National Transit Inc., And Its Successors And Alter Egos National Transit Services, Inc. And Carolina Paratransit

NATIONAL TRANSIT 453 National Transit Inc., and its Successors and Alter Egos National Transit Services, Inc. and Caroli- na Paratransit and General Drivers, Ware- housemen and Helpers Local Union No. 968, af- filiated with International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, AFL-CIO. Case 16-CA- 14204 August 13, 1990 DECISION AND ORDER BY MEMBERS CRACRAFT, DEVANEY, AND OVIATT Upon a charge filed by General Drivers, Ware- housemen and Helpers Local Union No 968, affili- ated with International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of Amer- ica, AFL-CIO (Union), on September 13, 1989, and amended on October 24, 1989, the General Counsel of the National Labor Relations Board issued a complaint on October 26, 1989, against National Transit, Inc (NTI) and its successors and alter egos National Transit Services, Inc (NTS) and Carolina Paratransit (CP), the Respondents, al- leging that they have violated Section 8(a)(5) and (1) of the National Labor Relations Act Although properly served copies of the charge, the amended charge, and the complaint, the Respondents failed to file an answer On January 8, 1990, the General Counsel filed a Motion to Transfer Case Before the Board and Motion for Summary Judgment, with exhibits at- tached On January 11, 1990, the Board issued an order transferring the proceeding to the Board and a Notice to Show Cause why the motion should not be granted The Respondents filed no response On January 26, 1990, pursuant to the request of counsel for Holland Industries, Inc (Holland), an extension of time until February 8, 1990, was grant- ed to file a response to the Notice to Show Cause On February 5, 1990, Holland filed a response and requested permission to file an answer On Febru- ary 27, 1990, the General Counsel filed a Memo- randum in Support of Motion for Summary Judg- ment The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel Ruling on Motion for Summary Judgment Section 102 20 of the Board's Rules and Regula- tions provides that the allegations in the complaint shall be deemed admitted if an answer is not filed within 14 days from service of the complaint, unless good cause is shown The complaint states that unless an answer is filed within 14 days of service, "all of the allegations in the Complaint shall be deemed to be admitted to be true and may be so found by the Board" Further, the undis- puted allegations in the Motion for Summary Judg- ment disclose that counsel for the General Counsel advised the Respondents by certified letters dated November 15, 1989, that unless an answer to the complaint was filed within 10 days of receipt of the letters, a Motion for Summary Judgment would be filed As noted, the Respondents failed to file an answer In its response to the Notice to Show Cause, Holland states that about February 1, 1990, it pur- chased the stock of NTI and thereby has taken "the chance of being declared the successor em- ployer to National Transit, Inc ," responsible for remedying any unfair labor practices that the Board might find were committed by the Respond- ents Thus, Holland "requests that it be permitted to answer the Unfair Labor Practice Complaint against its predecessor, National Transit, Inc, nunc pro tunc and be permitted to investigate, and, if necessary, to defend against the charges in a hear- ing" According to Holland, the opportunity to defend these charges will permit it "the simultane- ous opportunity to assess its status in light of its purchase of the stock of National Transit, Inc [and it is] conceivable that while preparing its de- fense of this matter may be able to adjust the situation, thereby averting a full hearing" Further, Holland submits its belief that the Respondents failed to file an answer because they were "in dire financial straits," could not afford the cost of coun- sel, and were about to file a Chapter 7 bankruptcy petition For these reasons, Holland requests that the Board deny the Motion for Summary Judgment and remand the case to the Regional Director for a hearing The General Counsel contends that none of Holland's assertions excuse the Respondents' failure to file an answer and that summary judg- ment is appropriate We find, in agreement with the General Counsel, that none of the contentions raised by Holland con- stitutes good cause for the Respondents' failure to file an answer The Board has rejected claims of fi- nancial crisis and inability to afford counsel,' the filing of a bankruptcy petition, 2 and the possibility of settlement 3 as justification for failure to file an answer Accordingly, we find that the Respondents' fail- ure to file a timely answer has not been supported 'Monroe Furniture Co, 231 NLRB 143 (1977) 'Jim Rodgers Superior Insulation, 296 NLRB No 66, slip op at 2 fn 2 (Sept 8, 1989) (Not reported in bound volume ) 'Sorenson Industries, 290 NLRB 1132 (1988) 299 NLRB No 58 454 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD by a showing of good cause and we grant the Gen- eral Counsel's Motion for Summary Judgment 4 On the entire record, the Board makes the fol- lowing FINDINGS OF FACT I JURISDICTION Respondent NT!, a Texas corporation, and Re- spondent CP, a North Carolina corporation, are wholly-owned subsidiaries of Respondent NTS, a Texas corporation, and they operate a facility in Houston, Texas, where they are engaged in provid- ing contract bus services During the 12-month period preceding issuance of the complaint, a rep- resentative period, Respondent NTS, in the course and conduct of its busmess operations, derived gross revenues in excess of $250,000 and purchased and received products, goods, and materials valued in excess of $50,000 directly from points located outside the State of Texas At all times material, NT!, CP, and NTS have been affiliated business enterprises, with common officers, ownership, directors, management, and su- pervision, have formulated and administered a common labor policy affecting employees of the three corporations, have shared common premises and facilities, have provided services and made sales to each other, have interchanged personnel with each other, and have held themselves out to the public as a single integrated business enterprise About September 1, 1989, CP was established by NT! and NTS as a subordinate instrument to, and a disguised continuation of, NT! and NTS By virtue of these facts, we find that the Respondents NT!, NTS, and CP are and have been at all times mate- rial alter egos and a single employer within the meaning of the Act Further, since about Septem- ber 1, 1989, CP and/or NTS have continued to op- erate the businesses of NTI in basically unchanged form with a majority of employees who were pre- viously employees of NT! By virtue of these facts, we find that CP and/or NTS are successors of NT! We further find, on the basis of the foregoing, that NT!, NTS, and CP are an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act and that the Union is a labor or- ganization within the meaning of Section 2(5) of the Act 4 We find that the issues raised by Holland regarding its potential status as a successor of the Respondents and its possible liability for rem- edying the Respondents' unfair labor practices are matters appropriate for resolution in compliance proceedings Golden State Bottling Co v NLRB, 415 US 168, 174 (1973), Edward Cooper Painting, 297 NLRB 627 fn 4 (1990) II ALLEGED UNFAIR LABOR PRACTICES A The Unit and the Union's Representative Status The following employees of the Respondent NTI constitute a unit appropriate for the purposes of collective bargaining within the meaning of Sec- tion 9(b) of the Act INCLUDED All operators/drivers, service workers, mechanics, and parts room clerks employed by the Employer at its Houston, Texas, facility EXCLUDED All other employees, including all charter/sales representatives, clerical em- ployees, secretaries, dispatchers, lead drivers and supervisors as defined in the Act About October 9, 1986, the Union was certified as the exclusive collective-bargaining representative of the unit described above Smce about October 9, 1986, and at all times material, the Union, by virtue of Section 9(a) of the Act, has been the exclusive collective-bargaining representative of the Re- spondent NTI's employees in the unit described above, and since that date the Union has been rec- ognized as such representative by NTI Such rec- ognition has been embodied in a collective-bargain- ing agreement, which is effective by its terms for the period April 26, 1987, to April 21, 1990 Since about September 1, 1989, the Union, by virtue of Section 9(a) of the Act, has been the exclusive rep- resentative of the employees of the Respondents CP and NTS in the unit described above B Refusals to Bargain About August 9, 1989, the Union, by letter, re- quested the Respondent NTI to continue to recog- nize it as the exclusive collective-bargaining repre- sentative of the umt employees and to give effect to the existing collective-bargaining agreement, to meet concerning grievances pending on behalf of unit employees and to provide certain information, including copies of contracts between the Respond- ents and the University of Houston, from which the Union could demonstrate that NT! and CP constituted a single employer This mformation necessary for, and relevant to, the Union's perform- ance of its function as the exclusive representative of the unit Since about August 11, 1989, the Re- spondents have failed and refused, and continue to fail and refuse, to recognize or bargain with the Union, to furnish the Union the requested informa- tion, and to honor the Union's request for arbitra- tion concerning alleged breaches of the contract Commencing about September 1, 1989, the Re- spondents have failed and refused, and continue to NATIONAL TRANSIT 455 fail and refuse, to pay various contractual benefits on behalf of unit employees, thereby eliminating or significantly lowering the wages, health insurance, pension benefits, vacation entitlements, and other benefits required to be paid pursuant to the collec- tive-bargaining agreement Since about September 1, 1989, and continuing to date, the Respondents have also failed and refused to check off union dues and to remit the dues to the Union, as re- quired by the collective-bargaining agreement By the acts and conduct described above, the Respondents have failed and refused, and are fail- ing and refusing, to bargain collectively and in good faith with the representative of their employ- ees Accordingly, we find that the Respondents have engaged in unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act CONCLUSIONS OF LAW By failing to recognize and refusing to bargain with the Union during the term of the collective- bargaining agreement, by failing to provide the Union with necessary and relevant information, by failing to meet with the Union concermng employ- ee grievances and to honor the Union's request for arbitration concernmg alleged breaches of the col- lective-bargaining contract, by failing to pay con- tractual wages and various contractual benefits on behalf of unit employees, and by failing to check off and remit dues properly owed to the Union pursuant to the collective-bargammg agreement, the Respondents have refused to bargain collective- ly and in good faith with the representative of its employees and have engaged in unfair labor prac- tices affecting commerce within the meaning of Section 8(a)(5) and (1) and Section 2(6) and (7) of the Act REMEDY Having found that the Respondents have en- gaged in certain unfair labor practices, we shall order them to cease and desist and to take certain affirmative action designed to effectuate the poli- cies of the Act We shall order the Respondents to recognize and bargain with the Union and to adhere to the terms and conditions of their collective-bargaining agree- ment with the Union, and to cease and desist from making unilateral changes in the unit employees' terms and conditions of employment by refusing to honor their collective-bargaining agreement with the Union We shall further order the Respondents to provide the Union with the requested informa- tion necessary for, and relevant to, the Union's per- formance of its function as the exclusive collective- bargaining representative of unit employees, to honor the Union's request for arbitration concern- ing alleged breaches of the contract, and to bargain on request concerning grievances pending on behalf of unit employees To remedy the Respond- ents' unlawful refusal to continue in effect the terms and conditions of its collective-bargaining agreement with the Union by failing to make fringe benefit contributions mandated therein, including vacation, health insurance, pension, and other bene- fits, we shall order them to comply with the collec- tive-bargaining agreement by paying all contnbu- tons 5 Further, the Respondents shall be ordered to make whole all affected unit employees for any losses incurred by virtue of their failure to make contributions to the benefit funds established by the collective-bargaining agreement Kraft Plumbing & Heating, 252 NLRB 891 fn 2 (1980), enfd mem 661 F 2d 940 (9th Cir 1981) This shall include re- imbursing employees for any contributions they themselves may have made, with interest, for the maintenance of any fund after the Respondents made their unilateral change 6 To remedy the Re- spondents' unlawful refusal to pay contractual wages, we shall order the Respondents to make employees whole for any losses Finally, to remedy the Respondents' refusal to honor the bargaining agreement by failing to remit dues to the Union, we shall order the Respondents to honor the con- tractual checkoff provisions and valid dues-check- off authorizations and remit to the Union dues it should have checked off pursuant to the terms of the agreement All payments to the employees and to the Umon shall be with interest as prescribed in New Horizons for the Retarded, 283 NLRB 1173 (1987) ORDER The National Labor Relations Board orders that the Respondents, National Transit, Inc , National Transit Services, Inc , and Carolina Paratransit, Houston, Texas, their officers, agents, successors, and assigns, shall 1 Cease and desist from (a) Changing the terms and conditions of em- ployment of the employees in the bargaining unit and refusing to bargain with General Drivers, War- ehousemen and Helpers Local Union No 968, af- filiated with International Brotherhood of Team- 5 Because the provisions of employee benefit fund agreements are vari- able and complex, the Board does not provide for the addition of a fixed rate of interest on unlawfully withheld fund payments at the adjudicatory stage of the proceeding We leave to the compliance stage the question whether the Respondents must pay any additional amounts Into the bene- fit funds in order to satisfy our "make-whole" remedy Any additional amounts shall be determined in the manner set forth in Merryweather Op- ncal Co , 240 NLRB 1213 fn 7(1979) 5 See Concord Metal, 295 NLRB 912 (1989) • 456 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD sters, Chauffeurs, Warehousemen and Helpers of America, AFL-CIO, as the exclusive representa- tive of their employees in the appropriate unit set forth below by withdrawing recognition during the term of the collective-bargaining agreement, by failing to furnish the Union information that is rele- vant and necessary to its role as the exclusive bar- gaining representative of the unit employees, by failing to meet with the Union concerning employ- ee grievances and to honor the Union's request for arbitration concerning alleged breaches of the col- lective-bargaining contract, by failing to pay con- tractual wages and various benefits on behalf of unit employees, and by failing to check off union dues and remit dues properly owed to the Union (b) In any like or related manner interfering with, restraining, or coercing employees in the ex- ercise of the rights guaranteed them by Section 7 of the Act 2 Take the following affirmative action neces- sary to effectuate the policies of the Act (a) Comply with the collective-bargaining agree- ment effective by its terms from April 27, 1987, to April 21, 1990, and recognize and, on request, bar- gain with the Union as the exclusive representative of the employees in the following appropriate unit Included All operators/drivers, service work- ers, mechanics, and parts room clerks em- ployed by the Employer at its Houston, Texas, facility Excluded All other employees, including all charter/sales representatives, clerical em- ployees, secretaries, dispatchers, lead drivers and supervisors as defined in the Act (b) On request, furnish the Union with the re- quested information that is relevant and necessary to its role as the exclusive bargaining representative of the umt employees (c) On request, meet and bargain with the Union concerning grievances pending on behalf of unit employees and honor the Union's request to arbi- trate alleged breaches of the collective-bargaining agreement (d) Pay all wages and benefits, including vaca- tion, health insurance, and pension benefit contribu- tions required by the collective-bargaining agree- ment, as provided in the remedy section of this de- cision (e) Check off and remit to the Union all union dues required by the collective-bargaining agree- ment, with interest, as set forth in the remedy sec- tion of this decision (f) Make unit employees whole for any losses re- sulting from the failure to adhere to the collective- bargaining agreement, including reimbursing them for expenses ensuing from the failure to pay fringe benefits pursuant to the collective-bargammg agree- ment in the manner set forth in the remedy section of this decision (g) Preserve and, on request, make available to the Board or its agents for examination and copy- ing, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary to analyze the amount of backpay due under the terms of this Order (h) Post at its facility in Houston, Texas, copies of the attached notice marked "Appendix " Copies of the notice, on forms provided by the Re- gional Director for Region 16, after being signed by the Respondents' authorized representative, shall be posted by the Respondents 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 Respondents to ensure that the notices are not altered, defaced, or covered by any other material (i) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Respondents have taken to comply 7 If this Order is enforced by a judgment of a United States court of appeals, the words in the notice reading "Posted by Order of the Nation- al Labor Relations Board" shall read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board" 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 with General Drivers, Warehousemen and Helpers Local Union No 968, affiliated with International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, AFL-CIO, by withdrawing recogmtion and failing to continue in full force and effect the terms and conditions of our collective- bargaining agreement with the Union, by refusing to furnish the Union with information necessary for and relevant to its function as bargaining represent- ative, by refusing to meet with the Union concern- ing employee grievances or to honor the Union's request for arbitration concerning alleged breaches of the collective-bargaining contract, by refusing to NATIONAL TRANSIT 457 pay wages and benefits, including vacation, health insurance, and pension benefits, as required by the collective-bargaining agreement, or by refusing to check off and remit union dues to the Union as re- quired by the collective-bargaining agreement WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exer- cise of the nghts guaranteed you by Section 7 of the Act WE WILL recogmze the Union and, on request, bargain with the Union as the exclusive representa- tive of the employees in the following appropriate unit and WE WILL comply with all terms and con- ditions of the collective-bargaining agreement by paying all wages and benefits, including vacation, health insurance, pension, and other benefits Included All operators/drivers, service work- ers, mechanics, and parts room clerks em- ployed by the Employer at its Houston, Texas, facility Excluded All other employees, mcludmg all charter/sales representatives, clencal em- ployees, secretaries, dispatchers, lead dnvers and supervisors as defined in the Act WE WILL, on request, furnish the Union with in- formation it has requested that is necessary and rel- evant to its function as bargaining representative WE WILL, on request, meet with the Union con- cerning employee grievances and honor its request to arbitrate concerning alleged breaches of the col- lective-bargaining agreement WE WILL make unit employees whole for any losses resulting from our repudiation of the collec- tive-bargaining agreement and WE WILL reimburse you for any expenses ensuing from our unlawful failure to pay fringe benefits pursuant to the collec- tive-bargaining agreement WE WILL check off and remit dues to the Union as required by the collective-bargaining agreement NATIONAL TRANSIT, INC , NATIONAL TRANSIT SERVICES, INC AND CARO- LINA PARATRANSIT