Mays Electric Co.

352 NLRB No. 49 NOTICE: This opinion is subject to formal revision before publication in the bound volumes of NLRB decisions. Readers are requested to notify the Executive Secretary, National Labor Relations Board, Washington, D.C. 20570, of any typographical or other formal errors so that corrections can be included in the bound volumes. Mays Electric Co., Inc. and Mays Electrical Services Corporation and Vincent T. Mays and Interna- tional Brotherhood of Electrical Workers, Local 666, AFL–CIO. Cases 5–CA–31247 and 5–CA– 31371 April 10, 2008 SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN SCHAUMBER AND MEMBER LIEBMAN The General Counsel seeks default judgment in this case on the ground that the Respondents have failed to file an answer to the compliance specification. On September 30, 2004, the Board issued a Decision and Order1 that, among other things, ordered Respondent Mays Electric Company, Inc. (MEC) to make whole dis- criminatee Allen Morgan for any loss of earnings or other benefits he may have suffered as a result of MEC’s unfair labor practices in violation of Section 8(a)(3) and (1) of the Act. On October 17, 2005, the United States Court of Appeals for the Fourth Circuit entered its judg- ment enforcing the Board’s Order.2 A controversy having arisen over the amount of back- pay due the discriminatee, the Regional Director issued a compliance specification and notice of hearing on De- cember 7, 2007,3 alleging the amount of backpay due under the Board’s Order, and notifying the Respondents that they should file an answer by December 28, 2007, complying with the Board’s Rules and Regulations. The compliance specification also alleges that at all material times and continuing until 2005, Respondent MEC, a corporation with an office and place of business in Lynchburg, Virginia, was engaged in the construction business as an electrical contractor; that since about January 23, 2003, and continuing to date, Respondent Mays Electrical Service Corporation (MESC), with an office and place of business in Lynchburg, Virginia, has been engaged in the construction business as an electrical contractor; that Respondent Vincent T. Mays (Mays) was the president of Respondent MEC, owned 100 percent of the stock in Respondent MEC, since January 23, 2003, served as the president of Respondent MESC, owns 100 percent of the stock in Respondent MESC, and is a su- 1 343 NLRB No. 20. 2 No. 05–1862. 3 The compliance specification initially issued on November 30, 2007, but was inadvertently sent to the wrong address. Consequently, the Regional Director reissued the compliance specification on Decem- ber 7. pervisor and an agent within the meaning of Section 2(11) and (13) of Respondent MEC and Respondent MESC; that Respondent Mays made all business and major construction decisions for Respondent MEC and Respondent MESC, including but not limited to all final bid submissions, including determining whether Respon- dent MEC or Respondent MESC would bid new work and perform work on successful bids; that Respondent Mays controlled the day-to-day management, labor rela- tions policies, and financial resources of Respondent MEC and Respondent MESC; and that since late 2003, Respondent Mays has diverted the assets of Respondent MEC for his own use, by using the assets of Respondent MEC for the purposes of satisfying the terms of a settle- ment in a court proceeding involving a personal matter, and in an effort to render Respondent MEC insolvent and to make it incapable of fulfilling its obligations, Respon- dent Mays directed the purchase of a property through English Tavern Development, a company wholly owned by Respondent Mays and engaged in a business unrelated to electrical contracting, at an artificially low price and later selling it for personal gain at a profit. Based on the conduct described above, the compliance specification alleges that Respondent Mays individually acted as an alter ego of Respondent MEC and of Respondent MESC, and thereby is personally liable, jointly and severally, with Respondent MEC and Respondent MESC for reme- dying the unfair labor practices of Respondent MEC. The compliance specification further alleges that about June 2003, Respondent MESC began acting as a single, integrated enterprise with Respondent MEC; that since about January 2003 and continuing to 2005, Respondent MESC maintained the same business address, business telephone, cell phone accounts, website address, and goodwill as Respondent MEC; that from 2003 to 2004, Respondent MESC regularly paid only nominal rental fees to Respondent MEC for office space, vehicle, and equipment use; that around April 2004 and continuing until 2004, Respondent MEC paid construction equip- ment, office equipment, office furniture, and vehicle ex- penses on behalf of Respondent MESC to English Tav- ern Development; that at all material times, Robin E. Mays was the vice president of Respondent MEC and since about January 23, 2003, has been the vice president of Respondent MESC, and at all material times has been a supervisor and an agent within the meaning of Section 2(11) and (13) of the Act of Respondent MEC and Re- spondent MESC. The compliance specification additionally alleges that beginning about June 2003 and continuing to 2005, Re- spondent MESC employed the same employees and su- pervisors as Respondent MEC; that certain employees DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 2 performed work on Respondent MEC’s jobsites and were compensated by Respondent MEC during the same pay period(s) that they performed work on Respondent MESC’s jobsites and were compensated by Respondent MESC; that employees of Respondent MEC and Re- spondent MESC were paid identical individual hourly wage rates and received identical individual benefits when performing work for Respondent MEC or for Re- spondent MESC; that all terms and conditions were the same, regardless of whether employees were performing work for Respondent MEC or Respondent MESC; that Respondent MEC and Respondent MESC maintained the same workers compensation insurance policy; that Re- spondent MESC has advertised itself as a continuation of Respondent MEC, including by promoting the trade ex- perience gained by Respondent MEC, and using the sub- stantially same corporate logo as Respondent MEC; that beginning in January 2003 and continuing to about April 2004, Respondent MESC established credit with, and procured supplies from, many of the same suppliers used by Respondent MEC; that in establishing credit, Respon- dent MESC relied on the goodwill earned by Respondent MEC; that beginning about June 2003 and continuing to 2005, Respondent MEC and Respondent MESC per- formed work for the same customers; and that beginning in July 2003 and continuing until at least April 2005, checks from customers made payable to Respondent MEC were deposited directly into an account held by Respondent MESC. Based on the conduct described above, that compliance specification alleges that Re- spondent MEC and Respondent MESC are a single, inte- grated enterprise. Further, the compliance specification alleges that at all material times, Respondent MEC and Respondent MESC have been affiliated business enterprises with common officers, ownership, directors, management, and supervi- sion; have formulated and administered a common labor policy; have shared common premises and facilities; have provided services for and made sales to each other; have interchanged personnel with each other; and have held themselves out to the public as single-integrated business enterprises; and that based on the operations described above, Respondent MEC and Respondent MESC have been the single employer of the employees of Respondent MEC. Although properly served with a copy of the compli- ance specification, the Respondents failed to file an an- swer.4 4 As stated above, copies of the compliance specification were sent by certified mail on December 7, 2007. On December 11, having learned that MEC refused delivery of the December 7 mailing, the Regional Attorney sent four envelopes to Mays by regular mail, each of On February 11, 2008, the General Counsel filed with the Board a Motion for Default Judgment, with exhibits attached. On February 15, 2008, the Board issued an order transferring the proceeding to the Board and a No- tice to Show Cause why the motion should not be granted. The Respondents failed to file a response. The allegations in the motion and in the amended compliance specification are therefore undisputed. Ruling on the Motion for Summary Judgment5 Section 102.56(a) of the Board's Rules and Regula- tions provides that a respondent shall file an answer within 21 days from service of a compliance specifica- tion. Section 102.56(c) of the Board's Rules and Regula- tions provides that if the respondent fails to file any an- swer to the specification within the time prescribed by this section, the Board may, either with or without taking evidence in support of the allegations of the specification and without further notice to the respondent, find the specification to be true and enter such order as may be appropriate. According to the uncontroverted allegations of the Mo- tion for Default Judgment, the Respondents, despite hav- ing been advised of the filing requirements, have failed to file an answer to the compliance specification. In the absence of good cause for the Respondents’ failure to file an answer, we deem the allegations in the compliance which contained a copy of the compliance specification and a letter advising him that a Motion for Default Judgment would be filed if he failed to file an answer to the compliance specification by the close of business on January 4, 2008. Two envelopes were mailed to Mays’ home address and two envelopes to MESC’s address—one mailed to each address contained the return address of the Region, and one did not. On December 20 and 26, 2007, the envelopes with the Region’s return address were returned to the Regional office marked “return to sender”; however, there is no evidence that the unmarked envelopes were returned. In addition, copies of the Notice to Show Cause were sent to the Re- spondent by certified and regular mail on February 15, 2008. The letter sent by regular mail was returned on March 3, 2008, and the certified letter was returned on March 6, 2008. Both were marked “return to sender.” Subsequently, an additional copy of the Notice to Show Cause was sent by regular mail on March 6, 2008, and it was returned on March 18, 2008, and marked “return to sender.” It is well-settled that a party’s failure to accept certified mail or to provide for appropriate service cannot serve to defeat the purposes of the Act. See, e.g., I.C.E. Electric, Inc., 339 NLRB 247 fn. 2 (2003). Accordingly, we find that the Respondents were properly served with the compliance specification. 5 Effective midnight December 28, 2007, Members Liebman, Schaumber, Kirsanow, and Walsh delegated to Members Liebman, Schaumber, and Kirsanow, as a three-member group, all of the Board’s powers in anticipation of the expiration of the terms of Members Kir- sanow and Walsh on December 31, 2007. Pursuant to this delegation, Chairman Schaumber and Member Liebman constitute a quorum of the three-member group. As a quorum, they have the authority to issue decisions and orders in unfair labor practice and representation cases. See Sec. 3(b) of the Act. MAYS ELECTRIS CO. 3 specification to be admitted as true,6 and grant the Gen- eral Counsel’s Motion for Default Judgment. Accord- ingly, we conclude that (1) the net backpay due the dis- criminatee is as stated in the compliance specification; (2) MEC and MESC are a single employer as alleged, and as such are joint and severally liable for the amount due the discriminatee under the Board’s Order; and (3) Mays is the alter ego of MEC and MESC, and as such is personally liable, jointly and severally with MEC and MESC, for the amount due the discriminatee. We will therefore order the Respondents to pay that amount to Allen Morgan, plus interest accrued to the date of pay- ment.7 ORDER The National Labor Relations Board orders that the Respondents, Mays Electric Co., Inc., and Mays Electri- 6 We note and correct two mathematical errors in the General Coun- sel’s Exhibit C. First, the correct amount of net backpay owed the discriminatee is $7,170.27, not $7,170.26. Second, we note that the amount of interim earnings in column 7 should be $170,107.51, not $95,039.70; however, the change in this total does not affect the amount of backpay owed. 7 In the compliance specification, the General Counsel seeks com- pound interest computed on a quarterly basis for any monetary amounts owing to the discriminatee. Having duly considered the matter, we are not prepared at this time to deviate from our current practice of assess- ing simple interest. See, e.g., Rogers Corp., 344 NLRB 504 (2005). cal Services Corporation, Lynchburg, Virginia, their of- ficers, agents, successors, and assigns, and Vincent T. Mays, an individual, shall jointly and severally make Allen Morgan whole by paying him the amount follow- ing his name, plus additional net backpay and interest which may accrue in the absence of a valid offer of rein- statement, plus interest as prescribed in New Horizons for the Retarded, 283 NLRB 1173 (1987), minus tax withholdings required by Federal and State laws: Allen Morgan $7,170.26 TOTAL BACKPAY DUE: $7,170.26 Dated, Washington, D.C. April 10, 2008 Peter C. Schaumber, Chairman Wilma B. Liebman, Member (SEAL) NATIONAL LABOR RELATIONS BOARD