Two M, Six S Coal Corp., And Fern Coal Corp.

TWO M Five M Coal Corporation d/b/a Two M , Six S Coal Corporation, and Fern Coal Corporation and District 30, United Mine Workers of America Case 9-CA-22737 October 21 1988 SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN STEPHENS AND MEMBERS JOHANSEN AND CRACRAFT On September 17 1986 the National Labor Re lations Board issued its Decision and Order in this case i ordering Respondent Five M Coal Corpora tion d/b/a Two M (Respondent Five M) to make whole its unit employees for all losses sustained as a result of its unfair labor practices in violation of Section 8(a)(3) and (1) of the National Labor Rela tions Act On April 22 1987 the United States Court of Appeals for the Sixth Circuit entered its judgment enforcing in full the backpay provisions of the Board s Order 2 A controversy having arisen over the amount of backpay and other benefits due under the Board s Order the relationship between Respondent Five M Six S Coal Corporation (Re spondent Six S) and Fern Coal Corporation (Re spondent Fern) and the responsibility of Respond ent Six S and Respondent Fern as successor em ployers to alter egos of or single employers with Respondent Five M the Regional Director for Region 9 issued a backpay specification on Decem ber 23 1987 and issued and properly served on Respondent Five M and David Smith president of each of the Respondents an amended backpay specification on June 21 1988 alleging the amounts of backpay due the discriminatees The amended backpay specification further alleged that Respond ent Six S and Respondent Fern are also responsible for the backpay liability of Respondent Five M based on the following alleged facts About March 18 1986 pursuant to the terms of a stock purchase agreement David Smith an indi vidual acquired Respondent Five M its facilities equipment supplies and liabilities and commenc ing on that date continued to carry on the business of Respondent Five M under the same name and style without significant interruption or substantial changes in the method of operation or employee complement At the time of the sale David Smith was put on notice of Respondent Five M s poten tial liability in the unfair labor practice proceeding by the seller Jesse Meadows About May 29 1986 David Smith caused Re spondent Six S to be incorporated in the State of 1 281 NLRB 502 (1986) 2 No 87-5188 unpublished 397 Kentucky for the purpose of continuing the busi ness of Respondent Five M Respondent Six S as sumed the contracts and liabilities of Respondent Five M and utilizing the facilities equipment and supplies of Respondent Five M continued to carry on the predecessor employers business without sig nificant interruption or substantial changes in the method of operation or employee complement or supervisory personnel Prior to these transactions Respondent Six S was put on notice of Respondent Five M s poten tial liability in the unfair labor practice proceeding by actual knowledege of its president David Smith who was owner and operator of Respond ent Five M at the time the unfair labor practice proceeding was in progress before the Board Therefore Respondent Six S continued the em ploying entity with notice of Respondent Five M s potential liability to remedy its unfair labor prac tices and is an alter ego of and/or single employer with Respondent Five M About September 8 1987 Respondent Fern was incorporated in the State of Kentucky with the same officers and ownership as Respondent Six S and acquired all the assets and liabilities of Re spondent Six S Since that date Respondent Fern has engaged in the same or similar business oper ations as Respondent Six S utilizing the equipment and other assets of the predecessor corporation Prior to these transactions Respondent Fern was put on notice of Respondent Six S s potential liabil ity in the unfair labor practice proceeding by actual knowledge of its president David Smith who was also president operator and owner of Respondent Five M and of Respondent Six S at the time the unfair labor practice proceeding was in progress before the Board Therefore Respondent Fern con tinued the employing entity with notice of Re spondent Six S s potential liability to remedy the unfair labor practices and is a successor to an alter ego of and/or single employer with Respondent Six S The amended backpay specification notified the Respondents that they must file a timely answer complying with the Board s Rules and Regulations The Respondents failed to file an answer On August 22 1988 the General Counsel filed a Motion for Summary Judgment with exhibits at tached On August 24 1988 the Board issued an order transferring the proceeding to the Board and a Notice to Show Cause why the General Coun sel s Motion for Summary Judgment should not be granted The Respondents failed to file a response to the Notice to Show Cause 291 NLRB No 67 398 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD The National Labor Relations Board has delegat ed its authority in this proceeding to a three member panel On the entire record in this proceeding the Board makes the following Ruling on the Motion for Summary Judgment Section 102 54 of the Board s Rules and Regula tions in pertinent part provides (a) The respondent shall within 21 days from the service of the specification, if any file an answer thereto (c) If the respondent fails to file any answer to the specification within the time prescribed by this section the Board may either with or without taking evidence in sup port of the allegations of the specification and without notice to the respondent find the specification to be true and enter such order as may be appropriate The amended backpay specification served on the Respondents specifically states that pursuant to Section 102 54 of the Board s Rules and Regula tions [T]he Respondents shall within 21 days from the date of this specification file with the undersigned Regional Director an original and four (4) copies of an answer(s) to the specifics tion To the extent that such answer(s) fails to deny allegations of the specification in the manner required under the Board s Rules and Regulations and the failure to do so is not ade quately explained such allegations shall be deemed to be admitted to be true and the Re spondents shall be precluded from introducing any evidence controverting them Further according to the uncontroverted allega tions of the Motion for Summary Judgment coun sel for the General Counsel informed Respondents counsel by telephone on July 21 1988 and on August 4 1988 and by letter dated August 4 1988 that unless an answer was received a Motion for Summary Judgment would be filed A copy of the August 4 1988 letter was also mailed to David Smith at the address of Respondent Five M The Respondents despite having been advised of the filing requirements have failed to file an answer to the amended backpay specification and have failed to file a response to the Notice to Show Cause As the Respondents have not filed an answer to the amended backpay specification and have not of fered any explanation for their failure to do so in accordance with the rules set forth above we deem the allegations of the amended backpay spec ification to be admitted as true and we grant the General Counsels Motion for Summary Judgment Accordingly we conclude that the net backpay due the discriminatees is as stated in the amended backpay specification and we will order payment by the Respondents to the discriminatees ORDER The National Labor Relations Board orders that the Respondents Five M Coal Corporation d/b/a Two M, Six S Coal Corporation and Fern Coal Corporation Phelps Kentucky their officers agents successors and assigns, shall make whole the discriminatees named below by paying them the amounts following their names plus interest ac crued to the date of payment as prescribed in New Horizons for the Retarded 3 minus tax withholdings required by Federal and state laws John Barnes $1463 02 James Bevins 1463 02 Charles Casey 1463 02 Miles Casey 1463 02 Elster Epling 1463 02 Gary Epling 1463 02 Billie Farmer 1463 02 Danny Griffith 1463 02 Jimmy Griffith 1463 02 Ricky Helton 1463 02 Vincent Henderson 1463 02 Steve McClanahan 1463 02 Vertrue Meadows 1463 02 Benny Shortridge 1463 02 Harvey Smith 1463 02 Tyrone Smith 1463 02 Verlin Smith 1463 02 Harold Stevenson 1463 02 3 283 NLRB 1173 (1987) Interest on and after January 1 1987 will 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 January 1 1987 (the effective date of the amendment to 26 U S C § 6621) shall be computed in accordance with Florida Steel Corp 231 NLRB 651 (1977)