MJ Mueller, LLC d/b/a Benjamin Franklin Plumbing

BENJAMIN FRANKLIN PLUMBING 733 MJ Mueller, LLC d/b/a Benjamin Franklin Plumbing and Michael J. Mueller and United Association of Plumbers and Gasfitters, Local Union No. 34. Cases 18–CA–18216, 18–CA–18419, and 18–CA– 18504 February 25, 2011 SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN LIEBMAN AND MEMBERS PEARCE AND HAYES The Acting General Counsel seeks partial default judgment in this case on the ground that the Respondents MJ Mueller, LLC d/b/a Benjamin Franklin Plumbing (MJM) and Michael J. Mueller (Mueller) have failed to file answers to the compliance specification. On May 30, 2008, the Board issued a Decision and Order1 that, among other things, ordered Respondent MJM to make whole discriminatees Steven LaMont and Donald Doty for any loss of earnings or other benefits they may have suffered as a result of MJM’s unfair labor practices in violation of Section 8(a)(1) of the Act. On February 27, 2009, the United States Court of Appeals for the Eighth Circuit entered its consent judgment2 en- forcing the Board’s Order.3 A controversy having arisen regarding the amount of backpay due the discriminatees, the Regional Director issued a compliance specification and notice of hearing on October 29, 2009. The compliance specification al- leged that Respondent MJM had not offered employees LaMont or Doty reinstatement, that Mueller is personally liable for the unfair labor practices committed by Re- spondent MJM, and set forth the amount of backpay due under the Board’s Order.4 The specification notified the Respondents that they should file an answer by Novem- 1 352 NLRB 525 (2008). 2 No. 08-3385. The court entered a Judgment enforcing in full the Board’s Order and a Stipulation for entry of consent judgment agreed to by Respondent MJM. 3 Although this case was decided by only two Board Members, the court’s order and mandate upholding that decision became final prior to the Supreme Court’s decision in New Process Steel, L.P. v. NLRB, 560 U.S. __, 130 S.Ct. 2635 (2010), holding that a two-member group may not exercise delegated authority when the membership of the group falls below three. In these circumstances, we regard the matters finally resolved by the court of appeals as res judicata in this proceeding. See Chicot County Drainage District v. Baxter State Bank, 308 U.S. 371, 374–378 (1940); Nemaizer v. Baker, 793 F.2d 58, 65 (2d Cir. 1986) (cited with approval in United Student Aid Funds, Inc. v. Espinosa, 559 U.S. __, 130 S.Ct. 1367, 1377 (2010)). 4 The specification originally alleged that another entity was the alter ego of Respondent MJM and also liable for its unfair labor practices. However, all allegations regarding that entity were settled and the Gen- eral Counsel does not seek default judgment as to it. We have amended the case caption accordingly. ber 19, 2009, complying with the Board’s Rules and Regulations. Although properly served with a copy of the compliance specification, the Respondents failed to file answers. On December 18, the General Counsel filed with Ad- ministrative Law Judge George Aleman a Motion for Partial Default Judgment.5 On January 8, 2010, the judge issued an order transferring to the Board the Gen- eral Counsel’s Motion for Partial Default Judgment. On February 2, 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. The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. Ruling on Motion for Partial Default Judgment 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(b) requires that an answer shall specifically admit, deny, or explain each and every alle- gation of the specification. Finally, Section 102.56(c) provides that if the respondent fails to file an answer to the specification within the time prescribed by this sec- tion, the Board may, either with or without taking evi- dence 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 partial default judgment, the Respondents, de- spite having been advised of the filing requirements, have failed to file answers to the compliance specifica- tion. In the absence of good cause for the Respondents’ failure to file an answer, we deem the allegations in the compliance specification to be admitted as true, and grant the General Counsel’s Motion for Partial Default Judg- ment. As stated, the compliance specification alleges that Respondent Mueller is personally liable for MJM’s un- fair labor practices because he controlled the day-to-day management, labor relations policies, business operations and financial resources of MJM; commingled MJM’s assets with his personal assets and other assets within his control; and participated in the creation of a new corpo- rate entity in order to avoid MJM’s legal obligations un- 5 Subsequently, this motion was inadvertently transferred to the Board for ruling. On December 29, the Board granted the General Counsel’s motion to rescind the Order Transferring the Proceeding to the Board, and remanded the Motion for Partial Default Judgment to the administrative law judge for ruling. 356 NLRB No. 99 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 734 der the Act. Accordingly, we conclude that Respondent Mueller is personally liable for the unfair labor practices committed by Respondent MJM. See White Oak Coal, 318 NLRB 732 (1995), enfd. mem. 81 F. 3d 150 (4th Cir. 1996) (personal liability imposed where (1) the share- holder and corporation have failed to maintain separate identities, and (2) adherence to the corporate form would sanction a fraud, promote injustice, or lead to an evasion of legal obligations). We further find that the net backpay due LaMont and Doty is as stated in the compliance specification. Thus, we will order Respondents MJ Mueller, LLC d/b/a Ben- jamin Franklin Plumbing and Michael J. Mueller to pay those amounts to LaMont and Doty, plus interest accrued to the date of payment. ORDER The National Labor Relations Board orders that the Respondents, MJ Mueller, LLC d/b/a Benjamin Franklin Plumbing and Michael J. Mueller, North Branch, Minne- sota, their officers, agents, successors, and assigns, shall make whole the discriminatees named below, by paying them the amounts following their names,6 plus interest accrued to the date of payment, as prescribed in New Horizons for the Retarded, 283 NLRB 1173 (1987), mi- nus tax withholdings required by Federal and State Laws:7 Steven LaMont $50,302 Donald Doty 11,783 TOTAL BACKPAY DUE: $62,085 6 As set forth in the compliance specification, the discriminatees’ backpay period is ongoing until they receive a valid offer of reinstate- ment; the backpay amount listed for LaMont above has been calculated through October 23, 2009, and the amount for Doty through February 22, 2008, in order to ascertain a definitive backpay period for purposes of this proceeding. 7 The Board has declined to apply its new policy, announced in Ken- tucky River Medical Center, 356 NLRB 6 (2010), of daily compound- ing of interest on backpay awards, in cases such as this, that were al- ready in the compliance stage on the date that decision issued. Three Rivers Electrical, Inc., 356 NLRB 170, 170 at fn. 2 (2010).