Hydro Logistics, Inc.

602 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Hydro Logistics, Inc. and James M. Jerard and Wizard Method Employees Independent Union Wizard Method, Inc. and Randolph Rotella Miracle Sales and Service , Inc. and Wizard Method Employees Independent Union. Cases 3-CA- 10534, 3-CA-11186, 3-CA-11147, 3-CA- 11086-1, 3-CA- 11388, and 3-CA-11086-2 16 December 1987 DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS JOHANSEN AND CRACRAFT On 29 September 1983 Administrative Law Judge James F. Morton issued the attached deci- sion. The Respondents filed exceptions' and a sup- porting brief, and the General Counsel filed cross- exceptions and the brief he had submitted to the judge. On 22 August 1984 the Board remanded this proceeding to the judge for consideration in light of the Board's decisions in Milwaukee Spring Divi- sion, 268 NLRB 601 (1984), and Otis Elevator Co., 269 NLRB 891 (1984). On 24 December 1984 the judge issued the attached supplemental decision. The Respondents filed new, exceptions and a sup- porting brief addressing the judge's original and supplemental decision. The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. The Board has considered the decision, the sup- plemental decision, and the record in light of the exceptions and briefs and has decided to affirm the judge's rulings, findings,2 and conclusions, to modify his remedy,3 and to adopt the recommend- ed Order as modified. The Respondents contended for the first time in their exceptions that Sec 10(b) barred the Board's entertaining the allegations that Respond- ents Wizard and Hydro violated Sec 8( a)(l) and (3) by discharging em- ployees James Jerard, Kenneth Leonard, and Dennis Leonard As the Respondents neither pleaded the 10(b) issue as an affirmative defense nor raised it before the judge, it was waived Federal Management Co, 264 NLRB 107 (1982), Taft Broadcasting Co, 264 NLRB 185, 190 (1982) Unlike our dissenting colleague, we make no exception to the require- ment of timely assertion of a 10(b) defense merely because the Board would have found no merit in the 10(b) defense at the time it was waived, but now would find merit pursuant to changes in the law See Ford Motor Co, 269 NLRB 250 fn 1 (1984) 8 In finding that Respondent Wizard unlawfully refused to reinstate employee Rotella because of his union activities and because it believed Rotella was responsible for the filing of one of the charges in this case, the judge inadvertently failed to specify the section of the Act that Wizard violated We find that Wizard, by the conduct above, violated Sec '8(a)(I) and (3), as alleged in the complaint a 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 US C § 6621 Interest on amounts accrued prior to I 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) We agree with the judge's findings that are based on the status of Respondent Hydro Logistics, Inc. as the alter ego of Respondent Wizard Method, Inc. Thus, Hydro Logistics was essentially a corpo- rate shell having substantially identical manage- ment, business purpose, operation, equipment, cus- tomers, and supervision, with Wizard and was used by Wizard for the purpose of evading responsibil- ities under the Act as found by the judge. Advance Electric, 268 NLRB 1001, 1002 (1984); Goodman Piping Products v. NLRB, 741 F.2d 10 (2d Cir. 1984). While the two corporations did not have the same ownership, the judge found that Wizard's president "controlled Hydro's operations overall and even its daily business," and cited precedent establishing that such control is a substitute for ownership. American Pacific Concrete-Pipe Co., 262 NLRB 1223, 1225-1226 (1962), enfd. mem. 709 F.2d 1514 (9th Cir. 1983). We also agree with the judge that Wizard sub- contracted work to Respondent Miracle Sales and Service, Inc., a company over which it exercised at least some degree of control, in order to avoid its obligations under the collective-bargaining agree- ment.4 Because the work transfer decision was mo- tivated by union considerations, we, agree with the judge that Wizard was not` exempt from a bargain- ing obligation under First National "Corp` v. NLRB, 452 U.S. 666 (1981), or Otis Elevator Co., 269 NLRB 891 (1984).5 Wizard did bargain for mid- contract concessions and threatened that without these concessions it would change to an equipment- leasing business, relinguishing the, ' providing of labor to its customers with the consequent loss of bargaining unit jobs. When this bargaining failed to produce the desired concessions, however, Wizard did not relinquish the labor part of its business on a permanent basis. Instead, it let some work out to its alter ego, Hydro Logistics, some to Miracle, over which it had sufficient control to minimize the risk of losing' the work permanently, and it retained some work. Unit employees worked, for whichever of the ,three was offering work, on, noncontract terms'when the employer was Hydroror Miracle. This tactic. worked. The Union eventually made midcontract concessions with the reasonable expec- tation that Wizard would take back those labor op- erations that it controlled and that the unit employ- ees, again working on Wizard's payroll, would be governed by the contract. Wizard gained this bar- gaining advantage by avoiding a true relinquish- We agree with the judge that the General Counsel failed to prove that Miracle Sales was also an alter ego of Wizard We find it unneces- sary to adopt the judge 's finding that Wizard and Miracle Sales were either joint employers or joint venturers 5 Strawsrne Mfg Co, 280 NLRB 553 (1986) 287 NLRB No. 62 HYDRO LOGISTICS ment of the work. This manipulation of its labor operations and the resulting layoff of employees from the Wizard payroll was intimately connected with its creation of an alter ego for the purpose of avoiding its obligations to its union-represented em- ployees. As the judge found, there was no bona fide transfer of the work. In effect, Wizard condi- tioned employment on the employees' working under noncontract terms for nonunion Hydro and Miracle. Therefore, Wizard's conduct violated Sec- tion 8(a)(3) as well as Section 8(a)(5) and (1). Ad- vance Electric, supra, 268 NLRB at 1004; Electric Machinery Co., 243 NLRB 239, 240 (1979). ORDER The National Labor Relations Board adopts the recommended Order of the administrative law judge as modified below and orders that the Re- spondents, Wizard Method, Inc. and Hydro Logis- tics, Inc., Niagara Falls, New York, and their re- spective officers, agents, successors, and assigns, shall take the action set forth in the Order as modi- fied. 1. Substitute the following for paragraph 1(a). "(a) Refusing to bargain collectively with Wizard Method Employees Independent Union by transferring unit work from Wizard Method, Inc. to Hydro Logistics, Inc. and ' Miracle Sales and Service, Inc., without affording the Union an op- portunity to bargain thereon." 2. Insert the following as paragraph 1(c) and re- letter the subsequent paragraphs. "(c) Discouraging membership in the Union, or any other labor organization, by imposition of ille- gal conditions of employment." 3. Substitute the attached notice for that of the administrative law judge. CHAIRMAN DOTSON, dissenting in part. I agree with the majority's decision except with respect to the transfer of work to Miracle Sales and Service, Inc. and the inapplication of Section 10(b) to certain allegations. I do not find that the General Counsel proved that Respondent Wizard Method, Inc. unlawfully transferred work over which it had control to Miracle Sales and Service, Inc. Part of the difficulty is that the General Coun- sel litigated this part of the case on the theory that Miracle was Wizard's alter ego and that therefore Miracle's work was Wizard's work. The adminis- trative law judge correctly rejected this contention, but found that Wizard and Miracle were either joint employers or joint venturers. My colleagues find it unnecessary to pass on the latter finding, which is based on several unwarranted inferences, and I agree with them that the real question is whether Wizard transferred to Miracle work that, 603 but for its desire to avoid its bargaining obligation would, have been performed by unit employees on Wizard's payroll. Miracle's gross business in 1982 was $96,000. Of this, $22,000 was subcontracted from Wizard ac- cording to the General Counsel's evidence. But of the $22,000, $8000 was for work done for a compa- ny called Durez whose work was subcontracted to Miracle with the Union's permission because, ac- cording to the uncontroverted testimony of Wiz- ard's owner and president, Garlen Stoneman, Wiz- ard's employees were too busy at the time. The bulk of the remaining $14,000 in subcontracted work was for Bethlehem Steel, whose contract with Wizard permitted Bethlehem Steel at any time to cease using Wizard's labor and revert to an equipment-leasing arrangement whereby Wizard provided only the equipment and one operator. Stoneman testified that times were becoming hard to the point where he feared that Bethlehem Steel and other companies with whom Wizard had simi- lar contracts would exercise the option to use their own labor. He subcontracted to Miracle with its lower labor costs in order to prevent that.' This arrangement coupled with the fact that Wizard em- ployees were kept apprised of job opportunities with Miracle actually enabled them to retain work they might otherwise have lost. It also tends to show that Wizard reasonably feared losing control of the work and did not voluntarily relinquish work over which it had a secure contractual enti- tlement. It was counsel for the General Counsel's burden to show otherwise. Instead, relying on the unproven theory that Wizard and Miracle were one and the same, he showed only that Miracle performed some labor for customers of Wizard for whom Wizard formerly provided both labor and equipment. In fact, Wizard bargained in good faith over pre- vention of loss of the work. This bargaining initial- ly produced no agreement, but it fulfilled Wizard's obligation to the Union. Then, instead of imple- menting the option which would have caused the employees a permanent loss of jobs, it subcontract- ed some of it to Miracle. This is insufficient to es- tablish any unlawfulness in Wizard's business rela- tionship with Miracle. I also find that Section 10(b) precludes a finding of any violations in the discharge of Jerard and the Leonards. They were discharged on 25 June 1981. A timely charge alleging that the discharges were discriminatory was dismissed by the Regional Di- I This testimony is consistent with Stoneman's statements to an em- ployee that he had to lease out his equipment instead of providing labor because his competitors were underbidding him 604 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD rector. There was no appeal from that dismissal. A new charge and an amended charge alleging the same conduct were filed in August 1982. On 27 September 1982 the Regional Director rescinded his dismissal of the 1981 charge. Subsequently he issued a complaint alleging that the June 1981 dis- charges were unlawful. At the time the Respond- ents answered the complaint and at all times the case was before the judge the controlling Board precedent permitted counsel for the General Coun- sel in his discretion to reinstate dismissed timely charges outside the 10(b) period. California Pacific Signs, 233 NLRB 450 (1977); Winer Motors, 265 NLRB 1457 (1982). However, after this proceeding was transferred to the Board, we overruled Califor- nia Pacific Signs and Winer Motors in that respect. We held that Section 10(b) bars reinstatement of a dismissed charge beyond the 6-month limitation period absent fraudulent concealment by a respond- ent. Ducane'Heating Corp., 273 NLRB 1389 (1985). The Respondents did not raise Section 10(b) before the judge, who would have had no author- ity to overrule existing Board precedent, but antici- pated Ducane Heating by arguing Section 10(b) in its exceptions to the judge's decisions. Counsel for the General Counsel argued in response that the re- instatement was valid under California Pacific Signs and Winer Motors and that the original dismissal was precipitated by concealment by the Respond- ents, an assertion for which the' General Counsel produced no supporting evidence.2 The General Counsel does not argue that the 10(b) issue was un- timely raised. While my colleagues are correct in asserting that Section 10(b) must be raised in a timely manner, timeliness is a flexible principle that must, be ap- plied according to the circumstances presented. Thus, although it is desirable to have Section 10(b) pleaded as a defense, the Board permits its asser- tion at the hearing. Ducane Heating Corp., supra at 1390. It is timely if litigated at the 'hearing even if not expressly asserted as a defense. Consolidation Coal Co., 277 NLRB 545, 548 (1985). The rule cor- rectly stated then is that Section 10(b) is timely as- serted if presented in a pending case at a time when it was reasonable in the circumstances to do so and when no one is prejudiced by failure to raise it sooner. In the instant case there was no viable defense to raise in answer to the complaint and nothing to litigate at the hearing concerning the expiration of the 10(b) period. The Respond- ents had every right, however, to argue to the Board as they in effect did that California Pacific 2 Although counsel for the General Counsel's submission to the Board was his brief to the judge, he added the 10(b) argument in a final foot- note not included in the original version Signs and `Winer Motors were incorrectly decided. As the Board now agrees with the Respondents that reinstatement of a dismissed charge is improp- er in circumstances like those presented here, I would dismiss the allegation of discriminatory dis- charges. 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 refuse to bargain collectively with Wizard Method Employees Independent Union by transferring unit work from Wizard Method, Inc. to Hydro Logistics, Inc. and Miracle Sales and Service, Inc. without affording the Union an op- portunity to bargain thereon. WE WILL NOT lay off unit employees as a result of such transfer. WE WILL NOT condition our employees' employ- ment on their acceptance of employment without representation by the Union. WE WILL NOT discharge any employee for filing a grievance pursuant to the provisions of a collec- tive-bargaining agreement covering that employee. WE WILL NOT refuse to reinstate any employee because of his activities on behalf of the Wizard Method Employees Independent Union or because he is believed to be responsible for that Union's unfair labor practice charges with the National Labor Relations Board. WE WILL NOT threaten to sue any of our em-, ployees to discourage the Wizard Method Employ- ees Independent Union from filing unfair labor practice, charges with the National Labor Relations Board., - 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 recall all employees laid off as a conse- quence of the above-mentioned unlawful transfer of unit work and offer them reinstatement to the posi- tions they held before their unlawful layoff or, if those positions no longer exist, to substantially equivalent positions, without prejudice to their se- niority or other rights and privileges, and make them whole, with interest, for any loss of earnings they may have suffered as a result of the discrimi- nation against them. HYDRO LOGISTICS 605 WE WILL offer James Jerard, Kenneth Leonard, and Dennis Leonard reinstatement to the positions they held before their unlawful discharge and to Randy Rotella, reinstatement to the position he held before he was discriminated against or, if those positions no longer exist, to substantially equivalent positions, without prejudice to their se- niority or other rights and privileges, and make them whole, with interest, for any loss of earnings they may have suffered as a result of the discrimi- nation against them and WE WILL remove from their personnel records all references to discipline imposed on them as a result of the discrimination against them and will give no effect to any such references. WE WILL pay the Wizard Method Employees Independent Union all dues and other moneys they are entitled to have received since 1 July 1981 under the terms of the contract we have with it. WIZARD METHOD, INC. AND ITS ALTER EGO, HYDRO LOGISTICS, INC. Carl B. Newsome, Esq., for the General Counsel. Angelo Massaro, Esq. (Hovey & Massaro), of Niagara Falls, New York, for Wizard Method, Inc. and Hydro Logistics, Inc DECISION STATEMENT OF THE CASE JAMES F. MORTON, Administrative Law Judge. The hearing in these consolidated cases was held in Buffalo, New York, on 8 days between February 7 and June 7, 1983. The principal issues are whether: (a) The 3 named respondents are a single enterprise; (b) 3 named employ- ees were discharged on June 25, 1981, because of their union activities; (c) a fourth employee was laid off in June 1982 and not recalled because he was believed to be responsible for starting a wage and hour investigation, because he filed a charge with the National Labor Rela- tions Board, or because of his union activities; (d) 14 named employees were laid off in June 1982 because they voted against surrendering benefits due them under their union contact; (e) unit work was transferred to non- union enterprises without bargaining and to discourage union membership; and (f) numerous alleged independent acts, violative of the statutory rights of employees, were committed On the entire record, including my observation of the demeanor of the witnesses, and after due consideration of the briefs filed by the General Counsel and the Respond- ent, I make the following FINDINGS OF FACT I JURISDICTION Wizard Method , Inc. (Wizard), a New York corpora- tion located in Niagara Falls, New York, is engaged in providing industrial cleaning services to major compa- nies, such as Bethlehem Steel Corporation and Union Carbide Corporation. Wizard's annual purchases of goods delivered directly to it in New York from loca- tions outside New York exceed $50,000 in value Hydro Logistics, Inc. (Hydro) is also a New York cor- poration engaged in providing industrial cleaning serv- ices, its principal office is in Buffalo, New York In 1980 its gross annual revenues totaled $68,865; in 1981 it to- taled $71,841 57. These services were rendered to Bethle- hem Steel Corporation, to Republic Steel Corporation, and to other major manufacturers. Miracle Sales and Service, Inc (Miracle) is another New York corporation engaged in providing industrial cleaning services. Its office is in Niagara Falls, New York The General Counsel contends that Wizard, Hydro, and Miracle comprise a single employer within the meaning of the National Labor Relations Act (the- Act) The evidence relating to that issue is set out below. II. THE LABOR ORGANIZATIONS Wizard Method Employees Independent Union (Inde- pendent Union) and the Painters District Council #4 with its affiliated maintenance local, Local 1581, AFL- CIO (Painters Union) are both labor organizations as de- fined in Section 2(5) of the Act. A. The Relevant Evidence 1 Background Wizard has been owned and controlled by its presi- dent, Garlen Stoneman, since it was incorporated in 1969 Its operating equipment consists principally of tank trucks that use powerful vacuum motors to suck up debris and dirt through hoses handled by laborers. It op- erated originally in and about Niagara Falls, New York. About 1973, Wizard recognized the Independent Union as the exclusive representative of its operators and driv- ers for purposes of collective bargaining. By the late 1970s, Wizard had expanded its operations and was pro- viding industrial cleaning services to plants located in and around Buffalo, New York, about 25 miles from Ni- agara Falls It had signed a series of renewal collective- bargaining agreements with the Independent Union, the last one on February 20, 1981, effective until February 1984. Hydro was incorporated in July 1979. It was inactive until December 1980. Its president then, Paul Mullen, was a consultant in the employ of Wizard, he also had negotiated on Wizard's behalf the collective-bargaining agreements Wizard had with the Independent Union. Hydro's treasurer then was Alfred McDonald, a full-time lieutenant in Buffalo's police department. McDonald then, as now, worked several days a week as an officer of Wizard, in overall charge of its operations in the Buf- falo area. McDonald testified that, in about 1980, Wizard was having problems with its employees, particularly those who lived in Niagara Falls and who wanted travel pay to work in Buffalo, 30 miles distant, and who apparently objected to the arduous working conditions in the plants serviced by Wizard in the Buffalo area It is undisputed 606 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD that Wizard discussed with the Independent Union the matter of Wizard's forming a company and hiring new employees in the Buffalo area to service the, Buffalo ac- counts Wizard's president, Stoneman, financed Hydro's oper- ations and obtained servicing contracts for it in the Buf-' falo area, apparently without recompense to himself Wizard lent its trucks and other equipment to Hydro. The foregoing arrangements had 'been made informally; there is no written agreement between Wizard and Hydro spelling out their respective rights and obliga- tions Hydro became active in late 1980, as discussed below - Sam Saunderson, conceded to be a supervisor within the meaning of the Act, testified that he was working as a supervisor for Wizard when Stoneman told him that Hydro would become operative because it was necessary to cut out the travel pay of Wizard's employees in Niag- ara Falls assigned to work in the Buffalo area. Saunder- son further testified that, after he was transferred to Hydro's payroll, he continued to attend "managers' meetings". which were held every Friday by Wizard's president, Stoneman, for all Wizard foreman. McDonald, Hydro's treasurer in 1981 who-is now its president, testi- fied that Stoneman, can tell him what employees Hydro may use and that Stoneman "counselled" Hydro in nego- tiating its contract with the Painters Union, referred to below. McDonald explained that Stoneman did that be- cause he was the one who was putting up the money. McDonald also related that he reported to Stoneman the employee demands made at. a meeting Hydro held on January 10, 1981, also recounted in detail below, and that Stoneman advised him that Stoneman would take care of the problem. - The uncontroverted testimony establishes also that Robert Wilson, a Wizard foreman, supervised Hydro's employees for a 2-month period in 1982-the only work done by Hydro that year., The following accounts reveal how Hydro made its initial appearance. James Jerard testified for the General Counsel as follows. He was hired on March 3, 1980, by Wizard's personnel director, McDonald, and worked for Wizard at Republic Steel and other locations in and near Buffalo. In October 1980 McDonald asked him to come to his house. There, McDonald told him that he heard that one of Jerard's coworkers was trying to bring in a Teamsters Union McDonald told Jerard that he did'not want the Teamsters and informed him that he' is "to be in the Painters Union " McDonald handed Jerard authori- zation cards for the Painters Union, directed him to pass them out to his coworkers, and informed Jerard that he would be the Painters Union steward. McDonald also told Jerard that the "company would be Hydro Logistics and (that the employees) were going to be with the Painters Union." Jerard followed McDonald's instruc- tions. His coworkers signed the authorization cards. Jerard turned the signed cards in at McDonald's office. Jerard's account regarding the foregoing is uncontrovert- ed. - Jerard further testified that in November 1980, one of his coworkers arranged to have the business manager of Mullen to negotiate a collective-bargaining agreement. Negotiations began in December 1980. Jerard testified that, during the period of those negotiations, McDonald called 'him several times to criticize several of the em- ployees who were "holding up the contract" as a "sweetheart contract." McDonald told Jerard then that if a contract was not signed,' "we would close up" and that "the AFL-CIO was needed because (the ' Independent Union) would not be recognized " McDonald also stated that the employees should either get the contract signed or they would go back working as stockboys-a- refer- ence to previous jobs they held Counsel for Wizard and Hydro noted in his brief that unions affiliated with the AFL-CIO represented the production and maintenance employees in the factories in which Hydro's work was to be performed. In late December 1980 Hydro's president signed a con- tract with the Painters Union. The agreement was dated December 1, 1980, and, by its terms, was to be effective then and until January 31, 1984 Nevertheless, Jerard and the other employees purportedly covered by the contract continued to be paid by Wizard until sometime in the spring of 1981 when, without explanation, they began re- ceiving paychecks drawn by Hydro. 'Also, the Painters Union' reportedly 'discharged its business, manager for having negotiated- that contract with Hydro and brought a civil action for rescission of that contract; the present status of that suit is unclear. ' None of the matters-set'out above are alleged as unfair labor practices. The General Counsel' notes that no unfair labor practice charge has been filed, particularly one alleging a violation of Section 8(a)(2)'of the Act. The complaint alleges no violations for the year 1980 for presumably the 'same reason. In any event, it appears that the "Painters Union has disclaimed the contract and, as discussed further in detail below, Hydro has been de- funct for at least a ,year. 2. The meeting on January 10, 1981 The General Counsel contends that, Paul Mullen, Hydro's president' and Alfred McDonald, its treasurer who was also Wizard's personnel director; engaged in unlawful coercion of employees at a meeting. in Hydro's office on January 10, 1981, and by, their conduct, the Painters Union was unlawfully bypassed-as the employ- ees' representative. The employees had requested 'that meeting to seek' (a) travel pay for the times when they were assigned by McDonald to work at locations in Ni- agara Falls, (b) double pay for work on Sundays, and (c) the use of seniority in job assignments The employee who asked for double time pay was told by McDonald that he would get it but would never work for McDon- ald again.' Another employee related, that he was not working while others with less seniority were Mullen drafted a document that reportedly was an amendment to the Painters Union contract and gave it to most of the employees present They signed it The employees testi- the Painters Union meet with Hydro's then president that employee He did not testify and his status was not fully litigated i There is no allegation in any of the compaints before me respecting HYDRO LOGISTICS 607 feed they never received a copy of that document and none was offered in evidence. 3 The Hydro paychecks In the spring of 1981 the Wizard employees who lived in the Buffalo area (including James Jerard and Kenneth and Dennis Leonard) no longer were given weekly pay- checks drawn by Wizard. Instead, their foreman then began to give them checks drawn by Hydro. Otherwise, the checks were identical (deductions, benefits, and net wages), to the checks previously drawn by Wizard. On the occasions, however, the employees on Hydro's pay- roll were assigned by McDonald to work in the Niagara Falls area, they were paid by checks drawn by Wizard. They thus understood that when they worked in Buffalo, they were "Hydro employees" and when in Niagara Falls they were "Wizard employees." They had not signed any separate W-2 forms or job applications for Hydro. 4. June 25, 1981 meeting The General Counsel alleges that three employees were discriminatorily discharged on June 25, 1981. It appears that work being done by Hydro slowed down by late May 1981 and only several employees were on the Hydro payroll then. James Jerard testified that he complained to his fore- man, Sam Saunderson, about the end of May or begin- ning of June 1981 concerning the fact that he was not working although he was the most senior employee. Jerard testified he referred Saunderson to earlier discus- sions on this subject and his earlier stated intent to file a grievance. According to Jerard, Saunderson, who is con- sidered to be a supervisor as defined in the Act, told him that he had mentioned the subject to McDonald and that McDonald told him that nothing could be done. Jerard then went to the office of the Painters Union and was told by its acting business manager how to prepare and submit a written grievance. He was given assistance but was also informed that the Painters Union did not seek to enforce that contract. Jerard drafted a grievance, and signed it, along with coworkers Dennis Leonard, Ken- neth Leonard, and Paul Reid. Shortly afterwards, Jerard received a telephone call from McDonald who told him, in substance, that he, Dennis Leonard, and Kenneth Leonard could not go back to work until they met with him The meeting was set for June 25, 1981. Jerard, Dennis Leonard, and Kenneth Leonard testi- fied in substance as follows respecting the events of that meeting. They met with McDonald , Mullen, and their foreman, Robert Stafford, at Hydro's office on that day. Jerard gave McDonald the signed grievance. McDonald looked at it and handed it to Mullen, who began reading it. McDonald then said he had his own grievances with them. Mullen read the grievance and said to McDonald, "You know who we're dealing with here" and made a vulgar gesture using his arms. McDonald then said to the three employees that he had gotten complaints about their work from officials of Republic Steel. Dennis Leon- ard interrupted to say that he never had worked there. McDonald then said that his comments also applied to Bethlehem Steel . Dennis Leonard said he never worked at Bethlehem Steel either. McDonald then said that his remarks apply to Donner-Hanna, Hydro's only other active customer then . McDonald then asked each of the three employees if they could do "high pressure work" and, when they said they could, he told them that they could not McDonald then told them that he had been told by their supervisor, Stafford, that they had violated safety rules by not wearing safety glasses They informed McDonald that Stafford had told them that they did not have to wear them as long as they had them on their person . Stafford said that was so . McDonald, according to their accounts, then became flustered and angry. He told them that the three of them were fired for not wear- ing safety glasses They testified that Mullen commented that that's a good reason . They thereupon left. McDonald testified as follows regarding the foregoing. He and Wizard 's president, Stoneman, had received com- plaints about unsatisfactory work done by Jerard , Dennis Leonard, and Kenneth Leonard and that Stoneman had instructed him not to discharge them but only to suspend them for 3 days each in accordance with ' the established progressive disciplinary system in effect. (No evidence was submitted about such a system.) McDonald met with Jerard and the Leonards on June 25 to discuss that matter, but they insisted instead on talking first about their grievance . When he told them that that could wait, they began to walk out. He became annoyed and told them they were fired. McDonald testified he was shocked that he said this as it was contrary to Stone- man's express instructions McDonald testified that his was a reflex action, caused by his desire to have the last word . He further explained that he meant that they had in effect quit when they walked out but he did not want to give them that satisfaction. Mullen testified that at the June 25 meeting he read the grievance submitted by the employees and asked what it was all about as "we don't have a contract with the Painters Union " He further testified that there were "some comments back and forth and the things, that is, what we wanted to talk about and they got up and they left." Mullen testified that he had no recollection of any- thing being said regarding the employees being dis- charged. Stafford, the foreman then, was deceased as of the hearing in this case Stoneman testified about a discussion he had with McDonald prior to the June 25 meeting . His account was completely confused. Respondent 's counsel, using principally leading questions, adduced from him testimo- ny that he told McDonald that the Leonards and Jerard were not to be fired but just suspended The three employees filed claims for unemployment compensation benefits that Hydro opposed on the ground that they had been fired for cause. Hydro did not contend in that matter that the three employees had quit their employment . After a hearing, they were found to have been discharged for presenting a grievance and were granted unemployment compensation. I credit the accounts of Jerard, Dennis Leonard, and Kenneth Leonard. Especially as Mullen did not begin to 608 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD corroborate McDonald's account, as Stoneman for all practical purposes undermined McDonald's version of his discussion with Stoneman; as it also seems highly un- likely to me that Jerard, who was always previously re- ceptive to McDonald's wishes about bringing in the Painters Union and otherwise, would present McDonald with an ultimatum whereby his grievance must be dis- cussed first, as McDonald's version would have it, and lastly because it is extremely improbable that an experi- enced police official such as McDonald would have bla- tantly disobeyed the express order he said was dust given him by Stoneman about how to conduct himself at that meeting. 5. Hydro's dormant stage Hydro's operations virtually ceased as of mid-1981 It stopped leasing any equipment from Wizard and McDonald devoted his time to Wizard's matters The lawsuit by the Painters Union to rescind its contract with Hydro may have had something to do with its demise. In any event, Mullen resigned as president of Hydro and McDonald assumed that post as of January 1982 together with all its stock-which he conceded was valueless. The Hydro foreman, Saunderson, and employee Paul Reid were transferred to Wizard's payroll. 6 The demands for concessions Wizard operated in the last half of 1981 and for sever- al months in early 1982 as it had before Hydro had leased any of its equipment or performed cleaning serv- ices. Thus, Wizard directly serviced industrial accounts in both the Niagara Falls and the Buffalo areas. In March 1982 Wizard's president, Stoneman, met with representatives of the Independent Union and told them that he had to have concessions as Wizard's com- petitors were underbidding Wizard because of their low wage rates Stoneman told them that, unless Wizard competitors are organized and pay the same wages as Wizard or unless Wizard gets concessions, Wizard would "just lease [its] equipment and go i strictly leasing." The inference was clear that, in that event, the Wizard em- ployees would no longer be employed by Wizard. Wizard then had about six trucks with powerful vacuum cleaners on them Each such truck was valued at $175,000, and all were mortgaged. Shortly after that first meeting about concessions, Wiz- ard's president met with all its employees, including the ones who were the president and vice president of the Independent Union Stoneman told them then that, to remain competitive, Wizard had to have their consent to reduce the contractual wage rates, to give up one of the holidays, and to permit Wizard to schedule employees to perform weekend work without having to pay them overtime rates In seeking these concessions, Stoneman told the employees that he was losing contracts to his competitors who paid lower wages than Wizard did Stoneman stated to them if those concessions were not granted, Wizard would be forced to close down The employees rejected Stoneman's demands. On March 30, 1982, Stoneman prepared a ballot which he gave to each employee, together with a covering letter he signed as Wizard's president, addressed to "Dear Union Member." The letter stated, in substance, that if they wanted "to forestall a possible company liquida- tion," a majority of the union members had to cooperate. They were instructed to mark the ballots, not to sign them, and to return them by April 2 so that Stoneman could count them, along with a representative of the In- dependent Union. On the annexed ballot the employees were asked to place a mark on the "Yes" line or on the "No" line In substance the ballot indicated that they were voting to accept or reject Wizard's request for elimination of double-time pay and of a paid holiday and its request for a flexible workweek, all in return for a promise that "all future work will be given present em- ployees until they are back to a 40-hour week before re- calling or hiring others" and a promise of merit pay for any who might warrant it The employees again voted to reject the demands for concessions. Randy Vangorder, the president of the Independent Union, testified that Stoneman asked him what he thought of Wizard's "proposals" and that Vangorder re- plied that they might be accepted if Stoneman withdrew his demand for a flexible work-week Somehow arrange- ments were made to take a third vote Vangorder testi- fied that a relative of his prepared the ballots for the vote. The members of the Independent Union looked at those ballots at a meeting held in a tavern. The record testimony indicates that they threw the ballots away. It is not clear about when that meeting was held. Altogether there were about 15 meetings, formal and informal, between Wizard's president and officials and representatives of the Union-relating to Wizard's de- mands for concessions In each of those meetings, Stone- man made it clear that he had to get those concessions or else he would "close down" Wizard and go into the leasing business exclusively In the spring and for most of the summer of 1982, the Independent Union refused to grant those concessions Neither did it challenge Stoneman's statements that Wizard could not compete because of the wages it paid its employees. Nor did the Independent Union ask Stone- man to furnish it with any information relative to his de- mands for concessions Moreover, Wizard adduced evi- dence that it was under intense pressure from its custom- ers to submit lower, more competitive bids, and that it in fact had lost accounts to competitors 7 The alleged unlawful layoff in June 1982 The General Counsel contends that the following em- ployees were laid off on June 11, 1982 because they had refused to renegotiate the contract in effect then between Wizard and the Independent Union- Alan L Ortiz Tony Brenetti Dave Knappert Pat Foote Doug Rehrauer Randy Rotella Mike Rehrauer Larry Szwedo Dave Wilson John Myrtle Tom Miles Bob Counts Ken Zortman James R. Garlitz HYDRO LOGISTICS The record indicates that a substantial number of Wiz- ard's employees were laid off in mid-1982, no precise records were submitted in evidence disclosing the identi- ties of the laid-off employees or the respective layoff dates. The record shows the following about the above- named individuals Ortiz testified he was laid off on June 11, 1982, under circumstances described in detail in the next subsection and that he has not been recalled to work since. Dave Knappert, the two Rehrauers, and Wilson worked as a crew in the summer of 1982, also as dis- cussed in more detail in the next subsection. Miles testified that he had been laid off from Wizard from February to May 1982 and that he did not take any part in the discussions pertaining to contract concessions Miles was recalled in May 1982 and has worked for Wizard since then Zortman testified he worked on June 11 and that he was laid off on June 21, 1982, for 1 week, having been told then that Stoneman was going broke Zortman also testified that McDonald had said to him that there would not have been a layoff if the employees had not slapped Stoneman in the face and if instead they had agreed to the concessions Stoneman wanted There is no evidence about the employment status of Tony Brenetti or Pat Foote. The matters involving Randy Rotella are discussed in the subsection below dealing with his status. Larry Szwedo testified that he was laid off in June 1982 and was never given a reason for being laid off then He has not been recalled The president of the Independent Union, Randy Van- gorder, testified that the 12th individual listed above, John Myrtle, had been president of the Independent Union when Stoneman initially had sought and was re- fused contract concessions Vangorder's testimony indi- cates that, sometime later in the spring of 1982, employ- ees Myrtle, Zortman, Bob Counts, and William Cody were laid off James Garlitz testified that he worked steadily several days a week for Wizard, all throughout 1982. Employee Zortman also testified that in July 1982 he was working at Stoneman's house when he and Stone- man talked about "the union guys going to the Labor Board," a reference to the charge in Case 3-CA-11086 Zortman related that Stoneman said then that he would sue everyone of the employees who "went to the Labor Board and that, if he had to, he would garnish their wages to get back the money he had to spend for law- yers." Stoneman summarily denied having made any threats I credit Zortman's testimony. 8. The reappearance of Hydro Douglas Rehrauer testified as follows for the General Counsel. He was working for Wizard at the Donner- Hanna Coke jobsite in Buffalo in the spring of 1982. McDonald, Wizard's personnel director, came to that jobsite then and talked separately with him and with each of the other employees of Wizard who were work- ing there McDonald gave him a layoff slip from Wizard and told him that he would be rehired by Hydro and that he would receive no fringe benefits. McDonald said 609 that Wizard was no longer operating and that it was only a leasing company. On the following day, Douglas Rehrauer returned to that same work location, worked with the same crew under the same foreman He contin- ued to work there for about 2 months In that period, he received paychecks drawn by Hydro, not Wizard. Al- though the wage rate he received was unchanged, it ap- pears deductions for union dues and fringe benefits were no longer made He was laid off from that job and later recalled by Wizard to work at another location. It ap- pears that he was called back after Wizard finally reached agreement with the Independent Union on the matter of concessions Michael Rehrauer testified that the exact date that he was laid off by McDonald along with his cousin, Doug- las Rehrauer, as related above and others, was June 11, 1982 His account otherwise corroborates that of Doug- las Rehrauer. In addition, his testimony indicates he had to pay for medical treatment that would have been pro- vided for under Wizard's contract with the Independent Union Further, he testified that when the Donner-Hanna job ended on July 9, 1982, he was laid off. He called Wizard's office and was assigned to work at the Bethle- hem Steel plant with a different crew and where he was paid by Wizard. Another employee, Alan Ortiz, testified along the same lines as the Rehrauers respecting the events on June 11, 1982. In addition, Ortiz asked McDonald if he would be covered by a union contract and McDonald answered that there was no union and that McDonald is the contract Ortiz said he would not work on that basis. He has not worked for Wizard or Hydro since then. The foregoing accounts were not materially contro- verted. 9. The emergence of Miracle The General Counsel placed into evidence copies of invoices from Miracle to Wizard for labor furnished to jobsites at which Wizard had contracts to furnish labor and equipment for purposes of performing industrial cleaning services. Those invoices reflect that, from June 12, to August 18, 1982, Miracle billed 2040 man-hours of work to Wizard for cleaning services performed at Union Carbide, Bethlehem Steel, and other locations, which Wizard itself normally serviced. One of Wizard's employees who was laid off in June 1982, Larry Szwedo, testified that he worked for Miracle on several of the jobs covered by the above invoices. Miracle's history as a company is as follows. At vari- ous times in the 1970s, James Szwedo was employed by Wizard in different capacities-first as a laborer and later as a shop mechanic. From 1976 through 1979, he was self-employed, doing industrial cleaning under the name of Western Power Clean. He returned to work for Wizard in 1979 and left at the end of 1980 for another period of self-employment, this time d/b/a Miracle Sales and Service. That company was incorporated in April 1981. In May 1982 Stoneman telephoned James Szwedo and proposed that Miracle perform work for Wizard's cus- tomers and lease Wizard's equipment in return for not 610 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD competing with Wizard. Szwedo accepted. As noted above, Miracle began in about June 1982 to perform a substantial amount of work pursuant to that arrangement In 1982, it grossed $98,000, compared to $49,000' in 1981 Miracle rented an office located in a building owned by Stoneman. That building adjoins Wizard's facility. Miracle used Wizard's office in June 1982 to distribute job application forms. It also posted a sign on a car be- longing to a Wizard foreman that directed those appli- cants to go to Wizard's office. Miracle also placed news- paper ads for job-applicants. Most of its employees had responded to those ads. One of the General Counsel's witnesses, Michael Rehrauer, testified without contradic- tion that he heard Wizard's general foreman say, in June 1982, that "We are starting up'Miracle Sales and Serv- ice." In the summer of 1982 Stoneman informed James Szwedo that a Wizard employee had to work with Mir- acle's crew because of insurance requirements, apparent- ly a reference to the coverage carried by Wizard on its trucks. On those -occasions when Miracle performed work for Wizard, as reflected by the invoices placed in evidence, the employees doing the work identified them- selves as Wizard employees at the plants at which they were assigned to work. They did so because the security guards at those plants had, in effect, orders to permit entry only to employees of Wizard, the nominal contrac- tor. - Miracle also serviced its own accounts, e g., Airco, leasing equipment from Stoneman for about $45 an hour. The General Counsel adduced testimony from an em- ployee, Ken Zortman,- that Wizard 's president , Stone- man, instructed him to report to the Airco jobsite and to work with Miracle employees there, to do the same work they do. On another occasion according to Zort- man's uncontroverted testimony, Wizard's general fore- man, John Kozlowski, referred him to work for Miracle. Szwedo set the wage scales for Miracle's employees;' neither Stoneman nor McDonald told him how much Miracle's employees were to be paid Szwedo testified that Miracle gave up its contract with Airco "at the request of Mr. Stoneman to help alleviate the problem he was having with his union." It appears that, about the time Szwedo did that, the Independent Union had agreed to the concessions sought by Stone- man in connection with discussions to resolve issues' raised by the initial unfair labor practice charge in this case. That matter is considered separately below. Con- cerning Miracle; Szwedo's testimony indicates that its operations have been materially reduced and that Wizard has taken over the servicing of the Airco contracts and the other industrial accounts th t Miracle had been han- dling. 10. The unit as of July-1981 Hydro has been defunct since about the end of July 1981 (except for a brief revival in mid-1982) and Mir- acle's arrangements with Wizard to service its customers ended about mid-August 1982. The uncontroverted testi- mony is that the Painters Union, by late June 1981, had discharged its business manager for having entered into a contract with Hydro in late 1980, that the Painters Union had brought a civil action in 1981 to rescind that con- tract, and that, while its acting business manager assisted James Jerard in drafting a grievance in June 1981, he also informed Jerard in essence that the employees would have to submit it themselves as the Painters Union was taking the position that the contract was null and void. As of about July 1, 1981, Wizard resumed servicing its own accounts in both the Niagara Falls and Buffalo areas and continued to do so to date, except for the inci- dents in the summer of 1982, discussed above. Wizard, together with the Independent Union, have applied their contract to all employees performing such work In effect, Wizard and the Independent Union have reverted to essentially the arrangement in existence before the advent of the Hydro-Painters Union contract in late 1980. That arrangement has been modified by certain contractual changes effected in September 1982 whereby the Independent Union finally acceded to some of Stone- man's requests for concessions. The significant point, however, is that since July 1981 the appropriate bargain- ing unit in existence has consisted of all employees em- ployed by Wizard excluding all office clerical employees, managerial employees and all supervisors as defined in the Act. 11. Alleged discrimination against Randolph Rotella , The General Counsel contends that- Rotella was laid off by Wizard in June 1982 because of his activities on behalf of, the Independent Union and because he cooper- ated in an investigation conducted by the wage and hour division of the U.S. Department of Labor. The General Counsel further contends that Respondent about October 10, 1982, failed and refused to recall Rotella from layoff because of those same reasons, and also because it be- lieved that, Rotella was the one responsible for, the filing of the unfair labor practice charges by the Independent Union in this case. Respondent asserts that Rotella requested to be laid off because he was going into business with his wife and that he was.not laid off for unlawful reasons. It contends fur- ther, that it did not have any work for Rotella when he sought on October 19, 1982, to be recalled from layoff. Rotella began working for Wizard in 1978 as a laborer, was soon assigned to work as a truckdriver, and then was, promoted to, foreman About the end of 1981, he married a sister of James Szwedo (Miracle's president) and of Edward Szwedo (one of Wizard's foreman). Ro- tella asked, in late 1981, to go back to work as a bargain- ing unit employee and his request was granted. No reason appears in the record about why he made that re- quest. 2 At one of the meetings of the Independent Union in the spring of 1982, Rotella told the employees present, after its consultant, James Stewart, had talked to them about Stoneman's demands for concessions, that Stewart 2 1 note that late in July 1982 the wage and hour division calculated that Rotella, among others in Wizard's employ, was entitled to pay for working what it termed, unrecorded hours of work in 1981 It is specula- tive that Rotella wanted to go back to the bargaining unit to ensure that he obtained full compensation for the hours he may have worked HYDRO LOGISTICS was "in cahoots" with Stoneman. Rotella then accused Stewart of informing Stoneman of all that transpired at meetings of the Independent Union, of having accepted personal loans from Stoneman, and obtaining medical in- surance coverage for his family through Stoneman. Stewart did not deny those statements and the record in this case discloses that he did accept loans and had medi- cal coverage from Wizard. Stewart's testimony before me is that he had told Stoneman that Rotella had made statements at a meeting of the Independent Union that "made it difficult to get the concessions through " In May 1982 an investigator for the wage and hour di- vision of the U.S. Department of Labor interviewed Ro- tella, but Rotella then declined to sign any statement in that investigation. Rotella was laid off on June 4, 1982, with five other employees. He testified that at some point before he was laid off, James Szwedo, Miracle's president, told him that Stoneman was going to lay him off because he believed that Rotella had filed a complaint with the wage and hour division along with two other individuals, one of whom was Samuel Saunderson. Saunderson had left Wizard's employ sometime in 1981. Stoneman testified that he had to lay off a number of employees in June 1982 because business was slow and that he selected Rotella as one of the employees to be laid off as it was his understanding that Rotella was opening up a restaurant with his wife.3 The only evidence before me that Rotella was inter- viewed in May 1982 by an investigator of the wage and hour division that can be attributed to Wizard was a form dated late July 1982, apparently served on Wizard then and that claims that moneys are owed various indi- viduals, including Rotella and Saunderson, under the Wage and Hour Act On June 7, several days after his layoff, Rotella signed a statement prepared for him by an investigator from the wage and hour division. That statement appears to be the same one Rotella had previously declined to sign. The following developments took place later in 1982 and led to Rotella's seeking reinstatement on October 10, 1982. In August 1982 representatives of the Independent Union met with Wizard's president at the office of Wiz- ard's attorneys and an agreement was reached that pro- vided that the Independent Union would withdraw its unfair labor practice charges. The Independent Union then requested withdrawal of those charges Board agents for Region 3 apparently wanted confirmation that all employees affected by the agreement were aware of its provisions and had no objections thereto. When it de- veloped that at least two, Rotella and the former presi- dent of the Independent Union, John Myrtle, expressed a desire to be recalled to work, the consultant employed by the Independent Union, Stewart, instructed them to report to Wizard's office on October 10, 1982. Mean- while, the Board's Regional Office withheld action re- specting the withdrawal requests. Rotella testified as follows concerning the events on October 10, 1982 He arrived at Wizard 's premises and 3 That restaurant, the Poor Man's Restaurant, opened for business on June 8, 1982-4 days after Rotella's layoff 611 waited for Stoneman When Stoneman came in about 40 minutes later, Stoneman looked at him, said nothing then, and walked into his office. He returned a few min- utes later and asked Rotella what he was doing there. Rotella replied that he was there for a meeting with Stoneman Stoneman told him that he knew of no meet- ing, that Rotella was unwanted, and that Rotella should get off Stoneman's property. Rotella left. Rotella saw Myrtle outside and told him what happened. Myrtle went into the office and came out 10 minutes later. Mytle told Rotella that Stoneman "threw [him] out of the office too" Stewart arrived next and was told by Rotella and Myrtle what had just occurred. Stewart testified as follows respecting the events of October 10, 1982. He arrived early and was in Stone- man's office making personal calls Stoneman came in. Stewart asked if he could make one more call before the meeting with Rotella and Myrtle began Stoneman re- plied that there would be no meeting and stated that he just "threw [Rotella and Myrtle] off [his] property." Stoneman said that he had "found out from other people [that] Rotella is a snake," that Rotella "was double cross- ing him and working behind his back and all the troubles [Stoneman] was having were [Rotella's] fault and that why [Stoneman] is not going to have him back " Stewart testified further that in June 1982 Stoneman called him and wanted to know why the unfair labor practice charge was filed, apparently a reference to the charge filed in Case 3-CA-11086 on June 23, 1982. Stewart related that, in that discussion, Stoneman said that "it had to be Rotella" who was responsible for the filing of that charge. Stewart further testified that, on an- other occasion, Stoneman told him that he would spend every dime he had to fight Rotella. Stoneman's testimony respecting the foregoing matters is as follows. After the concession agreement was signed, he had a meeting with Stewart. That took place in his office in the fall of 1982. He, Stoneman, had approached the employees to get the concessions he sought and later he met with Stewart who told him that he would get "no kind of concessions as long as Randy Rotella and Larry Szwedo [are] here." Stewart reported that Rotella had been telling the employees that Stoneman has "money stashed away " Stoneman then likely referred to Rotella as a snake In response to a series of leading questions, Stoneman denied having knowledge of any protected activities on Rotella's part until after Rotella filed his own charges with the Board Stoneman testified he had refused to take Rotella back because he did not have any work 'for him and not for any of the reasons alleged in this case by the General Counsel. On cross-examination Stoneman testified, in reference to Rotella's appearance at Wizard's premises on October 10, 1982, that Stoneman was aware that a meeting had been set for that day with Rotella and that, instead, he "asked" Rotella to leave the premises because he was not employed there and as Wizard was not then hiring em- ployees. Stoneman acknowledged that Rotella and Myrtle were there on that occasion because they wanted their jobs back . Stoneman testified that he would not "lay off an employee that was loyal to bring these people 612 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD back " Stoneman also acknowledged that Rotella's name was contained on forms sent to Wizard in the summer of 1982 by the wage and hour division of the U.S. Depart- ment of Labor in connection with an investigation being conducted there regarding overtime pay practices. I credit the above accounts of Rotella and Stewart' Stoneman 's testimony on direct examination did not con- test these accounts in any material way and his testimony on cross-examination confirmed many aspects of them The General Counsel also offered the following un- controverted testimony on the ground that the remarks made by James Szwedo, the president of Miracle, are binding also on Wizard as its alleged alter ego. Counsel for Wizard and Hydro objected to that testimony The merits of those contentions are discussed later in this de- cision. On two occasions in January 1983, James Szwedo asked Rotella why he filed the unfair labor practice charge against Stoneman . When Rotella answered that he did it to get his job back, Szwedo told him that Ston- eman would not give him his job back unless ordered to do so and even then it would be without backpay and that Stoneman would give him the worst job possible to force him to quit and would fire him anyway ties pursuant to the arrangements whereby Wizard leased equipment therefor to Miracle and billed Wizard for labor supplied 7 Stoneman ,, Wizard's president , was the controlling force in that period respecting the work cov- ered by those invoices Not only did he control the size of the crews, he also had James Szwedo surrender to Wizard the, purchase order Miracle had directly with Airco. The evidence does not establish that Wizard and Miracle were engaged in a joint venture before June 1982 or after August of that year. 2. The discharges of three employees on June 25, 1981 The credited testimony discloses that James Jerard, Kenneth Leonard, and Dennis Leonard, presented a writ- ten grievance under the Painters Union contract to McDonald and Miller on June 25, 1981 , and were sum- marily discharged after McDonald obviously sought to find a pretextual basis to discipline them and after Mullen, with a vulgar gesture , told McDonald that they knew what they were dealing with. McDonald's later futile efforts to show that those three employees had quit emphasized the showing that those employees were dis- charged because they filed that grievance and I so find. B. Analysis 1. The single, employer issue The uncontroverted evidence established that Wizard's president and sole stockholder, Stoneman, supplied the money to establish Hydro. He did so to save Wizard the expenses it would otherwise have incurred by reason of the travel pay provisions of Wizard's contract with the Independent Union. That he controlled Hydro's oper- ations overall and even its daily business; as Hydro's president himself acknowledged that Stoneman could tell him what employees Hydro was to use. Noting the fore- going, the overall testimony in the record, and also the testimony of Stoneman and McDonald that they dis- cussed before the June 25, 1981 meeting, the nature of the discipline to be meted out to three Hydro employees, I find that Hydro is the alter ego of Wizard The fact that Stoneman does not own the stock of Hydro is of no moment.5 Further, the individual who does, McDonald, has acknowledged that the stock of Hydro is valueless The evidence, however, is insufficient to find that Mir- acle is also an alter ego of Wizard. Miracle was in exist- ence as, a sole proprietorship for a number of years and -later as a corporation for a whole year before the inci- dents giving rise to this case occurred During that period, Miracle had been separately owned and operated by James Szwedo. At all times, Szwedo has on his own established the wage rates of Miracle's employees.6 The evidence does clearly show, nevertheless, and I thus find that Wizard and Miracle functioned as a joint employer from June 12 to August 18, 1982, when Mira- cle took over Wizard's contracts at various Buffalo facili- 4 Respondent introduced evidence of a matter admissible under Fed R Evid 609 for the purpose of impeaching Rotella's overall testimony I have considered that evidence in making this determination 5 American Pacific Concrete Pipe Co, 262 NLRB 1223 (1982) 6 Pinter Bros , 263 NLRB 723 (1982) 3. Alleged discrimination about Rotella The evidence is inconclusive to 'establish that Rotella was laid off on June 4, 1982, because of his activities on behalf of the Independent Union or, because he took part in an investigation by the wage and hour division of the U.S. Department of Labor Respecting the wage and hour investigation , the evidence indicated that the first knowledge Respondent had of Rotella's involvement in a claim filed with it in late July 1982-long after. Rotella was laid off. As to his union activities , there is evidence that the.consultant for the Independent Union , at some point, informed Stoneman that Rotella , along with others, was opposed to granting concessions sought by Stoneman and that Rotella had been persuasive in having that request rejected by the unit employees. It appears, however,,that that information may have been furnished Stoneman after Rotella was laid off. In any event, the General Counsel has not persuaded me that it occurred just prior to Rotella's layoff on June 4, 1982. The evi- dence-is insufficient to establish that Rotella was selected for layoff and then laid off on June 4, 1982, because of his earlier union activities.8 His layoff appears to have occurred as part of the much longer layoff, discussed in the next section. ' Regarding the events of October 10, 1982, the evi- dence is clear that Wizard had indicated it would rein- state Rotella on his application therefor but that, when he arrived at its premises for that purpose , Stoneman could not face up to the prospect of reinstating him. The credited evidence discloses that he first vacilated and then ordered Rotella off the premises. Stoneman's refer- ence to Rotella as a "snake" that he threw "off his prop- erty" because Rotella "was double-crossing him and 7 Trend Construction Corp, 263 NLRB 295 (1982) 8 Cf Townsend & Bottum, Inc, 259 NLRB 207, 218 (1981) HYDRO LOGISTICS 613 working behind his back" too clearly expresses the dis- criminatory motivation behind Stoneman's acts. I thus find that Rotella's reinstatement was denied because of his activities on behalf of the Independent Union and, re- lated thereto, because of Stoneman's belief that Rotella was the employee responsible for the filing of the charge in Case 3-CA-11086.9 4. June 1982 layoffs The General Counsel alleges that 14 named employees were laid off in June 1982 because they refused to grant concessions demanded by Stoneman and in violation of Wizard's duty to bargain collectively thereon. The evidence discloses that there was a layoff of Wizard employees in June 1982. The exact number of employees laid off, their identities, and the lengths of their respective layoffs are not fully ascertainable from the evidence submitted. It is clear that some of the 14 employees named in the complaint were laid off then and that others of the 14 were not. It seems likely that Wizard employees not named in the complaint were also laid off in June 1982. The record evidence is clear also that the Wizard em- ployees, who were transferred to Hydro's payroll in June 1982, were told then by McDonald that they no longer were covered by the Independent Union's con- tract and would not receive the fringe benefits they had received as Wizard's employees. Paystubs and the testi- mony of Douglas Rehrauer and of Michael Rehrauer confirm that not only were those benefits discontinued but also dues deductions for the Independent Union were no longer made. I have already found that Wizard and Hydro were alter egos of each other In substance, Stoneman manipu- lated Hydro to obtain on his own what the Independent Union had, in June 1982, declined to give Wizard- modifications in the existing agreement. The Board has made it clear that an employer may not, without union consent, relocate bargaining unit work during the terms of an existing collective-bargain- ing agreement, change contract terms, and layoff em- ployees because it wished to relieve itself of the labor costs of its union contract.1° That holding is particularly applicable to the facts in the instant case that disclose that Wizard acted unilaterally in relocating unit work to Hydro and Miracle in mid-1982 after it was frustrated in its efforts to effect contract changes with the consent of the Independent Union. Its conduct, and that of its alter ego Hydro, under applicable precedent, are violative of Section 8(a)(1), (3), and (5) of the Act. For substantially the same reasons, Wizard's entering into a joint venture with Miracle in the period June- August also is violative of Section 8(a)(1), (3), and (5) of the Act There is no clear evidence, but only strong suspicions, that Miracle was a knowing accomplice of Wizard in violating employee rights I find that the evidence is in- sufficient to charge Miracle with any liability therefor. Rather, it appears to have taken on the Wizard accounts, as a legitimate business interest on its part. i t 5 Alleged independent violations of the Act The complaint alleges that Respondent unlawfully at- tempted to bypass its duty to negotiate with the Painters Union by having dealt directly with employees Jerard and the Leonards on Hydro's payroll on January 10, 1981. As it appears that the Painters Union has dis- claimed any interest in representing any of Respondent's employees,12 as any remedial order respecting that alle- gation would tend to impair the bargaining rights of the Independent Union and as any unlawful conduct arising out of the alleged act would be satisfactorily remedied by reason of the order remedying the unlawful discharge of those three employees, it would not effectuate the policies of the Act to pursue that allegation further The General Counsel has made it clear in the record that no remedial order is sought regarding McDonald's questioning of Jerard in late 1980 and his directing Jerard then to organize the employees on behalf of the Painters Union I agree that none should issue, particu- larly as the Painters Union has taken action to nullify those events and as those matters were effectively re- moved from litigation The General Counsel has alleged too that many state- ments of economic duress uttered by Stoneman in his futile efforts to get contract concessions constituted un- lawful threats of reprisals designed to compel the grant- ing of his demands. I reject that contention as Stoneman offered those comments in the course of collective bar- gaining and , as such, it was capable of being evaluated for its truth or as a ploy used to obtain the consent of the Independent Union to Wizard's requests for conces- sions. It seems clear that, in the context of face-to-face negotiations, a statement by an employer that it cannot afford to pay contract rates is not by itself violative of the Act but obligates that employer, if asked for informa- tion thereon, to either "withdraw his claim or to provide documentary support thereof "13 A more stringent rule applies when an employer informs employees during a union organizing campaign it would be forced to close its plant if the union got in. Such a statement would con- stitute an unlawful threat unless that employer can meet the burden of providing an objective factual basis for such a prediction. 14 Even were Wizard held to that more stringent test, I would find that it did meet its burden of providing an objective factual basis for having done so. The evidence in this case is clear that the dete- riorating economic situation in the Buffalo-Niagara Falls 9 Timberline Energy Corp, 258 NLRB 292, 297-298 (1981) It is specu- lative that Stoneman was motivated also by the fact that Rotella's name was among those for which the U S Department of Labor, wage and hour division in July 1982 sought additional wages I find that General Counsel has failed to establish by a preponderance of the evidence that Wizard was so motivated 10 Milwaukee Spring Division, 265 NLRB 206 (1982) 11 Cf Navaho Freight Lines, 254 NLRB 1272 (1981), Wabash Asphalt Co, 224 NLRB 820 (1976) 12 Cf Rochester Institute of Technology, 264 NLRB 1020, 1021 in 7 (1982) 13 Hi-Grade Materials Co, 239 NLRB 947, 957 (1978) 14 NLRB Y Gissel Packing Co, 395 U S 575, 619 (1969), Crown Cork & Seal Co, 255 NLRB 14 (1981) 614 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD area was pressuring Wizard to lower its contract prices; indeed, it is undisputed that it lost key accounts { I thus find that the evidence is insufficient to establish' that Wizard unlawfully threatened loss of jobs, termination of employment, plant closure, reduction of work hours, dis- continuance of its operations, or the like in the course of seeking contract concessions from the Independent Union. The General Counsel has also alleged that remarks made by Miracle's president, James Szwedo, in May 1982 and in January 1983 to his brother-in-law, Rotella; were coercive. I note that, at those times, Miracle was not engaged in a joint venture with Wizard Szwedo's statements were not made in the course of the joint ven- ture and cannot be attributed to Wizard 15 More realisti- cally Szwedo was talking to Rotella as a brother-in-law- the January 1983 discussions reveal more that Szwedo and Rotella were involved in some personal, family argu- ment and that Szwedo was not speaking in Stoneman's stead. I credit Zortman's testimony that,in July 1982, Stone- man threatened to sue Wizard's employees because of the filing of a charge with the Board, an obvious reference to the one filed in Case 3-CA-11086. Such a threat is de- structive of employee rights under Section 7 of the Act and violates Section 8(a)(1) of the Act. 16 There are other, miscellaneous allegations of independ-. ent violations set out in the consolidated complaints, before me. The record does not contain supporting evi- dence thereon and General Counsel,does not allude, to them in the brief he filed. I thus find no merit in those contentions.' 7 CONCLUSIONS OF LAW 1. Wizard, Hydro, and Miracle are each employers en- gaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 2. The Independent Union and the Painters Union are each labor organizations within the meaning of Section 2(5) of the Act. 3. -Wizard and Hydro are alter egos of each other; Wizard and Miracle were engaged in June, July, and August 1982 as joint employers in a joint venture 4. Wizard and Hydro, as alter egos of each other, dis- charged employees James Jerard, Kenneth Leonard, and Dennis Leonard on June 25, 1981, because they filed a grievance pursuant to Hydro's contract with the Painters Union and Wizard and they have since failed and refused to reinstate these employees and, by the foregoing con- 15 Cf Joe & Dodie's Tavern, 254 NLRB 401, 411 (1981) See also Fed R Evid 801(d)(2)(D) 16 Clara's Restaurant, 263 NLRB 37 (1982) 11 The General Counsel urges that Hydro threatened employees with discharge on January 10, 1981, when its treasurer told employee Jerry Panikowski that it would pay him the double wages he claimed was due him and that he would not work for Hydro again Hydro's treasurer tes- tified that Panikowski was entitled to regular pay and that he had made it clear he would no longer work unless he got double pay Panikowski did not testify Although he no longer worked after January 10, 1981, for Hydro, there is no allegation that he had been unlawfully terminated In any event, the equivocal state of the record about the alleged "threat" warrants dismissal of that allegation duct Wizard and Hydro have violated Section 8(a)(1) and (3) of the Act. 5 All employees of Wizard excluding all office cleri- cal employees, ' managerial employees and all supervisors as. defined in the Act have, since at least late 1981, com- prised a unit appropriate for purposes of collective bar- gaining 6. At all times material herein, the Independent Union has been the exclusive representative of the employees in the unit described above in paragraph 5. 7. Wizard and Hydro, as alter egos, and Wizard by using Miracle in a joint venture, engaged in activities in June, July, and August 1982 by which ' a substantial number of employees represented by the Independent Union were laid off or had their working conditions al- tered, all in contravention of the contract then in force between the Independent Union and Wizard and not- withstanding that the Independent Union did not consent to such modification By the foregoing conduct, Wizard and Hydro violated Section 8(a)(1), (3), and (5) of the Act - 8. ' Miracle, by participating in the joint venture with Wizard, did not violate the Act. 9. Wizard and Hydro, as alter egos, by Stoneman vio- lated Section 8(a)(1) of the Act by having threatened to sue employees because the Independent Union filed an unfair labor practice charge. 10. Wizard did not select for layoff and lay off Ran- dolph Rotella on June 4, 1982, because of his activities on behalf of the Independent Union or for other activi- ties protected by the Act.18 11 Wizard has, since about October 10, 1982, refused to employ Rotella, because of his activities on behalf of the Independent Union, and because it believed that Ro- tella was the employee responsible for the filing of the charge in, Case 3-CA-11086. .12. The unfair 'labor practices found above in para- graphs 4, 7, 9, and 11 affect commerce within the mean- ing of the Act. THE REMEDY Having found that Wizard, and its alter ego, Hydro engaged in certain unfair labor practices, I shall recom- mend that, Wizard and Hydro be ordered to cease and desist therefrom and to take certain affirmative action de- signed to effectuate the policies of the Act. Having found that Wizard's revival of Hydro in 1982 and Wizard's entering into a joint venture with Miracle from June 12, 1982, to August 18, 1982, violated Section 8(a)(1), (3), and (5) of the Act Wizard shall be ordered to recall all employees laid off as a result of those unlaw- ful acts and to offer to reinstate them to the positions they held before their unlawful layoff or, if those posi- tions no longer exist, to substantially equivalent positions, without prejudice to their seniority and other rights and privileges They shall further make these employees whole for any loss of earnings they may have suffered 18 It appears that Rotella was one of many Wizard employees laid off as a result of Wizard's unlawfully relocating unit work to employees on Hydro's payroll or on Miracle's A determination thereon may have to await backpay proceedings HYDRO LOGISTICS by reason of the discrimination against them, by payment to them of a sum of money equal to that which they nor- mally would have earned from the respective dates of their layoff or discharge to the date of Respondent's offer to recall or reinstate, less net earnings during such period, with backpay computed on a quarterly basis, with interest, in the manner prescribed in F. W. Wool- worth Co, 90 NLRB 289 (1950), and Florida Steel Corp, 231 NLRB 651 (1977). See generally Isis Plumbing Co., 138 NLRB 716 (1962). Similarly, they shall offer rein- statement to James Jerard, Dennis Leonard, and Kenneth Leonard and make them whole in the same manner for having unlawfully discharged them on June 25, 1981, and Randolph Rotella and also make him whole since re- fusing him reinstatement on October 10, 1982. On these findings .of fact and conclusions of law and on the entire record, I issue the following recommend- ed19 ORDER I. The Respondent, Wizard Method, Inc. and its alter ego, Hydro Logistics, Inc., Niagara Falls and Buffalo, New York, their respective officers, agents, successors, and assigns, shall 1 Cease and desist from (a) Transferring work performed by employees em- ployed in a unit (comprised of all its employees exclud- ing all office clerical employees, managerial employees, and all supervisors as defined in the Act) represented by Wizard Method Employees Independent Union to em- ployees outside that unit during the term of a collective- bargaining agreement Respondent Wizard has with the Independent Union and without its consent. (b) Laying off unit employees as a result of such trans- fers. (c) Discharging any employee for filing a grievance pursuant to the provisions of a collective-bargaining agreement covering that employee. (d) Refusing to reinstate any employee because of his activities on behalf of the Wizard Method Employees In- dependent Union or because he is believed to be respon- sible for that Union's filing unfair labor practice charges with the National Labor Relations Board. . (e) Threatening to sue employees to discourage the Wizard Method Employees Independent Union from filing unfair labor practice charges with the Board. (f) In any like or related manner interfering with, re- straining, or coercing employees in the exercise of the rights guaranteed them in Section 7 of the Act. 2. Take the following affirmative action necessary to effectuate the policies of the Act. (a) Recall any employees laid off as a consequence of the above-mentioned unlawful transfers of unit work and offer them reinstatement to the positions they held before their unlawful layoff or, if those positions no longer exist, to substantially equivalent positions, without preju- is If no exceptions are filed as provided by Sec 10246 of the Board's Rules and Regulations , the findings, conclusions, and recommended Order shall, as provided in Sec 102 48 of the Rules, be adopted by the Board and all objections to them shall be deemed waived for all pur- poses 615 dice to their seniority or other rights and privileges, and make them whole for any loss of earnings they may have suffered as a result of the discrimination against them, in the manner set forth above in the remedy section. (b) Offer James Jerard, Kenneth Leonard, and Dennis Leonard reinstatement to the positions they held before their unlawful discharge and to Randy Rotella, reinstate- ment to the position he held before he was discriminated against or, if those positions no longer exist, to substan- tially equivalent positions, without prejudice to their se- niority or other rights and privileges, and make them whole for any loss of earnings they may have suffered as a result of the discrimination against them, in the manner set forth above in the remedy section (c) Remove from its files any reference to the dis- charges of James Jerard, Dennis Leonard, and Kenneth Leonard, and any reference to the refusal to reinstate Randolph Rotella and notify them in writing that that has been done and that evidence of those unlawful acts will not be used as a basis for any personal action against them .20 (d) Make whole the Independent Union for all dues and other moneys which it would have received but for the unlawful transfer of unit work referred to above. (e) Preserve and, on request, make available to the Board or its agents for examination and copying, all pay- roll records, social security payment records, timecards, personnel records and reports, and all other records nec- essary to analyze the amount of backpay due under the terms of this Order (f) Post at its Niagara Falls and Buffalo facilities, copies of the attached notice marked "Appendix."21 Copies of the notice, on forms provided by the Regional Director for Region 3, after being signed by the Re- spondent's authorized representative, shall be posted by the Respondent immediately upon receipt and maintained for 60 consecutive days in conspicuous places including all places where notices to employees are customarily posted. Reasonable steps shall be taken by the Respond- ent to ensure that the notices are not altered, defaced, or covered by any other material (g) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Re- spondent has taken to comply. IT IS FURTHER RECOMMENDED that the complaint against Miracle Sales and Service , Inc. be dismissed as are all allegations found without merit in the analysis section above. 20 Sterling Sugars, Inc, 261 NLRB 472 (1982) 21 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 Enforcm an Order of the National Labor Relations Board " Carl B. Newsome, Esq, for the General Counsel Angelo Massaro, Esq. (Hovey & Massaro), of Niagara Falls, New York, for Wizard Method, Inc. and Hydro Logistics, Inc 616 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD SUPPLEMENTAL DECISION STATEMENT OF THE CASE JAMES F MORTON, Administrative Law Judge. The Board remanded this proceeding for consideration of its Decision and Order in Milwaukee Spring Division, 268 NLRB 595 (1984) (Milwaukee Spring II), and its Decision and Order in Otis Elevator Co, 269 NLRB 891 (1984) (Otis Elevator II). As those two decisions had issued after my decision in this matter, the parties sought and were granted leave to file supplemental briefs. These have ,been received and were fully considered. So that the holdings in those cases may be examined in reference to the facts in the instant matter, I will first set out a brief chronology of those facts. Chronology A. Events Antedating the Alleged Unfair Labor Practices Wizard Method, Inc. (Wizard) has, since the early 1970s been in the business of providing industrial clean- ing services to various factories in and about Niagara Falls and Buffalo, New York. The Wizard Method Em- ployees, Independent Union (Independent Union), has since 1973 represented Wizard's employees. In October 1980 Wizard's personnel director told some employees of Wizard that they would be working for Hydro Logistics, Inc. (Hydro) and that those employees would be repre- sented by a Painters Union. He appointed one of those' employees as steward for the Painters Union. It was signed in late December 1980 after various of the affect- ed employees had criticized it as a "sweetheart con- tract." Those employees and the other Wizard employ- ees not placed under the Hydro contract were all still being paid by,Wizard at that time. Beginning in the spring of 1981, those employees who were for the most part performing cleaning services in Niagara Falls were paid on checks drawn by Wizard. Employees dispatched to Buffalo were given Hydro pay- checks. The latter thus referred to themselves as Hydro employees. The wage rates paid all. the employees then were the same, whether paid by Wizard or Hydro. B. The Unfair Labor Practices On June 25, 1981, Wizard's personnel director. dis- charged three employees on Hydro's payroll, because they had filed grievances concerning their being on layoff while less senior employees were working In mid-1981, Hydro ceased operations and no longer "leased" trucks from Wizard. It appears that there was no formal agreement between Wizard and Hydro. After Hydro's disappearance in mid-1981 and until mid-1982, Wizard operated as it_ had before Hydro had first entered the scene Thus, as of the spring of 1982, Wizard had resumed servicing industrial accounts in Ni- agara Falls and Buffalo under its own name, paid em- ployees on checks drawn by Wizard, and recognized the Independent Union as the representative for, all employ- ees (including those who had been listed at times previ- ously on Hydro's payroll). In mid-March 1982 Wizard's president, Garlen Stone- man, began pressing the Independent Union for wage concessions His efforts did not succeed. On June 11, 19821'- Wizard's personnel director (who was also Hydro's president and sole stockholder then, al- though it concededly had no assets) informed several of Wizard's employees that Wizard was -no longer operat- ing, that they were laid off, that they would be working thereafter for Hydro, and that Hydro had no union.- Thereafter, several employees who had been on Wizard's payroll continued to do the same work as before but were paid by Hydro checks and they had none, of the fringe benefits they had when they were on Wizard's payroll. Other employees'of Wizard continued to be paid by Wizard and retained their benefits. On June 25, 1982, the Independent Union filed the unfair labor practice charge in Case 3-CA-11086 A few weeks later, Wizard's president, Stoneman, told one of Wizard's employees that he would sue every employee who participated in the filing of that charge. Miracle Sales & Service, Inc (Miracle) made its ap- pearance in mid-1982 when Wizard's president arranged to have it service several of Wizard's accounts, using Wizard's name and some of its employees. In August 1982, after about 2 months, Miracle ceased performing those services. It ceased at the request of Wizard's presi- dent in order to help ,Wizard solve its problem, with the Independent Union. In September 1982 the Independent Union finally ac- ceded to Stoneman's requests for contract concessions and, since then, Wizard has operated as it did before the reappearance of Hydro in mid-1982 and the emergence then of Miracle. On the basis of all the evidence, Hydro was found to be the alter ego of Wizard during the mid-1982 operation and Miracle was found to be a point employer with Wizard during-that same period. Analysis Milwaukee Spring II holds that, in the absence of an express prohibition in the contract against transfers of unit work and when there is no evidence of union animus, an employer may relocate unit•work to one of its nonunion facilities after having • reached a bargaining im- passe over the proposed change Otis Elevator II addressed issues left open in Milwaukee Spring'II and pertained principally to the questions of whether and when an employer is obligated to bargain about a decision to transfer unit- work, to consolidate op- erations, to subcontract, and so on. As it is obvious that the making of a decision (the Otis Elevator II issue) antedates the effectuation of a decision (the critical fact in Milwaukee Spring II), I shall first treat with Otis Elevator II. A Otis Elevator II The decision in Otis Elevator II was based on a com- posite of three different views. All three views discuss the holding in First National Maintenance Corp. v. NLRB, 352 U.S 666 (1981), a case involving the duty to bargain about a decision to close one facility. Two Board HYDRO LOGISTICS 617 members in Otis Elevator II set forth one rationale for their holding A third member, while concurring in the result, disagreed with the rationale and relied on a differ- ent view The fourth member also concurred in the result but on grounds distinct from the other two ap- proaches. These divergent paths have been followed by the respective members in subsequent cases. See UOP Inc., 272 NLRB 999 (1984); Fraser Shipyards, 272 NLRB 496 (1984); and Columbia City Freight Lines, 271 NLRB 12 (1984). In the absence of a plurality opinion to guide me, I will undertake an examination of the three separate ap- proaches. To discuss them intelligently, I will first out- line the relevant facts in Otis Elevator H. Otis Elevator II involved a unit of professional and technical employees in a facility that was partially closed down; 17 of those unit employees were relocated to a relatively new major research and development center in another State that had about 1000 employees, including 30 previously unrepresented professional and technical employees relocated from another facility. The relevant complaint allegation in Otis Elevator II was that the employer there had failed to bargain collec- tively about its decision to remove the 17 employees from the represented unit and about its decision to assign them to work as part of a much larger integrated oper- ation out-of-state and in which none of the employees were represented. Two Board members joined in dismissing the allega- tion based on their view that the employer there had based its decision to relocate those 17 employees on its good-faith opinion that their relocation "would enhance its research and development and hopefully the market- ability of its product." The employer's decision there was held to be one that turned "upon a fundamental change in the nature and direction of the business [and not] upon labor costs . . . and thus was not amenable to bargaining." A third Board member took a different approach in reaching the same result. That approach utilized the fol- lowing technique Management decisions may be divided into three categories. Category I decisions such as those involving product type or design financing arrangements have only an indirect, attenuated impact on the employ- ment relations and are clearly nonmandatory subjects of bargaining. Category II decisions, such as those affecting the order of succession of layoffs and recalls, production quotas, and the like, are almost exclusively an aspect of the employment relationship and are clearly mandatory bargaining subjects. Category III decisions, such as par- tial closedowns, are those that have as their focus the economic profitability of an employer's operations and which also leave a direct impact on employment. Fur- ther analysis is needed to determine whether a category III decision is a mandatory bargaining subject and the test to be applied is as follows Bargaining over manage- ment decisions that have a substantial impact on the con- tinued availability of employment should be required only if the benefit for labor-management relations and the collective-bargaining process outweighs the burden placed on the conduct of the business Prior Board hold- ings in other cases were examined using this approach for purposes of analysis. The approach of the fourth concurring member in Otis Elevator II holds that, when it is found that a proposal by a union could reasonably alter a company's plan, the company must bargain about any decision to implement such plan as, in those circumstances, the matter would be amenable to resolution through bargaining under First National Maintenance, supra. Using the approach developed by the first two mem- bers in Otis Elevator II, the issue, to be decided as I see it, is whether the evidence establishes that the employer did not in good-faith base its decision to transfer unit work on a fundamental change in the nature and direc- tion of its business I find, in the instant case, that the General Counsel has clearly shown that Wizard, in dis- criminatorily laying off employees, threatening them and engaging in other unlawful acts, and by reactivating Hydro and manipulating Miracle did not in good-faith undertake a fundamental change in the nature and direc- tion of its business. That is really evident as Wizard, once it succeeded in obtaining the "givebacks" it pressed for, resumed its business as before. The first approach in Otis Elevator II indicates that that test would not be ap- plied in a "case where alter ego or other such devices were employed to disguise operations over which the employer maintained surreptitious control." In the in- stant case, the record is replete with such evidence. Very recently, however, one of the two members who joined in this rationale stated that it was not necessary to decide the bargaining issue in a case when an employer engaged in serious unfair labor practices in connection with the closing of a terminal. See Mash kin Freight Lines, 272 NLRB 427 (1984). Nonetheless, I am directed by the remand order to make such a decision. I find that Wizard, in mid-1982, did not, in good-faith, decide to un- dertake a fundamental change in the nature and oper- ation of its business in reactivating Hydro and entering into a temporary joint-employer arrangement with Mira- cle. Regarding the approach used by the third Board member in Otis Elevator II, footnote 7 in Mash kin Freight Lines, supra, discloses that, using that approach, Wizard's decision "was motivated by union considerations and had a direct impact on employment . . . and that it fell within the definition of Category II decisions, which are mandatory subjects of bargaining." The rationale used by the fourth member in Otis Eleva- tor II also supports the finding of a violation as, in that view, the rule of First National Maintenance Corp. v. NLRB, is inapplicable to a situation, such as the instant case, when union animus has been shown. Consequently, there was a duty to bargain before the changes involved in Wizard's dealings with Hydro and Miracle in mid- 1982 could be effected. B. Milwaukee Spring II The holding in Milwaukee Spring II is that an employ- er may, after satisfying any obligation it may have to bargain about the decision, relocate work from a union- ized to a nonunion plant during a contract term to obtain 618 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD relief from the contract's labor costs, unless the contract contains a provision restricting the employer's decision- making regarding the relocation The facts in the case before me provide Respondent with no basis to avoid liability under the rule of Milwau- kee Spring H. As found earlier, Respondent never satis- fied its obligation to bargain as to transferring unit work to its alter ego or to its joint-employer in mid-1982. For that matter it never effected a transfer as such but in- stead undertook surreptitiously a disguised continuation of its own operations in order to bring about the wage givebacks it wanted . I note, however, that the General Counsel has not asserted that Wizard flaunted any con- tract provision barring transfers of unit work. Conclusion As set forth in the General Counsel's supplemental brief, Wizard did not change the nature or direction of any significant facet of its business. Rather, there was only a disguised continuation of its business for several months in mid-1982 when it reactivated Hydro and ma- nipulated Miracle-all to bring about a reduction in its labor costs. First National Maintenance is thus inapplica- ble. Each of the three approaches used in Otis Elevator II support a finding that Respondent violated Section 8(a)(1) and (5) by having failed in mid-1982 to bargain collectively with the Independent Union respecting the transfer of work to Hydro and Miracle Having failed to bargain collectively respecting that decision, the rule of Milwaukee Spring II is inapplicable. Accordingly, I adhere to the Order heretofore issued.