasken identified a document submitted by Carthage to the State of Missouri under date of July 20, 1983. The document, signed by his wife Patricia, lists Ray and his wife as officers and directors of Carthage. Fasken explained that prior to 1980, one-half of Carth- age's stock was owned by the Barkers. At that time, the Barkers and the Fasken, also owned a nonunion sheet metal contracting company located next door to Carth- age known as Home Heating and Air Conditioning. Ac- cording to Fasken, in 1980, he, with his wife, bought out the Barkers' 50-percent interest in Carthage, and the Fas- having all this trouble with the union, I wasn 't sure that Carthage Sheet Metal was going to be here, and he said my wife has bought my-or I bought my wife's share of the company out, and I used the equipment as collateral, and she set up a shop in Pittsburg " Barkley said he learned from Fasken in mid-January 1984 that Leishing and Anderson were "financial core" employees and not members of the Union 19 The Union Charging Party's attorney replied by letter dated May 5, 1984, stating that he had engaged an accountant to review Respondent's books The letter asserted Jones could not insist on the presence of a union attorney as Jones had suggested CARTHAGE SHEET METAL CO. 1257 kens bought out the Faskens' S0-percent interest in Home Heating. The Barkers thus became the sole owners of Home Heating, and the Faskens became the sole owners of Carthage. Fasken added that the owner- ship of Carthage changed again about October 1, 1983, when Patricia relinquished her stock and directorship and resigned completely from the corporation . At that time, Fasken said, he assumed the positions of secretary and treasurer, in addition to his current position as presi- dent, of Carthage. Fasken identified the minutes of meeting of Carthage shareholders held on September 30, 1983 (G.C. Exh. 3). Fasken testified that at that meeting not only did Patricia resign, but the articles of incorporation were amended to reflect that only one director would be required on the board of directors and that he Would be that director. Fasken stated that on October 14, 1983 , be signed a bill of sale (G.C. Exh. 5) whereby certain machinery and equipment belonging to Carthage : would be transferred to Patricia Fasken in return for her stock in Carthage.20 Fasken testified initially that he could not identify the Sheet Metal Contractors of Southwest Missouri. Later, however, he stated that it was an assembly of the union sheet metal contractors in Southwest Missouri and he knew that the abbreviation for this organization, SMACNA, stood for Sheet Metal Air Conditioning Na- tional Association. Fasken said he became aware of the existence of this organization only after he became in- volved in the present litigation. Fasken claimed that he had no knowledge of being vice president of the Asso- ciation.21 Fasken testified that he personally knew Paul Fairchild, president of the Association, but did not recall discussing Association matters with him. Fasken said that he had been associated with Carthage since 1971 but stated that to the best of his knowledge Carthage never authorized the Association to bargain for it with the Union between 1971 and 1984. A letter dated March 22, 1976, typed on the Associa- tion's letterhead, addressed to Fasken and bearing the signed name of Paul Fairchild, was presented to Fasken (G.C. Exh. 6). Fasken acknowledged that the letter con- tained language indicating Carthage was to be represent- ed by the Association in upcoming negotiations with the Union. Fasken identified the name of a signature appear- ing above the words "contractor's signature" as that of Earl Barker but said he could not state with certainty whether the signature was, in fact, Barker's.82 Fasken stated that because he was working in the field during this time, and Barker was working in the office, he had no knowledge regarding Carthage ever authorizing the Association to bargain on its behalf. According to Fasken, he never actually participated in any contract negotiations with the Union, although he admitted signing local union agreements on behalf of 20 It was stipulated that G.C. Exh. 4 is an authentic document from Carthage's stock register and shows Patricia Fasken's transfer of stock ownership to Lawrence Fasken. 21 Fasken did not explicitly deny that he had been vice president- only that to the best of his knowledge and recollection, he was never aware of holding such a position. aR Barker, part owner of Carthage in 1976 , later appeared and ac- knowledged that he had signed the letter. Carthage. He explained that Harold Tindell, Local 36's business representative , would just show up at Carthage and say, "Here's what we've got this year." Fasken testi- fied that he assumed that the contracts were negotiated by Paul Fairchild for the Sheet Metal Contractors. Fasken stated that he had signed both union agreements and addendums during his term of employment with Carthage. He acknowledged that the addendums he signed were all negotiated between the Union and the Association. Fasken indicated that after negotiations be- tween the Association and the Union had been complet- ed, the printed contracts would then be brought to Carthage by Tindell and Fasken would then sign them.23 Fasken identified a letter dated March 30, 1984, which Carthage sent to the contractor's Association notifying it of the Company's intent to withdraw from the Associa- tion (G.C. Exh. 11). He said he and Carthage's attorney, together, made the decision to submit the withdrawal. According to Fasken, Carthage also entered into agree- ments with the Union concerning residential work. He explained that contractors who signed a residential agreement were permitted to pay 60 percent or more of the commercial wage rate in effect that had been negoti- ated between the Association and the Union contained in the contract addendum .24 Fasken testified that he did not know if the agreement had ever been renegotiated, adding that Carthage was never able to enforce the con- tract. Fasken stated that Carthage prepared a number of ben- efit reports, including one introduced into evidence as General Counsel's Exhibit 13. He said that this was a re- mittance report to the Union for the period January-De- cember 1983 and was prepared by Carthage office em- ployee Gwen Slater. In testifying about the exhibit, Fasken explained that the letter "'I"' in the term column "probably" stood for "terminated." However, he said this was misleading because some of the individuals quit, went into business for themselves, were bought out, etc. Therefore, the "T" more correctly indicated that the person was no longer employed by Carthage. Fasken in- dicated that the exhibit showed Carthage paid into a number of funds through December 1983 but that after this time the Union received no further remittance re- ports from Carthage.25 Fasken identified two grievances filed by Local 36 against Carthage in March 1983 .26 Fasken identified an- 23 A copy of a standard union agreement dated July 1, 1981, between Carthage and the Sheet Metal Workers International Union covering the period 1981-1984, plus an addedum signed by Fasken on January 22, 1982, were received into evidence as G C Exhs. 7(a) and (b). Fasken also acknowledged that he had signed similar agreements and addendums covering 1978-1981 (G.C. Exhs. 8(a) and (b); 1976-1978 (al- though the signature on the addendum was missing, G.C. Exhs . 9(a) and (b)); and 1973-1976 (G .C Exhs. 10(a) amd (b)) Regarding this latter ex- hibit, it was stipulated that Local 36 is the successor of Local 146. 24 Fasken explained that residential work involves performing "small, light jobs" and doing work at residences. A "typical residential agree- ment" executed between Carthage and Union Local 36 and signed by Earl Barker was received into evidence as G.C. Exh. 12. 25 The funds paid into included the national pension fund, the local training fund, and the local industry fund (maintained by Local 36). 26 One grievance dated March 1 (G.C. Exh 14), states two nonunion employees of Carthage worked on sheet metal work covered by the Continued 1258 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD other document (G.C. Exh. 16), a letter dated March 22, 1983, which he sent to Local 36. The letter asserts that Business Representative Tindell had orally agreed to allow Carthage to hire two nonunion workers and ac- cused Tindell of violating the oral agreement "by pulling the three employees from our employment." Fasken commented that he sent an additional copy of this letter to Paul Fairchild "because [I] knew he worked very closely to [sic] the union . . . [and] he is the president of the Southwest Missouri Sheet Metal Contractors Asso- ciation." Fasken acknowledged receiving a letter from Leo Zahner, a SMACNA representative, advising that Zahner would attend a hearing on May 13, 1983, at which the Union's grievances against Carthage would be considered. According to Fasken, he spoke with Zahner by phone and sent a letter (G.C. Exh. 18) giving Fas- ken's version of the events leading up to the grievance meeting. After other documents were introduced into evi- dence27 Fasken testified that after the complaint of Sep- tember 1983 was issued by the NLRB. a settlement was reached between Carthage and the Union. According to Fasken, the negotiations took place at an airport confer- ence room, and he, his wife Patty, Attorney Don Jones, Harold Tindell, Attorney James Singer and "Mel"28 were present. A settlement agreement was reached 2-1/2 weeks after the meeting, and Fasken acknowledged sign- ing the agreement.29 According to Fasken, a few days after signing the agreement he distributed some forms to Carthage's employees "because he had a problem." Three forms, G.C. Exhs. 23(a)-(c), were resignation forms90 and two forms, G.C. Exhs. 23(d) and (e), state that the named employee did not want to be a member of the Union but would pay the required dues and fees to the Union in order to remain employed. s' Fasken tes- tified that the resignation forms were not signed on the 27th but were executed subsequent to this date after a couple of meetings were held, and he said he "didn't tell these guys I'd sign the contract till the 27th." "My people told me that they quit" so he consulted his attor- ney. Fasken explained that the purpose of the financial core forms (G.C. Exhs. 23(d) and (e)) was "to allow any or all of them to go back and work in my shop without for- mally joining the Union." Fasken further pointed out standard form union agreement. An amendment to this grievance (G.C. Exh 15) states that around July 1, 1982, Carthage had refused to comply with the Union's exclusive hiring hall provision by hiring two nonunion employees, and Carthage had refused to pay the required fringe benefit contributions to the union trust funds. 27 G.C. Exh 19 is the charge filed by the Union against Carthage on July 25, 1983 G.C. Exh. 20 is the complaint and notice of hearing issued against Carthage on September 8, 1983. The answer to the complaint dated September 12, 1983, and filed by Carthage, is G.C Exh. 21 A copy of an order withdrawing the complaint was received as R Exh. 2 29 Fasken did not identify who "Mel" was, but the signature of a Melvin Zimmerman, business manager for Local 36, appears on the set- tlement agreement 29 It was stipulated that the settlement agreement (G.C. Exh 22) was executed on September 27, 1983. 2° These forms were signed by Mark Simpson , Ed Navarro, and Wayne Darrow and were effective September 27, 1983. " These forms were signed by George Leishmg and Steve Anderson and were referred to as "financial core" agreements. that the forms were suggested by Carthage's attorney as a way to get some of Carthage's employees back to work after they quit. The forms were distributed by Fasken at his home in the evening after working hours. Fasken explained that when he had met with his employ- ees a couple of times he told them that he was preparing to sign the agreement. He said there was little discussion of the situation until a later meeting when Fasken in- formed the employees that he had signed the agreement and stated, "Boys, you've got to join the union." "They all told me pretty well what I could do with it," he said. Additionally, Fasken testified that the employees told him that they would not have anything to do with a union shop. It was at this point that Fasken called Jones, asked for advice, and learned of the possibility of a "fi- nancial core deal." When Fasken distributed these forms the next day, he said he told the Carthage employees that "even though you guys don't want to join the union, you can work here without being a formal member of the union through this financial core situation." Those present at the meeting in which the forms were distribut- ed included Mark Simpson, Wayne Darrow, Ed Na- varro, George Leishing, and Steve Anderson. Fasken commented that his wife Patricia was at the house at the time of this meeting, but did not attend. Fasken related that he thought Simpson, Darrow, and Navarro's last day at Carthage was around September 23, 1983, and that they were working on a job at the Union Methodist Church in Parsons, Kansas, at the time. Fasken said Resco Construction, a nonunion branch of R. E. Smith, was the contractor on this job, which was begun in June or July 1983 and completed in December 1983. Fasken stated that he had bid on the Parsons' job and that prior to October Carthage employees performed the work until they quit; after October the production work was done by Sheet Metal Products. He explained that the job was handled this way because he found out Carthage did not have the "correct paperwork" to do business in Kansas.32 Fasken explained that the hours employees worked in Kansas prior to October 1983 were not reported on Carthage's fringe benefits report because he felt "they weren't part of the agreement." He stated further that Carthage's workers in Kansas were paid a different wage scale than the Union prior to the 1982 walkout, which varied between $10 and $12 an hour, and that separate books were not kept on Kansas jobs. Fasken indicated he felt that because the workers in Kansas were usually nonunion, he saw "no problem" with not keeping sepa- rate records or paying below union wages. According to Fasken, when Bud Barkley, one of Carthage's union employees, was working on a Kansas job, his hours were reported on the fringe benefit reports and his wages were union scale per the union contract. Fasken stated, however, that few union employees worked on Kansas jobs because he "kept the union people back in Missouri." 12 Fasken acknowledged that Carthage had done business in Kansas previously and that he "was wanted all over the Southwest at one time." CARTHAGE SHEET METAL CO. Fasken testified that prior to the Parson's job Carthage had performed work for both R. E. Smith and Resco, the nonunion branch of R. E. Smith. According to Fasken, he had a discussion with a Resco representative, probably Pete Chandler, regarding switching the invoic- ing from Carthage to Sheet Metal. The discussion, he said, lasted 4 or 5 minutes and concerned Carthage's ille- gality in performing work in Kansas.33 Fasken indicated that Wayne Darrow supervised the Parsons job. Fasken said he might have visited the job- site himself, but could not recall when it was. Since the completion of the Parsons' job, Fasken acknowledged that he had probably spoken to Resco representatives about the possibility of getting work in the future. Fasken explained that the likelihood of getting work de- pended on the company (contractor) performing the job, where the job was located, and who his competitors were. He stated that if the job were located in Missouri and his competition was from union companies, he would bid Carthage Sheet Metal for the job. On the other hand if the job were located in Kansas and his competition nonunion, he would bid for Sheet Metal Products. Said Fasken: A. 99 percent of our work is what they call plan spec. Q. 99 percent of whose work? A. The only work I can truly speak for would be mine, Carthage Sheet Metal. Q. I'm sorry I interrupted. A. I don't know how to explain the style of work we do. We don't go out and engineer or design sys- tems, architectural, say we're going to build this courthouse. I pick that information up off the Dodge Report. The nationwide deal that tells me any morning any jobs that are being bid and the lo- cation. Q. And then you contact the contractor? A.I'll either ask the contractor if he has an extra set of prints I can borrow or I will telephone an ar- chitect and have him mall me a set of plans and specifications. Q. How do you tell From the Dodge Report whether you should bid as Carthage Sheet Metal or Sheet Metal Products? A. Well, it's just kind of-I know basically what kind of work different contractors are their best at. Another thing, sometimes suppliers tell me. I'll call the suppliers and say who do you think is going to be competition on this project. He'll rattle off three or four names. I think it's something that's pretty standard in the industry. Fasken acknowledged that he bid on a particular Joplin, Missouri job for Sheet Metal Products. He said he did this because Business Representative Tindell had called and offered a special concession on wages and told him "to go in at 80 percent." Fasken said he then called another contractor who reported that Tindell had told him "to go in at 70 percent." The situation led 99 Fasken could not recall if this conversation took place on the phone or any further details of the discussion 1259 Fasken to believe "Carthage Sheet Metal had it stacked against it to start with" so a Sheet Metal bid was submit- ted instead.34 Fasken acknowledged that he bid on a Resco job at a Consumer Store project in Joplin, Missou- ri for Sheet Metal, apparently a different job, and that Carthage employees had never worked on the job. Fasken conceded that there were projects other than the "Parsons Church job" that Carthage had started but that were finished by Sheet Metal Product.35 Fasken estimat- ed that approximately 60 percent of his bids since Janu- ary 1984 had been for Sheet Metal since most of the ac- tivity had been located in Kansas. Fasken testified that another project started by Carth- age and finished by Sheet Metal was a Consumer Store in Clinton, Missouri. He pointed out that Carthage had worked on the project even though it did not have a contract with the Union or with the general contractor, Don Edwards. The job was invoiced initially by Carth- age and later by Sheet Metal. According to Fasken, Carthage employees Mark Simpson, Wayne Darrow, and Ed Navarro had worked on the project before it was completed some time around February 1984. Regarding the Newman job in Joplin, Fasken stated that Carthage did not bid on the project. Fasken identi- fied a sheet metal invoice for installing some duct work at Newman's (G.C. Exh. 24). The invoice was dated March 2, but Fasken indicated that the work was not necessarily performed at this time. Attached to the in- voice was a memo that read in part: "Although original- ly quoted by Carthage Sheet Metal Co., Inc., the work was done by the Pittsburg, Kansas shop and is being billed through that shop." In discussing this memoran- dum Fasken stated, "We did have a little problem there with people understanding who was doing what work, especially people that were in the construction trade." Fasken testified that the memo was prepared by Carth- age Secretary Gwen Slater, who had also performed work for Sheet Metal at Patty's request, either at the Fasken home or at the Sheet Metal office. Although records have been kept regarding Gwen's hours, Fasken did not know whether she had been paid separately by Sheet Metal or whether she had been paid at all. Ac- cording to Fasken, Gwen's assistance at Sheet Metal was required more during late 1983 and early 1984 than during the last few months preceding this hearing.36 Fasken noted that in preparing bids, either for Carth- age or Sheet Metal, he performed 95 percent of such work at home. He explained that his office at Carthage was too noisy and distracting for the type of concentra- tion required so he did this type of work at his house. Fasken agreed that after October 1, 1983, he, Gwen Slater, Harold Barkley (after "about the 10th"), Steve Anderson, and George Leishing were all employed at Carthage. Fasken said he would send Leishing to work 34 Fasken said he did not recall whether Patty or Mark Simpson had called in the actual bid for Sheet Metal. as One of these jobs Fasken identified as Newman's in Joplin, Missouri Fasken could not recall any details except that the job was originally bid by Sheet Metal 36 Fasken testified that Gwen 's schedule at Carthage calls for work in the Carthage office full time on Mondays, Wednesdays, and Fridays and half days on Tuesdays and Thursdays 1260 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD at Sheet Metal on occasion when Patty would request a service technician for a job outside Wayne Darros's ca- pability. Such situations did not occur often and a record of his hours would be kept. Fasken indicated that Leish- ing would have been paid by Carthage whether he was working on a Carthage job or a Sheet Metal job. Re- garding the procedure whereby Sheet Metal would be reimbursed by Carthage for work performed by Sheet Metal employees, the exchange was as follows: Q. How would Carthage be reimbursed by Sheet Metal Products? A. Well, we have-through, eventually it would be billed or settled up some way. Q. Formally? A. Well, I've never been formal about anything in my life, so I guess it would be informally. Q. Has Sheet Metal made payments to Carthage in the past? A. I can't really answer that. I don't know. If I said something it would be a guess. Fasken testified that Steve Anderson had not per- formed work for Sheet Metal Products. Fasken was shown a document that he identified as the payroll records for Carthage for 1983. He agreed that the docu- ment showed that Anderson had no reported working hours for the last week of September 1983 (week ending September 29) and the first week of October 1983 (week ending October 6) but that he was back at work at Carthage the week ending October 13. Fasken explained Anderson's absence to be due to the fact that Anderson had quit Carthage. Fasken admitted that he knew Ander- son was working for his wife Patty during this absence, helping her set up her company, because his wife had so informed him.37 Fasken added that there was not much work going on at Carthage during this time but that he had gone down to the office often during the week ending September 29. His normal hours at Carthage, ac- cording to Fasken, are from 7:30 or 8 a.m. until around noon every weekday unless something is "pressing" be- cause he tries to do a lot of estimating work at night or on the weekends. Fasken indicated that many persons had keys to the Carthage facility, but he was not certain whether Mark Simpson or Wayne Darros had any. According to Fasken, when Wayne Darrow, Mark Simpson, and Ed Navarro resigned from Carthage, noth- ing was mentioned at the time by them about working for Patty. Fasken conceded Patty would have been aware that three men were no longer employed at Carth- age. Fasken stated that "right after the meeting" when his employees quit, probably around October 3, 1983, Patty told him she was "very seriously thinking" about forming Sheet Metal Products.SB sT Fasken indicated an unwillingness to answer questions concerning whether other former Carthage employees had worked for Sheet Metal during the end of September 1983, saying, "You'll have to ask the owner of Sheet Metal Products " ss Fasken indicated that he was unsure of the date of Patricia's deci- sion to open Sheet Metal During his later testimony, he admitted that the date could have been prior to September 30, the date Patricia trans- ferred her stock to him and resigned her officership at Carthage. Carthage never occupied the building in Pittsburg, Kansas, leased by Sheet Metal, according to Fasken. The Carthage and Sheet Metal facilities are approximately a 40-mile drive from one another, Fasken said. Carthage and Sheet Metal had loaned money to each other, Fasken said, although Fasken indicated more money had probably been loaned to Carthage by Sheet Metal Prod- ucts than "the other way." Fasken testified that Carthage made three or four loans to Sheet Metal totaling around $15,000 in order to pay off suppliers. Fasken explained the loan procedure as follows: Q. When Carthage was loaning money to Sheet Metal, how does that work? What's the procedure? A. Well, I had a line of credit that-you know, it's credit I had to personally back. I'd pull money off my personal line of credit. Most of the time I'd say I've done it, out of my personal checking ac- count. We have a joint checking account. Q. So the money would come from the bank where your line of credit is to the Carthage, through the Carthage account? A. Yes, I'd say it did. Q. From the Carthage account to you? A. To me. Q. From you to- A. My bank. My personal bank. Q. How does it get from your personal bank to Sheet Metal Products? A. I'd write a check from our checking account, personal checking account. Sheet Metal Products has always repaid those loans. As a matter of fact, the other way around now. Q. We'll get to that in a second . What were the terms of the loan? A. Pay it back as soon as you got the money. Q. Is it- A. No. Q. Is the loan ever reduced to writing? A. No. Fasken added that Carthage probably received three or four loans from Sheet Metal totaling about $22,000 but that the accountant for Carthage and Sheet Metal, Dave McGuire and Company, would have the exact figures. Further, he said Carthage did not pay any interest on the loans, and none of the loans were reduced to writing. Fasken described the Carthage facility as an old two- story building, approximately 50 feet by 80 feet, located at 121 S. 9th in Carthage, Missouri, which includes a shop and offices. Fasken indicated the building had been owned by Carthage since 1971 and that no rent was being paid to anyone. Fasken testified after October 1, 1983, that Carthage employed two sheet metal workers, Steve Anderson and Harold "Bud" Barkley, and one service technician, George Leishing. Barkley and Anderson had performed primarily together as a team, and Leishing usually worked alone. Anderson and Barkley worked on con- struction jobs but Leishing would not work on construc- tion projects very often because he performed basically service work. On one occasion, according to Fasken, CARTHAGE SHEET METAL CO. 1261 Leishing worked with Anderson, Barkley, and himself on a Reverse Osmosis roofing job in Nevada, Missouri. Leishing had also run a refrigeration line on a construc- tion site. Additional construction jobs performed by Carthage after October 1, mentioned by Fasken, were Broadview Lumber Co. in Carthage and the Aurora Hospital. Fasken testified that he was the only individual who had bid on jobs for Carthage. Given and his accountant kept the books for Carthage. Carthage's accountant had been employed for probably 10 years. Gwen and Patty had been responsible for the books since October 1, 1983, although Patty had also worked on them prior to that date. Additionally, Patty would perform various func- tions in helping to run Cathage, although the responsibil- ity of hiring and firing employees and making daily job assignments rested with Fasken. He stated that there was a lot of on-the-job supervision required of his sheet metal workers and that he had experienced some difficulty in finding individuals who were good workers. Theoretical- ly, he said, the employees are supposed to be on the job- site at 8 a.m., but that this was not always the case. Often employees would leave their cars at the Carthage facility and take one of Carthage's trucks to the site, re- turning it at the end of the day. Fasken stated that Carthage's bank account was locat- ed at the Charter Bank of Carthage, and Dale Haglund of Southwest Agency is Carthage's insurance agent. Fasken listed Carthage's major suppliers" and the major tools or pieces of equipment40 and vehicles41 owned by Carthage prior to October 1, 1983. After October 1, 1983, Fasken said he sold the brake, lock former, glue sprayer, some insulation equipment, and various bench tools to Sheet Metal. He stated that this equipment was moved to Sheet Metal during the first part of October and that Mark Simpson and Wayne Darrow were "two of the group" who came to Carthage to pick it up. According to Fasken, the "negotiations" for the sale of the equipment took place between him and Patty around the 30th of September at their home.42 Fasken commented that he felt he was qualified to put a value on the equipment so he saw no need to get an esti- mate from anyone else. After the sale, Fasken stated that he leased a lock former brake and an old bar roll around the first part of October from a Jim Halk.43 If Carthage 39 The suppliers named were : Joplin Supply, Dill Insulation , Wichita Sheet Metal, Sheet Metal Contractors Supply , and Hammon Sheet Metal and Master Supply of Arkansas 40 The major pieces of equipment listed were a brake, lock former, insulating equipment, notcher, welders, miscellaneous hand tools, and two types of shears 41 Fasken listed seven vehicles. a 1980 jeep pickup, a 1972 GMC pickup, a 1967 Ford pickup, a 1978 Ford pickup, a 1981 Ford Courier pickup, and a 1978 van. 42 Fasken signed a bill of sale covering the transfer of the lock former brake and insulating equipment in exchange for $5000 worth of stock under date of October 14, 1983 (G C. Exh 5). 43 Fasken mentioned that the lease of one lock former and bar roll would give him two of each at Carthage because he retained one of each after the sale to Patty Fasken said Halk became nervous over Carthage filing under Chapter I1 and took back the equipment employees needed a tool, they would ask Fasken and he would attempt to borrow one from either Patty or his expartner next door. Fasken said he assumed that if Sheet Metal had a tool that was needed by Carthage, Patty would request someone to bring it over to Carth- age. Fasken testified that a 1981 Ford Courier pickup and a 1978 Ford pickup were leased by Carthage to Sheet Metal and that these negotiations took place with Patty sometime between the first and middle of October.44 Fasken noted that occasionally one of the leased vehicles would be needed by Carthage, in which case Patty would have one of her men bring the truck to their house. Fasken sent a letter to Harold Lindell dated February 7, 1984 (G.C. Exh. 27), which states that Carthage would no longer bargain with the Union because the Union had not been able to obtain a free and uncoerced majority among Carthage's employees (G.C. Exh. 27). The letter indicates, however, that Carthage would join with the Union in asking for an expedited election. According to Fasken, he sent this letter because, among other reasons, he was in a "real financial bind" and could not afford to make fringe benefit payments.45 Fasken explained that occasionally material or invoices would be mistakenly delivered to Carthage instead of Sheet Metal, and when such occurred he would straighten it out with Patty. Fasken stated that both Carthage and Sheet Metal used the same suppliers, but noted that "when there are no other suppliers, you buy from the people that have the material" and that "every sheet metal shop in this area buys from exactly the same suppliers." Fasken testified that around September 27, 1983, he, on behalf of Carthage, bid on, and Carthage thereafter performed, a job for Snyder Bros. in Eureka, Kansas. He stated that Carthage also had done jobs for Dill Con- struction and S.E.K. (Kelce Center) in Pittsburg, Kansas. Fasken said these latter jobs were similar to others previ- ously mentioned in which he had bid as Carthage, but the work was ultimately performed by Sheet Metal.46 Fasken said Carthage did a "Consumers" project at Ft. Scott, Kansas, "after the walkout." Fasken said he subse- quently had bid jobs for Crawford Construction Co. on behalf of both Carthage and Sheet Metal. Sheet Metal had performed on Crawford projects, he said, in Clinton, Missouri, and at Trinian Lake. Fasken also stated that Sheet Metal had done work for a Topeka mechnical con- tractor named McElroy; on an IBM building in Joplin, Missouri; for Fred's Frozen Foods on a job located south of Carthage; on a Branco job in Neosho, Missouri; and on a job at Fort Scott.47 44 The 6-month lease dated November 1, 1983, was received into evi- dence as G.C. Exh 26. Prior to this date, Fasken said he and Patty had a verbal agreement regarding the vehicles Also, the lease had not been re- newed in writing, but the arrangement is still continuing 4a Fringe benefit payments were not made after December 1983 46 Fasken said he bid on the Dill job at a time when that "union walked out on me." 47 Earlier, Fasken had indicated that a Fort Scott job was performed by Carthage-not Sheet Metal Fasken was uncertain about which com- pany had bid on certain projects 1262 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Fasken acknowledged that he bid all the jobs per- formed by Sheet Metal. He said he received a consultant fee of a flat $200 per month from Sheet Metal for the time he put in preparing the bids. He could not estimate the time spent preparing such bids. He said he also assist- ed other contractors in preparing bids, but did not charge them as they are "friends." Fasken denied that Sheet Metal employees ever inten- tionally perform work for Carthage or vice versa. How- ever, Fasken identified an invoice dated March 22, 1984 (G.C. Exh. 28), from Carthage to Hercules, Inc. for in- stallation work performed by Sheet Metal. He said he had bid this job for Carthage 1 year earlier and that shortly before the work commenced he spoke to a Her- cules engineer, Jim Short, and reviewed the bid. When asked who actually performed the work on this project, Fasken conceded that it was performed by Sheet Metal employees, probably Mark Simpson and Wayne Darrow. Fasken explained that after bidding on the job a year ear- lier, his prices had so escalated that it became impractical for him to proceed so he turned the job over to Patty. Carthage supplied the materials, he said, and Sheet Metal supplied the labor. Fasken indicated that Sheet Metal had paid some money to Carthage for the materials. He said he could not recall any other instances in which Carthage invoiced work performed by Sheet Metal .48 Fasken testified that around April 1984 Jim Halk came and removed the equipment Carthage had leased. Fasken said he did not replace any of the items because the two jobs (Reverse Osmosis and Aurora) Carthage was in- volved in at the time were almost completed and, if something were required, he could borrow it from his neighbor, Earl Barker. Sometime in early April 1984 when these two Carthage jobs were nearing completion, Fasken said Steve Anderson and Bud Barkley asked him about future work. He said he told them to lay off work for a few days, indicating there would be some new projects starting. After the layoff, according to Fasken, both Gwen, the secretary, and George Leishing contin- ued to work. For a time Anderson continued to come in every morning doing spot jobs and cleaning up the shop. But eventually he too was laid off. Fasken stated that on the first day Steve came in after the two jobs had been completed Bud Barkley also came by. Barkley asked about Anderson's whereabouts, and Fasken told him that Anderson had been sent to do some 48 At this juncture, G C Exhs 29-36 were introduced G C Exh 29 is a letter dated February 13, 1984, from Harold Tindell to Fasken asking for information regarding Sheet Metal G C Exh 30 is a letter dated February 17, 1984, from Carthage Attorney Donald Jones to Tmdell re- questing a meeting be set up between all parties to resolve the situation G C Exh 31 is a letter dated February 28, 1984, from Tmdell to Jones that asserts a refusal to meet and again request certain information G C. Exh 32 is a letter dated April 10, 1984, from Tmdell to Jones stating that the Union will proceed legally to enforce its contract on Carthage and Sheet Metal as alter egos. G C. Exh 33 is a letter dated April 11, 1984, from Jones to Tindell stating that Carthage had filed a Chapter 11 pro- ceeding G C Exh 34 is a letter dated April 23, 1984, from Union Attor- ney James Singer to Jones (charging Carthage with "unlawful bad faith conduct") G C. Exh 35 is a letter dated April 27, 1984, from Jones to Singer asking for a meeting to provide information that the Union previ- ously requested. G.C Exh 36 is a letter dated May 5, 1984, from Singer to Jones asking for a date when an accounting firm could review Carth- age's and Sheet Metal's records work on the Aurora Hospital project. Fasken told Bar- kley that he was welcome to go to Aurora and assist An- derson if he wished. Fasken recalled, however, that Bar- kley had a racketball date that day. Fasken commented that he did not learn of the Union's charge regarding Barkley's layoff until he received it later in the month by certified mail. Fasken stated that he had been thinking of filing for bankruptcy for at least 30 days prior to his April 11, 1984 filing. He thought he notified his attorney of his de- cision to file about 2 weeks before this date. Fasken added that except for his February 7, 1984 letter he made no other attempts to bargain with the Union over modification of the contract. Under questioning by the Charging Party's attorney, Fasken testified that as of the week ending September 23, 1983, he and Gwen were the only Carthage employees. He said he "understood" that former Carthage employ- ees worked during the week ending September 30, 1983, helping Patty set up Sheet Metal Products.49 Fasken denied that he was involved in the setting up of Sheet Metal. Fasken initially denied making a $1500 loan to Sheet Metal to cover their first week's payroll (week ending September 30, 1983), but later acknowledged that he wrote his wife a $1500 check from either his joint checking account or Cathage's account to buy out Patty's shares of Carthage. He assumed she was going to invest the money in her company, but denied knowing what she did do with the money. According to Fasken, Patty did not want Carthage to be a union contractor, one of the reasons being that she blamed the Union for the walkout in February 1983. Fas- kens denied that it was his idea to set up a nonunion company, and at this point stated that he first learned there was going to be a nonunion sheet metal company in Pittsburg, Kansas, in the first part of October.50 Again Fasken testified that he met with his union em- ployees around the time he signed the settlement agree- ment-twice after he signed the settlement agreement and one time before. On this earlier occasion (around September 25 or 26), Fasken explained that he called his employees out to his house to inform them of the pend- ing settlement.51 He noted that there was very little said by the employees at that time. At the second meeting, which occurred about September 27 or 28, Fasken stated that he told his employees that he had signed the settle- ment agreement and that they would be required to join the Union. He explained the employees' reactions to Fas- ken's announcement as follows: A. Mark Simpson told me no way in hell. Q. Was that what you recall him saying, "No way in hell"? A. Correct. 49 Fasken denied, however, that he was aware that Sheet Metal's pay- roll records indicate that Simpson , (Ed) Navarro, Darrow, Anderson, and Leishing worked for Sheet Metal during the week ending September 30 50 Fasken testified that Sheet Metal was not the first nonunion shop she had operated. He said she had operated the Home Heating and Air Conditioning business in 1980. ai Fasken stated that Ed Navarro, Simpson, Darrow , Leishing, and Anderson were all present at this meeting. CARTHAGE SHEET METAL CO. 1263 Q. That's what you recall Simpson saying? A. Yes. Q. Do you recall him saying anything else be- sides, "No way in hell"? A. Well, he just made further comment that he would not join the union. Q. Is that all you recall him saying'? A. Basically yes. Q. Who else said what? A. Wayne Darrow said there's no way that he would join. He said he hadn't been good enough to join in the past, why should he join now. Q. Okay, that's what you recall Darrow saying. Is that about all? A. Pretty well covers it. Some profanity was floating around. I got eaten pretty well alive that night. Q. Do you have any other recollection what spe- cifically was said? A. Ed Navarro, he just said "I won't join." George Leishing said, "I've been there once. I'm not going back for another dose" or something to that effect. I can't remember exactly what they said. Steve Anderson said he wasn't interested. Q. So that's your recollection of what the specif- ic employees said? A. Yes. Fasken stated further that Tindell had expressed an inter- est in talking to Carthage employees as soon as the set- tlement was executed, but Tindell had not yet spoken to them prior to this second meeting. Following this second meeting, which was after his employees had quit, Fasken typed up forms (G.C. Exhs. 23(a)-(e)) obtained from Carthage's attorney and distrib- uted them to the employees at his home on the following evening. Fasken said Mark Simpson was a residential member of Local 36 who had worked for Carthage at different times. He said Simpson had left to go to Colorado in late 1980 or 1981 and had returned in the spring of 1982 at which time Fasken employed Simpson as a nonunion worker. About the time of Simpson's return, around April 1982, Simpson came to the Carthage facility; Fasken explained to Tindell that he needed economic relief and needed to hire nonunion help. Fasken ex- plained that prior to the time Simpson and Ed Navarro began working in the spring of 1982 all Carthage em- ployees were members of the Union. Fasken maintained that he could obtain economic relief by paying less than union scale wages and not paying the benefits or the $25- per-day travel pay to those working in Kansas.52 As Fasken recalled, when Simpson and Navarro applied for employment he did not tell them they had to work under scale and without benefits. Instead, he thought he told each of them that he "had a job for [them]; if you want it it pays so much an hour." Fasken stated that in the spring of 1982, Darrow had been a "residential member" of the Union. Fasken testi- 52 Fasken conceded, however, that he probably did not pay the travel allowance to his union employees either. feed that although the May 1982 benefit report shows a "T" by Darrow's name, indicating that he was no longer employed at the time, Darrow continued to work at Carthage. Darrow, Fasken maintained , dropped out of the Union and had told Tindell so when the latter was at Carthage to meet with Carthage employees. The meet- ing, according to Fasken, was held because he had just fired the shop steward, Karl "Tex" McDaniel. Fasken acknowledged that McDaniel had "voiced an opinion" regarding the presence of the nonunion group at Carth- age, but Fasken denied that this was the reason for McDaniels' discharge. According to Fasken, Tindell met with John Howell, the shop steward, and the rest of the men without Fasken being present for approximately 45 minutes. After the meeting of employees Fasken talked with the then "acting shop steward" John Howell but not Tindell. According to Fasken, Howell told Fasken: We got things all smoothed out. Just let it ride along and you can use these people and keep them out of our hair; keep them over in Kansas some place working. Fasken said that he thought others (excluding Tindell) were present when Howell informed him about what went on at the meeting, but he did not have any recol- lection of Howell stating that the nonunion group con- sisted of two employees.53 Fasken testified that he agreed with Howell that everyone should take the rest of the day off to permit tempers to cool off. Fasken acknowledged that by February 1983 he had four nonunion employees at Carthage: Darrow, Ed Na- varro, Simpson, and Anderson'54 and he conceded that they were probably all being paid below the union wage scale. Fasken denied asking any Carthage employees to drop out of the Union in 1982 and also denied offering Howell union wages if he would drop out of the Union. Fasken stated that he did understand that if any employ- ees joined the Union he would be required to pay union scale and make benefit payments for him. He also stated that if the four nonunion employees had joined the Union he would have "lost my ability to move my people around and to work in Kansas" and therefore would have lost any savings benefit. Fasken agreed that prior to hiring Mark Simpson, Fasken agreed Carthage manned its jobs in Kansas and Oklahoma with employees who were members of Local 36 but, he said, that was "illegal." Fasken also agreed that Bud Barkley worked on other Kansas projects often with another Local 36 member.55 Fasken testified that the four nonunion Carthage employees had never com- plained about performing the same work as union mem- bers without getting the same benefits nor did they ever ask to join the Union, he said. sa In his March 22, 1983 letter to Tindell, Fasken stated that "you agree to an oral modification of the existing contract permitting this com- pany to hire two nonunion workers" in April 1982 (G C Exh. 15) Fasken testified, "I don't remember where that two came from, but anyway two had been mentioned or something along those lines." 64 Leishing was hired after February 1983 66 These projects were located in Fort Scott, Parsons, Girard, and Pittsburg He also worked on a job in Miami, Oklahoma 1264 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Fasken agreed that "a very short, temporary loan" of $5000 was made to Sheet Metal by Carthage "to solve a temporary cash flow problem," he said. He explained the procedure followed in obtaining loans by the Faskens as follows: Q. And so the entries that-am I right in under- standing that Sheet Metal Products did draw on this line of credit.56 A. No. Actually the way it would take place, I would draw the money out myself. I'm-I'd deposit it in my personal checking account. Q. In your joint checking account? A. Yes. Q. You would withdraw the money out on, from the line of credit, under the name of Carthage. As far as the bank knew it was Carthage taking out the money, right? A. Well, it was a check for $5,000 probably writ- ten to Ray Fasken. Q. Ray Fasken? A. Probably that's the way we did it. Q. Did you, is that how the line of credit works when you have a line of credit, you have the flexi- bility of drawing up to the limit? A. I can do anything with it I want. As far as the bank is concerned, they got my farm as security on this. They don't care what I do with the money. Q. So when Sheet Metal needed the money you would draw a personal check on the line of credit, put it into a joint checking account, and then your wife would just draw on it? A. It was just a short term, temporary loan. She might be in a cash flow problem over there for a few days. Usually, in about two weeks, three weeks, a month, she'd pay-she'd run it back through. Fasken pointed out that Carthage also had loans at the Charter Bank of Carthage for the purchase of trucks, but he denied that Sheet Metal made payments on these loans. Fasken said Carthage purchased a contractor' s license from the city of Pittsburg, Kansas, in July 1983 where he said he was the successful bidder on two jobs. Regarding one of the projects, the City National Bank job, Fasken stated that Carthage obtained the original bid and took out a license, but the work was being performed in 1984 by Sheet Metal.57 Fasken said he "backed out of the job ... when [he] realized that we were illegal" and that Sheet Metal would perform the contract. According to Fasken, Carthage had previously performed a limited amount of jobs in Kansas but no effort had been made to have Carthage authorized to do business in the State of Kansas. Fasken testified that after the September 27, 1983 set- tlement agreement was reached, Carthage worked on three major jobs-Reverse Osmosis in Nevada, Clinton County, Missouri; Aurora Hospital, Aurora Missouri; and Broadview Lumber Co., Carthage, Missouri. Fasken stated that at the time of the trial there were only him- self, Secretary Gwen Slater, and George Leishing, a service technician, in the employ of Carthage. Fasken said, "We have no more work right now." He conceded that at least since January 1980 Carthage had not laid off his entire work force, although there had been tempo- rary work stoppages on particular projects. According to Fasken, the decision whether to bid as Carthage or as Sheet Metal depended on the type of job involved and who the competitors were. He said he bid as Sheet Metal on jobs that he felt Carthage could not compete on because of Sheet Metal's more productive employees.58 Fasken stated that whether to bid on a job for Carthage or for Sheet Metal was "just not a black and white situation." At the time of the trial he said he was still bidding jobs for Carthage and that he would hire people should he be awarded contracts.59 Fasken stated that he did not bid for both companies on a given project. Fasken denied that he intended to liquidate Carthage or consolidate it with Sheet Metal into one operating company. However, Fasken acknowledged receiving a copy of General Counsel's Exhibit 33, a letter written by his attorney to Business Representative Tindell that ex- pressed the possibility that the two companies might be merged if Carthage were permitted to cancel its labor agreement with Local 36. Fasken said he did not call his attorney to inform him that he did not contemplate such a result, but he conceded that a merger was an option available to him. Fasken was recalled as a witness for Respondent. He testified that he had received his training in sheet metal work at Stewart Heating & Air Conditioning beginning in 1963. He did not go through an apprenticeship pro- gram, but was trained on the job. In 1966, when he became a journeyman, Fasken joined the Sheet Metal Workers Union while employed at Stewart. According to Fasken, he and his wife and Earl Barker, who also worked for Stewart, and Barker's wife bought out Stew- art in 1971 and changed the name to Carthage Sheet Metal Co. In September 1980 the Faskens and the Bark- ers set up Carthage Home Heating and Air Conditioning, the nonunion company, next door. In September 1981, Faskens bought out the Barkers' interest in Carthage Sheet Metal, and the Barkers bought out the Faskens' in- terest in Carthage Home Heating. Prior to September 1981 Barker's wife had served as president of Home Heating, and P. Fasken was the secretary-treasurer. Fasken indicated that Union Business Representative Tindell had been at the Carthage facility when it and the nonunion company were being operated side by side by the same owners, and the Union had never made a claim 66 Fasken said he had a line of credit under the name of Carthage per- sonally guaranteed by him with a bank in Carthage. He also said he had a $100,000 loan personally guaranteed by "our farm." Both the farm and Faskens' checking account were held jointly. 57 Another job in Pittsburg, Wendy's, was personally bid by Fasken and performed by Sheet Metal sometime in 1984 It is unclear whether Fasken bid this job for Carthage or Sheet Metal 58 Fasken acknowledged that he had not terminated a Carthage em- ployee for low productivity and had not asked the Union for skilled sheet metal workers He also acknowledged that he had not warned either Bud Barkley or Steve Anderson regarding their productivity sa Fasken mentioned school jobs in Hollister and Ozark, Missouri, as recent bids he had made for Carthage CARTHAGE SHEET METAL CO. 1265 that the latter should be required to comply with the Union's collective-bargaining agreement. Fasken ac- knowledged that after he (and his wife) bought Carthage Sheet Metal, the Company had employed nonunion workers. Mark Simpson was one of such nonunion em- ployees (who had once worked for Home Heating), and he had "made it very plain to [Fasken] that he was not interested in joining the union at all." Fasken said he re- hired Simpson in April 1982 and stated that "he didn't force him to be in the unior," or apply the collective- bargaining agreement to him. Regarding the April 1982 meeting held at Carthage's facility, attended by Carthage employees and Tindell, Fasken thought the meeting had been originally called because he had fired the union steward, Karl McDaniels. Faskens said he was told by the new steward, John Howell,60 after the meeting that the nonunion mem- bers'81 employment at Carthage was discussed. Said Fasken: A. Well, [Howell] told me, he said, "I've got it worked out and as long as we just kind of keep a low profile with these non-union people, I can keep the lid on it." He said, "They're going to let all of us continue to stay here and work." Q. (By Mr. Jones) And did you ask him what he meant by keep a low profile on those people? A. Well, yes. He told me, he said, "We need to keep the non-union people out of the way from the shop." He said, you know-the-he was very wor- ried that they were going to be working but he said, "Just kind of keep a low profile on them and keep them out on some of these outlying jobs."82 Fasken stated that Tindell did not report to him the outcome of the meeting. It was Fasken's understanding at that time, he said, that the union contract did not apply to the nonunion employees. Fasken testified that in early February 1983 his nonunion employees were Mark Simpson, Wayne Darrow, Ed Navarro, and Steve An- derson. His union employees, he said, were Harold Bar- kley, Frank Navarro, and John Howell. According to Fasken, Howell told Fasken that he was going to meet with Tindell on Friday night (February 11, 1983) and that "[it] looks like we're in for some prob- lems." Fasken said the "problem" was Fasken 's use of nonunion people at Carthage. On the morning of Febru- ary 14, according to Fasken, the three union employees came to his office and informed him that "you've got to fire those people or we're being pulled out."63 When Fasken responded that he could not fire the nonunion 60 Fasken said he was unsure whether Howell was made steward at this meeting or at a later time Fasken said he considered Howell as a spokesperson for his employees in any event. 61 Fasken said he used nonunion workers to reduce his costs thereby enabling him to compete with other predominantly nonunion contractors in the area 82 Such testimony was not received for the truth of the matter 63 In a letter to Zahner, the representative of the Contractors' Associa- tion (G.C Exh 18), Fasken stated that the three union workers quit Carthage on February 13, 1983 employees, the three packed up their belongings and left the premises. 64 Additionally, Fasken testified that he did not attend the arbitration meeting at which Zahner, representative of the Contractors' Association, was present. Fasken said he talked to Zahner by telephone and told him he would not "waste my time going to Springfield." Fasken again claimed that he was not aware of Carth- age's membership in the Sheet Metal Contractors' Asso- ciation. He stated that he had not been invited to a meet- ing of the Association and had never received a member- ship certificate, a copy of the bylaws, constitution, or ar- ticles of association from SMACNA. Further, Fasken stated that the Association had never asked him ques- tions regarding collective-bargaining provisions or pro- vided copies thereof; that it never gave him information concerning special negotiated rates for separate counties; or provided him with representation before any arbitra- tion committee. Also, Fasken claimed he never received from SMACNA any financial reports or information on the annual audit and was neither permitted to vote at any Association meeting nor participate in the Association's selection of a bargaining committee. Fasken said he also never received information on how the Association pur- ported to represent his interests. Fasken recalled that at the settlement meeting held on September 9, 1983, he specifically stated that he did not want the Association or its head official, "Bud" Fairchild, a Carthage competi- tor, to represent Carthage. Fasken testified that between the time the three union members quit Carthage in February 1983 until the settle- ment conference on September 9, 1983, he had five em- ployees-Mark Simpson, Wayne Darrow, Steve Ander- son, Ed Navarro, and George Leishing-working for him, all of whom he said were opposed to the Union. Fasken said he was aware of these employees' feelings toward the union when he signed the settlement agree- ment on September 27, 1983. Fasken stated that Carthage never filed an application with the Secretary of State of Kansas to do business in that State and that he never considered having Carthage authorized to do business there.65 Fasken maintained that Carthage had done only a limited amount of work in Kansas. When signing the settlement agreement on September 27, 1983, Fasken said his intentions were to "put the company back together and make a go of it." But, he said, "It just didn't work." There were financial prob- lems, but the first problem encountered was the fact that "everybody just quit" because they did not want to be represented by the Union. He implemented a financial core plan that George Leishing and Steve Anderson took advantage of in order to keep working at Carthage. The other three workers, Mark Simpson, Ed Navarro, and Wayne Darrow, still refused to return under this ar- rangement, however. Fasken denied that he fired them or that the Union requested they be fired. He did, how- 64 Since that date, of the three only Harold Barkley returned to work at Carthage (about October 10, 1983) 65 Fasken testified that he first learned of the authorization require- ment "after we got into some litigation." 1266 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD ever, have them sign statements to the effect that they were voluntarily resigning rather than join the Union, to protect himself. Fasken acknowledged that he could have asked for people from the Union's hiring hall, but he said he con- sidered the individuals who had previously been sent out as "pretty sub-standard mechanics." Fasken stated that Sheet Metal had completed some projects started by Carthage because he had learned he was not authorized to work in Kansas and also because of a shortage of manpower. It was also his understand- ing, he said, that the jurisdiction of Local 36 stopped at the Kansas line. Concerning the invoice on the Newman job (G.C. Exh. 24), Fasken said that the project was both bid and performed by Sheet Metal and that Gwen Slater, his secretary, was in error when she sent a letter stating that Carthage had bid the job, but that it had been com- pleted by Sheet Metal. Fasken said he bid the job for Sheet Metal instead of Carthage because his competition was from other nonunion contractors and he thought Carthage would not be able to realistically compete with them. He said bidding for Sheet Metal in no way harmed Carthage because Carthage would not be pursuing projects in Kansas where it was not authorized to do business. Fasken testified that Sheet Metal and Carthage have kept separate financial records and insurance policies and that both have separate labor policies and management. According to Fasken, he had managed Carthage's labor policies and he would "suppose" Patty had managed the labor policies at Sheet Metal. Fasken stated employees have not been transferred back and forth. He denied ever doing any hiring and firing for Sheet Metal, adjusting grievances or directing the work force for it, and he ac- knowledged that the last union benefit report was filed in January 1984 (for the month of December 1983) because of financial problems. Testifying about his February 7, 1984 letter to the Union (G.C. Exh. 27), Fasken said he was having severe financial problems at the time and had sent the letter be- cause he had no choice but to rescind the Union's con- tract. He stated that after signing the September 1983 settlement, he had only the three employees-Leishing, Anderson, and Barkley-and a majority of them did not want the Union to represent them. The only response he got from the Union, he said, was a request for "a ton of information" (G.C. Exh. 29). He said he tried, with his attorney's help, to meet with the Union at his lawyer's office and had not refused to provide information. The Union, he said, however, had rejected all proposals to meet with him in this attorney's office. On April 11, 1984, Fasken filed for reorganization under Chapter 11 of the Bankruptcy Code. Fasken testified that he laid off Steve Anderson and Harold Barkley around May 1, 1984, because, they had caught up on the two projects that the Company had been working on-Reverse Osmosis in Nevada, Missouri, and Aurora Hospital in Aurora, Missouri. 66 86 Fasken denied firing Barkley He said George Leishing, the service technician, remained employed due to the demand for service work at that time About May 3, 1984, Fasken sent Anderson, who had dropped by to see about any work, to the Aurora jobsite to perform some work that had "needed to be done." About the same time Barkley also stopped by attired in sporting clothes. Fasken told him he was welcome to join Anderson on the Aurora site (later denied by Bar- kley). Fasken stated that Barkley declined, saying he had a date to play racquetball. On May 18, Fasken said he contacted Barkley concerning work on the Reverse Os- mosis job but was told by Barkley that he was working on a steady job in Springfield and "would probably be there until the end of the year." Fasken denied that he ever discriminated against Barkley because he would do additional work in the evenings and showed greater in- terest in obtaining work. On cross-examination by the General Counsel, Fasken said he hired nonunion employees because of their great- er freedom in work schedules and the reduced total labor cost. He conceded that he paid Wayne Darrow and Mark Simpson union scale wages, but he said they turned out a greater amount of work. Fasken denied any knowledge of ever being vice presi- dent of SMACNA or discussing this possibility with Tom Powell, a fellow contractor, although he agreed there were occasions when the two did discuss general business matters. Fasken claimed that although he was aware of his employees' antiunion sentiments before he signed the settlement agreement, he said he felt he might be able to persuade them to join if it meant being able to continue to work at Carthage. When the Union was dis- cussed at a meeting at his home after he signed the agreement, Fasken said he told those present that the union initiation fee would be approximately $400. Fasken denied offering to make loans to his employees so they could join the union because, he said, "I couldn't afford it.,, Fasken claimed he could not recall what type of litiga- tion problem arose that prompted him to call his attor- ney in late 1983 and learn that Carthage was doing busi- ness illegally in Kansas. He also could not recall when Carthage stopped performing work in Kansas, or wheth- er he gave the bid for the Newman job to "Bud" over the phone or in person, or whether Bud contacted him or vice versa. Fasken stated that he felt that Bud had a misunderstanding about who was performing the work at Newman's so he asked Gwen Slater to send the memo (G.C. Exh. 24) straightening him out. Fasken said he tried "to keep everything very definite" because of the "possibility for a misunderstanding when I'm bidding work for both companies." Fasken thought that he had stopped bidding jobs for Carthage in Kansas around Oc- tober 1, 1983, and that he began bidding jobs for Sheet Metal around the same time. Fasken said Carthage was in serious financial condition at the time of the trial, but he still hoped to "make a go of it." Fasken testified that he received a call about work from Larry Rosenbaum, his contact at the Reverse Os- mosis project in Nevada, Missouri, on May 18. Fasken said he called Steve Anderson on the 19th (he said he could not reach him or Barkley on the 18th) and told CARTHAGE SHEET METAL CO. 1267 Anderson about the work. Anderson told him that he was temporarily tied up on another job so Fasken said he finished up the Reverse Osmosis job himself. According to Fasken, the last time a sheet metal worker was em- ployed by Carthage was the first week in May 1984. At the time of the trial, Carthage had no jobs, although Fasken said he was "negotiating a couple of different projects." Therefore, at the time of this litigation, the only Carthage employees were Fasken and Gwen Slater. 67 On cross-examination by the Charging Party Union, Fasken said he could not recall having an SMACNA plaque at the Carthage facility (contrary to Tindell's tes- timony) or receiving an SMACNA newsletter or mag- zine. Fasken acknowledged that lie was aware at the set- tlement conference on September 9, 1983, that Paul Fair- child was president of SMACNA. He denied knowing at the time, however, that by signing the settlement agree- ment he authorized SMACNA to negotiate on behalf of Carthage for the next union contract.68 According to Fasken, Harold Barkley was a commer- cial journeyman who was paid the commercial journey- man's rate . Fasken believed that Barkley did not go through the Local 36 apprenticeship program but said that Barkley "wouldn't agree to work on any residential work or draw any residential money," which Fasken stated "was one of the problems that [I] had with Bud." Fasken's understanding was that after 4 years of work by an individual, a contractor had no choice but to pay him the commercial journeyman rate regardless of whether the contractor felt the person was qualified as such. Fasken noted that Carthage had employed apprentices in the past, and he was aware of the apprenticeship school in the area, although no Carthage employees had ever been sent there for training. Fasken testified that he and Wayne Darrow had had a conversation with Harold Tindell around 1980 about Darrow becoming a commercialjourneyman. According to Fasken, Tindell gave him the impression that an indi- vidual had to be 25 years old or younger in order to get into the apprenticeship program, the first step in becom- ing a commercial journeyman. Thus, the implication was that because Darrow exceeded age 25, he was therefore precluded from ever becoming a commercial journey- man.69 Fasken, however, denied telling Darrow that the Union would not let him get a commercial card. Fasken did not recall Tindell calling him about the removal of Darrow's name from the Union's benefits report or Tin- dell asking him to check into Darrow's union suspension. Fasken also said Frank Navarro got his commercial card 4 or 5 years after he began working at Carthage in 1974 as a service technician. Fasken thought Navarro began his employment at Carthage when he was 22 to 25 years old. 87 Fasken explained that even though Carthage had no current projects "there's still a lot of paperwork" to be done. 68 Fasken claimed that he "probably " signed the contract without un- derstanding what it meant He said he recalled he would not be required to be a member of the Association chapter 69 Fasken acknowledged that he knew "exceptions to that rule have been made." After reviewing letters sent by the Union demanding payment of Carthage's delinquent benefit contributions (C.P. Exhs. 3 and 4), Fasken acknowledged that he did not explain to Tindell that there were some nonunion employees he was not reporting. Fasken pointed out that he felt he did not have to explain this situation to Tindell because he thought "he was pretty well aware of what we were doing there." Fasken testified that he told Tindell that Fasken's wife Patty and Earl Barker's wife had established Carthage Home Heating next door to Carthage. He said Tindell told him that the existence of this nonunion shop would cause Fasken and Barker to split up their partnership, and Fasken conceded that he was "exactly correct" about that. Fasken stated that after signing the settlement agree- ment he never called the union hiring hall for any refer- rals and, in fact, had not called for a referral for several years. It was Fasken's understanding that, according to the hiring hall procedure, he did not have any choice about who would be sent out to work. Fasken thought that only if the worker proved unsatisfactory could he call for a replacement. Fasken said he received a letter from "Mr. Zimmer- man" but could not recall having any phone conversa- tions with him regarding Steve Anderson's getting into the apprenticeship program. Fasken acknowledged that the litigation with the Union had brought to his attention that Carthage was not authorized to do business in Kansas. He denied, how- ever, that this information came about as a result of in- quiring into how a sheet metal contractor could be au- thorized to do business in Kansas while litigation was going on with the Union. Additionally, Fasken indicated that all his nonunion employees participated in a group health insurance plan with Southwest Agency that also handles Carthage's other insurance. But Fasken said he did not know whether those ex-Carthage employees now working for Sheet Metal were still in the same program. On redirect examination, Fasken stated that Barkley and Anderson are still employees of Carthage, but are presently on layoff status. Patricia Ann "Patty" Fasken is the sole owner of Sheet Metal Products located in Pittsburg, Kansas, where she said she had been employed since October 7, 1983. She is also the president and secretary-treasurer of the corpora- tion. Fasken described the business of Sheet Metal as heating, cooling, and ventilation work. Prior to Septem- ber 30, 1983, she was the secretary (and probably treas- urer too she thought) as well as a director of Carthage Sheet Metal. She was paid a salary by Carthage. She said she did not recall doing any work at Carthage during the last week in September 1983. Prior to that time, howev- er, she did "whatever was called for," which included bookkeeping, office work, and, if Fasken were unavail- able, telling the workers what projects to do. She said she would also cut materials in the shop if necessary. "I have been associated with this since 1971," she said. Fasken testified that after October 1983 she assisted Gwen Slater with the preparation of Carthage's payroll "for a while" until she learned the job. Fasken acknowl- 1268 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD edged, however, that it was her handwriting that appears on Harold Barkley's checkstubs from Carthage during October, November, and December 1983 (G.C. Exh. 37). She explained that she would have performed such jobs as writing checks if Gwen Slater were not around. Fasken also acknowledged her handwriting appears on checkstubs of Carthage checks issued to Barkley in 1984 (G.C. Exh. 38). Fasken stated that the decision to open her sheet metal company was made on September 28, 1983. She ex- plained that she had been unhappy with the situation be- tween Carthage and the Union "when the three men walked out." She stated that the Union had lied to her husband, and she "did not like" the way he was treated. She added that she had told only Fasken on September 28 of her decision, but she could not recall the time or place of this discussion. Said Fasken: "I told my husband I did not want to be a member of Carthage Sheet Metal anymore. I wanted to start my own company." She was unhappy, she said, over the fact that Carthage "was going back union." She said she had not discussed the possibility of starting up another company prior to her decision. According to Fasken, that same day (Septem- ber 28, 1983) she drove to Pittsburg, Kansas (a 30-minute drive), located a suitable building, and made a "verbal" month-to-month lease of $150 per month.70 On the fol- lowing day, September 29, she began moving equipment (a former, brake and glue equipment) into this building with the aid of Mark Simpson, Wayne Darrow, George Leishing, and Steve Anderson.71 She said she called each of these men on the evening of the 28th and offered to pay them "the equivalent to a net amount they nor- mally received on their paycheck" for helping her move and cleaning up the shop. Fasken said she did not speak to these men at that time about working for Sheet Metal Products, but she said she was aware that all had quit Carthage on September 27. Fasken identified copies of W-4 forms signed by Sheet Metal employees and Sheet Metal's payroll records for 1983 and 1984. She identified certain employees listed as former Carthage employees (Ed Navarro, Wayne Darrow, and Mark Simpson) and others who were not- Jess Hettinger, Mark Simpson's brother-in-law; Kevin Houser, Wayne Darrow's cousin; and William Weber, Mark Simpson's half-brother. These three latter employ- ees quit Sheet Metal between February-May 1984, and Ed Navarro, Darrow, and Simpson have not worked at Sheet Metal since June 1984. Fasken said she intended to recall all of these individuals as soon as more work became available. Another document, General Counsel's Exhibit 41, was identified by Fasken as a list of the checks she wrote on September 29 to those who helped her move equipment 70 Said Fasken "I decided that Pittsburg was a nice size town and would be a good place for me to go , and Kansas is a right-to-work state, it's out of Local 36's jurisdiction " 71 Mark Simpson testified that neither Steve Anderson nor George Leishing helped move equipment or clean up for Fasken I credit her tes- timony that Simpson and Anderson as well as Simpson and Darrow helped her set up shop in Pittsburg and set up her facility in Pittsburg.72 According to Fasken, Sheet Metal is licensed to do business in both Kansas and Missouri, and there are no other officers and directors of Sheet Metal besides hereself. She said she initially invested approximately $2000 in Sheet Metal- $1500 from her return of Carthage stock and $400 from the joint checking account she had with her husband. The money, she said, was mainly used for payroll and telephone installation. For her share of Carthage stock she received $5000 worth of equipment. Fasken's October 1983 check record ("Item 10" and "Item 11 " dated October 10 and 11) refers to a $3000 loan she received from Carthage and a payment of $1500 to Carthage .7 3 Fasken said the $3000 was a loan to her that was paid back to Carthage within 30 days. Fasken testified that she performed the clerical work, including payroll and bookkeeping, for Sheet Metal, but that on occasion Gwen Slater would assist her. She said Mark Simpson supervised the work performed by the sheet metal workers. He was also in charge of staffing the jobs and determining how many hours should be spent on them. Fasken stated that Simpson discussed these details with her and that the two of them made a "mutual decision" about the work. Fasken indicated some familiarity with pieces of sheet metal equipment used by her company and stated that it did not own any vehicles itself but leased two trucks from Carthage. She said that all Sheet Metal's materials inventory is stored at Sheet Metal unless something had been shipped to Carthage by mistake. Fasken stated that Sheet Metal's accountant is Dave McGuire and Co. (same as Carthage), its bank is City National Bank in Pittsburg, and its insurance agency is Southwest Agency (also the same as Carthage). According to Fasken, Sheet Metal pays Mark Simpson $14.01 per hour, Ed Navarro $10 per hour, and Het- tinger $7 per hour. She thought Simpson and Navarro had been making the same rate of pay at Carthage before they quit. Fasken stated that she does not furnish any benefits to Sheet Metal employees, and Sheet Metal has not recognized the Union or adhered to the Union's col- lective-bargaining agreement. Fasken identified a letter from Attorney Don Jones on behalf of Sheet Metal to Union Official Tindell and As- sociation Official Paul Fairchild (G.C. Exh. 42) an income record of Sheet Metal from September 1983 through June 1984 (G.C. Exh. 43). Jones' letter, dated March 30, 1984, states, among other things, that he has learned that the Union is claiming a collective-bargaining relationship with Sheet Metal and expresses an intention not to be a part of any multiemployer bargaining. Fasken explained two $5000 entries made in her company's income record as follows: Q. The first entry on that page dated March 2, 1984, lists $5,000 received by Patricia Fasken. Could you describe what that is? 72 The document listed George Leishing, Wayne Darrow, Mark Simp- son, Steve Anderson, and Ed Navarro. 92 Fasken said she could not recall what this $ 1500 was for She char- acterized it as "just money paid to Carthage Sheet Metal " CARTHAGE SHEET METAL CO. 1269 A. That would be-it's a check I wrote to the company that would go into Sheet Metal Products account. Actually it's money that Carthage Sheet Metal is loaning Sheet Metal Products. Q. I see. A. That's what that is. Q. How did the money get from Carthage to you before you put it into the account, or did the money go direct from Carthage to Sheet Metal? A. I don't remember. Q. I see. Do you recall the terms of that loan? A. Well, it may be repayment. ][ know Sheet Metal Products on occasion pays them a line of credit for Carthage Sheet Metal, and that's what I'm assuming it is. I don't know. Q. Are these records maintained where you keep track of the loans and the money going back and forth? A. You will find it in the check register, I would imagine, in your deposits. We keep everthing on the money back and forth-it's accounted for. Q. I see, but there are no separate loan agree- ments as such? A. No. Q. I see. On the following page, the page entitled "Sheet Metal Products, Income-February 1984," I notice that there's another $5,000 entered on Febru- ary 27, 1984. Do you know, can you explain what that is? A. That's what-when I said evidently Gwen has helped me because I don't know what that means unless it's also money received from Carthage Sheet Metal to Sheet Metal Products. Since it's under the account total and under the column received, that would be my assumption on that. Q. What was the procedure that you utilized when you would need a loan from Carthage Sheet Metal, how did you go about securing that or ob- taining that? A. Well, either-Ray would either have a check written to Sheet Metal Products or to me, and then I could endorse it over to Sheet Metal Products. Fasken testified that she would. inform her husband if she needed money for Sheet Metal whenever the occa- sion arose. On examination by the Charging Party, Fasken stated that she was present, along with her husband, during a phone conference between the Union's attorney and At- torney Don Jones regarding the settlement agreement of September 27, 1983. At that time "it did look like" Carthage and Local 36 were going to settle all of their claims. She denied that she had decided to open another shop prior to or at the time of the settlement agreement. Rather, she stated that she made the decision "on the day of the 28th" of September and told her husband that day that she "wanted to start her own company." Fasken acknowledged that she "had never been pro- union" even before the February 1983 walkout by three employees at Carthage, but she denied that she had been involved in her husband's decision in the spring of 1982 to start hiring a nonunion work force. She also denied conferring with Carthage's attorney before she and her husband went to Pittsburg on September 28, 1983, to look for a suitable location for her shop. Fasken said that her husband accompanied her in order to assist her with "the basics" regarding the type of a building she would need. However, when they found a possible building, Fasken negotiated and finalized the rental arrangements while Fasken remained in the car. That same day, she and her husband made the decision on which pieces of equipment would be moved from Carthage to the Pitts- burg shop. According to Fasken, she paid those workers who helped her move the equipment on September 29, 1983, that same day, and she paid them the equivalent of 1 week's net wages in advance for their services. Fasken said that while her husband sat in the car she personally opened a bank account in Pittsburg on Sep- tember 28 with a $1500 check made payable to her and drawn on Carthage Sheet Metal. Four hundred dollars in cash was deposited a day or so later. The name "Sheet Metal Products" was one that she had thought of earlier for Carthage, but her husband and Barkley had decided on their own what to call Carthage. As far as she could remember, Fasken signed the arti- cles of incorporation for Sheet Metal Products on Octo- ber 4, 1983, in an attorney's office in Columbus, Kansas. Fasken confirmed Fasken's earlier testimony that he re- ceives $200 per month as a consulting fee for doing the bidding work for Sheet Metal. Fasken stated that she made separate phone calls re- garding the equipment move to Leishing, Darrow, Simp- son, and Anderson on September 28 and denied that these individuals had been at her home that evening. She said they did not ask her why she was starting her own company and she did not tell them. She stated: "I've had my company before."74 During the setting up of the Pittsburg shop, Fasken su- pervised the operations "part of the time" but also relied on the expertise of Simpson and Darrow.75 She denied Fasken ever participated in the setup operation at Sheet Metal or that Darrow, Leishing, Anderson, and Simpson ever asked her about the future of Carthage Sheet Metal when she phoned them on September 28. Fasken explained that while the Sheet Metal Shop was being set up on September 29 she was approached by the men assisting her as to the possibility of employment at her facility. She discussed the exchange as follows: Q. Do you recall explaining to them what the terms of their employment would be? A. They knew it was-well, I told them again nonunion shop, which, you know, that was fine with them. Q. When they came up to you and said we'd like a job, that would have been the time you told them it was a nonunion shop? 74 The other company she referred to was Carthage Home Heating & Air Conditioning, a nonunion shop located next door to Carthage She said that company had performed residential as well as some light com- mercial work She and her husband sold their interest in the company in September 1981 75 Fasken indicated that both Simpson and Darrow are fully proficient sheet metal workers 1270 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD A. Well, it was a matter of discussing the job and wage, and it was all-I would just generally discuss it with them, I'm sure, when they were asking about it. I don't recall any definite sentences I have said to them, but they knew that it was not going to be any union shop before they ever went to work. Q. Before they went to work? A. Before they went to work for me, they would know it was going to be a nonunion shop. Q. Well, how would they know that? A. Well, I was going to say, if they would ask-I don't remember any definite conversations, but we had to have had some general conversations of em- ployment; and when you're employing someone, you tell them how much per hour you will pay and what are or are not the benefits of that employment. That would only be a normal thing to tell. Q. And one of the things that you have a general recollection of coming up was that this was going to be a nonunion shop? A. It's a right-to-work state that- Q. You explained that to them? A. Yes. Q. Was it during that first week that you were setting up the shop that you actually hired the em- ployees that were going to work beyond setting up the shop? A. I believe their W-4's say October 7, and I be- lieve that would be the day I hired them. Harold Tindell said he had been the business represent- ative for Sheet Metal Local 36 for 13 years. His duties call for him "to police collective bargaining agreements and to enforce our constitution." Tindell described Sheet Metal Contractors of Southwest Missouri Area as an as- sociation of member contractors formed to negotiate with the Union on collective-bargaining agreements. On voir dire examination by Respondent's counsel Tindell testified that he had helped negotiate every contract with the Association since 1952. Tindell conceded he had never seen a copy of the Association's bylaws. He denied that all the negotiations only took place between himself and Paul Fairchild but admitted that the most recent ne- gotiations involved an informal meeting with three union people (including Tindell) and Fairchild. Tindell ex- pressed the view that the Association consisted of 13 em- ployers that employed approximately 140 employees. Ac- cording to Tindell, the Union and the Association have negotiated collective-bargaining agreements for approxi- mately 22 years for a bargaining unit that consists of "the employees of the members of the Association that belong to the union." Tindell explained that once an agreement was reached and ratified a master copy of the contract was signed by the Union and the Association. Then a copy would be signed by each individual contractor rep- resented. Tindell said that the negotiating committee for the As- sociation tells the Union which employers it represents in negotiations "first thing." He stated that Carthage has signed Association agreements since approximately 1971 and that it was his understanding that the addendum to the most recent agreement (G.C. Exh. 7(b)), negotiated by Local 36 and SMACNA, is still in effect. Tindell defined a "free zone" as "geographical area where the membership has agreed to give up their ex- penses and travel time and subsistence pay." He said there were free zones existing between the 40- and 60- mile radius of circles drawn around Springfield and Joplin, Missouri. Pittsburg, Kansas, he said, falls within Joplin's free zone.76 Tindell stated that there is a residential agreement that covers heating, air conditioning, service work, and archi- tectural work performed on residential dwellings. Resi- dent wage rates are 60 percent of the commercial jour- neyman's wage rate, which is established through negoti- ation with the Association. He added that not all of the SMACNA contractors had residential agreements. Tin- dell stated that all 140 employees in the bargaining unit are union members because he enforces the union-securi- ty clause contained in the Association agreement. Tindell identified two documents (G.C. Exhs. 44 and 45) as monthly remittance forms submitted by the Asso- ciation members on their employees for the months of November and December 1982. He explained that these forms also contain the names of nonbargaining people and, contrary to Fasken's testimony, stated that a "T" on these forms indicated "terminated." The reports cover 10 different funds, including SASME or a local industry fund which, according to Tindell, are dues paid by the employer (at the rate of 12 cents per hour) to SMACNA. Tindell also identified another document (G.C. Exh. 46) as the list of union members of SMACNA participants during November and December 1982 that, he said, was prepared from the membership cards kept in his office. To his knowledge, according to Tindell, Carthage had paid into the local industry fund since it began signing agreements in 1971, and Carthage had not submitted any remittance reports or paid any money into any of the funds since December 1983. Regarding the April 19, 1982 meeting at the Carthage facility, Tindell recalled events as follows on direct ex- amination: Q. Approximately what time did that meeting occur? A. Just a little after 9:30, 9:30 or just shortly thereafter. Q. In the morning. A. Yes, sir. Q. Do you recall who was present at that meet- ing? A. Yes. There was Ray Fasken, owner; the em- ployees was John Howell, Frank Navarro, Bob Ed- wards, Wayne Darrow, and Karl McDaniel was there and Mark Simpson. Q. If you recall, why did you go out to the facili- ty on that date? A. I had a grievance that Mr. Fasken had fired my steward, Karl McDaniel. 76 According to Tindell, due to complaints from contractors, the Union in 1978 decided to allow Jophn 's free zone to extend into Kansas, Oklahoma, and Arkansas. CARTHAGE SHEET METAL CO. 1271 Q. Could you tell us what was said during that meeting and who said it? A. Well, when I got there, I come in off of the street entrance, and there wasn't nobody working. Everybody was standing around, some of them sit- ting on benches, and everybody was kind of mum- bling and talking. And Ray came out of the office door, and he was very hostile. I'd never saw Ray that mad-we'd never had that kind of atmos- phere. . . . Like I said, Ray came out of his office, and I could tell he was really mad, and he says, "I'll tell you one Goddamn thing, this man"-pointing to Mark Simpson-"is not going to join the union as I'll lock the big ass door first." And I said, "Now, Ray, there's a union security clause." He said, "I'll lock the doors first," and just kept saying that, and finally I asked him, I said, "Ray, could I talk to the people a few minutes," and he says, "I don't know, and do you know whose property you're on?" I said, "Yes, I know whose property I'm on, and if you'd like, we'll go out on the side- walk." So he finally agreed to give us a few min- utes and him and Mark Simpson went back in the office. And we didn't get but just a few minutes, the best I can remember, because he came back out, and I reiterated again that we did have union secu- rity clause, and he reiterated that he would lock the doors first before he'd make this man join the union. Finally I said, "Well just do what you got to do," and then somebody said, I don't know-"Well, just let him lock the doors for a couple days and let him decide what he wants to do, and Ray agreed to that, and I left shortly thereafter. It was about almost 12 o'clock noon when I left. Q. (By Mr. Zavelo) Let me direct your attention now to approximately two days later. Did you have a telephone conversation with Ray Fasken on that day.? A. Yes, I did. Q. Approximately what time did that conversa- tion occur? A. I believe it was in the middle of the morning. Q. Did you call Mr. Fasken or did he call you? A. He called me. Q. To the best of your recollection, what was said during that telephone conversation and who said it? A. Well, he says, "I think we're going to open it back up." He said, "I think we've got it, I've got it, I've calmed down and I've got it ironed out," and I said, "I'm glad of that," and he said, "Now, Mark Simpson is going to be doing his own thing. He's going to be selling furnaces on his own and putting them in. He's going to order his ductwork from Carthage and we're going to build it for him," and he says, "He won't be driving no Carthage trucks with Carthage names on them and he won't be af- filiated with Carthage in any way." "In other words, he's doing his own thing," I said, and he said, "Yes, that's right," and that's pretty well the end of the conversation. Tindell testified that he had another conversation with Fasken about January 25, 1983, at the Carthage shop. This time, he said, Fasken was in a better mood and mentioned to Tindell that he "could use some cheaper, nonunion help." Tindell said he replied that there was no way he could do that. According to Tindell, about Feb- ruary 9, 1983, he was informed by an unemployed union member named Rex Allen that he saw Mark Simpson working in the Carthage shop.77 Based on this informa- tion, Tindell said he had a meeting with several Carthage employees on February 11, 1983, in a Carthage coffee- shop regarding the situation.78 Tindell related the events as follows: So as we was getting ready to drink our coffee, why, Brother Barkley says, "I'm going to tell you one thing. We're going to stay with the union," and I said, "Well, that's good," and I said, "I want to ask you fellows something. Is there indeed non- union people working up there?" and they said, "Yes, there is. There's Mark Darrow-Wayne Darrow and Mark Simpson," and they said, "Ray intends to keep them." I said, "Well, that don't seem quite right, and when I get back home, I'm going to call our attorney and see just what is right," and one of them said-I don't remember which one-that they was going to talk to Ray Monday morning and they was going to get it straightened out or they was going to quit, and I said, "I want you to understand one thing, I can't tell you to quit; and if you indeed do quit and Ray Fasken wants more people, then I'm going to send him more people." Tindell identified a letter he sent under date of Febru- ary 22, 1983, to Fasken informing him of the Union's in- tention to file a grievance with the Local Joint Adjust- ment Board. Carthage was not paying fringe benefits or utilizing the hiring hall (G.C. Exh. 47). Contrary to what is asserted by Fasken in a letter dated March 9, 1983 (G.C. Exh. 16), Tindell denied that he had ever agreed to an oral modification of the union contract. Tindell also identified a document dated July 1, 1983 (G.C. Exh. 48), as a letter he received from Sheet Metal Workers' International General President Edward Carlough stating that a grievance hearing had been held by the Joint Ad- justment Board and that Carthage had been assessed $10,500 in damages.79 Tindell testified that on two mornings in early Novem- ber 1983 Fasken called him concerning the procedure for getting Steve Anderson into the apprenticeship program. Tindell said he gave Fasken the requested information, 77 This testimony and the statements that Tindell said were made to him later at the Carthage coffeeshop were not offered or received for the truth of the matter. 78 These employees were Harold Barkley, Frank Navarro, and John Howell Other union persons present were Robert Shank, Dennis Tmdell, Tom Womack, and Rex Allen 79 These damages were eventually set aside in the settlement agree- ment of September 27, 1983 Also, G C Exh 49, a letter from Carthage's Attorney Jones to Umon Attorney Singer dated October 8, 1983, con- cerning the resignation of Carthage employees, was stipulated into evi- dence. 1272 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD including the age limit of 17-25. Additionally, according to Tindell, he wrote a letter to Fasken requesting infor- mation regarding the other company the Faskens had re- portedly opened up in Kansas (G.C. Exh. 29), but he claimed that the Faskens never provided him with any of the requested information. Tindell also stated that during 1984 Carthage never requested the Union to bargain over or agree to any midterm modifications of the cur- rent collective-bargaining agreement or any other collec- tive-bargaining agreement. On examination by the Charging Party Union's attor- ney, Tindell testified that G.C. Exh. 22, the settlement agreement, shows the free zones in the form of a map that has been included in each successive contract since 1978. Tindell stated that the free zone around Joplin, Missouri, includes Pittsburg, Kansas, which is part of Local 2's jurisdiction. He explained that Local 36 and Local 2 are parties to a consensus agreement that allows union employees to work in other States located within the 40-mile free zone radius of Joplin without regarding any expense money to be paid to them by contractor em- ployers. If an employee should be working on a job within a 60-mile radius of Joplin, he would be entitled to $8 per day for gas money "if [he] drove his car in be- tween them two circles." According to Tindell, the Union has no authority to direct how money in the local industry fund is to be spent. The contractors pay their dues to SASMA out of the fund, he said. On cross-examination by Respondents, Tindell testified that he supposed that there was a Board election in 1939 when Local 146 became the representative of both con- struction workers and production shops in the Spring- field area. On April 1, 1976, according to Tindell, Local 146 dissolved. Since that time Local 208 has represented the production shops in Springfield, and the construction workers have been part of the St. Louis-based Local 36. Tindell acknowledged that there was no NLRB or inter- nal election that took place regarding the dissolution of Local 146. According to Tindell, in order to become a commer- cial worker in the Union one must pay the initiation fee of $1400 (100 hours x $14, the current wage rate). Al- though Tindell admitted that he received a copy of the October 8, 1983 letter of Attorney Jones (G.C. Exh. 49) regarding George Leishing and Steve Anderson becom- ing financial core members of the Union, he stated that he personally took no action or provided any informa- tion with respect to it. Any information of that kind, Tindell said, would have come from Frank Miller, the Union's financial secretary. Tindell also agreed that the Union never asked the company to fire Anderson or Leishing. Tindell said the only union member to work for either Carthage or Sheet Metal since September 27, 1983, was Harold Barkley. According to Tindell, the last meeting between the Association and the Union took place on June 11, 1984, to discuss a replacement contract for the one that ex- pired June 30, 1984. Prior to this meeting, a written offer had been presented to Association Representative Paul Fairchild regarding the commercial . agreement, but not the residental agreement. Tindell explained that the resi- dential agreement had expired in April 1984 and had not been renewed. "We let it run from year to year," he said. Tindell stated Fairchild did not make a written pro- posal to the Union at this meeting, and Tindell did not know if any other meetings were scheduled.80 Tindell acknowledged the possibility that other contractors who were part of the multiemployer agreement could work nonunion people and not report them on their reports. Tindell acknowledged receiving letters from Attorney Jones (G.C. Exhs. 11 and 42) stating that both Carthage and Sheet Metal did not want to belong to the Associa- tion and if any contracts were in effect, they were being repudiated. Tindell also accepted the fact that because Carthage did not submit any benefit reports in 1984 it would not have paid anything into the local industry fund that presumably would include Association dues. Tindell, however, declined to agree to that because as no dues were paid to the Association, Carthage and Sheet Metal would not be represented by the Association for purposes of collective bargaining . Tindell responded that he had "turned [the letter] over to our attorney to tell me really what that was." Further, Tindell said he would rely on the Union's attorney to advise him whether a contractor's letter declining representation by the Asso- ciation would take precedence over the Association's bargaining representative, who claimed he represented the contractor. Tindell said he did not recall Carthage or Sheet Metal as being on the list of contractors Fairchild said he was representing at the negotiation meeting on June 11, 1984. Tindell stated that he did not know the procedure for electing the Association's negotiation com- mittee members. He also said the Union pays rent to the Association for the Union's office space and that the building owned by the Association was purchased through the industry promotion funds. Tindell added that union members must pay their own dues as there is no dues checkoff. Tindell said he received a letter dated February 7, 1984, from Respondent's counsel (G.C. Exh. 30) and was aware that Respondent was offering to provide the re- quested information, at Respondent attorney's office lo- cated in Springfield, Missouri. He also acknowledged that it would be easier for him to come to Respondent's attorney's office in Springfield than to go to Carthage for this information. Tindell stated that he could not recall reading a letter dated April 27, 1984, sent by Re- spondent's attorney to the Union's attorney regarding a further offer to provide the requested information, or that as of the settlement agreement of September 27, 1983, all future communication between the two parties was to be between Singer and Respondent's attorney. Tindell acknowledged that Karl McDaniel, a former Carthage shop steward, had been fired in April 1982 and that no grievance was filed regarding the discharge. Tin- dell at first indicated a man named "Kenny" had held the position after McDaniel and then John Howell.81 80 Tindell said that Zimmerman , the business manager who represent- ed the Union's bargaining committee, was in charge of the negotiations. 81 Tindell claimed he could not recall exactly when Howell became shop steward, but he thought it was about 1-1/2 to 2 weeks after McDan- iel was fired However, on cross-examination Tindell asserted that only Howell succeeded McDaniel CARTHAGE SHEET METAL CO. 1273 According to Tindell, Wayne Darrow was a residential member of the Union until August 1982. Tindell estimat- ed that there are currently approximately 15 residential members in Local 36. Frank Navarro, according to Tin- dell, has not worked at Carthage since the settlement agreement of September 1983 When he advised the Union that he did not wish to return to Carthage.82 Contrary to the Faskens' understanding of the hiring hall procedure, Tindell explained I hat when an employer calls the hiring hall he is read the list of possible employ- ees. The employer is permitted to select anyone he wants from the list. Tindell stated that Harold Barkley was placed on the hiring hall list for 1 to 2 weeks before being referred to his current job at Cox Hospital South in Springfield, a job that Tindell thought would last until January 1985. Tindell indicated at first that air-conditioning service- men who work for Association contractors would be covered by the collective-bargaining agreement with Local 36. He said, however, that George Leishing was not covered by the agreement because he was not a member of the Union. But on examination by the Charg- ing Party Union's attorney, Tindell indicated that a serv- iceman working for a contractor who has a Local 36 agreement would be considered as belonging to the Union. Tindell testified that Mark Simpson "took a withdraw- al card" and was no longer a member of the Union. Con- trary to Wayne Darrow's later testimony, Tindell said Darrow had been a residential member of the Union. Tindell said he did not recall Darrow ever asking him to become a commercial member. Tindell also denied that Darrow ever indicated to him that he did not wish to be a member of the Union, but Tindell agreed that Darrow "went suspended." Tindell testified that he found out about Sheet Metal Products around January 1984. 83 He agreed that he was informed by the Kansas Secretary of State that it was Patricia Fasken who was the officer of the corporation and conceded that he did not ask Ray Fasken for any in- formation regarding this new business. He further ac- knowledged that the first time he requested any informa- tion from Fasken was after he had received Fasken's February 7, 1984 letter asserting a lack of majority sup- port. Tindell acknowledged that a few employers have ter- minated their collective-bargaining agreements with Local 36.84 Tindell maintained that he informed Fasken 82 Tindell indicated Navarro was employed by a nonunion employer 83 Tindell claimed he learned of Sheet Metal from a supplier and then said he was told by a union member Under questioning by the Union's attorney Tindell testified he would not have known of Carthage's earlier delinquency from its failure to submit a fringe benefit report for Decem- ber 1983 as such report was not delinquent until January 20. 84 Tindell said he told every contractor, including Fasken, that they could bid the consumer's job for 80 percent of the agreed-on rates This is contrary to Fasken's testimony to the effect that he was told he could bid 80 percent, but heard that Tindell had told a competitor (Hoffman) that he could bid at 70 percent Tindell said that when he makes an ex- ception for a specific contractor he does not send out notices to compet- mg contractors but rather places the notice on "a board" for other con- tractors' information about the free zone around Joplin, probably by mailing him a letter. Tindell acknowledged that he had "author- ity to set the rates" and that he had given permission on occasion to contractors to allow them to bid certain jobs at lower rates than those specified in their collective-bar- gaining agreements in order to be more competitive. On being recalled by the General Counsel, Tindell identified membership cards of six individuals, which he kept on file in his office.85 On cross-examination, Tindell testified that between the time Howell, Barkley, and Na- varro quit Carthage-about February 15, 1983-and the time Barkley went back to work for Carthage about Oc- tober 7, 1983, the only one of those six union members to work for Carthage was Wayne Darrow. Tindell agreed that Darrow had been a residential member of Local 36 until August 31, 1982, but he again denied that Darrow had ever tried to become a commercial member of the Union. As a rebuttal witness for the Charging Party Union, Tindell testified that Local 36 limits its apprenticeship program to individuals between the ages of 18 and 25. On completion of the apprenticeship program, the indi- vidual is considered a commercial journeyman. Tindell explained that an employee could become a commercial journeyman without going through the apprenticeship program "if he finds an employer that will pay him the journeyman wages." Tindell said Local 36 has members who had become commercial journeymen through this method and (contrary to testimony of Fasken, Simpson, and Darrow) he denied ever telling anyone that he could not become a commercial journeyman because he was over age 25. He also stated that to his knowledge no Carthage employees had ever served in an apprenticeship program. Tindell then explained how Barkley became a com- mercial journeyman as follows: The best I remember, he went to work there and worked a week or two and I told him he would have to join the union. I told Ray, and Ray knew it and we told Mr. Barkley, and he was drawing com- mercial wages, he told me. So he told me he went and got a bank loan and paid his intiation fee. According to Tindell, he and Fasken had a conversa- tion at Carthage several years ago regarding Darrow: Q. Okay. And can you tell us what you recall of the conversation? A. Well, Ray asked me-he said Darrow had been wanting to-had been inquiring about being a commercial journeyman and he said, "What will it curtail [sic]?" And I said, "Well, if you're willing to pay him the top wages, as far as the union's con- cerned, that's what it will have to be, and then he'll have to pay a higher rate of union dues and he'll have to pay a higher initiation fee." Q. And what did Ray say? 85 These six members were Wayne Darrow, Frank Navarro, Karl McDaniel, John Howell, Harold Barkley, and Robert Edwards See G.C. Exhs 52(a)-(f). 1274 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD A. He didn't really say anything. He just looked at me like he'd have to think about it or something. Q. Do you have a-you've already testified to this meeting in April of `82 when Ray said he as going to close the doors for several days for every- body to cool off. Do you remember that meeting? A. Yes, I do. Q. At that time did Wayne Darrow make any statement to you-or did he make a statement that you recall? A. Yes. Q. Okay, and what was it that Darrow said? A. Well, after Ray consented to let me visit with his employees for a few minutes, somebody-I don't know who, said, "Do you think he will shut the doors?" And I said, "Well, let me ask you." And I asked each one of them and when I go to Darrow he said, "Well, I don't know whether he will or not, but if he does, I'll probably go with him." Tindell stated that he first became aware that Darrow had stopped paying his union dues when he was notified by the Union's St. Louis office in August 1982. At that time, Tindell claimed he called Fasken by phone and asked him about Darrow's status and was told by Fasken that he would "check into it." After this conversation, according to Tindell, on the next Carthage trust fund report, there was a "T" behind Darrow's name. Tindell stated he was never informed by Fasken or Earl Barker that their wives had established a company called Carthage Home Heating and, contrary to Fasken's testimony, he denied ever telling Fasken that he could have a nonunion work force. Tindell explained the difference between residential and commercial journeymen as follows: Residential jour- neymen are limited to residential dwellings only; they re- ceive wages based on 60 percent of the commercial jour- neyman's wage rate; they pay $24 in monthly dues; and they pay a $150 initiation fee. On the other hand, a com- mercial journeyman can work on any phase of the sheet metal industry (residential and commercial), he pays $40 monthly dues and he must pay a $1400 initiation fee. Tin- dell also stated (contrary to Simpson's later testimony) that Mark Simpson never asked him whether he could become a commercial journeyman. On cross-examination, Tindell explained that Local 36 gets authority to have residential membership from the residential addendum to the standard collective-bargain- ing agreement. This authority, according to Tindell, allows the Union to charge its residential members initial fees and dues. Tindell testified that he had not provided Respondent's attorney Jones with any information regarding the ap- prenticeship program that Jones had requested. Finally, on redirect, Tindell stated (contrary to Fas- ken's testimony) that he had seen a SMACNA insignia on Fasken's office wall at Carthage. But he acknowl- edged that he had not been to Fasken's office at Carth- age since early 1982. Tindell also stated there were about 16 contractor's offices in his jurisdiction that he would visit on occasion. Harold Barkley said he was employed by Carthage Sheet Metal as a commercial sheet metal worker from August 1972 or 1973 until February 14, 1983. Barkley testified that he performed work in several locations in Missouri, Kansas, and Oklahoma. He said he received his daily job assignments from Ray Fasken and normally worked without supervision, although on occasion Fasken would come out and inspect a job. Barkley said he had observed Patricia Fasken performing office duties at Carthage. Barkley stated that he has been a member of Local 36 since 1976 and a member of Local 146, before that. Ac- cording to Barkley, John Howell, Karl McDanlies, Wayne Darrow, Frank Navarro, Bob Edwards, and they were the sheet metal employees of Carthage around April 1, 1982, and all were union members at that time. On February 11, 1983, Howell told him that there was going to be a meeting with Tindell at a coffeeshop that evening. Several persons attended, including Barkley. At the meeting, Barkley said that Tindell had told them that a union member had observed Mark Simpson working at the Carthage Shop and Tindell was going to check into the situation with his attorney. Barkley said he told Tin- dell at that meeting that "no matter how it came out [he] was going to stay in the Union." On the following Monday, February 14, 1983, Barkley said he and the other union members at Carthage had a discussion with Fasken and told him that unless the non- union people were made to join the Union they, the union members, would all quit. When Fasken told them he would not force the other men to join the Union, Bar- kley said he and his fellow union members worked the rest of the day and then quit. Barkley testified that when he returned to work at Carthage on October 10, 1983, he noticed that several large pieces of equipment that were formerly in the shop in February 1983, as well as some Carthage trucks, were missing.86 At the time of his return, Steve Anderson, George Leishing, and Gwen Slater, the secretary, were also employed at Carthage. Barkley said that thereafter he and Anderson would work together on construction jobs. Barkley also said that at this time Carthage was en- gaged in three on-going projects-Broadview Lumber Co. in Carthage, Reverse Osmosis in Nevada, Missouri and Aurora Hospital in Aurora, Missouri. Barkley testified that on October 13, 1983, he had a discussion with Ray and Patty Fasken as follows: A. O.K. On-I guess this was October 13-about 11:30 in the morning I went in to use the telephone in the office to call my wife and tell her that I was going to come home for lunch being as I was work- ing in the shop, and that's when I was told that Carthage employees were not allowed to use the telephone except in case of emergency. Q. Who said that to you? A. Patricia Fasken. 86 Barkley identified the pieces of missing equipment as the brake, the lock former, the power notcher, insulation materials , the insulation table, and "some pickups " CARTHAGE SHEET METAL CO. 1275 [Continuing] So I said, "Fine. You're making out checks, make mine out early because I quit." I was very disgusted because I had been trying to build ductwork all morning and I didn't have the tools that were required to do the work. I went out in the shop and started loading up my tools. Ray come out and said, Bud, you know, what's the matter, settle down; and I said, Ray, I cannot do you a good job. I said I'm wasting my time down here. I cannot build the ductwork you need built without the tools to work with. He says I will get you the tools to work with, and he says back when I was having all this trouble with the union, I wasn't sure that Carthage Sheet Metal was going to be here, and he said my wife has bought my-or I bought my wife's share of the company out, and I used the equipment as collateral, and she set up a shop in Pittsburg. He said I've got the boys working over there. Who he meant by the boys, I have no idea, but I have a pretty good idea, but [ can't say because it would be hearsay. At this time Patty said that we could never be friends because I was a member of the union. She also said that if the union told you to quit tomor- row, you would, and I said, yes, Patty, I would, and she said, well, we're making some changes around here; and from now on, there will be no coffee breaks, there will be-when you fill out your timecards, that the employees cannot use the tele- phone except in a case of emergency. And I said fine, and, "Patty, if I can't drink coffee any more, go ahead and continue to make out my timecard because I still quit." Ray said at that time that if you want to have a cup of coffee every now and then, that's no big deal, you know, because it was common practice when I worked there before. So consequently that was more or less the end of the conversation. Q. (By Mr. Zavelo) Concerning that conversa- tion, what, if anything, did Mr. Fasken say about the union? A. Say about the union? Q. About trouble with the union. A. Well, he said that if he had any more trouble with the union, he was going to shut the doors of Carthage Sheet Metal. Barkley testified that on the following Monday morning when he came in to work there was a used brake and a used lock former, neither of which he had ever seen before. According to Barkley, he had another conversation with Fasken on January 15, 1984, about 3 p.m. on the bridge near Fasken's house. Both Leishing and Anderson were in the area, but only Leishmg was present in the area of the conversation. Barkley described the conversa- tion as follows: Q. To the best of your recollection, what was said during that conversation and who said it? A. That was a weekend that we had Saturday and Sunday. We got through a little early on Sunday afternoon. We were coming back in and we stopped there by Ray's house. I asked Ray what the pay scale was for Saturday and Sunday. He said he thought it was double time, he wasn't sure. I did not know. So at that time he also stated that the union was more for the contractor than they are for the individual, that the union is not going to repre- sent one little old sheet metal worker way down here in the southwest part of Missouri. At that time I asked Ray what the deal was on George and Steve. He stated that they- JUDGE KENNEDY (interrupting) George and Steve? THE WITNESS: Anderson-George Leishing and Steve Anderson. A. (Continuing) He said that they were financial core members, that they paid union dues, and that they paid-I guess he paid benefits on them or whatever, but they were not members of the union. During the period October 10, 1983, through April 30, 1984, Barkley stated that he observed Simpson, Navarro, and Darrow at different times at the Carthage facility. He said he would see them either early in the morning or in the late evening when he was either going to or returning from a job. He said he once observed Darrow dropping off material at Carthage. He said he also saw boxes of materials stocked on Carthage's premises that he believed did not belong to Carthage because he worked on all the Carthage jobs and those materials were not used by Carthage. Barkley also said that on oc- casion he would make requests regarding the use of vehi- cles and specific tools that he knew Carthage owned that were not on the premises. Shortly thereafter such equip- ment would be made available by Fasken. Barkley also said that he had seen Navarro, Simpson, and Darrow after October 10, 1983, at different times in town in Carthage vehicles.87 Barkley testified that about April 23, 1984, he asked Fasken where the brake and lock former were, and Fasken told him that the man from whom he had been renting them needed them for a job and had repossessed them. Few parts were needed thereafter, for the work at Carthage was "winding down." Barkley said he had another conversation with Fasken on May 1, 1984, around 8 a.m. in Anderson's presence regarding a temporary layoff due to the winding down of two jobs. According to Barkley, Fasken told him to take the day off and he would call him back in 2 or 3 days to finish up a job. On May 3, 1984, Barkley said he went to the Carthage office to pick up his paycheck. He was dressed in racquetball attire. During the subsequent conversation (and contrary to Fasken's testimony) Bar- kley said Fasken did not offer to recall him for work. Barkley noted that during the next week (May 7-11, 1984) he went by the shop, usually in the morning, and saw Anderson's pickup parked in the lot and noticed that the Company vehicle was also gone. Barkley said he had also observed during this period that a black and grey 87 Barkley indicated that the logos had been removed from all Carth- age's trucks except on one of the pickups 1276 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Ford pickup, formerly owned by Carthage and used to pick up their special sheet metal products, was parked in the alley adjoining the Carthage facility. Barkley further testified that on May 14, 1984, he went to work for Cates Sheet Metal on the Cox Medical project in Springfield. On May 18, 1984, Fasken called him in the evening and asked him to come in and finish the Reverse Osmosis job. Barkley told him that since he was going to be working on this project until January 1985 he did not see any sense in quitting just to put in a couple of days at Carthage. Barkley stated that after his return to Carthage in Oc- tober 1983 there had been no layoffs at Carthage until May 1, 1984. Nor had he ever been involuntarily laid off by Carthage when other Carthage employees had been assigned or recalled to work. Also, Barkley added that occasionally when work was real slow, he would offer to take off work so that others could get some hours in. Barkley was uncertain about when Steve Anderson began working for Carthage, but thought that it was right after Karl McDaniels was terminated (April 1982). Barkley said he had worked continuously for Carthage from August 1972 or 1973 until February 1983. Barkley estimated the employment dates for certain Carthage em- ployees and estimated when work was performed by Carthage on certain projects between 1981 and 1983 in Missouri, Kansas, and Oklahoma. When he worked out- side Local 36's jurisdiction he thought he was paid the union wage rate and received full benefits. Barkley testi- fied that between January 1, 1980 and February 1983 he worked 50 percent of his time within Local 36's jurisdic- tion and 50 percent of it outside. Barkley stated that Carthage rehired Mark Simpson on April 19, 1983, and that prior to this date all Carthage's employees had been members of Local 36. Barkley said he did not inform Tindell about the operations of Sheet Metal Products in Pittsburg. On cross-examination, Barkley indicated that he had quit Carthage twice: once on February 14, 1983, and again on October 13, 1983. The first time, he, John Howell, and Frank Navarro quit because Fasken refused to make the nonunion employees become union mem- bers.88 Barkley stated that he was not present at the April 1982 meeting concerning Karl McDaniels' dis- charge because he was on a 3-day vacation. When Bar- kley returned to Carthage on October 10, 1983, Steve Anderson was employed and Barkley assumed Anderson had been during the time of Barkley's absence. Barkley testified that he had no idea whether strict seniority rules were followed in the construction industry. He indicated that in the event of a layoff he would have expected Fasken to keep "the man that knew what he was doing." Barkley acknowledged that during his 12 to 14 years with Carthage he had worked on only five or six jobs in Kansas and these were in 1980 or 1981. He conceded 88 Barkley explained that Frank Navarro's brother , Ed Navarro, had never been a member of the Union and continued to work at Carthage when Frank and Barkley quit in February 1983 that he was "not sure exactly how the free zone works."89 Barkley stated that prior to his quitting Carthage with Howell and Frank Navarro on February 14, 1983, one of them had informed Tindell that they would probably quit if Fasken did not make the other workers become union members. Barkley said he was aware that if he re- mained employed with other nonunion workers he could be fined by the Union's trial board, but denied he ever discussed this with Tindell. Barkley said he did not know if it would be a violation of the Union's constitution if one knew someone was violating the constitution by, for example, working with nonunion employees and failed to file a report of the violations with the Union. Barkley also denied that he had asked for Tindell's clearance to work and not quit in February 1983.90 The second time Barkley quit was on October 13, 1983, 3 days after his return to Carthage. Barkley agreed that Fasken did not act like he wanted to be rid of him, but instead asked him to reconsider his decision and stay with Carthage. In fact Barkley said Fasken initially talked him into staying on at Carthage. Barkley agreed that work at Carthage was winding down but he denied knowing construction work at the time was as scarce in the Carthage and Springfield areas as it was in 1980 and 1981. He did admit, however, that when he came to pick up his check dressed in his racquetball outfit in May 1984 there was not a whole lot of work being done by Carthage around that time and that "possibly" poor eco- nomic circumstances in the construction area were re- sponsible for his layoff. According to Barkley, on May 1, 1984, Fasken told him that it looked like Barkley would get the day off be- cause there was not anything to be done immediately on the Aurora job, and Fasken would call him if he needed him. Barkley also said he and Anderson informed Fasken that day that there were 2 days of work left to be done on the Nevada, Missouri, Reverse Osmosis project. Barkley conceded that it was no secret that he liked to get a day off every chance he could. He said he never insisted that Fasken call him back to work before Ander- son or claimed he had such a right to be called back first. But he was "positive" that Fasken did not say either one or both could go and work on the Aurora Hospital. On May 3, 1984, when Barkley went to Carth- age to pick up his paycheck, Fasken told Barkley, ac- cording to Barkley, that Anderson was working on the Aurora project. However, contrary to Fasken's previous 89 Initially, on direct, Barkley indicated that he understood the con- cept of the "free zone" to work as follows "As long as we were using the company truck, anything , inside the second circle is our territory and we could work without subsistence or without any pay or anything." Nor is it clear from Barkley's testimony how union jurisdiction relates to the free zone Said Barkley . "If you'll look on that circle on the contract, I think you'll see that the circle includes a lot of area that's definitely in ours that is called free zone " 90 Barkley testified that when he quit in February 1983 four nonunion employees were working at Carthage Mark Simpson , Wayne Darrow, Ed Navarro, and Steve Anderson George Leislung did not join the Company until later CARTHAGE SHEET METAL CO. testimony, Barkley said Fasken did not tell him he could join Anderson that day on the Aurora project.9 t Barkley testified that he registered with the union hiring hall either May 2 or 3, 1984, by personally driving to Springfield and speaking with Tindell. Barkley said he told Tindell that he had been laid off and assumed Tin- dell thought the layoff was a result of being between jobs. Barkley spoke to Tindell again on May 14, 1984, when Tindell referred him to the Cox Hospital job. When he reported to work for this job, Barkley learned that the job would last until January 1985. Barkley stated that on Friday evening, May 18, 1984, Fasken called him and asked him to return to work to complete the Re- verse Osmosis job. Barkley acknowledged that Fasken followed his normal procedure of calling people in the evening to tell them work was available and he said he told Fasken that he would be unable to work for him be- cause of the Cox project. Barkley testified that the Union did not consult him about the filing of the charge regarding his discharge. Barkley said he did not know if he were wrongfully laid off. Barkley said he knew Anderson worked when he did not, and that he thought Anderson was not capable of doing as good a job as he. Barkley agreed that Fasken did not conceal the fact that he had bought out Patricia Fasken's stock in Carth- age and she had started her own company. Barkley testified that Ed Navarro had told him in Oc- tober 1983 that he was working for Sheet Metal Prod- ucts. Barkley also acknowledged that he had been aware that the Faskens and Barkers had been operating Carth- age Home Heating and Air Conditioning next door to Carthage as a separate, nonunion business. Barkley asserted that Fasken did not make the requi- site contributions to his vacation fund and two other funds while working for Carthage between January and May 1984. He claimed he had worked approximately 700 hours during this period. He said he had not kept close watch on his hours prior to January 1984. Finally, Barkley stated that the only difference be- tween his work as a journeyman and the work of Ander- son was that Barkley might make decisions about how to handle a problem. He said he did not supervise Anderson and indicated that their work was much the same. Bar- kley said he did not feel obligated to help Fasken out for a couple of days as requested by Fasken on May 18, 1984, and he did not think Fasken really needed him. Barkley denied that he had refused to put in overtime work like Anderson had. He said the overtime was vol- untary, but he agreed that Anderson had volunteered to do it while he had not. Jameson Earl Barker is the present owner of Carthage Home Heating and Air Conditioning. Barker testified that from 1971-1981 he was part owner of Carthage Sheet Metal Co. and that he performed various duties in- cluding service work, administrative work, and manual labor. Barker identified his signature on a document 91 Barkley agreed that Fasken did not hide Anderson' whereabouts from him . Also, Barkley admitted that he did not ask Fasken to call him and make future work available to him and that he did not express disap- pointment to Fasken that Anderson was working and he was not 1277 giving SMACMA authorization to bargain with Local 36 on Carthage's behalf as it was standard procedure prior to contract negotiations (G.C. Exh. 67). Barker described his understanding of a "free zone" as follows: Q. Could you describe for us what your under- standing of the free zone was? A. Well, my understanding of free zone was an overlapping territory of two union jurisdictions, that whoever was the closest could work in it with- out having to notify the other union that they were working in it-I mean that's my interpretation of free zone. Q. Do you recall any work that Carthage did when they employed that free zone concept? JUDGE KENNEDY: You'll have to voice your re- sponse. THE WITNESS: I'm sorry. A. No, I don't. According to Barker, he learned about the free zone from Tindell and from the map attachment to the con- tract. On cross-examination, Barker stated that he and Fasken formed Carthage Home Heating and Air Condi- tioning in 1980 as a nonunion company. Although his wife and Patricia Fasken were the officers of this compa- ny, Barker testified that he performed the day-to-day op- erations until the Barker-Fasken partnership was dis- solved in 1981. At that time, Barker and his wife became the sole owners of Carthage Home Heating & Air Con- ditioning, and the Faskens became the sole owners of Carthage Sheet Metal. James I. Singer is a partner in the St. Louis law firm of Schuchat, Cook & Werner, which represents Local 36 of the Sheet Metal Workers International Association. Singer said he was primarily responsible for the negotia- tions of the settlement agreement (G.C. Exh. 22) on behalf of the Union. The settlement meeting was held on September 9, 1983, in a Springfield, Missouri airport meeting room. Singer, Melvin Zinkerman (business man- ager of the Union), Tindell, Respondent's attorney Donald Jones, and the Faskens were present. According to Singer, the meeting began by Jones offering a settle- ment proposal (G.C. Exh. 54) after making a preliminary statement that if a settlement could not be reached, Carthage would likely go into bankruptcy because they could not afford to pay back wages and fringes. After re- viewing the proposal, the Union stated that "it was com- pleted unacceptable." Singer said there was also discus- sion regarding the Association (SMACNA). He stated that Jones said that Carthage did not want SMACNA representing Carthage in grievance procedures or con- tract negotiations because it did not represent Carthage's interests. Singer said that he told Jones that the Union would not request anyone be terminated-only join the Union. In addition, he said he told Jones that if they could settle the case, they would be willing to work out a payment schedule or even a reduced initiation fee to get the nonunion workers to join. 1278 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Singer testified that the Union's counterproposal was for Carthage to reaffirm the collective-bargaining agree- ments and be bound by the next agreement negotiated by the Association. There would be no liability for back wages or fringes, and the Union would try to work out a 70-percent rate for light commercial work to enable Carthage to be more competitive with nonunion contrac- tors. In a subsequent conversation with Jones, according to Singer, Jones told him he thought his client would be willing to have the Association bind Carthage in the next agreement, but added that he thought it was not fair to force Carthage to pay Association dues and be a formal Association member. Singer stated that he told Jones (later incorporated in the settlement agreement) that Carthage would be bound by the Association's negotia- tions but it would not be required to pay dues. According to Singer, Jones received a letter and writ- ten settlement proposal on September 23, 1983, and called Singer that same afternoon. During the telephone conversation Jones stated to Singer that the trustees of the pension fund would still be able to sue Carthage even though the settlement agreement waived liability as to the Union. According to Singer, Jones said the only way to get around liability to the trustee was for the Union to agree to a break in the contract. Singer responded that he did not see a problem and said he would get back to him. Singer stated that on September 26, 1983, he had an- other telephone conversation with Jones and the Fas- kens. Singer stated that he was authorized to agree to this break in the contract to avoid trust fund liability and the proper language was inserted in the contract and a copy mailed to Jones. On September 27, 1983, Jones and Singer agreed to modify the contract's effective date from September 1 to 27, 1983, and General Counsel's Exhibit 22 is the final settlement agreement . General Counsel's Exhibit 57 was identified by Singer as the cover letter attached to the final settlement agreement sent by Jones to Singer. Singer testified that during the settlement negotiations and the subsequent telephone conversations nothing was ever said by any Carthage representative about a prehire agreement or the transfer of Carthage employees to an- other facility. Singer pointed out, however, that Jones told him at the airport meeting that he was going to pre- pare a release form for employees who wanted to quit Carthage. Singer stated that he also told Jones at that meeting that Tindell wanted to meet with the Carthage employees. Singer identified a document (G.C. Exh. 58) as a letter dated August 25, 1983, which he said he sent to Jones requesting certain employee information prior to the set- tlement meeting. Singer further identified a document (G.C. Exh. 59) as a response from Jones.92 On cross-ex- amination, however, Singer conceded that inasmuch as both parties had agreed to postpone the depositions and requests to produce information and settle the lawsuit the requests to produce had become moot. On cross-examination, Singer denied that the Union during settlement negotiations had tried to force Carth- age to be a member of the Association. Singer agreed that he had rejected Jones' proposed bargaining unit def- inition for Carthage that would have included union and nonunion employees. Singer also conceded that at the time the settlement was negotiated he knew that no union members were then employed by Carthage. Mark Simpson, Respondents' first defense witness, is currently employed by Sheet Metal Products as a sheet metal worker. Simpson testified that he first worked for Carthage Sheet Metal from November 1978 to March 1980 as a union residential sheet metal worker. Although he was paid as a residential worker, Simpson said he also performed "other work." Simpson stated that approxi- mately 2 or 3 months after he began working at Carth- age he attempted to get into the commercial unit because of its better pay scale. He was told by Tindell, however, that he was too old at the time (age 25) to get into the apprenticeship program and thus could not become a commerical member. After quitting Carthage in 1980, Simpson went into business for himself and eventually began working for Carthage Home Heating & Air Conditioning (located next door to Carthage Sheet Metal) until October 1981. Simpson stated that during the period he worked for Home Heating, the managers of Carthage Sheet Metal were Ray Fasken and Earl Barker . Simpson indicated that although he was paid by nonunion Home Heating, the two companies (Home Heating and Carthage Sheet Metal) were actually run somewhat as one operation. After moving to Colorado in October 1981, Simpson returned to Carthage Sheet Metal in April 1982. Simpson explained that the first day he came to work was the day of the union meeting regarding the dismissal of Karl McDaniel.99 Simpson said the meeting took place in the Carthage Shop and the employees present included him- self and union official Tindell. Simpson said he was asked to leave by Tindell, he thought, during the course of the meeting because he was not a union member. Simpson said he had previously made statements to others concerning the fact that he did not wish to be a union member and that during the April 1982 meeting, Tindell had asked him why he did not wish to be a member.94 Simpson indicated that the Union had never sent him anything in writing spelling out his obligations to pay dues or join the Union. Simpson said he continued to work at Carthage after the three union workers walked off in February 1983 and thereafter up until Fasken signed the settlement contract with the Union around October 1983. Simpson said when Fasken told Carthage employees that he had signed a new contract Simpson decided to quit because he "wasn't going to join the Union." Simpson said he had told Fasken of his desire not to be a union member at the as Simpson initially stated that the April 1982 meeting took place on the first day he returned to Carthage, but later said that the meeting oc- curred about 5 days after his return. 92 Respondents also introduced evidence that they too had requested 94 Simpson never testified concerning what his response was to Tm- information from the Union prior to the settlement negotiations dell's inquiry. CARTHAGE SHEET METAL CO. 1279 time the three men quit in February 1983, and he had not changed his mind since. On cross-examination, Simpson testified that when he returned from Colorado in 1982 he chose to go to work for Carthage Sheet Metal, rather than Carthage Home Heating, because he preferred to work for Fasken, al- though he said he did not have any problem getting along with Barker. Simpson stated that he signed the resignation form (G.C. Exh. 23(a)) in late September 1983. He said Fasken gave him the form at Fasken's home in the presence of other Carthage employees, George Leishing, Steve An- derson, and Wayne Darrow. According to Simpson, Fasken called all his employees and arranged for every- one to meet at his house that evening. Fasken explained at the meeting that he had signed a new union contract, and Simpson resolved he would not work for him any- more.9 5 Simpson recalled moving equipment from Carthage Sheet Metal a few days after he signed the resignation form and said he actually began working at Sheet Metal Products sometime around the first part of October 1983. Simpson stated that he first became aware that there was going to be a Sheet Metal Products concern when Patri- cia Fasken called him to move the equipment; however, he was unable to say when Patricia made such a call. He thought that perhaps a couple of days had elapsed be- tween the time Patricia called and when the actual moving took place. Simpson said the moving and the set- ting up of the operation took a day or two, and he was aided in this respect by Wayne Darrow. Simpson said he did not have any discussion with Patricia during the move about getting full-time work at Sheet Metal, al- though he could not recall exactly when that subject came up.96 Simpson acknowledged that he knew Harold Barkley as a commercial member of the Union, but denied know- ing that Barkley had become such a member without going through the apprenticeship program. Simpson stated that no one had ever explained to him that he could be considered a commercial member if Fasken, or other employers under contract with Local 36, should pay him the commercial rate. Simpson testified that when he returned to work for Carthage Sheet Metal in April 1982 Fasken told him that he would work nonunion, but would receive the union commercial wage rate without any union benefits. Simp- son said he was unaware of any conversations between Faskens and Steward Karl McDaniel in April 1982 re- garding his (Simpson's) joining the Union. Nor did Simp- son recall Fasken ever mentioning any such discussion. Simpson insisted that he had not been interested in any benefits that might have been available from the Union. He said Fasken did not mention anything to him about hiring other nonunion workers. Simpson said he did re- ceive health insurance coverage through the Company sometime after he began working as he had noticed de- 95 Simpson indicated that the settlement occurred at the end of Octo- ber, although it actually took place on September 27, 1983. 96 Simpson described the circumstances of his coming to work for Pa- tricia as a "joint effort," saying "he wasn't working" and "she needed some help " ductions from his paycheck of approximately $140 or $150 each month. According to Simpson, the layoff situation at Carthage in September 1983 was not the first one, although Simp- son could not recall specific times or instances in the past when they had occurred. Also, Simpson said he could not recall any details concerning the September 1983 layoff. Simpson explained that Fasken "probably said something to the effect that we were shut down for awhile, so we were, you know, just shut down." He said he thought a few days had elapsed between the shut- down and the day he signed the resignation form. Simpson stated that neither Fasken nor his wife dis- cussed with him what was transpiring with the Union in terms of settling the case, and he had no knowledge of it until he resigned at the meeting at the Fasken home. Simpson noted that he could not remember if there had been other meetings between the Faskens and the em- ployees at which the settlement agreement had been dis- cussed. He also could not remember what Patricia said to him when she called him after he had resigned. But he said he knew it had to do with moving some equipment, and he could not recall whether he asked her about what was happening with Carthage Sheet Metal. After the equipment had been moved by Simpson and Darrow, according to Simpson, Ed Navarro came over to the Sheet Metal Shop and "helped out a little bit" but he said (contrary to Patricia Fasken's testimony) that nei- ther Steve Anderson nor George Leishing had helped move equipment or clean up the shop. Simpson testified that an agent of the NLRB had tried to speak to him, but that he had been unwilling to speak to him. He said he made the decision not to speak with the agent on his own. According to Simpson, when Patricia Fasken asked Simpson to work for Sheet Metal, she told him that it would be a nonunion operation, but he could not recall if this was in his initial conversation with her, or later. Simpson indicated that because he was being paid the same wage rate as union commercial journeymen are paid, but without union benefits, he hoped that if the union workers received a wage increase that he too would receive an increase. Simpson indicated that he had been laid off for about 2 months and had just returned to work before the hearing had commenced. He said he first became aware that Pa- tricia Fasken was planning to set up her own sheet metal shop either during the initial phone call she made to him regarding the equipment move or possibly the next day. Additionally, Simpson was unable to recall where on the Fasken's premises he had signed his resignation form, and he was also unable to recall if Patricia was present at the time of the meeting. On redirect examination by Respondent's counsel, Simpson said he was unsure whether he signed his resig- nation form in September or on October 5. He said he initially told Fasken orally that he was quitting Carthage prior to signing the form. Simpson acknowledged that some employees had signed a different type of form than the one he signed. According to Simpson, Fasken ex- plained to the employees that in order to remain working 1280 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD for Carthage they would have to join the Union; also that Fasken had not asked him to join or not join the Union. Simpson added that Fasken did not ask him to quit, and his decision to resign from Carthage rather than join the Union was entirely his own. Simpson stated that he could not recall if he understood that he had an alter- native to quitting by becoming a "financial core member"; however, he indicated that even if the alterna- tive had been offered "there was just no way" he would have done that. On further cross-examination, Simpson acknowledged that Fasken did not explain to him about the reduced ini- tiation fee or the 6-month payment plan, but stated that he "never gave it a thought" regarding an initiation fee because there was absolutely no way he wanted to become a member of the Union.97 Wayne Darrow, Respondent's second witness, worked for Carthage Sheet Metal in April 1982 and was present during the meeting called by Tindell. Darrow gave his version of what occurred at the meeting: The reasons they was there was Carl McDaniel's being fired, and Mark being-coming back to work with Carthage Sheet Metal. It was discussed, and the reasons for Tex's firing, Karl McDaniel's, and then I think they asked Ray to leave the room, where we was meeting at the shop. And he asked us each one of us individually what we thought of why Tex was fired. And I don't remember him saying anything, making a comment or anything. And Ray come back out after we done a little more talking, and John Howell, the guy in the shop there, said that everything was smoothed over, and everthing could go back to running smooth again. Darrow said that he had been a residential member of the Union, but that after the meeting he quit paying his dues. According to Darrow, McDaniel's discharge was discussed at the meeting. Darrow also thought that Simpson may have also been discussed. Darrow said that he did not tell Tindell why he was dropping out of the Union. Darrow testified (contrary to Tindell's testimony) that prior to April 1982 he and Fasken together had ap- proached Tindell about the possibility of Darrow becom- ing a commercial member of the Union. According to Darrow, Tindell told him Darrow was too old to become a commercial member.98 Darrow thought this meant that the Union had an age requirement regarding commercial membership. Darrow indicated that he did not think that informing Tindell of his decision to drop out of the Union would have any effect on his job. There was no effect on his job, in fact, and he continued to work for Carthage, as did Simpson and Darrow. 97 The Charging Party moved to strike the testimony of Simpson and Wayne Darrow on the basis that Respondent 's questioning of him in the presence of others prior to being called violated the sequestration rule that had been involved. It is of course appropriate to interview witnesses prior to their taking the stand, and the motion is denied 9a Darrow stated that he was between 30 and 33 years of age at the time. On cross-examintion, Darrow stated that he began working for Carthage in December 1979 and he joined the Union as a residential member when Tindell "came down" sometime in 1980. According to Darrow, Fasken began paying him the commercial journeyman's wage rate sometime in May 1982 after he had dropped out of the Union. Darrow denied, however, that Fasken used the increased wages as an incentive for him to drop out.99 Darrow indicated he thought the Union had kept him from getting the commercial rate, although he ad- mitted that he knew there were other employees (i.e., Barkley) who were commercial journeymen that had never gone though the apprenticeship program. He stated further that he asked Tindell if he could just "join the commercial" and not go through the apprenticeship training. Darrow stated that Tindell did not tell him that he could become a commercial journeyman if he could find an employer who would pay him the higher rate. Darrow testified that he knew prior to the April 1982 meeting that Fasken had hired Simpson as a nonunion commercial journeyman. Darrow conceded that he hoped if he quit the Union that he too might be paid the commercial journeyman's rate, but he denied that this ac- tually prompted him to drop out. Darrow said that he could not recall Tindell's reaction to his statement that he was going to quit the Union, but he testified that Bar- kley, McDaniel, and Edwards were also present when he informed Tindell of his decision to drop out of the Union. Finally, Darrow said he had no knowledge of Fasken ever asking any other employees to drop out of the Union in exchange for a higher wage rate. Darrow also acknowledged that after he dropped out of the Union all the new employees Fasken hired at Carthage were non- union. Donald Jones is a partner in the Springfield, Missouri law firm of Hulston, Jones & Sullivan and counsel to Re- spondents. Jones testified that he received no communca- tion from Melvin Zimmerman, president of Local 36, in response to an October 27, 1983 letter of Fasken to Zim- merman regarding a proposed meeting in Jones' office (G.C. Exh. 51). Jones stated that it had not been his in- tention to refuse to provide information to the Union. He felt, however, that before providing information to the Union a meeting was needed to clarify some of the re- quests and determine their appropriateness. Also, he ex- plained that he did not want to send all this information in the mail as well as cause additional inconvenience to his clients. Jones said, however, he never received any indication from the Union that it was agreeable to a meeting or that it would attend one. Jones stated that he sent a copy of his letter proposing a meeting (G.C. Exh. 30) to both Tindell and Attorney Singer because he thought advising the Union's attorney as well as the Union of his intentions was a professional courtesy and an effort not to violate any ethics require- ment. e9 Said Darrow "[Fasken] said he thought I was capable of the work, that he was going to bring me on up " CARTHAGE SHEET METAL CO. 1281 Jones conceded that when he responded on February 17, 1984 to the Union's earlier request for information (G.C. Exh. 29) that he did not have in his possession all the information necessary to respond to the request, but he thought that by the time a meeting would be held, all the requested information would be assembled. Jones in- dicated that he did not feel that by making a counter- offer to the Union regarding a meeting that this action constituted a denial of the Union's request for informa- tion. According to Jones, he delivered notices (G.C. Exh. 42) to Harold Tindell and Paul Fairchild on March 30, 1984, because of what was said to him by Daniel Hubbel, an NLRB field investigator. Said Jones: As I recall, Mr. Hubbel indicated that he thought, or the agenda thought, or something, that a timely notice of withdrawal would have been preferable to the pre-hire notice of February 7, 1984 and he also indicated that there was possibly a com- plaint going to be issued against both of these com- panies indicating they were bound by a collective bargaining agreement. And when I questioned him further about the analysis of the case and the poten- tials involved, I learned that there was a potential, at least, that there would be a claim that both com- panies were bound by the contract, but that it was not too late to-but my own inspection of the con- tract and the conversation with Mr. Hubbel led me to believe it was not too late to make a timely notice that withdrew each company from any multi- employer bargaining association if anyone would contend they were in one at that time, and to termi- nate any contract as of the expiration date of June 30. So I made it a point to deliver both these letters today-or that day, March 30, 1984, so that as a precaution against any potential contractual obliga- tions of either company after June 30, 1984, and as a precaution against anyone claiming their either company was bound by any multi-employer bar- gaining negotiations after that date. Jones explained that after meeting with the Regional Director and regional attorney he sent a letter to the Union (G.C. Exh. 35) setting forth possible meeting dates. Jones said, however, that Singer, the Union's at- torney, made no response to his request. Jones also stated that it was his belief that an employer need not permit a union to audit the books of the em- ployer until the company has made a plea of poverty in connection with the bargaining proposals. Thus, he rea- soned that although Carthage had filed for reorganiza- tion in bankruptcy, the Company had not actually made a plea of poverty in a bargaining proposal because the Company has been unable to get a meeting with the Union to discuss any bargaining matters. Jones added that he requested in an October 8, 1983 letter to Singer (G.C. Exh. 49) that the Union furnish a written explanation in full detail to Leishing and Ander- son concerning their dues and fee obligations, along with the due dates, and to provide him with a copy. But Jones testified that no response was ever received to this re- quest. Jones testified on cross-examination that since the Union's first request for information on February 13, 1984, he has not telephoned the Union's office to arrange for a meeting to provide any information. Jones said he did have a recollection of sending a letter to the effect that there was a possibility that Carth- age Sheet Metal could be merged with Sheet Metal Products as a result of the bankruptcy proceeding. Jones stated that the letter (G.C. Exh. 33), which asserts that the labor agreement between Carthage and Local 36 was burdensome and oppressive, "speaks for itself." Jones agreed that he received a letter in response from Singer asking for a meeting and contract proposals, but he said no meeting ever took place because the Union had "re- fused to meet with me present." On direct examination, Jones had testified that he did not respond to a letter by Singer (G.C. Exh. 36), which he received between May 10 and 12, because he had been "in the middle of this litigation." However, on cross-examination, Jones said that he thought that he did respond to this letter by telephoning Singer. Said Jones: Mr. Singer, I believe in response to that letter that I telephoned you. My best recollection is that I telephoned you and we had a little discussion about that letter and I said, "What's the matter, Jim? How come you all didn't meet when I offered to meet earlier about this information?" And you said, "Jones, you were trying to force the union to have Singer present at a meeting." And I said, "Singer, I don't care if I never see you again." I said, "We're going to have a Labor Board trial in a few weeks and I'll have any information you want there." And I said, "Just so you'll understand, I'm not insisting that you come to this trial. If you want to stay home, you can, and we'll just meet Harold Tindell down here. I'm not insisting on you being present." And I said, "That was a professional courtesy to you, that I invited you to attend any meeting when we offered information to you." And I remember that discussion very well, because you tried to twist around this because it was obvious to me, Jim, that you were trying to twist these letters around to create litigation to break this client. And that's ex- actly what you're trying to do and you' re being very successful at it. Jones acknowledged that Singer had asked him at the end of the second day of the trial whether Carthage's books could be audited by the Union's auditor. Jones denied telling Singer in response that all the documents had been produced pursuant to a subpoena and "that as far as [he was] concerned there would be no more pro- duction of documents." 100 100 Jones never expressly denied Singer's allegation, but he implied this by stating that he has never refused to give information to the Union and the record reflects this position 1282 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Jones said that regarding the airport settlement meet- ing of September 9, 1983, he could not recall producing any documents other than a proposed settlement agree- ment and a proposed collective-bargaining agreement. Finally, on redirect examination, Jones explained that he did not recall ever telephoning Tindell to have him come out and meet with him because he did not feel it was ethically correct to contract another lawyer's client when litigation was pending. Stated Jones: I did talk to Mr. Singer and wrote letters and that was-and I really felt that after there was response to my letter of-there was no willingness by the union to meet in response to our offer of February 17, 1984, I thought that the union's letter of Febru- ary 28, 1984 was actually a rejection of any further meetings on the matter and that-and I thought the matter was laid to rest by the union' s unwillingness to meet with us and discuss their requests. The next information I got about any request for information was the amended charge, which I be- lieve I checked the record and it was filed April 4, 1984. Q. At anytime between February and April 4, 1984, did anyone from the union contact you to in- dicate that thought that you should make any fur- ther efforts to have any further meetings to provide any information to the union or to otherwise pro- vide information to the union? A. No, I thought the matter was not being pur- sued by the union and that they didn't want a meet- ing and that they didn't really, sincerely want any information from the company. Discussion There is no significant conflict of testimony among the principal witnesses on any major issue . Mrs. Fasken im- pressed me as a credible witness. Ray Fasken indicated uncertainty in his testimony at times and seemed unnec- essarily vague on certain matters, especially those per- taining to the operation of Respondent Sheet Metal. For example, he indicated a lack of knowledge as to the iden- tity of persons working for Sheet Metal. I have difficulty in believing that Fasken was unaware of the existence of SMACNA, the association that had been authorized by Carthage for many years to bargain for it, until the onset of the instant litigation as he had claimed . I generally credit Harold Tindell's testimony, which is basically in accord with that given by the Faskens . I am of the view, however, that he must have been aware of the operation of the nonunion Home Heating concern next door to Carthage. Further, it is difficult for me to believe that Tindell did not know, contrary to his testimony, that Mark Simpson continued to work for Carthage after the April 1982 employees meeting held at the Carthage facil- ity as a nonunion employee of Carthage. It is also diffi- cult for me to believe that John Howell would have taken it on himself, following the April 1982 meeting, to indicate to Ray Fasken that everything would be all right if the nonunion workers were kept out of sight. I am not convinced that Tindell had seen a SMACNA in- signia at Carthage's facility as he claimed; he admitted that he visited as many as 16 contractors' facilities at dif- ferent times and could have easily been confused. I credit Mark Simpson's testimony, over the contrary testi- mony of Tindell, that Simpson made it known to Tindell during the April 1982 employees meeting that Simpson was quitting the Union. Also, I accept Simpson's testimo- ny that he was told by Tindell that Simpson was too old to be an apprentice and not advised by Tindell that he could, nevertheless, be considered a commercial member and be paid at the commercial rate if Carthage or an- other employer were willing to do so. Further, I credit Darrow's (and Fasken's) testimony that he and Fasken had approached Tindell about Darrow becoming a com- mercial member of the Union and that Tindell had stated in response only that Darrow was too old. The Alter Ego and Single Employer Allegations Among the factors to be considered in resolving the alter ego and single employee issues in this case are the interrelations of operations, common management, cen- tralized control of labor relations, and common owner- ship. Radio Union Local 1264 v. Broadcast Service, 380 U.S. 255 (1965). Common ownership and control are critical in alter ego cases. In its leading decision in this field, Crawford Door Sales Co., 226 NLRB 1144 (1976), the Board stated: Clearly each case must turn on its own facts, but generally we have found alter ego status where the two enterprises have "substantially identical" man- agement, business purpose, operation, equipment, customers, and supervision, as well as ownership. Similar factors are considered under the Board's "single employer" doctrine, although in this situation, unlike the alter ego case, the employees of the two companies must be shown to constitute a single bargaining unit. Under the alter ego doctrine the focus is on "whether there is an attempt to avoid the obligations of a collective bar- gaining agreement through a sham transaction or a tech- nical change in operation." Carpenters Local 1478 v. Ste- vens, 117 LRRM 2023 (9th Cir. 1984). The factors to be considered in determining whether two firms constitute a single employer are: (1) interrelation of operations, (2) common management, (3) centralized control of labor re- lations, and (4) common ownership. Id. After weighing all the relevant factors I have conclud- ed that Respondent Carthage and Respondent Sheet Metal must, for labor relations purposes, be treated as alter egos and as a single employer. The husband and wife relationship of the Faskens, owners of the two companies, and the regular transfer of funds back and forth between these two individuals, are persuasive evidence that both of the Faskens actually owned and controlled both concerns. i o i Moneys for the two corporations were drawn out of one bank account. Money was loaned back and forth on an oral basis, and 101 Family relationship has been considered a factor in determining ownership and control See, e g , Crawford Sales Co , supra Cf NLRB v. Bell Co, 561 F 2d 1264 (7th Cir 1977) CARTHAGE SHEET METAL CO. 1283 no interest was paid. The formation and operation of Sheet Metal were clearly not arms' length transactions. It is evident that Ray Fasken has been the dominant force in managing Carthage's operations, at least since September 1981. I find it impossible to believe that he was not also a significant force in managing the affairs of Sheet Metal as well. Two other factors weigh heavily in my reaching the conclusion that the two companies must be treated as alter egos and as a single employer for purposes of the National Labor Relations Act: The practice of Ray Fasken preparing bids for both companies, and the com- pletion by Sheet Metal of a number of jobs bid on and begun by Carthage. In addition, there was some intermingling of person- nel. Gwen Slater, a Carthage office employee, spent time doing administrative work for Sheet Metal, and Mrs. Fasken continued to do similar work for Carthage well after she was supposedly concerned only with operation of Sheet Metal in Pittsburg. 102 George Leishing, a Carthage serviceman, also performed some work for Sheet Metal. It is also to be noted that many of the customers of the two concerns were the same. The two companies have utilized the same counsel, the same accountant, insurance agency, and the same suppliers, but I attach no particular significance to these facts.1 o s It is apparent that both Carthage and Sheet Metal have had the same business purpose. They have been en- gaged in the same business, utilizing the same or similar equipment, and essentially in the same geographical area. I am thus persuaded that the purpose of forming Sheet Metal was to enable the Faskens to evade Carthage's re- sponsibility under the Act to honor its collective-bargain- ing agreement with the Union. See Advance Electric, 268 NLRB 1001 (1984). I reject Respondents' contentions that Carthage had a right to rescind its obligations under the collective-bar- gaining agreement for lack of majority status on the basis that a prehire agreement came into existence in 1983. There is no question about the fact that the Union held a majority status among Carthage employees at the time the 1981-1984 collective-bargaining agreement was exe- cuted, and such status, under the law, must be presumed to continue during the term of the contract. See, for ex- ample, NLRB v. Iron Workers Local 103 (Higdon), 434 U.S. 335 (1978). The break in the bargaining relationship between Carthage and the Union from February to Sep- tember 27, 1983, did not give rise to a prehire agreement. As the Charging Party Union points out, the Union only agreed to the hiatus in the existence of the 1981-1984 collective-bargaining agreement in order that Carthage should not be held liable for "back fringes."104 102 Harold Barkley also testified that Mrs Fasken continued to exer- cise supervisory authority over Carthage employees after she had sup- posedly set up her own business in Pittsbui g 103 Fasken indicated there were few suppliers in the sheet metal indus- try. And see NLRB v. Bell Co, supra. 104 Carthage notified the Union and the Association about March 30, 1984, that it would no longer be involved in multiemployer bargaining, but such notice is of no assistance to Respondents in this proceeding. And while Fasken admittedly hired only nonunion em- ployees after 1982, I reject the Union's suggestion that Carthage employees' decisions to either drop out of the Union or not to join the Union was a result of coercion on the part of their employer. There is no credible evi- dence that either George Leishing or Steve Anderson signed the financial core forms as a result of any pressure from the Faskens. Nor is there any credible evidence that Mark Simpson, Ed Navarro, or Wayne Darrow re- signed their employment from Carthage involuntarily. 105 Having found that an alter ego and a single employer status existed between Carthage and Sheet Metal, it is in- appropriate to inquire into the propriety of a unit that in- cludes employees of both companies. In any event, Sheet Metal employees working out of the Company's Pitts- burg facility, while located 30 or so miles from Carthage, have sufficient community of interest with employees of employer-members of SMACNA, as well as the employ- ees of Respondent Carthage, to belong properly in one bargaining unit. Respondent Carthage and Respondent Sheet Metal have performed work in areas other than those mentioned in paragraph 7 of the complaint that un- dertakes to define an appropriate bargaining unit.106 I do find that the bargaining unit represented by Local 36 has included employees of Respondent Carthage, Respond- ent Sheet Metal, and employees of other employees, which had authorized SMACNA to bargain on their behalf with Local 36. I specifically define the appropri- ate unit as follows: All sheet metal workers employed by Carthage Sheet Metal Company, Inc., its alter ego, Sheet Metal Products, Inc., and all sheet metal workers employed by employer-members of SMACNA, but excluding clerical employees , guards and supervi- sors as defined in the Act. It is clear, therefore, that Carthage violated Section 8(a)(l) and (5) by declaring in its letter to the Union dated February 7, 1984, that it was withdrawing recogni- tion of the Union and that it would no longer abide by the Union's collective-bargaining agreements (G.C. Exh. 27). Having found Sheet Metal and Carthage to be alter egos and a single employer, I must also find that both concerns were bound by the Union's 1981-1984 collec- tive-bargaining agreement.107 'os Although I believe Tmdell was aware that Carthage had kept at least one nonunion employee on its payroll , the record hardly provides a basis for holding that the Union acquiesced in the use of nonunion per- sonnel so that it can be said that the Union had waived its right to repre- sent employees of the Respondent . See Plumbers Local 669 (A-I Fire Pro- tection) v. NLRB, 676 F.2d 826 (D C Cir. 1982) In any event, the union contract cannot be lawfully applied to those former Carthage employees working in Kansas (a right-to-work state) for Sheet Metal or any other employees working in Kansas so as to require them to join the Union contrary to their desires. 106 It is to be noted that the Charging Party Union and the General Counsel have not been in agreement concerning what the appropriate unit should be (See Tr. 365-372.) 107 As indicated previously, the union-security provisions of the agree- ment cannot be lawfully applied to employees working in the State of Kansas as it is a right-to-work state. 1284 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Any impact of the Supreme Court's recent decision in NLRB v. Bildisco & Bildisco, 465 U.S. 513 (1984), which allowed an employer following the filing of a petition under Chapter 11 of the Bankruptcy Code to make changes without the bankruptcy court's approval, on the case at bar is not readily apparent. The Court in Bildisco did indicate that a petitioner must first make an effort to negotiate a modification of the collective-bargaining con- tract before filing such a petition. The record here indi- cates that Carthage withdrew recognition and repudiated the collective-bargaining agreement approximately 2 months prior to filing its bankruptcy petition without making an effort to get the Union to make any changes in the contract. In any event, Sheet Metal has not filed for bankruptcy and, being an alter ego of Carthage, would be liable for any fringe benefit contributions owed. i 08 The Alleged Failure to Furnish Information, the Alleged Discriminatory Discharge of Harold Barkley, and the Alleged Threat of P. Fasken With Local 36 being the collective-bargaining repre- sentative of employees of Carthage, the Union was enti- tled to obtain information regarding the relationship be- tween Carthage and Sheet Metal. See Leonard B. Herbert Jr., 259 NLRB 881 (1981), enfd. 696 F.2d 1120 (5th Cir. 1983). Although Carthage's attorney initially denied there was any obligation to provide such information, the record does not persuade me to hold that Carthage or its attorney unlawfuly refused to furnish the Union the requested information or that any unnecessary or burdensome condition was imposed on the Union to re- ceive it. Attorney Jones' letter of April 27, 1984, to the Union's attorney offered to produce "any and all infor- mation which you may require." It was certainly not un- lawful for Respondents' attorney to suggest that the par- ties and their counsel confer in an effort to determine the relevance of some of the information and the need for the Union to have it. See Detroit Edison Co., 440 U.S. 301 (1979). Respondents' counsel did not condition his offer to furnish the information only on the basis that union counsel appear with union representatives at Re- spondents' counsel's office. Respondents' counsel, I am persuaded, was concerned only with ethical consider- ations in suggesting that union counsel be present. The Union did not do everything it possibly could to obtain the requested information, as it argues, but instead sought unreasonably to dictate to Respondents' counsel in what form the information must be supplied. The allegations of paragraph 10 are therefore being dismissed.109 108 The General Counsel argues that Carthage would be liable for fringe benefits until its Chapter 11 filing on April 11, 1984, even if the bankruptcy court should reject the collective-bargaining agreement And further, irrespective of the bankruptcy court's action regarding Carth- age's petition, the duty to recognize and bargain with the Union "contin- ues unabated " I do agree with the General Counsel's suggestion in fn 23 of his beef that the Board should retain jurisdiction of the proceeding until a final ruling is made on Carthage's bankruptcy petition After such ruling is issued, the Board may then determine "whether or not a remedy is war- ranted or allowed by the final rulings of the Bankruptcy Court " 109 Respondents produced all the information that the Charging Party Union desired at the start of the trial in response to a subpoena issued on I reject the contention of the General Counsel that Harold Barkley was terminated by Carthage about May 1, 1984, because of his membership in and support of the Union. He was not terminated, but temporarily laid off along with Steve Anderson, which was not contrary to Carthage's past practice. Barkley indicated during his testimony that he understood he had not been terminat- ed, and he agreed that there was no work to be done at the time on either of the Company's two pending projects. Barkley stated that he always enjoyed having time off and that Fasken knew that. Barkley also ac- knowledged that he had previously offered to quit work- ing at Carthage but that Fasken had persuaded him to stay with the Company. After being laid off Barkley was promptly dispatched to a hospital job in Springfield, Mis- souri; when recalled to work by Fasken about May 18, Barkley elected to stay with the hospital project. I credit Fasken's testimony that he offered Barkley employment earlier, about May 3, and that Barkley turned it down, choosing instead to play racquetball. Patricia Fasken's remarks of October 13, 1983, to Harold Barkley to the effect there would be no more coffeebreaks and that he must fill out his timecard and make phone calls, except in an emergency, on his own time were undoubtedly motivated by antiunion animus on her part. P. Fasken prefaced her remarks, according to Barkley, with the comment that the two of them "could never be friends again because [Barkley] was a member of the union." Such evidence, which was not contradicted by Respondents, tends to support paragraph 5 of the complaint, but I decline to enter a finding or any remedy on the charge. Neither the Charging Party Union nor the General Counsel has asked for any remedy on this allegation. Such evidence, while indicat- ing that Patricia Fasken sought to exercise managerial authority over a Carthage employee after forming Sheet Metal, was not coercive because Ray Fasken repudiated her remarks soon thereafter. Barkley stated that after his conversation with P. Fasken he spoke with Ray Fasken, who told him that P. Fasken had set up shop in Pittsburg and that Barkley was free "to have a cup of coffee every now and then" just as before. I agree with Respondents' contention that "the isolated statement attributed to Pa- tricia Fasken" does not provide a basis for entry of a fording of a violation of the Act or any relief. See Gray Drug, 272 NLRB 1389 (1984). behalf of the General Counsel and left it in the courtroom in opposing counsels' custody Union counsel and union official Tindell took certain documents of Respondents out the courtroom and had them copied Re- spondents have moved for dismissal of these proceedings on the basis that there was "misconduct of the General Counsel in permitting the Union and its counsel [to] have unsupervised access to the company's financial records and other subpoenaed documents, outside of the courtroom " While I was surprised at learning that the documents had been taken out of the courtroom and reproduced , I believe such acts occurred as a result of a misunderstanding The General Counsel's attorney explained that he selected documents for reproduction and that he remained with Respond- ents' files while the selected documents were taken out of the courtroom for copying Accordingly, I find the acts complained of did not violate the proceedings so as to warrant dismissal of the charges against the Re- spondent Accordingly, the motion is being denied CARTHAGE SHEET METAL CO. 1285 CONCLUSIONS OF LAW 1. Respondents are employers engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 2. Local Union No. 36, Sheet Metal Workers Interna- tional Association, AFL-CIO is a labor organization within the meaning of Section 2(5) of the Act. 3. Respondents Carthage Sheet Metal Company, Inc. and Respondent Sheet Metal Products, Inc. are alter egos and a single employer for the purpose of the Na- tional Labor Relations Act. 4. All sheet metal workers employed by Carthage Sheet Metal Company, Inc., its alter ego, Sheet Metal Products, Inc., and all sheet metal workers employed by employer-members of SMACNA, but excluding clerical employees, guards, and supervisors as defined in the Act constitute a unit appropriate for collective-bargaining within the meaning of the Act. 5. By failing and refusing to recognize and bargain with the Union as the exclusive representative of em- ployees in the appropriate unit, by failing to honor the 1981-1984 collective-bargaining agreement regarding such employees, and by failing to apply to such employ- ees the terms and conditions of the agreement, Respond- ents violated Section 8(a)(5) and (]) of the Act. i 10 6. No other violation of the Act has been established. THE REMEDY Having found that Respondents engaged in certain unfair labor practices within the meaning of Section 8(a)(1) and (5) of the Act, I recommend to the Board that the Respondents be ordered to cease and desist from engaging in such unfair labor practices. I also recom- mend certain affirmative action be taken in order to ef- fectuate the policies of the Act. I specifically recommend that Respondents be ordered to recognize the Union as the representative of their employees and to honor and apply the terms of the 1981-1984 agreement to them. In addition, I recommend that Respondents make whole employees by making the contractually established pay- ments to the various trust funds established by the collec- tive-bargaining agreement and by reimbursing employees for any expenses ensuing from Respondents unlawful fail- ure to make such required payments. Further, I recom- mend that the Board retain jurisdiction of this proceed- ing until after a final ruling is issued on the Chapter 11 petition filed by Carthage Sheet Metal Company, Inc., at which time it may determine whether any remedy is warranted or allowed. [Recommended Order omitted from publication.] 10 As previously noted, the union-security provision of the collective- bargaining agreement could not be lawfully applied to employees work- ing in the State of Kansas, a right-to-work state