Hageman Underground Construction

DECISIONS OF NATIONAL LABOR RELATIONS BOARD Hageman Underground Construction; Hageman Con- struction Company, Inc.; Hageman Engineering, Inc. ad Operating Engineers Local Union No. 3, affiliated with International Union of Operat- ing Engineers, AFL-CIO. Case 20-CA-14502 October 15, 1980 DECISION AND ORDER BY CHAIRMAN FANNING AND MIMBITRS JENKINS AND PENELI.O On February 8, 1980, Administrative Law Judge Jerrold H. Shapiro issued the attached Decision in this proceeding. Thereafter, the General Counsel and the Charging Party Union filed exceptions and supporting briefs. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has considered the record and the at- tached Decision in light of the exceptions and briefs and has decided to affirm the rulings, find- ings, and conclusions of the Administrative Law Judge only to the extent consistent herewith. The complaint alleged that the named Respond- ents constitute a single employer for purposes of the Act and that it violated Section 8(a)(5) and (1) of the Act by withdrawing recognition from the Union as the bargaining representative of a unit of backhoe operators and by repudiating in midterm the collective-bargaining agreement covering these employees. The Administrative Law Judge found, and we agree, that Respondents are a single em- ployer, that the backhoe operators employed by Respondents comprise a single appropriate unit, and that Respondents repudiated in midterm a con- tract with the Union covering this unit.' However, the Administrative Law Judge further found that Respondents did not violate the Act because the contract repudiated was a Section 8(f) agreement, entered into without a showing that the Union rep- resented a majority of the unit employees, and the General Counsel failed to show that the Union ever acquired the majority status necessary to invoke the provisions of Section 8(a)(5) of the Act. The General Counsel and the Union except to the Administrative Law Judge's findings regarding the 8(f) issue. They argue that Respondents employed i We also agree with the Administrative Las Judge's findings Ihat Re- spondent Hageman Construction Company, Inc, is the ilter ego of Re- spondent Hageman Underground Construction While the Adnilnstrative Law Judge did not determine whether Respondeill liageman aEngineer- ing is the lter ego of Hageman Constructio Company, we find it unec- essary to make such a determination since we agree with the Administra- tive Law Judge that these two entities are part of a single employer for purposes of the Act, and that the appropriate unit of backhoe operators encompasses the backhoe operators working fir both entities 253 NLRB No. 7 a permanent and stable unit of backhoe operators, that soon after the 8(f) agreement was signed the Union achieved majority status among these em- ployees, and that Respondents thereby became ob- ligated under Section 8(a)(5) of the Act to recog- nize and bargain with the Union for the duration of the agreement. We find merit in these exceptions. 2 Respondents, herein referred to collectively as Respondent, are primaily engaged in the construc- tion and installation of utility lines. To perform this work Respondent employs general laborers, truck- drivers, mechanics, and backhoe operators. The backhoes are used for digging the ditches in which the utility lines are laid. As George Hageman, the owner of Respondent's enterprises, testified, em- ployees hired as backhoe operators must possess a high degree of skill and experience to operate the equipment properly. At all relevant times Respond- ent owned five backhoes and used four in its oper- ations. The fifth backhoe was leased to an inde- pendent company. On September 2, 1977, Respondent entered into a collective-bargaining agreement with the Union in which it agreed to recognize the Union as the bargaining representative of its employees who per- formed the type of work falling within the Union's recognized jurisdiction; namely, the operation of heavy equipment. : Among Respondent's work force, only the backhoe operators primarily per- formed the kind of work covered by the contract, and the other employees did not come within the contractual unit.4 It is undisputed that this contract was entered into pursuant to Section 8(f) of the Act and was a multisite agreement effective until June 15, 1980. On or about March 5, 1979, and at all times thereafter, Respondent refused to recog- nize the Union as the exclusive representative of - he (iencral Counsel and the Ulnion also exceptl the Adminilsra- iv\e Law Judges failure to find that Respondents Hiageman Construction Cimpany arid Hageman EIlgineering not only are a single employer hut also are aultr go As noted in fii . upra. we find it unnecessary to pass on this question :' This was not the first collectse-hargaining agreement hetween the Union and a Hageman enterprise rior to September 1977, he Union and the fHageman enterprise doing business as Hageman ackhoe Service had hccn parties to four successive collectise-hargaininlg agreements, the most recenlt one expiring during 1977 Hageman ackhoe Sersice, which no longer exists, wuas a predecessor company toI the Hageman enterprises named as Respondents herein, performing similar utility-constructlon work. hut oni a smaller scale When the Union sent the September 1977 contract roted abore to Ilageman Btackhoe Service for approval. that company already had ceased operating, hut George Hageman signed the agreemenl ion behalf of the newly formed Respondenl Hageman Under- ground I In this connection. we agree illh the Administratie l.aw Judge that the conlractual bargaining unlt of backhoe operators. excluding all other emplouees is an appropriate unit Given their separate tasks and special skill. the backhoe olperatlors constitute a readily identifiable group of' em- ployees with a community of ntcerest separate and apart from the other workers h ILH( lhMAN N N)tFR(R()U'NI) (()NS IRL II()N the backhoe operators and refused to abide by the terms of the contract. At the time the contract was signed in Septem- ber 1977, Respondent employed six employees: Bertalon. Staggs, Lee, Romero, Miller, and Schuell. Of these six only BIertalon, Staggs, and Lee were hired as backhoe operators. As the Ad- ministrative Law Judge found, from October 1977 through December 1977 Respondent installed util- ity lines in Petalunla. California, where it used three of its four backhoes. They wele operated by Bertalon, Staggs, aid Lee. From January 1978 to April 1978, Respondent utilized three of its four backhoes at a jobsite in Sonoma, California. Again, this work wuas performed by Bertalon, Staggs. and Lee.' At certain times during this period, October 1977-April 1978, Respondent performed brief work at other jobsites. Although the record does not contain specific evidence of the backhoe work per- formed at ev'ry such project, it does showv that inl March 1978, on three separate occasions, Lee was transferred from the Sonoma job to perform brief backhoe work at other projects. At all times during this 7-month period between October and April, Becrtalon, Staggs, and Lee were members of the Union. The other three employees, Romero, Miller, and Schuell, were not. In addition to Respondent's backhoe complement of Bertalon, Staggs, and Lee, the record shows that, during the October 1977-April 1978 period, Respondent briefly employed employees Hay and Emerson as backhoe operators. While the record does not show the jobs at which they worked, it is clear that they were referred from the Union's hiring hall and were union members. George Hageman testified that, in addition to the backhoe operators mentioned, various other indi- viduals operated backhoes between October 1977 and April 1978, who were not members of the Union. However, Hageman offered no names of other employees hired for the position of backhoe operator. While he did mention that other employ- ees such as Miller, Schuell, Black, and Romero op- erated backhoes on occasion, it is apparent that these employees were hired as general laborers or in some other capacity, not as backhoe operators; that the operation of backhoes was not their pri- mary responsibility; and hence they were not in the backhoe operators unit. 6 During this period fHageman hmself also, operated hbackhe T oc- casiorn The record does not discloseh the location of he fourth blckkhrt( during the Pelalunima and Snllloma lhs i Miller. for example. Aas; hired a a genteral lilhoer ild Romenio la, hired a il mechanic While the record sho, s Ihalt uch ernployccs opera.- ed hackhoes oi occaslon as atl incidentl of hr otlihe r r iork. II is iclir thal Ihey spent the vasi m lajorit of r ine prfrmirg n-hackhhoe sork H contrast, the employees mrntioned abuhte ho l, rc lhured .ia halik hlt ,peratorr s spent t leastl ( )t} perctenl oft their tirtie -Iperitiig tIh hackhoe The record further shows that of the six employ- ees (three whom ere backhoe operators) em- ployed by Respondent at the time the contract was signed in September 1977, all except Lee were still employed at the time of the hearing in No',ember 1979. Lee's employment ended i April 1978. The record also discloses, and the Administrative La, Judge found, that in May 1979 2 months after Re- sponderit repudiated the contract. Respondent em- ployed at least I I employees arid, in November 1979. employed 22 employees. No evidence was presented ias to which of tile 11 employees working in May, or the 22 employees working in Novemn- her, were part of a permanent work force or were employed as backhoe operators. Upon considering this evidence pertliling to Re- spondent's ,ork force, the Administrative Law Judge found that ill March 1979 Respondent as free to vithdraw recognition from the Union and repudiate the collective agreement covering the backhoe operators. The Administrative Law Judge reasoned that the contract repudiated was an (f) agreement, entered into without regard to whether the Union represented a majority of the unit em- ployees, and the General Counsel failed to show that the Union subsequently acquired the majority status necessary to become the employees' statu- tory bargaining representative at all projects during the term of the contract. The Administrative Lasw Judge specifically rejected the General Counsel's argument that, between October 1977 and April 1978, the Union achieved majority status among a stable complement of backhoe operators and that, under Precision Striping. Ilc., 245 NLRB 169 (1979), Respondent thereafter had a statutory duty to recognize and bargain with the Union at all job- sites. The Administrative Law Judge rejected this argument for two reasons. First, the Administrative Law Judge found that, assuming the Union achieved majority status in a permanent and stable unit of backhoe operators soon after the contract was signed in September 1977, the General Coun- sel failed to show that the Union had such majority status at the time the contract as repudiated, and such a showing was necessary under the Board's Decision in Precision Striping, supru. Second, in the event his reading of Precision Striping proved erro- neous, the Administrative Law Judge found that, even if the Union represented a majority of the unit employees on various sites between October 1977 and April 1978, the evidence discussed above ,was too ambiguous to conclude that Respondent employed a permanent and stable work force. equlpmlllti and 1(I, llonre than i it 2(I percenlt l I (their tilc asiti 1 i h 11 e -ss skilled lhorer, ih rnl,clIlaneouls lasks DECISIONS OF NATIONAL LABOR RELATIONS B()ARD Absent a permanent and stable work force, the Ad- ministrative Law Judge concluded that there was no basis for inferring that this earlier majority status continued to exist from jobsite to jobsite until the time the contract was repudiated in March 1979. We disagree with the Administrative Law Judge's findings and conclusion, for the rea- sons set forth below. Initially, since the General Counsel was attempt- ing to show that, in October 1977, the Union achieved majority status among employees in a permanent and stable work force, rather than among employees hired only for a particular pro- ject or projects, the Administrative Law Judge erred in requiring the General Counsel to demon- strate additionally that the Union enjoyed majority status at the time the contract was repudiated. As we held in Precision Striping, supra, and in Land Equip- ment Incorporated, 248 NLRB 685 (1980), where an employer employs a permanent and stable work force to work on a multisite basis, and the union, initially recognized under Section 8(f), subsequent- ly achieves majority status in that stable work force, the employer is then under a statutory duty to recognize and bargain with that union at all pro- jects without requiring the union to demonstrate majority status at each one.7 It logically follows, and we so held in Precision Striping, that where there is majority status in a permanent and stable work force, and a contract in effect between the parties covering that work force, the union not only becomes the employees' statutory bargaining representative for all present and future sites but, as in a typical industrial setting, also enjoys an irre- buttable presumption of majority status for the du- ration of the agreement.8 It is clear therefore that, if the Union here achieved majority status in a per- manent and stable work force at any time during the term of the collective-bargaining agreement, the Union thereafter became the backhoe opera- tors' bargaining representative at all projects and was entitled to an irrebuttable presumption of ma- jority status for the duration of the agreement. Contrary to the Administrative Law Judge's analy- sis, inquiring into the Union's majority status at the time of the contract's repudiation, in such circum- stances, would be both irrelevant and improper. 9 7 This contrasts with the situation in which a construction industry em- ployer has no stable complement and hires its employees on a project-by- project basis with little employee carryover from site to site. In such situ- ations majority status among employees at a given jobsite is not presumed to carry over automatically to future sites and "the union must demon- strate ils majority status at each new johsite in order to invoke the provi- sions of Section (a)5) of the Act." See Dee Cee Floor Covering, Inc. and its alter ego and/or succesor. Dgin-Ar rab Floor Covering, inc., 232 NLRB 421 (1977) 4 See Ilexton Furniture Company. Ill NLRB 342. 343-344 (1955) 9 In requiring a showing of majority status at the time of the contract's repudiation the Administrative Law Judge relied apparently on the spe- Accordingly, the only issues at hand are whether Respondent employed a permanent and stable unit of backhoe operators and whether, at sometime prior to the repudiation of the contract, the Union represented a majority of the employees in that unit. We now turn to those questions. While the Administrative Law Judge also noted that in Haberman Construction Company, 236 NLRB 79, fnl. 1 (1978), and in Amado Electric, Inc., 238 NLRB 37, fn. 1 (1978), the Board again re- ferred to a demonstration of majority status at the time of the contract's repudiation, we note, as did the Administrative Law Judge, that these cases did not involve employers which employed a perma- nent and stable work force, and thus are not con- trolling should we find that a permanent and stable work force existed here. In concluding that Respondent did not employ a permanent and stable work force, the Administra- tive Law Judge found that the evidence on this issue was too ambiguous, and the General Counsel therefore failed to carry his burden of proof. The Administrative Law Judge thus noted that, while Respondent initially employed, and continues to employ, a nucleus of six to seven permanent work- ers, Respondent employed other employees in addi- tion to this nucleus, employing as many as 11 em- ployees in May 1979, and 22 employees in Novem- ber 1979, and no evidence was presented as to the precise number of these additional employees, the precise jobs they performed, or the duration of their employment. The Administrative Law Judge's analysis, however, focused on the changes and fluctuations in Respondent's entire work force and was not, as it should have been, limited to the employees in the unit at issue-the backhoe opera- tors. An examination of the record pertaining to the backhoe operators alone reveals that between October 1977 and April 1978, a substantial period during the contract, Respondent utilized a perma- nent and stable group of backhoe operators and did not generally hire on a project-by-project basis. In this regard, it is undisputed that Bertalon, Staggs, and Lee operated backhoes for Respondent at var- cific finding in Precision Striping, supra, that the union there represenlted a majority of a permanent and stable work force atr the time the emplover withdrew recognition. While Precivion Striping does contain such a state- menl because those were the facts of that case. that statement was not meant to preclude a union from becoming the employees' statutory repre- senlative ion Ihe basis of majority status achieved at some earlier period. Indeed. as noted above, this same decision holds that a union that estab- lishes majority status in a permanent and stable unit becomes the 9 (a) bar- gaining representative for the employees in that unit and is entitled to an irrebultable presumption of majority status for the remainder of the col- lective-bargaining agreement It would be anomalous to erect anl irrehul- table presumption on the basis of an earlier demonstrated majority status and simultaneously to require a union to demonstrate this status at the time of he contract's repudiation Ohbviously Preciion Striping does not so hold 62 HAGEMAN UNDERGROUND CONSTRUCTION ious jobsites during this period and that they were not rehired for each project. Rather, as the Admin- istrative Law Judge himself found, these men were Respondent's permanent backhoe operators who moved from project to project. Inasmuch as Re- spondent only operated four backhoes at this time, as well as thereafter, it is clear that these three em- ployees constituted a representative complement of employees in a stable backhoe operators unit, even when allowing for the few occasions when Re- spondent seems to have utilized an additional back- hoe operator referred from the Union's hiring hall.' ° We further note that, while Lee was termi- nated in April 1978, and that Respondent subse- quently may have hired new backhoe operators as a result of turnover, there is no evidence suggest- ing that Respondent ever abandoned its practice of using a stable complement to operate its four back- hoes. Therefore, since Bertalon, Staggs, and Lee were union members between October 1977 and April 1978, it is clear, and we find, that at this time the Union represented a majority of the employees in a permanent and stable backhoe operators unit. Under the Board law discussed above, from that time forward Respondent was under a statutory duty to recognize the Union as the exclusive bar- gaining representative of the unit employees work- ing at all existing and future jobsites. And, in view of the collective-bargaining agreement in existence, the Union was entitled to an irrebuttable presump- tion of majority status for the duration of the con- tract. Accordingly, Respondent was not free to withdraw recognition from the Union or to repudi- ate the collective-bargaining agreement in midterm. By doing so, we conclude that Respondent violat- ed Section 8(a)(5) and (1) of the Act. CONCLUSIONS OF LAW 1. Respondent Hageman Underground Construc- tion and Respondent Hageman Construction Com- pany, Inc., are alter egos, and Respondent Hageman Underground Construction, Respondent Hageman Construction Company, Inc., and Hageman Engi- neering, Inc., constitute a single employer and, at all times material herein, have been an employer engaged in commerce within the meaning of Sec- tion 2(6) and (7) of the Act. 2. The Union is a labor organization within the meaning of Section 2(5) of the Act. '0 As noted above. Hageman testified that various other employees op- erated backhoes between October and April However, given that there were only four backhoes operating at any one time, that there were three permanent operators, and that Hageman himself occasionally operated a backhoe, it appears evident that the various other employees Hageman referred to in his testimony were those laborers or other employees who were not part of the backhoe operators unit but who, as an incident to their laborer's work, occasionally had to move a backhoe or operate one briefly 3. The following employees constitute a unit ap- propriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act: All employees performing work within the recognized jurisdiction of the Union employed by Hageman Underground Construction, Ha- geman Construction Company, Inc., and Ha- geman Engineering, Inc., in Northern Califor- nia, excluding all other employees, guards, and supervisors as defined in the Act. 4. At all relevant times since October 1977, the Union has been, and is now, the exclusive repre- sentative of all employees in the above-described appropriate unit for the purposes of collective bar- gaining. 5. On September 2, 1977, Respondent and the Union entered into a collective-bargaining agree- ment in which Respondent agreed to recognize the Union as the representative of the employees in the above-described unit and in which it also agreed to abide by the provisions of the master agreement be- tween the Union and the Associated General Con- tractors of California, Inc., which by its terms is ef- fective from June 16, 1977, until June 15, 1980. 6. By refusing to recognize and bargain with the Union as the exclusive representative of the em- ployees in the above-described unit and by failing to abide by the terms of the collective-bargaining agreement covering such employees, Respondent has violated Section 8(a)(5) and (1) of the Act. 7. The above-described unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Re- lations Board hereby orders that the Respondent, Hageman Underground Construction, Hageman Construction Company, Inc., and Hageman Engi- neering, Inc., its officers, agents, successors, and as- signs, shall: 1. Cease and desist from: (a) Refusing to abide by the terms of the collec- tive-bargaining agreement entered into with the Union on September 2, 1977. (b) Refusing to recognize and bargain concerning rates of pay, wages, hours, and other terms and conditions of employment with the Union, as the exclusive bargaining representative of its employees in the following appropriate unit: All employees performing work within the recognized jurisdiction of the Union employed by Hageman Underground Construction, Ha- geman Construction Company, Inc., and Ha- l) ECISIONS OF NATIONAL LABOR REL.ATI()NS BOARD geman Engineering, Inc., in Northern Califor- nia, excluding all other employees, guards, and supervisors as defined in the Act. (c) Withholding contributions to the employee benefit trust funds as prescribed by the above con- tract, or otherwise departing from the terms of the contract, without first reaching agreement with the Union to do so. (d) In any like or related manner interfering with, restraining, or coercing its employees in the exercise of the rights guaranteed them in Section 7 of the Act. 2. lake the following affirmative action which the Board finds will effectuate the policies of the Act: (a) Upon request, recognize and bargain with the Union concerning the employees in the above-de- scribed unit. (b) Upon request, rescind any or all unilateral changes in terms or conditions of employment of the employees in the above-described unit made after its abrogation of its bargaining relationship with the Union on or about March 5, 1979; and honor and give full retroactive effect to the terms of the contract that were abrogated on or about the same time. (c) Make whole the employees in the above-de- scribed unit for any loss of wages and benefits they may have suffered because of Respondent's unlaw- ful refusal to comply with the terms of the afore- said contract, in the manner set forth in Ogle Pro- tection Service, Inc. and James L. Ogle, an Individu- al, 183 NLRB 682 (1970), with interest thereon as prescribed in Florida Steel Corporation, 231 NLRB 651 (1977),'' and reimburse the contractually agreed-upon trust funds for contributions Respond- ent failed to make on behalf of the unit employ- ees. 12 (d) Preserve and, upon request, make available to the Board or its agents, for examination and copy- ing, all payroll records, social security payment re- cords, timecards, personnel records and reports, and all other records necessary to analyze the amount of backpay due under the terms of this Order. t See, gelnerally, Iti Plunmbing d& hlating Co., 138 NLRB 71 ('ht2) Member Jenkins would provide interest on this portion of the make- whole remedy in accordance with his partial dissent i Olympic Medicul Corpiruion, 250 NlRB 146 (1980). 1: Because the provisions of employee benefit trust fund a;greemens are variable and complex, the Board does not provide at the adjudicatory stage (of a proceeding for the addition of nterest at a fixcd rlte on pay- ments which are required Io be made to such funds as a result iof make- whole remedy VWe therefore lease to the compliance stage the question whether Responldent must pay any additional amounts inlo the Itrust funds in order tt saltisfy our make-whole remedy See .Merrwauithr (Oli- cal Companv. 2441 NlRB 1213 (1979) (e) Post at its facility or facilities in Santa Rosa, California, and at all of its jobsites in northern Cali- fornia where the unit employees are working at the time Respondent commences compliance with the terms of this Order, copies of the attached notice marked "Appendix." i: Copies of said notice, on forms provided by the Regional Director for Region 20, after being duly signed by Respondent's authorized representative, shall be posted by Re- spondent immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Rea- sonable steps shall be taken by Respondent to insure that said notices are not altered, defaced, or covered by any other material. (f) Notify the Regional Director for Region 20, in writing, within 20 days from the date of this Order, what steps the Respondent has taken to comply herewith. : In the event that this Order is einforced by a Judgment oif a United States Court of Appeals, the words in the ntice reading "Posted by Order of the National I.abor Relations Board" shall read "Posted Pursu- anlt to Judgment (if the United Stles Court of Appeal, Enforcing an Order of the National Labor Rclatiitls Board" APPENDIX NOT-ICE TO EMPLOYEiES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WI: WIl. NOT refuse to abide by the terms of the collective-bargaining agreement entered into with Operating Engineers Local Union No. 3, affiliated with International Union of Operating Engineers, AFL-CIO, on Septem- ber 2, 1977. WiE WILI. NOr refuse to recognize and bar- gain concerning rates of pay, wages, hours, and other terms and conditions of employment with the above-named Union as the exclusive representative of the employees in the follow- ing appropriate unit: All employees performing work within the recognized jurisdiction of the Union em- ployed by Hageman Underground Construc- tion, Hageman Construction Company, Inc., and Hageman Engineering, Inc., in Northern California, excluding all other employees, guards, and supervisors as defined in the Act. Wl WllI. NOT withhold any contributions to the employee benefit trust funds as prescribed by the above contract, or otherwise depart 64 I,ti; MAN UtNI)FR(iRO()UNI C()NSI RCTI ()N from the terms of the contract without first reaching agreement wxith the Union to do so. Wt. wit Nor in any like or related manner interfere with, restrain, or coerce our employ- ees in the exercise of the rights guaranteed them in Section 7 of the Act. Wi w' tI , upon request, recognize and bar- gain with the Union concerning the employees in the above-described unit. WI: W;'I , upon request. rescind any or all unilateral changes in terms or conditions of employment of the employees in the above-de- scribed unit made after our abrogation of our bargaining relationship with the Union on or about March 5, 1979, and W: wtii honor and give full retroactive effect to the terms of the contract that were abrogated on or about the same time. W wvit i make whole the employees in the above-described unit for any loss of wages and benefits they may have suffered because of our unlawful refusal to comply with the terms of the aforesaid contract, with interest, and reim- burse the contractually agreed-upon trust funds for contributions we failed to make on behalf of the employees in the unit. HAGEM.LAN UNDERGROUNI) CON- STRUCTION; HAGFMAN CONSI RUC- IION COMPANY, INC., HA(I.MAN EN- GINIlRING, INC. DECISION S IX I [ IN o)I I: Ilil CASI JERROI I) H. SHAPIRO., Administrative Law Judge. The hearing in this case was held before me on October 10 and November 8, 1979, and is based on an unfair labor practice charge filed by Operating Engineers Local Union No. 3, affiliated with International Union of Oper- ating Engineers, AFL-CIO, herein called the Union, on March 28, 1979, as amended on October 26. 1979. On June 28, 1979, a complaint issued on behalf of the Gener- al Counsel of the National Labor Relations Board, herein called the Board, by the Regional Director for Region 20. It was amended October 10, 1979, the first day of the hearing. The initial charge filed on March 28, 1979, was filed against Hageman Underground Construction, herein called Underground. The amended charge filed on Octo- ber 26, 1979, added, as charged employers Hageman Construction Company, Inc., herein called Construction, and Hageman Engineering, Inc., herein called Engineer- ing. The complaint was issued against Construction and the amended complaint added Underground and Engi- neering. The complaint, as amended, alleges in substance that the aforesaid Respondents constitute a single em- ployer, herein collectively referred to as Respondent. and further alleges that, commencing on or about March 5, 1979, Respondent violated Sction 8(a)(5) and (I) of the Act by withdrawing recognitioii from the Unioni a, the exclusive bargaining repre, entative of all appropriate unit of employees aid by repudialing its collective-hbar- gaining contract ith the Uion covering these employ- ees Respondent denies the comnmission of the alleged unfair labor practices. Upon the entire record, from nl m observation of the denileal or of the witnesses, and having considered the parties' post-hearing briefs I make the following: FINI)INs ()ol Fc I. I H AI I (,1 ) UNE XIR I \HOR I'RA(\IICt-S A. 1he uers 1. The Hagemani enterprises There are four business enterprises involved il this case: Hageman Backhoe Service. Respondent Hagcmani Underground, Respondent Hagemani Construction, and Respondent Hageman Engineering. Hagciman Backhoe Service. herein called 13ackhoe Service. was a proprietorship owned by George Hage- man and his wife. It operated until 1975. Underground is a proprietorship owned by George Hageman and his wife, which commenced operation in 1975. Construction is a corporation oned by George Hageman and his wife, hich ss.as incorporated in July 1978. Engineering is a corporatioll oned by George Hageman and his wife, which ,as icorporated in May 1979. B3ackhoe Service oned several pieces of equipment. hackhoes and trucks. and employed one or two workers \who operated this equipment. Hageman rented the equip- ment and operators to contractors for whom they in- stalled undergrounld utility liles or other work of that nature. In 1975 George Hageman secured his contractor's li- cense and formed Underground for the purpose of in- stalling underground utility lines. Underground soon had so much work that it needed the use of all of the trucks and backhoes owned by Backhoe Service, so the owner- ship of all the trucks and equipment, except for one or two items. was transferred to Underground. and the Backhoe Service went out of business. Underground's primary business was the construction of underground utility lines, and its principal customer was Pacific Telephone & Telegraph Company. It also rented out trucks and backhoes to other contractors or employers. It remained in the construction business until approximately July 1978, at which time George Hage- man formed Construction to construct underground util- ity lines. Hageman testified that "the jobs [he] bid as Ha- Re,.pondeni admits that the I nlon i a labor orgallllo 1 :ll "ill lth' mcllnrlng o Scc 2151) of the Act Al'o. Rcspondcnt .idmnli, that ColliruC tlli i a ctlipioscr eligaged Inr corlllrc iiilli the rImeaning of Sec 2(th) and 171 of th Acl and m leet, the 1loard ' , applicahlc dlscrelilolary IlrIs- Litilelolal st;iiard Since a t hl.c ound ,rlJ ., t ontruciioll. tilder ground, all d LIIglrlncering conIlIl k il iiglet ri cipl.s r, t ill efftc'tua.lt the prp.., o.I' the Act -Ill a l urldL.llHi herrl .cr all hree CItIItIe Sec. g, Sri[ru/, .Arth, rtl ('h//rn,- ' /*It N S IR 1B. 32 1: 2d '2. 9g0 gllth tOlr 1t4) hS DECISIONS OF NATIONAL LABOR RELATIONS BOARD geman Construction Company, Inc., [he] intended to run non-union." Construction, commencing in July 1978, in fact operated as an underground utility line contractor. Its primary customer was Pacific Telephone & Tele- graph Company. It owned none of its trucks and back- hoes, but leased them from Underground. Underground completed all of its construction jobs in progress, and thereafter bid for no more jobs, but only rented out trucks and backhoes. 2 Construction hired all of the con- struction workers employed by Underground, who per- formed the same work as they had done for Under- ground. Construction is currently in the business of con- structing underground utility lines; however, since the formation of Engineering, it has not performed any work but has unsuccessfully submitted bids for several jobs. Engineering was established in May 1979 for the pur- pose of installing underground utility lines under non- union conditions, whereas Construction would only bid for similar jobs under union working conditions. Engi- neering, like Construction, rents all of its trucks and backhoes from Underground, constructs underground utility lines, and its principal customer is Pacific Tele- phone & Telegraph Company.3 The construction work- ers employed by Construction at the time Engineering commenced its operation, were transferred to the payroll of Engineering. They worked concurrently for both companies during the period immediately after Engineer- ing's formation, when Construction still had jobs in prog- ress. The employees of Engineering performed the same kind of work, using the same skills that they used when working for Construction. Underground, Construction, and Engineering have separate contractor's licenses, payrolls, and bank ac- counts. Underground and Construction use the same book- keeper to maintain their business records, whereas Engi- neering uses a different bookkeeper. The labor relations policies pertaining to the employ- ees' terms and conditions of employment of each of the Hageman enterprises named as Respondents in this case are established by the same persons-George Hageman and his wife. When Construction commenced operation, all of the trucks it leased from Underground had signs identifying the truck as an Underground truck, but as new trucks were purchased by Underground, the name of Construc- tion was affixed to the new trucks. However, at all times, Construction has on occasion used trucks bearing the name of Underground or Engineering. Likewise, at all times, Engineering on occasion uses trucks with the name of Underground or Construction. Finally, the other equipment leased from Underground by Construction and Engineering, i.e., backhoes, contain no identifying name and are shared by both companies. 2 I reject George Hageman's testimony that Underground, after the formation of Construction, continued to bid for construction work. His testimony was not given in a convincing manner, it was inconsistent with his other testimony that Underground, after the formation of Construc- tion. completed all of its construction jobs in progress and then went out of the construction business. Hageman was also unable to recall the name of a single job Underground bid after Construction's formation. I Engineering took over the Pacific Telephone & Telegraph work from Construction. 2. The work force of the Hageman enterprises As described supra, Construction and Engineering in- stall underground utility lines. Underground also did this work when it was in the construction business. In per- forming this type of work, the employees employed by the Hageman enterprises operate backhoes to dig the ditches in which the utility lines are laid; drive trucks which are used to bring sand and small tools and equip- ment to and from the jobsite; lay the utility lines and in- stall manholes, blacktop the area after the job is finished, and perform other miscellaneous tasks, such as carpentry and painting. The job which requires more skill than any of the others is the position of backhoe operator. George Hage- man testified, "the back-hoe is one of the top-notch skilled jobs" because "it is quite a unique operation ... . You don't just get anybody who can run a hoe ... . Hoe operators are just one in a dozen, if you are lucky." Thus, backhoe operators are paid substantially more than the other workers. The record also establishes that the backhoe operators, during their 8-hour workday, normally spend between 6-1/2 and 7 hours operating a backhoe. The remainder of their time is spent performing other work for which they are paid their usual rate of pay. Although other employees will operate a backhoe, this occurs infrequently and the employees are not paid the higher rate of pay normally associated with operat- ing a backhoe. Unlike those employees who usually do not operate the backhoes, the employees who usually op- erate the backhoes are hired because of their expertise in this area with the expectation that they will spend most of their working time operating a backhoe. If George Hageman observes that they are not journeymen back- hoe operators, he terminates them rather than retain them to perform other less skilled work. During all times material to this case, the Hageman en- terprises owned five backhoes, one of which was rented out to another employer which operated it with its own employees. The General Counsel and the Union present- ed evidence pertaining to the employment of backhoe operators by Underground during the 7-month period from October 1977 through April 1978. An examination of this evidence follows. During the period from October through December 1977, Underground installed underground utility lines for Pacific Telephone & Telegraph at a site in Petaluma, California. It used three of its four backhoes. They were operated by backhoe operators Staggs, Lee, Bertalon,4 occasionally by George Hageman, and during the last month of the job, backhoe operator Ole Everson worked for about 1 week. All but Hageman were members of the Union. 4 Bertalon was employed by the Hageman enterprises as a "working foreman." There is no evidence that, at any time material to this case he has occupied the position of a supervisor within the meaning of Sec. 2(11 ) of he Act. Quite the opposite, George Hageman testified that while on the Petaluma job. Bertalon did not work in a "supervisory capacity," inasmuch as Hageman himself was "in control" of hat job Also, Hage- man further testified that Beralon spent the same percentage of his work- ing tinme operating a backhoe as did backhoe operators Lee and Slaggs. who the record reveals spent betwleen 6-1,/2 1to 7 hours daily, when they worked, operating a hackhoe 66 HAG'EMAN UNDERGROUND CONSTRUCTION The three backhoes did not remain on the Petaluma jobsite during the entire period of the job, but as back- hoe operator Lee testified, "frequently they would move hoes for a special job. There were a couple of jobs, a one-day job where they would come and get a hoe and they would go do it," and further testified that even the backhoe he was using left the jobsite. Also, the parties stipulated that during the last week in October 1978 a union business representative visited the Company's Ben- nett Valley jobsite and observed Staggs, Bertalon, and Lee performing the work "of operating engineers." No evidence was adduced as to the whereabouts of the Company's fourth backhoe during this 3-month period. During the period from January into April 1978, Un- derground installed underground utility lines for Pacific Telephone & Telegraph at a jobsite in Sonoma, Califor- nia, using three of its backhoes. The backhoe operators employed on this job were Staggs, Lee, and Bertalon. Also on occasion, George Hageman operates a backhoe. The record also shows that during this 4-month period the Company also had similar work on other projects. Thus, in March 1978 on three separate occasions one of the backhoes, with backhoe operator Lee, was trans- ferred from the Sonoma site to other sites for -day jobs. Also, it is undisputed that during this period of time the Company was performing other jobs about which no evidence was presented. Likewise, no evidence was ad- duced concerning the whereabouts of the Company's fourth backhoe during this period of time. It is undisputed that during the 7-month period dis- cussed herein, October 1977 through April 1978, a union business representative, in conjunction with his job of policing Underground's contract with the Union, visited several of the jobsites where this Company was working; and on each occasion checked the dispatch slips of the persons operating the backhoes and at no time did he discover anyone operating such equipment who was not a member of the Union. Regarding the number and duration of the employ- ment of the Hageman enterprises employees, the record reveals that in September 1977, when George Hageman signed the collective-bargaining agreement with the Union on behalf of Underground, six employees-Berta- Ion, Staggs, Lee, Romero, Miller, and Shuell-were em- ployed by that company, all but Lee were still employed on November 8, 1979, the date of the hearing in this case. Lee's employment was terminated in April 1978. The record is silent about the number of other employ- ees hired by the Hageman enterprises to supplement this nucleus of permanent employees and the duration of their employment, other than the fact that as of the date of the hearing in this case, October 10, 1979, Engineering employed approximately 22 employees, of whom ap- proximately 11 had been employed by Construction in May 1979, when Engineering was incorporated.5 ' The I were transferred from the payroll or Constructiorn to the pas- roll Iof Engineering B. 7he Relationship Between the Union and the Hageman Enterprise Backhoe Service and the Union were parties to four successive collective-bargaining agreements, the last one having terminated at a date in 1977, not specified in the record. By letter dated August 4, 1977, the Union trans- mitted to Backhoe Service a copy of a new collective- bargaining agreement for George Hageman's signature to replace the recently terminated agreement. On Septem- ber 2, 1977, George Hageman signed the agreement on behalf of Underground and returned a signed copy to the Union. 6 The agreement, which is similar to the previous collective-bargaining agreements between the Union and Backhoe Service, is known as the Northern California Construction Agreement. By its terms, the signatory em- ployer agrees to recognize the Union as the collective- bargaining representative of all employees employed by the employer in northern California who perform the type of work falling within the recognized jurisdiction of the Union, namely, heavy equipment operators, and also agrees to abide by the provisions of the current master agreement between the Union and the Associated Gener- al Contractors of California, Inc. The master agreement, incorporated therein, by its terms is effective from June 16, 1977, until June 15, 1980, and, among its provisions, contains a conventional 7-day construction industry union-security clause. On March 5, 1979, Construction was installing an un- derground utility line at a project in Santa Rosa, Califor- nia, when its owner, George Hageman, was visited at that jobsite by business representatives from the Team- sters Union, Laborers Union, and the Union. The repre- sentatives from the Teamsters Union and Laborers Union unsuccessfully tried to persuade Hageman to sign con- tracts with those unions. The representative from the Union, Brad Datson, pointed out to Hageman that he was employing equipment operators on the project who were not members of the Union, and that this violated the collective-bargaining contract between Hageman and the Union. Hageman replied that he did not have a con- tract with the Union, but was willing to pay the employ- ees' contractual fringe benefits without a contract. Datson rejected this offer, stated that Hageman had a contract with the Union and would get into trouble if he did not pay the contractual fringe benefits. Hageman re- iterated that he did not have a contract with the Union and asked Datson to show him a copy of the contract he was supposed to have signed. 7 Datson left the job and immediately went to his office where he secured a copy R As described supra. Backhoe Service in 1975. during the term of its contract with the Union. had ceased performing construction work. which work was then performed by another Hageman enterprise. Under- ground. George Hageman had not informed the Union about this devel- opment until September 1977. when he executed the new collective-bar- gailing agreement on behalf of Underground rather than on behalf of Backhoe Service 7 The record establihshes that this was the Union's first indication that Hageman was taking the position that his construction company was not bound by the union contract he had signed on behalf of Underground in September 1977 Until March 1979, Hageman in the name of Under- ground paid moneys to the various trust funds for employees' fringe benefits pursuant to the terms of that contract 67 I)( ISIONS ()1 NA II()NAL I .A()R R I.AII ONS B( )ARD) of the contract signed in September 1977 by lageman on behalf of Underground. The same day Dalson left a copy of this contract bearing Hageman's signaturre on Hageman's desk. Hageman who was out of his office at the time, never acknowledged the receipt of the contract and at no time ever notified the Union that he had erro- neously stated that he was not bound by the ternms of the contract. 8 By letter dated March 12. 1979, the Union notified Un- derground that it had violated its contract fwith the Union by hiring employees on March 5 through March 8, 1979, in derogation of the "job placement regulations" contained in said contract and requested that the empilo- er, pursuant to the terms of the contract, remedy the io- lations by paying the Union a surn of money. The Union received no answer to this letter. The testimony of CGeorge Hagclman establishes that he created Engineering in May 1979 to operate as a non- union company because of the visit of the union business representatives on March 5, when, as described above, Union Business Representative Datson attempted to secure compliance with the Union's contract. II. CONCI USIONS A. The Hageman Enterprises Con situte One Employer 1. The applicable principles An employer cannot evade its obligation under the Act by setting up what appears to be a new company, but is in reality a "disguised continuance" of the old one. Southport Petroleum Company v. N.L.R., 315 U.S. 100, 106 (1942). The new company is considered an alter ego or disguised continuance of the old one when it is set up to enable a company to continue operations while rid- ding itself of a union, or when the closing of one compa- ny and opening of another is used as a means of eliminat- ing a union, even though motivated by economic consid- erations. N.L.R.B. v. Jack Lewis and Joe Levitan. dl/h/a Cali/brnia Footwear Compuny & Trina Shoe Companyl, a Corporation, 246 F.2d 886, 887-889 (9th Cir. 1957). For changes in a business involving no more than "a mere technical change in the structure or identity of the em- ploying entity, frequently to avoid the effect of the labor laws. without any substantial change in its ownership or management," are properly disregarded, and such an alter ego successor, accordingly, "is subject to all the legal and contractual obligations of the predecessor." Howard Johnson Co., Inc. v. otel Employeev Detroit Local Joint Executive Board, Hotel & Restaurant Employ- ees & Bartenders International Union. 4AFL-CIO, 417 U.S. 249, 259, fn. 5 (1974). The continued operation of the business by the same individuals, without substantial change in the nature of the work performed by the com- pany or in the manner of its performance indicates such an alter ego relationship, in contrast to a hona ide succes- sorship. See, generally, '.L.R.B. v. Rapid Bindery, Inc. " Datsonl aid Hageman reslinilcd about their March 5 concrlsrarton In those instances where heir ICstolinl(l conflicts. I hane disregairdCd tlage- man's scrion allnd credited Inal lon', w, ho. in hearing rid dCllUnicllnr. irll- pressed me as the more ruslwortihy witlies & rontier Bindery Corp.. 293 F.2d 170() 171 (2d Cir. 19'61). And alter ego status will generally be found where the two enterprises have substantially identical manage- ment business purpose, operation, equipment, customers. alnd supervision as well ais ownership. Cratjobrd Door Sal/e Comnpany. Ic. and Cordes Door C'ompany. Inc., 226 NLRB3 1144 (1976). It is also settled that, regardless of whether they con- stitute alter e'go, the Board may treat two or more dis- tinct business entities as a "'single employer" for purposes of the Act. In such cases, the criteria to which the Board looks in order to determine single-employer status are: (1I) interrelation of operations; (2) common management: (3) centralized control of labor relations; and (4) common ownership .. L.R.B. v. Don Burgess Conlsruc- tion Corporation, dl/h/a Burge C'onstrueion, 596 F.2d 378 (9th Cir. 179). 2. Construction is the alter ego of Underground Guided by the applicable principles, I am persuaded as alleged in the amended complaint that Construction is the alter ego of Underground. In reaching this conclusion I was influenced by these considerations. 1. Underground after the incorporation of Construc- tion, ceased doing business as a construction contractor after completing its jobs in progress. 2. Construction is in the identical business as Under- ground, in the same geographical area, and its principal customer is the same as Underground's. 3. Underground w';i a union company, i.e., it had a contract with the Union, whereas Construction was cre- ated in order to avoid operating with a union contract. 4. Construction and Underground are owned by the same persons-George Hageman and his wife. 5. The day-to-day affairs of both companies, i.e., the hiring and firing of employees, are managed by the same personis--George Hageman and his wile. 6. The labor relations policies of both companies are established by the same persons-George Hageman and his wife. 7. Both companies used the same equipment, i.e., back- hoes, and on occasion the same trucks. 8. All of the construction workers on the payroll of Underground were transferred to the payroll of Con- struction, where they performed the same work which they had done while working for Underground, using the same skills, and under the same immediate supervi- sion. 9. ]The construction workers on the payroll of Con- struction initially worked concurrently for Underground until the jobs which that company had in progress were completed. 10. Both companies operate from the same business lo- cationi and use the same bookkeeper to maintain their business records. 11. Some of the trucks used by Construction had the niame of Respondent Underground on them. 12. In 1978 and 1979, after the formation of Construc- tion ad after Underground had ceased performing con- struction work, Underground, pursuant to its contract with the Union, continued to transmit money to the Op- HIAG(iMAN NI)EKRGROUNI) C()NSIRUCTION erating Engineers trust funds for the employees' fringe benefit payments, een though these employees were em- ployed by Conslruction." Based on the foregoing, I am persuaded that the man- agement, business purpose, operation, equipment. cus- tomers, supervision, as well as ownership of Constlruc- tion, were virtually identical to those of Underground and that, in forming Construction to replace Under- ground, it was the intent of the owners of these compa- nies to operate nonunion, vwhereas Underground was party to a union contract. Under these circumstances, the record overwhelmingly establishes that Construction is the alter ego of Underground. B. Construction and Engineerig Conslitute a Single Employer I. The record reflects an interrelation of operations Guided by the applicable principles, I am persuaded that the evidence establishes that Engineering and Con- struction constitute a single employer for purposes of the Act.I° In so concluding, I relied upon the following con- siderations. Engineering is in the same business as Construction, the installation of underground utility lines, and its prin- cipal customer is Pacific Telephone & Telegraph Compa- ny, which was Underground's principal account. Since the formation of Engineering, Construction no longer bids for Pacific Telephone's jobs; only Engineering bids for this work. Upon the formation of Engineering, the employees of Construction were transferred to the payroll of Engi- neering and worked for that company performing the same work as they had done previously for Construc- tion. Engineering and Construction share the same facility and the same equipment which they lease from Under- ground, and on occasion will use trucks which bear each other's name. Since Construction has not performed any work since the formation of Engineering, there is no evidence whether or not there has been any interchange of em- ployees between companies. However, the testimony of George Hageman is to the effect that, although those employees who are not union members will not work for Construction, he intends to interchange employees. such as Charles Staggs, who are union members between the companies. The record reflects substantial evidence of common management. 9 t have rejected Geolrge Hageman's ttimonls that the aho, c-de- scribed rust fund payment, were paid by checks dra n oin the hank ac- count of Constructinon Initially. he Iestified he was without any recolic- tion, absent a cops of the checks. of the name of the enmploer on hose accounl these checks s are drasn No such checks ",ere produced to corroboralc his later tsllmonll In addition. I er, Isltanrce hrc re check as transmitted to the trust fund It as accompanied hb a docu ment entitled "Employer's Report of Contributions" signeld hb (icorrg Hageman. hich named Underground as the contributiiig emploher Under these crcun stanLces, Illiuding tagr il7 s poor demetor ai a s Wil ness, I hase relected hi, testlimon he that he iade he abose-dec rlhed t rle, fund payment on check, drasn on the hiank iccotllt f CornltrLltl1on "' I hic not decided shether he rollrd is sufficient t estabilh thait Engineering is the ahuer ego of Construction There is no ce.idence pertaining to the interchange of working level supervision between the companies inas- much as Construction has not done any work since the formation of Engineering Hov ever, the record estab- lishes that George Ilagerila and his wife together exer- ci,,e close day-to-day management over the operations of both companies, including the hiring and firing of em- ployecs and the establishment of rates of pay. It is undisputed that the labor relations policies of both companies are established by the same persons-George Hagenman and his wife. The record also reflects common ownership inasmuch as George Hageman and his wife own both companies. It is for these reasons that I conclude that Construc- tion and Engineering constitute a single employer for purposes of the Act. 2. Respondents were given fair notice of this proceeding " I reject Respondent's contention that the charge herein is barred by the 6-month limitation period contained in Section 10(b) of the Act. The alleged unfair labor prac- tices commenced on March 5, 1979. Thus, the original charge, which was filed against Underground on March 28 and served on that enterprise at its place of business on March 29, was filed well within the prescribed 6- month limitation period. Since Construction and Under- ground are alter egos of the same enterprise, sers ice of the charge upon Underground constitutes service upon Construction inasmuch as valid service over one entity binds its alter ego, particularly w here, as in the instant case, the latter acquired actual notice of process at the time of the service. See Sturdeiant Sheet .lMcal & Roofing Co., Inc. and Orion Trading Company. Inc. d/hb/a Surde- tant Roofing Trading Company, 238 NLRB 186 (1978). Here, George Hageman, the owner of both companies, was served with the initial charge in this case well within the 10(b) period. I also note that, when the com- plaint issued, well within the 10(b) period, it was served on Construction and named that Company as the Re- spondent. Regarding the timeliness of the charge against Engi- neering, the 6-month limitation period did not begin to run until the Union knew or should have known about Engineering's role in the unfair labor practices. See, e.g., l ncar Division. CF Industries, Incorporated \. _.: L. R. B., 592 F.2d 422, 430-431 (Sth Cir. 1979), and Wisconsln Rlc'r l'all' District Council of the United Brotherhood of ( Carpenters and Joiners of ,merica, .4F EL-CIO . .' L. R. B., 532 F.2d 47, 53 (7th Cir. 1976). Here, the Union's Octo- ber 26, 1979, charge against Engineering was filed within 6 months of the Union's knowledge of Engineering's role in the instant alleged unfair labor practices inasmuch as Engineering did not commence doing business until May 18, 1979. Moreover, since Underground, Construction, and Engineering constitute a single employer for pur- poses of the Act. notice and service upon Underground or Construction was sufficient to satisfy the requirements ' I he three illlniC ] Rcsponldenls lheretlt. 1 I il.sC tlund ipru. coltrlll- tile .i sigic cniplo[er for purpo..s it. thc Act A cordingls. I refer to [heni cllIt'u lC ii t "i Rtii ,fldtin 'Re s 69 DECISIONS OF NATIONAL LABOR RELATIONS BOARD as to Engineering. See Clinch Valley Clinic Hospital, A Division of Bluefield Sanitarium. Inc., 213 NLRB 515 (1974); Esgro Inc. and Esgro Valley Inc., 135 NLRB 285, 286 (1962); Barrington Plaza and Tragniew. Inc., 185 NLRB 962, 969 (1970). 3. The appropriate unit Construction, as the alter ego of Underground, was ob- ligated to recognize the Union and apply the terms of the Union's collective-bargaining contract with Under- ground, if, as discussed below, the Union represented a majority of the employees covered by the contract. 1 2 See Wayne Electric Co.; Electric Installation and Services, 226 NLRB 409, 414-415 (1976); Sossamon Electric Com- pany and Sassco Building Systems, Inc., 241 NLRB 324 (1979). It does not follow, however, that because Construction and Engineering are a "single employer" Engineering is likewise obligated to recognize the Union and apply the terms of the collective-bargaining agreement to its unit employees if the Union demonstrates its majority status among those employees. For a finding that two affiliated companies, one union (Construction) and the other non- union (Engineering), constitute a single employer is not dispositive of the issue as to whether one is bound to the contract of the other. Such a finding of single-employer status does not require that a union's collective-bargain- ing agreement with one of the companies be extended to the employees of the other and does not imply that the employees of the two companies do not comprise sepa- rate appropriate units. South Prairie Construction Co. v. Local 627, International Union of Operating Engineers, AFL-CIO, et al., 425 U.S. 800, 803-805 (1976). Thus, it is settled that in the construction industry a single employ- er may have one company to perform contracts under union conditions and another to operate competitively under nonunion conditions. Such parallel and simulta- neous operations in the construction industry are general- ly referred to as "double-breasted."t 3 And, even though such companies constitute a single employer, the Board does not include the nonunion company employees in the same bargaining unit with those of the union company, where the interests of the employees do not warrant an employer wide unit. South Prairie Construction Co. v. Local 627, International Union of Operating Engineers, AFL-CIO, 425 U.S. at 805. The key element in determin- ing the scope of the unit is the "community of interest of the employees involved." Peter Kiewit Sons, Co., South 12 The contractual bargaining unit, all employees within the jurisdic- tion of the Union, is not repugnant to the policies of the Act. According- ly, since Underground voluntarily agreed to recognize the Union's repre- sentative status in this unit, it constitutes an appropriate one. See Pioneer Inn Associates. d/b/a Pioneer Inn and Pioneer Inn Casino, 228 NLRB 1263, 1272 (1977)., enrd. 578 F.2d 835 (9th Cir. 1978) In any event, as described in detail supra, the employees employed in this unit, the back- hoe operators, are a readily identifiable and homogeneous group of con- struction tradesmen with a community of interests separate and apart from the other workers. Thus, they constitute an appropriate unit. 's I note that the relationship between Underground and Construction did not involve a so-called "double-breasted" operation inasmuch as Un- derground ceased operation with the formation of Construction and, as found above, Construction and Underground were alter egos of the same enterprise, Prarie Construction Co., 231 NLRB 76, 77 (1977) (on remand). In the instant case the employees of Construction and Engineering who perform the kind of work covered by the collective-bargaining agreement, the backhoe opera- tors, all work in the same geographical area, possess the same skills and perform the same functions, and their terms and conditions of employment are established by the same persons-George Hageman and his wife. I rec- ognize that Construction, since the formation of Engi- neering, has not performed any work, so, there is no evi- dence whether or not there will be an interchange of unit employees or job foremen between the two compa- nies. However, the record does establish that George Hageman and his wife, besides owning both companies, will exercise day-to-day management over the operations of both and in so doing will hire and fire the employees, establish wages, and exercise authority over the employ- ees' working conditions. Also, the record indicates that backhoe operators, such as Charles Staggs, who are union members will transfer back and forth between companies. Under all of these circumstances, I am of the view that all of the employees of Construction and Engi- neering who perform work within the jurisdiction of the Union constitute a single appropriate unit. 4. Respondent's refusal to bargain 4 On September 2, 1977, Respondent and the Union en- tered into a collective-bargaining contract of 3 years' du- ration, which covered an appropriate unit of employees. All parties to this proceeding agree that the Union and Respondent entered into this collective-bargaining con- tract pursuant to a Section 8(f) bargaining relationship. In March 1979, during the term of the contract, as de- scribed in detail supra, Respondent refused to recognize the Union as the representative of its employees covered by the contract and refused to abide by the terms of the contract. The complaint alleges that, by engaging in this conduct, Respondent refused to bargain with the Union within the meaning of Section 8(a)(5) of the Act. Respondent, citing Dee Cee Floor Covering, Inc., and its alter ego and/or successor, Dagin-Akrab Floor Covering, Inc.,' 5 and Irvin-McKelvy, I6 contends that it was free to withdraw recognition from the Union and repudiate its contract in midterm, because there has been no showing that in March 1979, when the refusal to bargain took place, that the Union represented a majority of the unit employees. The General Counsel and the Charging Party acknowledge that there has been no showing that the Union represented a majority of the unit employees at the time of the refusal to bargain in March 1979, but argues that the record establishes the Union's majority status from October 1977 through April 1978 and, citing Precision Striping, Inc., 7 urge that this showing is suffi- '4 The three named Respondents herein, as I have found supra, consti- tute a single employer for purposes of the Act Accordingly. I have re- ferred to them collectively in this section as "Respondent." '5 232 NLRB 421 (1977). 1 David F Irvin and James B McKelvy. Partners. d/hba lThc Irvin- MrcKelvy Co.. 194 NLRB 52 (1971). enforcement denied in part 475 F.2d 1265 (3d Cir. 1973). 117 245 NLRR 169 (1979) 70 HAGEMAN UNDERGROUND CONSTRUCTION the majority representative of the unit employees in March 1979 because the record establishes Respondent employs "a permanent, stable work force." Assuming Respondent employs a stable, permanent work force and the Union represented a majority of the unit employees from October 1977 through April 1978, 1 am not persuaded that a year later, in March 1979, Re- spondent was not privileged to repudiate its 8(f) contract with the Union where, as here, the General Counsel has not demonstrated that the Union represented a majority of the unit employees at the time of the repudiation of the contract. See Haberman Construction Company, 236 NLRB 79, fn. I (1978); Amado Electric, Inc., 238 NLRB 37, fn. 1 (1978). I realize that the cited cases do not in- volve employers who employ "a permanent, stable work force," but in Precision Striping. supra, relied upon by the General Counsel and the Charging Party, the Board, in concluding that the respondent's repudiation of an 8(f) contract in midterm violated Section 8(a)(5) of the Act, specifically found that the General Counsel had estab- lished that the Union represented a majority of the unit employees at the time of the refusal to bargain. In any event, assuming I have interpreted Precision Striping too narrowly, the record herein does not estab- lish that Respondent employs a permanent, stable work force. Like the usual contractor in the construction in- dustry, Respondent annually works on numerous pro- jects varying in size and duration. Although Respondent, like many contractors in the construction industry, em- ploys a nucleus of permanent employees who move from site to site, this is not analogous to the typical industrial situation, which results in a 9(a) collective-bargaining re- lationship, wherein an employer maintains a permanent, stable work force, hiring new employees only because of normal employee turnover. Thus, in the instant case the record merely shows that Respondent employs a nucleus of approximately six or seven employees on a permanent basis, normally employs other employees to supplement them, but that in September 1977, when it signed its con- tract with the Union, only employed this group of ap- proximately six or seven permanent workers. And fur- ther shows that, following its execution of the union con- tract, Respondent employed other employees in addition to this nucleus, and that in May 1979 it employed at least 11 employees and in November 1979 it employed 22 em- ployees. No evidence was presented about the number of employees employed by Respondent at other times in 1977, 1978, and 1979 or about the duration of the em- ployment of the employees it employed other than the nucleus of permanent employees. In light of the forego- ing, I am of the opinion that the record is ambiguous on the question of whether Respondent employed a perma- nent, stable work force and, because of this, am not per- suaded that the General Counsel has proven by a pre- ponderance of the evidence that Respondent employs a permanent, stable work force. It is for this reason that I shall recommend that the complaint be dismissed in its entirety. [Recommended Order for dismissal omitted from pub- lication.] 71