A.N. Electric Corp.

190 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD A.N. Electric Corp. and its successor or alter ego, Ozone Electric Corp . and Jose Gonzalez, Ray Edwin Coffie, and Ismael De Jesus. Cases 2- CA-19011, 2-CA-19227, 2-CA-19387, and 2- CA-19429 computed in the manner prescribed in New Hori- zons for the Retarded, 283 NLRB 1173 (1987), and accrued to the date of payment, minus the tax withholdings required by Federal, state, and city laws: August 21, 1989 Jose Gonzalez $274,383 SECOND SUPPLEMENTAL DECISION John Gonzalez 255,947 AND ORDER Ray Coffie 196,997 Rupert Allen 273,887 BY CHAIRMAN STEPHENS AND MEMBERS CRACRAFT AND DEVANEY Ismael De Jesus 197,377 On January 5, 1989, Administrative Law Judge Eleanor MacDonald issued the attached decision. The Respondent filed exceptions and a supporting brief, and the General Counsel filed a brief answer- ing the Respondent's exceptions. The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. The Board has considered the decision and the record in light of the exceptions and briefs' and has decided to affirm the judge's rulings, findings,2 and conclusions3 and to adopt the recommended Order as modified.4 ORDER The National Labor Relations Board adopts the recommended Order of the administrative law judge as modified and set out in full here. It is or- dered that the Respondent, Ozone Electric Corpo- ration, New York, New York, found herein to be the alter ego of the Respondent A.N. Electric Cor- poration, its officers, agents, successors, and as- signs, shall make whole each of the employees named below by payment to them of the amounts set forth opposite their names, plus interest to be i The Respondent has requested oral argument The request is denied as the record, exceptions, and briefs adequately present the issues and the positions of the parties 2 The Respondent has excepted to some of the judge's credibility find- ings The Board's established policy is not to overrule an administrative law judge's credibility resolutions unless the clear preponderance of all the relevant evidence convinces us that they are incorrect . Standard Dry Wall Products, 91 NLRB 544 (1950), enfd 188 F.2d 362 (3d Cir 1951) We have carefully examined the record and find no basis for reversing the findings In addition , some of the Respondent 's exceptions assert that the judge's rulings, findings, and conclusions demonstrate bias and prejudice On careful examination of the judge's decision and the entire record, we are satisfied that such contentions are without merit 8 We note the February 23, 1988 judgment of the United States Court of Appeals for the Second Circuit, No. 88-4018, enforcing the Board's previous backpay Order against Respondent A N Electric Corp, and the court's remand of the proceeding to the Board for litigation of the status and liability of Respondent Ozone Electric Corp as an alter ego or suc- cessor and further backpay matters in the administrative law judge's deci- sion See 285 NLRB 297 (1987) Our decision herein is consistent with the court's remand, which re-established the Board's jurisdiction in this proceeding. 4 We will substitute a more appropriate Order, specifically setting forth the backpay amounts owed, for that of the administrative law judge The net backpay figures above reflect backpay computations only up to February 21, 1988. The Respondent remains responsible for complying with the Board's reinstatement Order, 276 NLRB 887 (1985); the' rights of all the discriminatees are thus reserved in futuro. Polly Chill, Esq., for the General Counsel. Bruce H. Beckmann, Esq., of New York, New York, for Respondent Ozone Electric Corp. Ismael De Jesus, for the Charging Party. Jose Gonzalez, for the Charging Party. SECOND SUPPLEMENTAL DECISION ELEANOR MACDONALD, Administrative Law Judge. On September 30, 1985, the National Labor Relations Board issued its Decision and Order at 276 NLRB 887, finding that Respondent A.N. Electric had unlawfully discharged Jose Gonzalez, John Gonzalez, Ray Coffie, Jose Robles, Rupert Allen, and Ismael De Jesus, and or- dering Respondent to reinstate its employees and make them whole for any loss of earnings. On May 16, 1986, the United States Court of Appeals for the Second Cir- cuit enforced the order of the Board based on a consent judgment. On August 29, 1986, the Acting Regional Di- rector for Region 2 issued a backpay specification and notice of hearing alleging various amounts of backpay due for the six employees named above, specifying that the backpay continued to accrue from certain dates in 1982 and 1983 until a valid offer of reinstatement was made to the six employees and alleging that since De- cember 1982, a new Respondent, Ozone Electric Corp., was the alter ego or successor with knowledge of its un- remedied unfair labor practices of Respondent A.N. Electric. The specification alleged that Ozone is liable to remedy the unfair labor practices of A.N. Electric, in- cluding the obligation to reinstate the employees and to make them whole. Ozone Electric filed an answer generally denying the allegations of the specification. The General Counsel moved the Board to grant summary judgment as to A.N. Electric and to strike the answer of Ozone Electric. On August 10, 1987, the National Labor Relations Board issued its Supplemental Decision and Order at 285 NLRB 297, granting summary judgment as to A.N. Electric and concluding that A.N.'s liability was as stated in the Specification calculated through June 30, 1986. With respect to Ozone, the Board ordered that a 296 NLRB No. 30 OZONE ELECTRIC CORP. hearing be held to determine the alter ego or successor status and liability of Ozone. The Board ordered that the hearing "also address any other matters concerning the backpay specification which the administrative law judge deems appropriate in light of a determination of Re- spondent Ozone's status." On February 23, 1988, the United States Court of Appeals for the Second Circuit issued its supplemental judgment enforcing the supple- mental Order of the National Labor Relations Board. On November 30, 1987, the Regional Director for Region 2 issued a supplemental backpay specification and notice of hearing alleging the backpay liability through November 30, 1987, and noting that backpay continued to accrue because the employees had not received valid offers of reinstatement. Ozone filed an answer on Janu- ary 5, 1988. On February 22, 1988, the Regional Direc- tor issued an amended supplemental specification which was further amended on March 10, 1988. Ozone amend- ed its answer on February 25 and again on March 17, 1988. This matter was heard by me in New York, New York, on 8 days between February 22 and May 6, 1988. On March 2, 1988, Respondent Ozone called Thomas J. Carlough to testify concerning the wage rates used to compute gross backpay for employees subject to the Davis-Bacon Act and related Acts. Before Carlough's testimony was concluded, he was excused with the un- derstanding that he would return to complete his testi- mony at a later date. A reason for his need to return at a later date was that he did not have all the technical data with him that were necessary for his testimony in sup- port of Ozone's contentions concerning the proper gross backpay. On March 2, as the hearing was being ad- journed, agreed on the record that Carlough would return to testify on April 5, 1988. Due to delays in en- forcement proceedings related to a subpoena served by counsel for Ozone, the hearing did not resume until May 6, 1988. On that day, Carlough did not appear. Counsel for Ozone advised that Carlough had called him the night before and stated that he could not appear for "personal reasons." No showing having been made why Carlough, who had ample notice of the date of hearing, could not appear as scheduled, and no further witnesses being called, the hearing was closed . I gave notice to counsel that I intended to strike Carlough's testimony since General Counsel had had no opportunity to cross- examine the witness . I hereby strike the testimony of Carlough. Upon the entire record, including my observations of the witnesses, and due consideration of the briefs filed by General Counsel and Respondent Ozone Electric in July 1988, 1 make the following' FINDINGS OF FACT A. The Alter Ego and Successor Issues The criteria used to determine whether an alter eqo re- lationship exists between two entities include: I The transcript was corrected in accordance with the stipulation of counsel on May 6, 1988. Additional corrections were noted and made to the record. 191 (1) Common ownership and control (2) Substantially identical management (3) Common business purpose (4) Nature of operations (5) Common customers or similar business and market (6) Common premises and equipment (7) Common supervision (8) Nature and extent of dealings between the two entities (9) Formation of alter eqo to evade the Act See Fugazy Continental Corp., 265 NLRB 1301 ( 1982), enfd . 725 F.2d 1416 (D.C. Cir. 1984), where the court held that "common ownership is not an absolute prereq- uisite to a finding of alter ego status" (emphasis in origi- nal) 725 F.2d at 1420; Crawford Door Sales Co., 226 NLRB 1144 (1976). In the instant case, the facts relevant to a finding that Ozone is an alter ego of A.N. Electric are as follows: Richard M. Lipsman, Esq., was the attorney for both A.N. and Ozone.2 Lipsman testified that sometime in 1981, Louis Squillante came to him and Lipsman pre- pared a stock certificate and certain other documents for A.N.; Squillante told Lipsman that he would hire his son-in-law Nicole Argano as a licensed electrician be- cause Argano "did not have a job." Squillante , who held all the stock in AN., died in 1987. Argano testified that he was employed by A.N. and managed the day-to-day operations of the business. In A.N. Electric, Argano was the only employee with an electrician's license . He helped his father-in-law Squil- lante estimate jobs and he checked the jobs to make sure they were being done right . According to Argano, he at- tended all the meetings where A.N. needed to appear be- cause he knew all the men and all the jobs. Squillante did not know anybody and he did not know what was going on.3 No one else was ever in charge of the jobsites for A.N., according to Argano . On occasion he brought materials to the jobsites and he brought the pay for the employees. Although General Counsel sought A.N.'s records, for the most part these could not be found, ac- cording to Lipsman. Thus, only some correspondence and some canceled checks were able to be introduced into evidence. As more fully set forth in Judge Green's decision in the underlying case, in the summer of 1982 , the employ- ees of A.N. became aware that as a subcontractor on a federally funded rehabilitation job their employer was liable to pay them certain wages and benefits . They con- fronted Argano and the violations of the Act soon began to occur. The first charges in the underlying case were filed in July 1982, and the case before Judge Green was tried between February and May 1983. 2 A N is apparently no longer in existence , and Lipsman no longer represents A.N Lipsman represents Ozone for matters other than the in- stant backpay proceeding 8 According to Argano the same obtains for meetings relating to Ozone; its president, Cathy Cataraso, does not attend them because Argano knows all the men and all the jobs 192 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD In the summer of 1982, Lipsman received a telephone call from Cathy Cataraso or her father Paul Argano.4 Lipsman was told that Cataraso would be starting an electrical contracting business and that her father was going to give her money to start the business. Lipsman thought that this was a strange development, but Catar- aso told him that her father and brother were behind her. According to Lipsman, Cataraso said that "she was aware of the problems that A.N. Electric had." Lipsman testified that he incorporated Ozone and that he repre- sented Ozone "with the understanding with Mr. Squil- lante who at that point was terminating his business be- cause of these problems that had occurred with these in- dividuals, these discriminates. He was not financially able to continue in business and for awhile represented them [A.N. and Ozone] concurrently." Lipsman testified that Cataraso was aware that Squillante was going out of business due to problems with the Department of Labor. Cataraso, on the other hand, testified that she had no in- formation about A.N. and that she was not told about A.N.'s problems. According to Cataraso, she has no background in elec- tricity and she is not a licensed electrician. As a young woman just out of school, she worked as a teller and then stayed home with her child. After a while, her mar- riage ended and she asked her father if she should go into business. Her father agreed to back her and she hired her brother because he was out of a job. Her father sent her to see Lipsman and he gave her $10,000 and then $20,000. Ozone was incorporated on October 15, 1982, with Cataraso as the president and sole sharehold- er. Cataraso is also the treasurer and secretary of Ozone; Argano is the assistant treasurer and assistant secretary, apparently because he holds an electrician's license and one of the officers of an electrical contractor must be li- censed. Similarly, Argano was an officer of A.N. Both Lipsman and Cataraso testified that for a period of months Ozone and A.N. occupied the same office space in a building owned by Flushing Bank and then by the Bank of New York. In 1984, Palerna Realty, a corpo- ration owned by Cataraso, bought the building from the bank. Cataraso paid the rent, but Ozone did not take over any lease from A.N. According to Cataraso, she brought a desk from home and Squillante continued to use his desk. She and Squillante were sometimes in the office together. They answered each other's phone calls. The record does not disclose when Squillante stopped coming to the office. According to Lipsman, Cataraso had very little experi- ence and Argano hired the employees for Ozone when the company was set up. Argano hired some men who had worked for A.N. because he knew that they were capable. Cataraso testified that she works in the Ozone office a couple of hours a day and that she has always worked part-time at Ozone. She does the bookkeeping and takes care of things in the office. She and Argano look at the bulletin listing jobs Ozone might want to bid on and they look at blueprints together. Argano does all the estimat- ing and puts in bids for the jobs. Cataraso never visits the jobsites and Argano hires all the employees of Ozone. Cataraso testified that Argano is the superintend- ent of Ozone Electric. He handles the correspondence with contractors and with insurance companies. Argano also testified that on occasion he brings materials and the paychecks to jobsites. Cataraso did not receive any compensation from Ozone until 1986. At the present time, Cataraso is paid $500 per week by Ozone and Argano is paid $600. According to Cataraso, she did not pay any money to Squillante and he did not pay her any money. However, General Counsel introduced into evidence a check from A.N. Electric dated December 23, 1982, for $20,000. This check was made out to cash and was endorsed by Ozone Electric on the back. Cataraso explained this check by stating that Squillante had borrowed money from her father and that he repaid it to Cataraso so that she could start her business. Although none of the wit- nesses identified the handwriting on the check, I am con- fident that the check was written on behalf of A.N. by Argano and endorsed by Argano in the name of Ozone Electric.5 The record shows that until March 1983 Ozone's bank statements were sent to Argano's home address. That ad- dress is the same as that of Louis Squillante; Argano tes- tified that at the time in question he shared a two-family house with his father-in-law. The record shows that bank statements for A.N. Electric had been sent to the same address while A.N. was in business. When Argano was asked why Ozone bank statements were sent to the house he shared with Louis Squillante, Argano gave an unresponsive answer. Cataraso was not forthcoming on the subject of Ozone's finances. She claimed not to know who wrote various checks to suppliers of Ozone, an incredible posi- tion in view of the fact that she and Argano run the busi- ness and that she did not name any office employee of Ozone who might have written the checks. The claim is also incredible in view of the fact that some of the checks were in a very distinctive handwriting which I have no trouble at all ascribing to Argano. Cataraso's name appears at the bottom of all the checks. One of the checks in evidence was written by Ozone to Kennedy Electric Supply, a supplier used by both A.N. and Ozone; the check bears a notation at the top "AN ELEC." Although the witnesses could not say who wrote the matter at the top, I find that it is in Argano's handwriting. I find Cataraso's lack of candor troubling. She contra- dicted Lipsman about her knowledge of A.N.'s problems. She failed to identify handwriting on checks for large sums of money paid out by the company she owns. After sharing an office with Louis Squillante for months or even years, she contended that she did not know about the troubles A.N. was experiencing. In addition, her brother and her father knew about A.N.'s problems, but she would have us believe that she knew nothing about them. I do not find that Cataraso was a credible witness S The record is full of documents written in the handwriting of 4 Cathy Cataraso and Nicolo Argano are brother and sister. Argano OZONE ELECTRIC CORP. and I shall not credit her testimony where it is contra- dicted by other more credible evidence. Argano testified in large part in response to leading questions put to him by counsel for Ozone. I cautioned counsel for Ozone that he should not use leading ques- tions because the answers would not be given any weight, but Argano seemed incapable of testifying with- out leading questions. In addition, Argano gave much contradictory testimony. Further, he was very uncoop- erative in responding to questions posed by General Counsel and he professed not to know many things such as the price of tools. Since Argano has been in the elec- trical business, by his own admission, since his teen years, I cannot believe that he did not have the informa- tion requested. I believe that Argano tried hard not to tell General Counsel anything that might be of use.6 I shall not credit the testimony of Argano where it is con- tradicted by other more reliable evidence. Argano testified that he began to work for Ozone in October 1982. He also testified that in the fall of 1982 he was checking A.N.'s jobs at 139th St. and Lenox Avenue in Manhattan and at Mohican Avenue in the Bronx almost everyday. According to Argano, he received no pay from A.N. from August 1982, but he continued to help Squillante finish off the jobs. Both Cataraso and Argano testified that A.N. did not lend nor give large tools to Ozone.' Argano stated that the tools used by A.N. belonged to Sal Coico, a man who was involved in A.N. in a capacity that has never been fully explained on the record. Coico also owned a white truck that was used by A.N. According to Argano and Cataraso, Ozone rented large tools when it first went into business and then bought tools when it could afford to do so. Neither Cataraso nor Argano could recall when this was. An orange truck was apparently owned by Argano; he claimed that it was never used by A.N. nor by Ozone. Argano testified that Ozone never had a truck and never used a truck; however, he also testified that the tools used at the Beck Street job by Ozone were stored in "his truck." Argano testified that 25 to 30 percent of Ozone's jobs are private and not federally funded. He did not specify the names of any private jobs and no contracts or other documents relating to those jobs were introduced into evidence. I do not credit this testimony . The evidence shows that Ozone worked on the same type of federally subsidized rehabilitation jobs that A.N. had done, in the five boroughs of New York City. The documentary evidence shows that both A.N. Electric and Ozone Electric used Kennedy Electric Co. as a major supplier of equipment. The testimony of Charles Roslonowski, vice president and sales manager of Kennedy, shows that Kennedy is one of the large sup- pliers in the New York City area and has about 1500 ac- 6 1 note that in testifying before Judge Green in the underlying case, Argano stated that he could not recall when or under what circum- stances he ceased being employed by A.N., and he testified that he could not recall the last name of the person he reported to; her name was "Cathy." This is Cataraso, Argano's sister. r A contractor uses certain large and expensive tools on a job. These are to be distinguished from the hand tools which are owned by the indi- vidual employees and which are brought to the job by them 193 counts. Roslonowski has known Argano 14 or 15 years. His testimony tended to show that A.N. and Ozone had different files and credit applications with Kennedy. Al- though he testified that he had consulted his files in preparation for his testimony, these were not introduced by Respondent Ozone. I find Roslonowski's testimony of little help. It was established by the many documents introduced into evidence that Argano wrote most of the checks on A.N.'s account to suppliers, to Government agencies, and for large sums of cash . I have no difficulty at all in identifying his handwriting on these checks . In addition, many of the business records of Ozone Electric were in- troduced into evidence. These documents show that Argano corresponded with suppliers, with governmental agencies, with prime contractors, and with other organi- zations. Much correspondence was addressed to him per- sonally. An overview of the documents introduced into evidence discloses that Argano controlled every aspect of Ozone's affairs and that the outside world considered him the sole representative of Ozone. None of the mate- rial in evidence is addressed to Cataraso. Indeed, as shown above, Ozone's bank statements were sent to Argano for the first 6 months of its existence. Rafael Gonzalez was employed by A.N. beginning in mid-February 1982. He was made a foreman by Argano when Sal Coico left A.N. in August 1982 . According to Gonzalez, A.N. worked on federally subsidized jobs such as Lenox Avenue and 139th Street and Mohican Avenue in the Bronx. Gonzalez stated that in August 1982, the men went over to Beck Street to put temporary lights on the jobsite. Then, in October or a bit later in 1982, the men began work on the Beck Street job in the Bronx.8 This was also a federally subsidized residential rehabilita- tion job.9 Apparently, the Beck Street job ended around April or May 1983. According to Gonzalez, before Christmas 1982, Argano met with the men and told them that he was changing the name of the company because of the charges that were made against A.N. to the effect that the men were being underpaid . Sometime after this, the men began receiving their pay by check rather than in cash as had been the custom; the checks were from "Ozone Electric" and were signed by Cataraso. Gonzalez testified that both A.N. and Ozone used an orange truck; the men used the same large employer-sup- plied tools as they had used with A.N. and the same 17 men still worked under Gonzalez ' supervision. Gonzalez denied that Ozone rented any large equipment except for one machine used to drill through cement. Gonzalez, as foreman from April 1982, was responsible for calling in the men's hours to the office so that their pay could be calculated and he also called in his need for materials on the job. Gonzalez stated that he called in this informa- tion to Squillante when the employer was A.N. and that he continued to do the same when it was changed to Ozone. Sometimes, Gonzalez made these calls to Ar- gano's house at night; he would speak to either Argano 6 The men had been working for A N. and they included, besides Gon- zalez, Coffee, De Jesus Jr., Jimmy, and Robles. 9 It is possible to know when jobs are federally subsidized because of the mandatory signs posted in front of the worksite. 194 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD or Squillante on these occasions . As far as the direction of the work, Gonzalez testified that only Argano gave him orders; neither Squillante nor Cataraso ever gave him an order. After the Beck Street job, Ozone did fed- erally subsidized work at the Ramirez Apartments, at Boynton Avenue, at Belmont Avenue, and at Kelly Street in the Bronx. Gonzalez stated that all but one A.N. job had been federally funded and that all the Ozone jobs he knew of were federally funded. Gonzalez testified that on the Ramirez Apartment job, the Belmont Avenue job, and the Boynton Avenue job, there was overtime work on Saturdays and sometimes in the after- noons after normal quitting time . On the Boynton Avenue job, the men worked some Sundays. 1° Argano fired Gonzalez in 1985 . Gonzalez was an impressive wit- ness who recalled dates well and was cooperative on cross-examination. I shall rely on his testimony. Gonzalez' testimony was supported by that of former employees of A.N. and Ozone. Jose Antonio Robles was employed by A.N. from June 1982 until mid-January 1983. He worked at the 139th Street jobsite, and while he was there he was moved to the Beck Street job to help out on various occasions . Robles stated that before Christmas 1982 Argano told the men that the name of the Company would be changed and for that reason the men would not work for a few weeks. He was laid off for a few weeks from Christmas until the second week of January 1983. When he went back to work the name of the Company was changed to Ozone. Employee Rupert Allen also testified that he worked for A.N. at 139th Street and Lenox Avenue. He was occasionally pulled off the 139th Street job, and sent to the Beck Street job at 4 p.m. The Board found herein that the employees confronted Argano beginning in late July 1982, with the fact that the job at Mohican Avenue was federally funded and that the employees were entitled to higher wages than they were receiving. The Department of Labor investi- gation began at the 139th Street location in early August. The threats to discharge employees and the actual dis- charges began in the summer of 1982 . Later, Respondent A.N. obtained employee signatures on certain alleged settlement documents which the Board has found to be invalid under the Act. These documents apparently con- stituted an attempt to secure a release of liability from the employees at sums much lower than the sums which might be owing for violations of the Davis -Bacon Act. Thus, A.N. was aware that it might be liable to pay sub- stantial sums to its employees and it took action begin- ning in summer 1982, to avoid having to pay money to its employees. It is clear that A.N. has been shown to take actions motivated by a desire to evade its responsi- bilities under the Act. l1 The first charges were filed here 10 1 do not credit the denials of Cataraso and Argano relating to over- time work 11 Indeed, the underlying decision by Judge Green states that A.N ceased operating as A.N. Electric in December 1982 and changed its name to Ozone Electric . This finding was not disturbed by the Board and is binding as against A.N. Moreover, I am bound by the finding of the Board that the discharges of Robles , Coffie, Allen, and De Jesus took place in January 1983, a time when A N. was purportedly out of business and only Ozone was in business. beginning in July 1982, so that A.N. knew from that time that it might be liable to its employees both under the Davis-Bacon Act and the National Labor Relations Act. The evidence that Ozone was established in order to evade A.N.'s responsibilities is overwhelming . A.N. did some preliminary work at the Beck Street jobsite in the second half of 1982 but by the time work on the job began in earnest, the company performing the work was called Ozone. Gonzalez, the foreman, testified that the same employees were working for Ozone at Beck Street as had worked for A.N. Electric. The only reason given on the record for the decision by A.N. to go out of busi- ness was that there were problems with the employees. The only reason given on the record for the establish- ment of Ozone was that Cataraso needed a business to go into. It is more than mere coincidence that she formed Ozone to carry on the work begun by A.N., with the same employees, using the same tools, the same truck, the same premises, and the same supervisors. Further- more, she used some of the capital of A.N. as evidenced by the check for $20,000 that A.N. gave to Ozone. The transfer of the $20,000 was not an arm's-length transac- tion; indeed, no documents have been introduced to show that any debt actually existed from Louis Squil- lante to Cataraso's father and no principal to the transac- tion testified about it. Most of A.N.'s corporate records seem to have disappeared , an unusual situation since the same attorney represents Ozone as represented A.N. and since the same family members are involved in both companies . From what appears on the record, A.N. gave Ozone $20,000. Although the lack of explanation by Re- spondent concerning the true interests behind A.N. and Ozone precludes any exact finding about the financial re- lationship among the persons concerned in the business- es, it is clear that a family group has used A.N. and Ozone to engage in the electrical contracting business and that the businesses differ only in the corporate name and structure. Cataraso, her father, Argano, and his father-in-law Squillante have all been involved, have all lent their names and efforts to these two businesses and have used the corporate structures to gain income and to transfer capital, tools, and employees to their advantage. A major advantage in the setting up of Ozone was to avoid potential liability to the discriminatees as a result of the charges filed against A.N. Electric. The constant figure in this corporate rearrangement is Argano. He has, according to his testimony, run the busi- ness for both A.N. and Ozone. 12 He performed the bid- ding and estimating . He supervised the employees and jobsites. He hired and fired employees . He dealt with the prime contractors, and the various governmental agen- cies. As Argano testified, he did these things because he was the one who knew all about the business. Cataraso, by her own admission, knew nothing about the electrical contracting business and has never worked at Ozone more than on a part-time basis. It is also clear that Argano handled the financial affairs of both A.N. and 181 note that Judge Green referred to Argano Electric Corp, 248 NLRB 352 (1980), where Argano was found to be the president of the corporation and his brother-in-law Louis Squillante was found to be the superintendent and supervisor OZONE ELECTRIC CORP. Ozone; the bank statements for both corporations went to his home address until March 1983, and the docu- ments introduced into evidence show that Argano wrote checks in his own hand on the accounts of both corpora- tions. I conclude that the evidence here is sufficient to meet the criteria for an alter ego set forth above. As discussed here, A.N. and Ozone were controlled by the same family. Both were managed by Argano . Both operated as electrical contractors on federally funded residential re- habilitation projects in New York City. Both worked on the Beck Street job in 1982 . Both used the same premises and large tools and trucks . Both bought great quantities from the same supplier. Rafael Gonzalez was a foreman for A.N. and was the foreman for Ozone until 1985. A large sum of money was transferred from A.N. to Ozone. Finally, the evidence is overwhelming that Ozone was formed to evade the Act. Chippewa Motor Freight, 261 NLRB 455 (1982), cited by Respondent Ozone, is not apposite . In that case, the alleged alter ego was found not to be a disguised con- tinuance of the previous employer formed to avoid re- sponsibilities under the Act, and there were also found great dissimilarities in the method of operation, equip- ment, customers, and supervision of the two employers. In reaching this conclusion, I have relied on Mar-Kay Cartage, 277 NLRB 1335 (1985), where the Board found that an inexperienced family member took over as nomi- nal head of a family owned business in order to evade responsibilities under the Act. 277 NLRB at 1341. Even if Ozone were not found to be the alter ego of A.N. Electric, I would find that Ozone is the successor of A.N. with knowledge of its unfair labor practices. See Perma Vinyl, 164 NLRB 968 (1967), enfd. sub nom. U.S. Pipe & Foundry Co. v. NLRB, 398 F.2d 544 (5th Cir. 1968); Golden State Bottling Co. v. NLRB, 414 U.S. 168 (1973). In Perma Vinyl, the Board found that the successor had acquired the predecessor's business with knowledge of the unfair labor practice proceeding against the prede- cessor, that the successor had continued to operate the former facility without substantial change, that the oper- ation was continued at the same location , that essentially the same personnel were employed and that they worked under the same supervisors who had been on the prede- cessor's payroll. In the instant case, Ozone is operating essentially the same business without substantial change, at the same location , with the same personnel and the same supervisors, namely, Argano and Ralph Gonzalez. I note that Gonzalez was not fired until 1985. As to whether Ozone "acquired" the Company from A.N., the available evidence shows that the answer is in the affirm- ative. I repeat that the lack of candor of Cataraso and Argano and the disappearance of most of the financial records sought by General Counsel have made it difficult to determine exactly what happened in the fall and winter of 1982-1983. However, the check from A.N. to Ozone in the amount of $20,000 and the use by Ozone of A.N.'s tools shows that Ozone acquired capital and ex- pensive tools from A.N. I have found above that Lips- man testified that Cataraso knew of the problems of A.N. and that charges had been filed against A.N. Further, 195 Argano was the superintendent of both A.N. and Ozone; he was the son-in-law of the owner of A.N. and the brother of the owner of Ozone . He was the one who represented both businesses to the outside world. In these circumstances, it is fair to infer that Argano in- formed Cataraso of the status of the charges against A.N. Thus, I find that Ozone had knowledge of the unfair labor practices pending against A.N. at the time Ozone was incorporated in October 1982 and acquired the cap- ital and tools of A.N. Electric. See Golden State, supra. B. The Backpay Issues General Counsel presented two witnesses from the U.S. Department of Labor who testified as to the method of calculating pay due to employees subject to the Davis-Bacon Act and related Acts on federally subsi- dized rehabilitation projects . The record contains no evi- dence contradicting the testimony of these two expert witnesses. Louis Graciano was a compliance specialist and field investigator with the Wage and Hour Division of the U. S. Department of Labor responsible for audits under the Davis-Bacon Act. He investigated A.N. and found violations of the Davis-Bacon Act and of related Acts. A.N. eventually entered into a consent order. Gra- ciano also investigated the Beck Street job and he found that many of the employees of Ozone at Beck Street were the same men who had worked on various jobs for A.N. He found that the Beck Street job was going on simultaneously with the A.N. job at 139th Street and Lenox Avenue. On the Beck Street job, Graciano found that Ozone's payroll records were not accurate and that employee interviews were more reliable than the compa- ny records. Graciano calculated the gross backpay due for violations of Davis-Bacon Act and related Acts for the Beck Street job. Edmund Vargas is a compliance of- ficer with the Wage and Hour Division of the U.S. De- partment of Labor. He also investigated the A.N. jobsites and found violations. Vargas testified at length about the method of calculating the proper wages of electricians on the type of jobs conducted by Ozone Electric and A.N. Electric and about the applicable wage determina- tions issued by the Department of Labor. I find that the method of calculation used by General Counsel in the backpay specification is reasonable. Respondent questioned the discriminatees at length about their efforts to find work after their discharges and about their interim earnings. The results of these exami- nations are as follows Rupert Allen testified that after he was fired by Ozone in January 1983 he got various jobs in the electrical in- dustry. He had to drop out of his apprentice program in order to take nonunion jobs and drive a taxi. Allen kept no records of his earnings and his memory of events which took place a few years ago was not good. Al- though the backpay specification here, as amended, shows long periods of time when Allen had no interim earnings and was apparently unemployed, Allen testified that he was sure he was not unemployed for 9 months at a time. Allen stated, "I know I wasn't sitting down that long period of time." From his testimony, I conclude that for some of the time when General Counsel shows 196 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD no interim earnings, Allen was in fact driving a cab and earning $250 per week. Thus, I find that for the first three quarters of 1984 Allen was driving a cab and earned $3250 per quarter. Further, I find, based on his testimony, that in 1986 he drove a cab for 3 months and earned $3250; I shall assign this to the first quarter of 1986. Allen testified that in the third quarter of 1987 he took a 1 -month visit to Jamaica and that he did not go there to seek work; further, he took a 1-week vacation in the second quarter of 1985. There should be a reduction in his net backpay for these amounts since vacation was computed as a fringe benefit in the gross backpay. The burden of proving interim earnings is on Respondent, and Respondent has not shown any except those dis- cussed here and detailed in the specification. Further, it has not been shown that Allen failed to seek work. Allen credibly testified that whenever he was out of a job, he tried to get a new one through the Union, that he went around to construction sites asking for work, and that when all else failed he drove a cab. Allen should be awarded backpay in accord with the following computa- tions, which, it is noted, are current only to February 21, 1988, and are reserved in futuro. Gross Backpay Interim Earnings Net Backpay 1983 1st qtr. $9,798 $2,488 $7,310 2d qtr. 12,584 4,043 8,541 3d qtr. 14,633 944 13,689 4th qtr. 15,119 2,016 13,103 1984 1st qtr. 15,119 3,250 11,869 2d qtr. 15,119 3,250 11,869 3d qtr. 15,119 3,250 11,869 4th qtr. 15,275 1,568 13,707 1985 1st qtr. 15,275 0 15,275 2d qtr. 14,100 2,420 11,680 3d qtr. 15,505 3,250 12,255 4th qtr. 16,224 3,250 12,974 1986 1st qtr. 17,394 3,250 14,144 2d qtr. 17,394 2,253 15,141 3d qtr. 17,394 0 17,394 4th qtr. 17,394 2,236 15,158 1987 1st qtr. 18,707 4,160 14,547 2d qtr. 18,707 2,520 16,187 3d qtr. 12,955 1,200 11,755 4th qtr. 18,707 2,400 16,307 1988 1st qtr. 10,073 960 9,113 Total $273,887 Ray Comae testified that after he was discharged by Ozone on January 21, 1983, he tried to get jobs through the Union and then through Local 3. He stopped looking for work through the unions when he started his own business in 1985 . Coffie testified about his interim earn- ings which are shown on the specification as amended. Coffie should be awarded the sum of $196,997 as calcu- lated in the specification as amended , General Counsel's Exhibit 60, to which I fmd that no change is necessary. See Arduini Mfg. Corp., 162 NLRB 972 (1967). These calculations are current only to February 21, 1988, and Coffie's rights are reserved in futuro. Ismael De Jesus was discharged by Ozone on January 25, 1983. He tried to fmd a job through the Union unsuc- cessfully and he was finally assisted by Local 3. The specification as amended shows De Jesus' interim earn- ings for 1983. In 1984, De Jesus went to Puerto Rico to be with his ailing mother. After 4 weeks, he got a job and was employed in Puerto Rico through 1985. Al- though De Jesus stated that in 1984 he was out of work for a while and performed "side jobs" to pay his bills, the amounts earned on these side jobs are not indicated on the specification which shows no interim earnings for the last two quarters of 1984. However, I am mindful of the rule which states that it is Respondent's burden to show interim earnings; it is clear that Respondent did not make any record sufficient to allow me to find any inter- im earnings for De Jesus for the last half of 1984. I note also that De Jesus provided paystubs in his possession to show his interim earnings throughout this period. In the first quarter of 1986, De Jesus was involved in an acci- dent and for the next 8 or 9 months he could not work. After he recovered a bit, he earned about $2500 doing odd jobs but he was not well enough to perform his usual work. In the first half of 1987, he only attempted to work enough to pay certain bills because he was still concerned about his physical condition . During this period, De Jesus was not seeking employment compara- ble to his employment with Ozone . I note that the speci- fication does not show any interim earnings for the first two quarters of 1987 and no explanation was offered for this omission. In the summer of 1987, De Jesus moved to Miami and his earnings thereafter are shown on the spec- ification as amended. General Counsel urges that De Jesus' move to Puerto Rico did not constitute a failure to seek comparable employment and thus a failure to miti- gate damages. Respondent has not offered any proof that Puerto Rico does not offer comparable job opportunities. I find that the move to Puerto Rico did not constitute a willful loss of earnings . Rainbow Coaches, 280 NLRB 166 (1986). General Counsel also argues that had De Jesus suffered his accident while in the employment of Ozone, "he would have received any sick pay customarily paid by Ozone in accordance with its collective bargaining agreement with Local 363. Therefore his net backpay should not be reduced as a result of his accident, since the loss of pay was not willful and he would in all likeli- hood have received pay during the period of his disabil- ity." It is the burden of General Counsel to prove back- pay owing to the discriminatees. It is clear that while he could not work at his regular employment De Jesus was not available for work and is therefore not entitled to backpay. General Counsel has not claimed that De Jesus' accident was related to his interim employment and has not shown what provision, if any, would have been made for sick pay or disability pay for De Jesus had he remained in Ozone's employ. See American Mfg. Ca of OZONE ELECTRIC CORP. Texas, 167 NLRB 520, 522-523 (1967); Big Three Indus- trial Gas Co., 263 NLRB 1189, 1200-1202 (1982). There- fore, I cannot award backpay to De Jesus for the period of time he could not work due to his accident in 1986 and for the first two quarters of 1987. Backpay should be awarded to De Jesus in accordance with the amounts claimed by General Counsel in the specification, as amended, General Counsel's Exhibit 60, except that no backpay is due for the year 1986 and for the first two quarters of 1987. Deducting the proper amounts from the specification results in a total amount due to De Jesus of $197,377. I note that De Jesus' quip has been calculated only up to February 21, 1988, and his rights are reserved in futuro. John Gonzalez was discharged from A.N. on July 22, 1982. He testified credibly and in some detail about his efforts to find work after his discharge. He sought jobs and kept a list of the places he contacted. At various times he was unemployed because he could not find work, but he made efforts to be employed. It has not been shown that he did not reasonably seek employment. Some corrections should be made to the specification as drawn by General Counsel. John Gonzalez testified that in the first quarter of 1983 he worked for Rex Manage- ment for about 2-1/2 months at $300 per week. Thus, he had interim earnings of $3000. Further, he stated that from mid-May 1986 he worked at Inter City Communi- cations at $700 per week. Thus, he had interim earnings in the second quarter of 1986 of $3500. Finally, he testi- fied that he was involved in a car accident in the fall of 1987 and could not work for about 10 weeks. It is not claimed that this accident related to his interim employ- ment and there has been no proof submitted concerning any sick leave or other benefits to which employees of Ozone might be entitled. Thus, he is not entitled to back- pay for 10 weeks in the last quarter of 1987. See Ameri- can Mfg Co. of Texas, supra, and Big Three Industrial Gas Co., supra. In 1988, John Gonzalez started his own business which consists of performing electrical work, re- modeling and installing kitchens. Starting one's own busi- ness is an acceptable method of mitigating the loss of pay. See Arduini Mfg. Corp., supra. I find that John Gon- zalez should be awarded backpay in accordance with the following figures which were calculated up to February 21, 1988, and are reserved in futuro: Gross Backpay Interim Earnings Net Backpay 1982 3d qtr. $12,045 $0 $12,045, 4th qtr. 13,351 2,035 11,316 1983 1st qtr. 13,351 3,000 10,351 2d qtr. 13,351 1,726 11,625 3d qtr. 13,419 4,485 8,866 4th qtr. 15,873 6,224 9,649 1984 1st qtr. 15,873 4,108 11,765 2d qtr. 15,873 4,108 11,765 3d qtr. 15,873 4,108 11,765 4th qtr. 15,873 4,108 11,765 197 Gross Backpay Interim Earnings Net Backpay 1985 1st qtr. 15,873 6,910 8,963 2d qtr. 15,873 6,910 8,963 3d qtr. 15,873 6,909 8,964 4th qtr. 16,224 1,000 15,224 1986 1st qtr. 17,394 0 17,394 2d qtr. 17,394 3,000 14,394 3d qtr. 17,394 7,800 9,594 4th qtr. 17,394 7,950 9,444 1987 1st qtr. 18,707 2,800 15,907 2d qtr. 18,707 5,760 12,947 3d qtr. 18,707 720 17,987 4th qtr. 4,317 480 3,837 1988 1st qtr. 10,073 8,155 1,918 Total $255,947 Jose Gonzalez was discharged from A.N. on July 22, 1982. He described in some detail his search for work from that time forward. Gonzalez always looked for work, but he was not always successful and he often went for weeks between jobs. On these occasions, he did small side jobs for various people. I am satisfied from the testimony that Jose Gonzalez was reasonably diligent in looking for work and that he asked people he knew about work and went around to various construction sites inquiring if there was work available for him. In March 1983, Jose Gonzalez signed a purported "Re- lease," which by its terms sought to settle all claims he might have under the NLRA and the Davis-Bacon Act, to provide for withdrawal of all charges filed with the NLRB and the U.S. Department of Labor, and to indem- nity A.N. Electric Corporation, Argano Electric Corpo- ration, Nicolo Argano, and Louis Squillante. The docu- ment, on its face, recites various facts which are untrue; the date of signing is not set out correctly, the purported release was not discussed with counsel for the General Counsel nor with the administrative law judge who heard the underlying case and the document was not signed at the Regional Office. Nor was any representa- tion made by counsel for Respondent that the document was discussed with any official of the U.S. Department of Labor. It seems that this document differs from the re- lease found invalid by Judge Green and the Board in the underlying case. In any event, the document is not bind- ing on me since the issue of Jose Gonzalez' illegal dis- charge and A.N.'s liability to make him whole and offer him reinstatement were decided in the underlying case. However, Jose Gonzalez did testify before me that in March 1983 he received $6000 from Lipsman, who, at that time, represented both A.N. and Ozone Electric. It would seem unjust, therefore, not to offset the sum of $6000 and I shall add this amount to Jose Gonzalez' in- terim earnings for the first quarter of 1983. Therefore, Jose Gonzalez should be made whole in the amount of $274,383 based on the specification, General Counsel's 198 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Exhibit 60. This amount was calculated up to February 21, 1988, and Gonzalez' rights are reserved in futuro. Jose Robles was discharged by Ozone on January 21, 1983. When he found that Local 363 was of no help to him in securing employment, he joined Local 3 and ob- tained employment in the winter of 1983. However, he was subpoenaed several times , apparently in connection with the underlying case here, and he was eventually laid off because his attendance was not steady . Robles' testimony was inconsistent; at first he stated that he stopped looking for further employment in the beginning of 1983, then he testified at length that after his layoff from the Local 3 shop he registered for unemployment and went to look for work pursuant to instructions from the unemployment service . He stated that he applied for several civil service jobs and he looked for jobs as an electrician through the newspapers . Later, Robles testi- fied that at some point , which he did not specify but per- haps in 1984, he refused work from Local 3 because he had registered to enter college in September 1984. Still later, Robles testified that he looked for work everyday and that for the balance of 1983 and most of 1984 he was supported by his mother and his various girlfriends. At the time of the hearing on the specification, Robles testi- fied that he was "a professional student" and that he had begun to attend school in September 1984. The specifica- tion lists no interim earnings for Robles after the first quarter of 1983 . My impression of Robles was that he was not candid and that he took no care with his testi- mony, answering anything that came into his mind at the moment without regard for whether it was accurate. Based on Robles' contradictory testimony it is impossible for me to find that Robles made a reasonable search for work. Respondent has thus met its burden of showing that Robles incurred a willful loss of earnings . I conclude that Robles is not entitled to any backpay pursuant to the specification. On these finding of fact and conclusions of law, and on the entire record, I issue the following recommend- ed'a ORDER The Respondent, Ozone Electric Corp., New York, New York, its officers, agents, successors, and assigns, shall pay to John Gonzalez, Jose Gonzalez, Ray Coffie, Rupert Allen, and Ismael De Jesus the sums indicated in the discussion above, plus interest. 14 Further, Respond- ent Ozone is responsible for complying with the rein- statement order, and the discriminatees' rights for peri- ods after the dates covered in this Order are reserved. " If no exceptions are filed as provided by Sec 102 .46 of the Rules and Regulations of the National Labor Relations Board , the findings, conclusions, and recommended Order herein shall, as provided in Sec 102 48 of the Rules and Regulations, be adopted by the Board and become it findings, conclusions, and Order, and all objections shall be deemed waived for all purposes i4 In accordance with New Horizons for the Retarded, 283 NLRB 1173 (1987), interest on and after January 1 , 1987, shall be computed at the "short-term Federal rate" for the underpayment of taxes as set out in the 1986 amendment to 26 U .S.C. § 6621 Interest on amounts accrued prior to January 1, 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).