M&B Services, Inc.; Berry Service, Inc. (Berry I); Berry Services, Inc. (Berry II); Berry Transporta

362 NLRB No. 122 NOTICE: This opinion is subject to formal revision before publication in the bound volumes of NLRB decisions. Readers are requested to notify the Ex- ecutive 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. M&B Services, Inc.; Berry Service, Inc. (Berry I); Berry Services, Inc. (Berry II); Berry Transpor- tation, LLC, Milton Berry, an individual charged with personal liability; Carolyn Berry, an individual charged with personal liability and Service Employees International Union, Local 100. Case 15–CA–018808 June 15, 2015 SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN PEARCE AND MEMBERS MISCIMARRA AND MCFERRAN The General Counsel seeks a default judgment in this case on the ground that the Respondents have failed to file an answer to the compliance specification. On Au- gust 26, 2010, the National Labor Relations Board issued a Decision and Order1 that, among other things, ordered Respondent M&B Services, Inc. (M&B) to make unit employees whole by paying them retroactively the con- tractually-required wage increases that were not paid to them since September 1, 2008, with interest. On De- cember 13, 2010, the United States Court of Appeals for the Fifth Circuit entered its judgment enforcing the Board’s Order.2 A controversy having arisen over the amount of backpay due the unit employees, on November 28, 2014, the Acting Regional Director for Region 15 issued a compliance specification and notice of hearing alleging the amount due under the Board's Order and notifying the Respondents that an answer should be filed by De- cember 19, 2014, in conformity with the Board's Rules and Regulations. Although not parties to the original unfair labor practice litigation, Respondents Berry Ser- vice, Inc. (Berry I), Berry Services, Inc. (Berry II), Berry Transportation LLC (Berry Transportation) (collectively, the Companies) were added to the compliance specifica- tion and were alleged to be a single-integrated business enterprise, alter egos, and a single employer within the meaning of the Act, and are jointly liable to fulfill the remedial obligations of the Board’s Order. In addition, Respondents Milton Berry and Carolyn Berry, individu- als (the Berrys), were alleged to be personally liable to fulfill the remedial obligations of the Board’s Order. The compliance specification sets forth the following allegations. 1 355 NLRB No. 136. 2 No. 10–60718. Relationships among the Respondents Since about January 23, 2006, and continuing through December 22, 2009, M&B has been a corporation with a place of business in Metairie, Louisiana, and has been providing temporary employees to companies engaged in the business of collecting and disposing of municipal waste. Since about January 23, 2006, and continuing through December 22, 2009, Berry I was a corporation with a place of business in Metairie, Louisiana, which provided bus transportation, and received payments for services performed by M&B employees for companies engaged in the business of collecting and disposing of municipal waste. Since about December 22, 2009, through January 14, 2013, Berry Transportation has been a corporation with a place of business in Harvey, Louisiana, engaged in the business of providing bus transportation. About December 22, 2009, Berry Transportation was established as a disguised continuance of Berry I's school bus transportation service. Since about January 6, 2010, through January 14, 2013, Berry II has been a corporation with a place of business in Metairie, Louisiana, which provided school bus transportation, and provided temporary employees to companies engaged in the business of collecting and dis- posing of municipal waste. About January 6, 2010, Berry II was established as a disguised continuation of M&B and Berry I. At all material times, the Companies have had substan- tially identical management, business purposes, opera- tions, equipment, customers, supervision, and ownership. At all material times, the Companies have been affili- ated business enterprises with common officers, owner- ship, directors, management, and supervision; have for- mulated and administered a common labor policy; have shared common premises and facilities; have inter- changed personnel with each other; have interrelated operations with common businesses that provide tempo- rary employees to companies engaged in the business of collecting and disposing of municipal waste and school bus transportation; and have held themselves out to the public as a single-integrated business enterprise. Based on the operations described above, the Companies consti- tute a single-integrated business enterprise. Based on the operations and conduct described above, the Companies are, and have been at all material times, alter egos and a single employer within the meaning of the Act. At all material times, the Berrys were the sole owners and were officers and/or agents of the Companies. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 2 At all material times, the Berrys failed to adhere to corporate formalities in the management and direction of the Companies by: (1) failing to maintain arm's length relationship between the Companies and themselves; (2) failing to follow the rules of corporate governance; (3) failing to segregate accounts; (4) diverting corporate funds or assets for noncorporate purposes; and (5) com- mingling corporate and personal funds and money. Based on this conduct, adherence to the corporate form would sanction a fraud, promote injustice, or lead to an evasion of legal obligations, and the corporate veil shielding the Berrys from personal liability arising from the Board Order should be pierced. Failure to file an answer Although properly served with a copy of the compli- ance specification, the Respondents failed to file an an- swer. By letter dated January 29, 2015, the Regional Director reminded the Respondents that the time limits for filing an answer to the compliance specification had expired and stated that unless an answer was received by February 4, 2015, a motion for default judgment would be filed. Nonetheless, the Respondents again failed to file an answer. Motion, Order, and Notice On February 12, 2015, the General Counsel filed with the Board a motion to transfer this proceeding to the Board and for default judgment. On February 18, 2015, the Board issued an order transferring the proceedings to the Board and a Notice to Show Cause why the motion should not be granted. And on March 25, 2015, the Board issued a Supplemental Notice to Show Cause. The Respondents again filed no response. The allega- tions in the motion and the compliance specification are therefore undisputed. The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. Ruling on the Motion for 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(c) provides that if the respondent fails to file an answer 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 re- spondent, 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 failure to file an answer, we deem the allegations in the compliance specification to be admitted as true, and we grant the General Coun- sel's Motion for Default Judgment. Accordingly, we conclude that the Respondents are jointly liable for the backpay as described in the compliance specification. The obligation of Respondents to make employees whole under the Board Order and Judgment will be discharged by payment to the Board in the amount of $223,781.00,3 plus interest to the date of payment, minus tax withhold- ings by Federal and State Laws. ORDER The National Labor Relations Board orders that Re- spondent M&B Services, Inc., Respondent Berry Ser- vice, Inc. (Berry I), Respondent Berry Services, Inc. (Berry II), and Respondent Berry Transportation LLC (Berry Transportation), Metairie and Harvey, Louisiana, and Respondents Milton Berry and Carolyn Berry, indi- viduals, Gretna, Louisiana, their officers, agents, succes- sors, and assigns, shall jointly and severally make whole unit employees by paying them the amounts set forth in the compliance specification, totaling $223,781.00, plus interest accrued to the date of payment, as prescribed in New Horizons, 283 NLRB 1173 (1987), compounded daily as set forth in Kentucky River Medical Center, 356 NLRB No. 8 (2010), and minus tax withholdings re- quired by Federal and State laws. Dated, Washington, D.C. June 15, 2015 Mark Gaston Pearce, Chairman Philip A. Miscimarra, Member Lauren McFerran, Member (SEAL) NATIONAL LABOR RELATIONS BOARD 3 We correct a mathematical error in the compliance specification. The compliance specification mistakenly states that the total amount of backpay owed to employees is $223,891.00. The correct total is $223,781.00. M&B SERVICES, INC. 3 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 4 M&B SERVICES, INC. 5 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 6 M&B SERVICES, INC. 7 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 8 M&B SERVICES, INC. 9 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 10 M&B SERVICES, INC. 11 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 12 M&B SERVICES, INC. 13 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 14 M&B SERVICES, INC. 15 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 16 M&B SERVICES, INC. 17 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 18 M&B SERVICES, INC. 19 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 20 M&B SERVICES, INC. 21 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 22 M&B SERVICES, INC. 23 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 24 M&B SERVICES, INC. 25