NLRB v. Crossroads Elec , 178 F. App'x 528 ( 2006 )

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 06a0320n.06
Filed: May 5, 2006
No. 05-1395
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
NATIONAL LABOR RELATIONS )
BOARD, )
)
Petitioner, )
) ON PETITION FOR ENFORCEMENT
v. ) OF AN ORDER OF THE NATIONAL
) LABOR RELATIONS BOARD
CROSSROADS ELECTRICAL, INC., )
AND ITS ALTER EGO GREER AND )
ASSOCIATES ELECTRICAL, INC., )
)
Respondent. )
Before: COLE, GIBBONS, ROGERS, Circuit Judges.
JULIA SMITH GIBBONS, Circuit Judge. The National Labor Relations Board (“Board”
or “NLRB”) has applied to this court for enforcement of its order issued against Crossroads
Electrical, Inc. (“Crossroads”) and Greer and Associates Electrical, Inc. (“Greer and Associates”).
In its order, the Board found that Greer and Associates is the alter ego of Crossroads and that both
entities unlawfully refused to give effect to the collective bargaining agreement that existed between
Crossroads and the International Brotherhood of Electrical Workers, Local Union 429, AFL-CIO,
CLC (the “Union”), in violation of Section 8(a)(5) and (1) of the National Labor Relations Act
(“NLRA” or “Act”), 29 U.S.C. § 158(a)(1), (5). Greer and Associates argues that enforcement is
unwarranted because either the Union failed to file its charge against Crossroads and Greer and
1
Associates within the applicable statute of limitations or, assuming the charge was timely,
substantial evidence did not support the Board’s determination that Greer and Associates is an alter
ego of Crossroads. For the following reasons, we grant the application for enforcement of the
Board’s order.
I.
Crossroads, which was formed in 1997, is an electrical contracting company. Crossroads
works mainly in metropolitan Nashville, Tennessee, focusing primarily on small construction
projects, such as restaurants and tenant build-outs, and service calls. Crossroads was initially owned
and operated by three individuals: Micheal Thomas (“Thomas”), president; Billy Randolph, vice-
president; and Thomas Greer (“Greer”), secretary-treasurer.1 In March 2002, Billy Randolph gave
his ownership interest in Crossroads to Thomas and Greer, making them each fifty-percent co-
owners. At that time, Thomas continued as president, Greer became vice president, and Barbara
Randolph became secretary-treasurer. Thomas and Billy Randolph performed the estimating and
bidding work at Crossroads. Greer and Thomas hired and fired employees. Greer was responsible
for the day-to-day supervision of employees and spent most of his time visiting job sites.
In its first year of operation, Crossroads signed a letter of assent, agreeing to be bound by
the collective bargaining agreement between the Middle Tennessee Chapter of National Electrical
Contractors Association (“NECA”) and the Union. A letter of assent generally allows a multi-
employer bargaining group – here, the NECA – to negotiate with a union on behalf of the employer,
1
Billy Randolph is married to Barbara Randolph, the sister of Micheal Thomas. Stacey
Greer, wife of Thomas Greer, is the daughter of Billy and Barbara Randolph. Barbara Randolph
also worked at Crossroads, handling payroll and bookkeeping. Stacy Greer worked part-time as a
secretary at Crossroads.
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and the employer is bound to any collective bargaining agreement that results. The agreement
between the NECA and the Union at issue in this case was effective from September 1, 2001 through
August 31, 2005. The collective bargaining agreement requires all bound employers to notify the
Union of their need for electricians and to seek job referrals exclusively through the Union’s hiring
hall.
In the middle of 2003, faced with the realization that Crossroads was losing money as a result
of high labor costs, Greer decided that some changes had to be made. Greer had served for several
years as an NECA representative on the board of the Nashville Joint Apprentice Training Committee
(“JATC”), which trains apprentice and journeymen electricians. The JATC board consists of four
NECA representatives and four Union officials. At a weekly JATC board meeting in June, Greer
stated his opinion that wages and insurance and retirement contributions were getting too high and
that something was going to have to be done if the situation was not worked out. At least four Union
officials were present at the meeting. Sometime after the June 2003 JATC board meeting, union
members complained to the Union that they had heard that Greer was “going nonunion.” Based on
these complaints, the Union filed internal charges against Greer in the “middle of 2003.”
On July 22, 2003, Greer incorporated Greer and Associates. At that time, he told his wife
Stacy Greer that Greer and Associates was going to be a “nonunion electrical company.” Greer and
Associates was issued a business tax license and filed for a federal tax number. Greer and
Associates’s initial officers were Greer and Barbara Randolph. At the time of incorporation, Greer
was also a fifty-percent owner and officer of Crossroads and Barbara Randolph was its secretary-
treasurer. On August 1, 2003, Barbara Randolph resigned as secretary-treasurer of Crossroads. On
August 6, 2003, following another weekly JATC board meeting, the director of the JATC asked
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Greer to resign from the JATC board. The JATC director had heard the rumors that Greer was
“going nonunion” and told him that, if that was the case, he would need to resign because nonunion
employers cannot sit on the JATC board. Greer did not resign at that time.
Barbara Randolph provided Greer a $10,000 interest-free loan with which to start Greer and
Associates. With this money, Greer opened a bank account in the name of Greer and Associates.
The check that Greer eventually provided as repayment on this loan was made out to Billy
Randolph. Following this initial loan, Barbara Randolph gave Greer two additional interest-free
loans of $4,000 and $9,000. These additional loans, which were repaid by Greer with checks made
out to Billy Randolph, served, at least in part, to cover payroll expenses of respondent Greer and
Associates during shortfalls.
Greer officially resigned from both Crossroads and the JATC board on August 18, 2003, and
Greer and Associates began conducting business from Greer’s home. On that day, Greer prepared
Greer and Associates’s first bid, which was for an office build-out project. Greer learned of this
project while working at Crossroads. On August 19, 2003, Greer and Associates signed its first
contract, which was for the construction of a Pizza Hut in Springhill, Tennessee. On August 20,
2003, Crossroads gave five of its trucks and some accompanying electrical equipment to Greer and
Associates. Loan documents were prepared for the transaction, requiring Greer and Associates to
make sixty monthly payments of $750 with interest; however, no money was ever paid by Greer and
Associates to Crossroads. Greer and Associates received title to the trucks and the equipment from
Crossroads without any money ever changing hands. In August of 2003, Greer and Associates used
Crossroads’s mailing address to obtain liability insurance.
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On August 21, 2003, Greer and Associates placed an advertisement in the newspaper seeking
electricians. The advertisement did not identify Greer and Associates as the employer, and Greer
never advertised the new business in any way. Greer and Associates hired its first employee,
without having first notified the Union of its need for electricians or going through the union hiring
hall, on August 22, 2003.
Billy Randolph retired from Crossroads on August 31, 2003, leaving it solely operated by
Thomas. Following Billy Randolph’s retirement, Thomas did not seek any further projects for
Crossroads. On October 20, 2003, Crossroads issued Greer a $500 bonus; it also issued bonuses in
October to Stacy Greer and Barbara Randolph. On October 31, 2003, Crossroads finished its last
major project and laid off its remaining employees. At that time, Thomas was serving as
Crossroads’s president and Stacey Greer, who was simultaneously working for Greer and
Associates, was Crossroads’s secretary-treasurer. Thomas engaged in various efforts to “wind
down” Crossroads in November and December.
On November 1, 2003, Greer asked Mickey Patterson, a Crossroads employee who had been
laid off a day earlier, to work for Greer and Associates. Shortly thereafter, Greer and Associates
hired another former Crossroads employee, Preston Jackson. Ultimately, Greer and Associates hired
at least five former Crossroads employees, not including members of the Randolph, Thomas, and
Greer families. All of these employees engaged in the same type of work at both companies. In
November 2003, Greer and Associates moved into Crossroads’s office space and started using
Crossroads’s telephone number. Although Greer and Associates occupied the office by November
7 at the latest, Crossroads paid the rent for the months of November and December.
5
On December 16, 2003, Greer and Barbara Randolph offered Thomas the position of vice-
president of Greer and Associates and a 50% ownership interest. When Thomas joined Greer and
Associates on January 1, 2004, he waived any debt it owed Crossroads and brought with him all of
Crossroads’s remaining equipment and supplies. Thomas performed the estimating work at Greer
and Associates, as he had at Crossroads, and Greer oversaw projects and employees, as he had at
Crossroads. On its 2003 tax return, Crossroads identified Greer as a fifty percent owner of the
company through the month of December.
In early February 2004, Michael Bearden, the Union’s assistant business manager, began
hearing rumors that Crossroads was no longer in business. Bearden called Crossroads’s telephone
number and Stacy Greer answered the call as “Greer and Associates.” Bearden asked Stacy to
explain the difference between the two companies. She stated that the companies were “pretty much
the same . . . except for [Greer and Associates] isn’t union any more,” and that Greer and Associates
“just [took up] Crossroads’ old work” and “old customers.” Stacy added that Greer and Associates
decided to operate nonunion because it is “[h]ard to get jobs, hard to compete . . . when you are
union versus nonunion.” Bearden then visited some of Greer and Associates’s job sites. During the
visit, he noticed that Greer and Associates’s trucks still had “Crossroads” written on them and that
the vehicles were still registered to Crossroads.
On February 20, 2004, the Union filed a charge with the Board alleging that Greer and
Associates is an alter ego of Crossroads and thus violated Section 8(a)(5) of the Act by failing to
honor the collective bargaining agreement between Crossroads and the Union. On March 5, 2004,
Greer and Associates denied the Union’s demand for recognition as the collective bargaining
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representative of Greer and Associates’s employees and refused to give effect to the terms of the
collective bargaining agreement.
On April 30, 2004, a complaint issued on the allegations raised in the charge. Greer and
Associates answered, denying any violation of the Act and raising the affirmative defense that the
Union’s charge was filed outside of the statute of limitations. On July 14 and 15, 2004, a hearing
before an administrative law judge was held. Following this hearing, the administrative law judge
issued a decision on September 1, 2004, finding that Greer and Associates was the alter ego of
Crossroads and that both entities had violated Section 8(a)(5) and (1) of the Act by refusing to honor
the collective bargaining agreement. Greer and Associates filed its exceptions to the administrative
law judge’s decision.
On December 20, 2004, the Board issued a decision and order affirming and adopting the
judge’s findings that Greer and Associates and Crossroads were alter egos and that they had violated
the Act. 343 N.L.R.B. No. 112 (2004). On March 29, 2005, the Board filed with this court an
application for enforcement of its order.
II.
On appeal, Greer and Associates challenges the Board’s finding that it is an alter ego of
Crossroads and the Board’s determination that the Union’s charge was timely filed. Greer and
Associates does not dispute that Crossroads was bound by virtue of its letter of assent to the
collective bargaining agreement during all times encompassing the events in question. Nor does
Greer and Associates challenge the Board’s conclusion that, if it was the alter ego of Crossroads, its
actions violated that agreement. The only two questions on appeal are whether Greer and Associates
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was bound to the agreement as a result of its status as an alter ego of Crossroads, and whether the
Union filed its charge within the statute of limitations.
We review the Board’s factual determinations as well as the Board’s application of law to
these facts under a substantial evidence standard. Pleasantview Nursing Home, Inc. v. NLRB, 351
F.3d 747, 752 (6th Cir. 2003); FiveCAP, Inc. v. NLRB, 294 F.3d 768, 776 (6th Cir. 2002). “Evidence
is substantial when it is adequate, in a reasonable mind, to uphold the [NLRB’s] decision.”
Pleasantview Nursing, 351 F.3d at 752 (quoting NLRB v. St. Francis Healthcare Ctr., 212 F.3d 945,
952 (6th Cir. 2000)). “This Court defers to the Board’s reasonable inferences and credibility
determinations, even if we would conclude differently under de novo review.” FiveCAP, 294 F.3d
at 776.
A.
Under Section 8(f) of the Act, employers in the building and construction industry may enter
into a collective bargaining agreement with a union before the union has established majority status.
29 U.S.C. § 158(f); see also Electrical Workers Local 58 Pension Trust Fund v. Gary's Elec. Service
Co., 227 F.3d 646, 653 (6th Cir. 2000). Such an agreement is often referred to as a Section 8(f) or
“prehire” agreement. Although either party may repudiate a Section 8(f) or pre-hire agreement once
it expires by its terms, an employer that refuses to give effect to the Section 8(f) agreement while it
is in effect thereby violates Section 8(a)(5), which makes it “an unfair labor practice for an
employer . . . to refuse to bargain collectively with the representatives of his employees.” 29 U.S.C.
§ 158(a)(5); Gary's Elec. Service Co., 227 F.3d at 653; John Deklewa & Sons, Inc., 282 N.L.R.B.
1375, 1377-78, 1389 (1987). In addition, any violation of Section 8(a)(5) produces a derivative
8
violation of Section 8(a)(1), which makes it an unfair labor practice to “to interfere with, restrain, or
coerce employees in the exercise” of their statutory rights. 29 U.S.C. § 158(a)(1).
An employer cannot avoid its obligations under Section 8(a)(5) and (1) by forming a new
corporate entity that is merely the alter ego of the old employer. Howard Johnson Co. v. Detroit
Local Joint Executive Bd., Hotel & Restaurant Employees & Bartenders Int’l Union, 417 U.S. 249,
259 n.5 (1974); Southport Petroleum Co. v. NLRB, 315 U.S. 100, 106 (1942); NLRB v. Fullerton
Transfer & Storage Ltd., 910 F.2d 331, 336 (6th Cir. 1990); NLRB v. Allcoast Transfer, Inc., 780
F.2d 576, 580-81 (6th Cir. 1986). One business entity is therefore bound by the collective bargaining
agreement between another business entity and a union if the two business entities are alter egos.
Allcoast Transfer, 780 F.2d at 582-83; Nelson Elec. v. NLRB, 638 F.2d 965, 968 (6th Cir. 1981).
“[T]he essential inquiry under an alter ego analysis is ‘[w]hether there was a bona fide
discontinuance and a true change of ownership . . . or merely a disguised continuance of the old
employer.’” Allcoast Transfer, 780 F.2d 576, 581 (6th Cir. 1986) (quoting Southport Petroleum, 315
U.S. at 106). The factors to be considered are well established: we examine whether the two entities
possess substantial identity of management, business purpose, operation, equipment, customers,
supervision and ownership. Fullerton Transfer, 910 F.2d at 336; Allcoast Transfer, 780 F.2d at 579,
581-82. In addition, employer intent is examined. Allcoast Transfer, 780 F.2d at 581-82. The alter
ego analysis is “flexible,” and generally requires the “examination of all the circumstances of each
case, and a weighing of all the relevant factors.” Id. at 581. This court has repeatedly noted that “it
is the Board’s function to strike a balance among each of the criteria set forth above.” Fullerton
Transfer, 910 F.2d at 336 (internal quotation marks and citation omitted); Allcoast Transfer, 780 F.2d
at 579. Moreover, the finding that two business entities are alter egos is a question of fact which is
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entitled to affirmance if supported by substantial evidence. 29 U.S.C. § 160(e); Allcoast Transfer,
780 F.2d at 579.
Substantial evidence on the record supports the Board’s determination that Crossroads and
Greer and Associates were alter egos. When Greer and Associates was formed, Greer was an officer
and a fifty percent owner of Crossroads. When Thomas officially joined Greer and Associates on
January 1, 2004, the ownership of the two companies was identical. Thereafter, Thomas performed
the estimating work while Greer oversaw projects and employees, as they had at Crossroads. The
two companies engaged in primarily the same type of work: small construction job electrical
contracting. Greer and Associates operated from Crossroads’s offices, although Crossroads
continued to pay the rent through December, and used Crossroads’s telephone number. Crossroads
gave Greer and Associates vehicles and equipment without charge. These vehicles were registered
to Crossroads and bore Crossroads’s name while Greer and Associates used them on jobs. In short,
substantial evidence regarding the identity of management, business purpose, operation, equipment,
customers, supervision and ownership supports the Board’s decision that the two entities were alter
egos.
Also critical is the Board’s finding that the intent of Greer and Thomas in forming Greer and
Associates was to avoid Crossroads’s contractual labor obligations. Although this circuit does not
require the Board to show that an employer intended to circumvent its labor obligations in order to
establish that one company is the alter ego of another, see Allcoast Transfer, 780 F.2d at 581, such
a showing lends considerable support to an alter ego finding. See Fullerton Transfer, 910 F.2d at 337
(“[I]ntent to thwart a board order or statutory requirement is an important criteria”). On appeal, Greer
and Associates does not challenge the Board’s finding that the intent of Greer and Thomas was to
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circumvent labor obligations. Thus, Greer and Associates has abandoned the right to object to those
determinations and “has effectively admitted the truth of those findings.” NLRB v. Kentucky May
Coal Co., Inc., 89 F.3d 1235, 1241 (6th Cir. 1996). This uncontested finding that Greer and Thomas
formed Greer and Associates with the intent to avoid its contractual and statutory obligations
provides significant support for the Board’s conclusion that Greer and Associates and Crossroads are
alter egos.
On appeal, Greer and Associates concedes that there is substantial evidence that, as of
“mid-December” of 2003, Greer and Associates and Crossroads had “substantially identical
management, business, purpose, operation, equipment, customers, supervision, and ownership.”
Greer and Associates argues, however, that the Board should have focused on the events at the
formation of Greer and Associates as opposed to later developments.2 Greer and Associates asserts
that the Board mistakenly rejected its own precedent, George C. Shearer Exhibitors Delivery Service,
262 N.L.R.B. 622 (1982), which, according to Greer and Associates, requires the Board to place
greater weight on the developments that took place at the time the second company was established
than on the developing status of the new company in later years. Greer and Associates construes
2
We note that, although Greer and Associates argues that this court must focus on events at
the formation of the company rather than on events that followed formation, Greer and Associates
relies heavily on events between July 22, 2003 and mid-December 2003 to support its position that
it is not an alter ego of Crossroads. For instance, Greer and Associates argues that it operated out
of different facilities than Crossroads for the “first four months of existence”; that Greer was the
only person involved in management and supervision of Greer and Associates “[u]ntil mid-
December”; that Greer sought capital from outside investors, an event which occurred “[w]ithin the
first several months of Respondent Greer’s existence”; and that Thomas either interviewed for or
had conversations about other job positions in October, November, and December 2003. Thus,
Greer and Associates encourages this court to consider numerous events that followed Greer and
Associates’s formation, so long as those events are helpful to its position. What Greer and
Associates never does, however, is offer this court any reason why it should examine events up until
mid-December but then abruptly stop examining events after mid-December.
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Shearer to mean that the Board is limited to examining events at the immediate formation of a new
company to determine whether it is the alter ego of a pre-existing company.
Greer and Associates’s reliance on the Board’s Shearer decision is misplaced for multiple
reasons. First, Greer and Associates misreads Shearer. In Shearer, the Board decided that two
business entities were alter egos because of the similarities that existed at formation, even though the
companies’ identities diverged as time went on. See 262 N.L.R.B. at 623-24. Shearer therefore
refers to discounting subsequent divergence, not convergence. See id. at 624 (“On the question of
whether one company and a successor are one and the same, . . . the really determining factors are
whether both do the same kind of business and are owned and operated by the same people. . . . If
both these elements remain the same, small changes in the day-to-day running of the business mean
nothing.”). Moreover, the Board in Shearer actually examined the relationships between the entities
for three years following the formation of the second entity. Id. at 624. Second, as the Board
correctly noted, “The applicable precedent in the circumstances of this case is stated in Blue & White
Cabs, 291 N.L.R.B. 1047, 1048 (1988), where the Board, in finding no alter ego, held that ‘to restrict
consideration of the alter ego issue to . . . [the time of the alleged alter ego’s] formation would distort
the picture of . . . [its] essential identity and purpose.’” Thus, the Board’s own precedent actually
encourages consideration of events occurring beyond the immediate formation of a new business
entity. Third, the approach of Blue & White Cabs – that the Board may look to events outside
immediate formation – is entirely consistent with Sixth Circuit and Board precedent indicating that
the alter ego analysis is a flexible, balance-striking, functional analysis. See, e.g., Fullerton Transfer,
910 F.2d at 336; Allcoast Transfer, 780 F.2d at 581-82; Nelson Elec., 638 F.2d at 968. Indeed, this
court examined events following incorporation in Allcoast Transfer. See 780 F.2d at 582. As the
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Board correctly stated, to limit the analysis to the very beginning of a new entity’s existence would
make avoidance of obligations under the Act a matter of merely waiting a short period of time before
resuming full operations. See J. Vallery Elec., Inc. v. NLRB, 337 F.3d 446, 451 n.15 (5th Cir. 2003)
(“Because the alter ego doctrine contemplates the existence of a predecessor corporation and a
successor corporation, a single person need not own, manage, or supervise both corporations at the
same time. The doctrine would be rendered useless if an employer could avoid liability by simply
washing his hands of one company and starting a new one.”). In short, neither the Shearer decision
nor any other by the Board or this court rigidly limits the Board’s analysis to the entities as they
existed at the time of the second company’s formation. In this case, the Board engaged in exactly
the type of functional analysis that inheres in an alter ego case.
In sum, the Board properly examined the events that took place within the first six months
of Greer and Associates’s incorporation. Substantial evidence of events during this time period
supports its decision, as Greer and Associates concedes, that Greer and Associates and Crossroads
are alter egos.
B.
We now turn to consideration of the timeliness of the Union’s charge. Under Section 10(b)
of the Act, “no complaint shall issue based upon any unfair labor practice occurring more than six
months prior to the filing of the charge with the Board.” 29 U.S.C. § 160(b). The six month clock
runs from the date on which the plaintiff “discovers, or in the exercise of reasonable diligence should
have discovered, the acts constituting the alleged violation.” Taylor Warehouse Corp. v. NLRB, 98
F.3d 892, 899 (6th Cir. 1996) (quoting Nida v. Plant Protection Assoc. Natl., 7 F.3d 522, 525 (6th
Cir. 1993)); see also NLRB v. Allied Products Corp., Richard Bros. Div., 548 F.2d 644, 650 (6th Cir.
13
1977) (“[T]he six month limitation period does not begin to run until the employer’s unlawful
activity, which is the basis for the unfair labor practice charge, has become known to the charging
party.”). “This is only a specific application of the general rule that a limitation period begins to run
when the claimant discovers, or in the exercise of reasonable diligence should have discovered, the
acts constituting the alleged (violation).” Id. (quotation marks and citations omitted). The party
asserting the statute of limitations defense “bears the burden of establishing that a charging party
received such notice.” Taylor Warehouse Corp., 98 F.3d at 899.
In this case, the Union filed its unfair labor practice charge on February 20, 2004. Six months
prior to that date was August 20, 2003. Therefore, if the Union had actual or constructive notice,
before August 20, 2003, that Greer and Associates committed an unfair labor practice, then its charge
was filed outside of the Section 10(b) statute of limitations.
The Board found that the first date on which Greer and Associates failed to abide by the
Section 8(f) agreement was August 21, 2003 – the date on which Greer and Associates placed an
anonymous help-wanted advertisement in the newspaper rather than seeking referral of employees
from the Union. Contrary to Greer and Associates’s contention on appeal, the Board did not
conclude that this event was the “initial triggering date for the statute of limitations.” Rather, the
Board clearly stated, “The Union had no notice of [the placing of the advertisement] because the
advertisement did not identify the name of the employer.” The Board did not specify exactly when
the statute of limitations period began to run; instead, the Board concluded that there was no evidence
that any employee was hired or that Greer and Associates was failing to pay contractual wages or
make appropriate contributions prior to August 20, 2003. For this reason, the Board found that Greer
and Associates had failed to establish a valid Section 10(b) defense.
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Greer and Associates first claims that the Union had either actual or constructive notice of its
repudiation of the Section 8(f) agreement prior to August 20, 2004. Specifically, Greer argues that,
as of August 6, the Union had either actual or constructive knowledge that: (1) Greer had formed a
new company; (2) the new company was an alter ego of Crossroads; and (3) the new company was
not abiding by the collective bargaining agreement. According to Greer and Associates, when
combined, these events triggered the statute of limitations. To show that the Union knew that Greer
had formed a new company that was not abiding by the terms of the collective bargaining agreement,
Greer and Associates points first to the internal union charges filed against Greer by the Union in the
“middle of 2003,” which were based on union member complaints that Greer had formed a nonunion
company. Greer also notes that, on August 6, 2003, the JATC director requested Greer’s resignation
from the board because he had formed a nonunion company. According to Greer and Associates, this
request for resignation came after Greer had told the JATC, including its four Union officials, that
he felt constrained to do something about the high labor costs, and after the JATC director had
spoken with board about the need to request Greer’s resignation because he had formed a nonunion
company. None of these events, however, constitute the basis for the unfair labor practice charge
or the acts constituting the alleged violation. This court has previously held in an unpublished
opinion that mere incorporation of an alter ego cannot be an unfair labor practice. See R.L. Reisinger
Co., Inc. v. NLRB, Nos. 93-6430, 93-6560, 1994 WL 706749, at *2 (6th Cir. Dec. 19, 1994). In that
case, this court rejected a similar argument:
It is undisputed that proof of alter ego status, on which the company's
liability turns, depends on the circumstances of the 1981 incorporation,
circumstances well outside the limitations period. Nothing in the collective
bargaining agreement or the applicable labor laws, however, prohibited the
incorporation of a bound employer. The 1981 incorporation was therefore not
an unfair labor practice. Rather, the alleged unfair labor practices were the
15
company's hiring of workers outside the hiring hall and Bernadine
Reisinger’s letter contending that the company had no agreement with the
union, both of which undisputedly occurred within the limitations period.
Id. Nor can mere speculation on the part of Union members or officials that the new company, Greer
and Associates, might hire nonunion employees at some future date be equated to an unfair labor
practice. As the Seventh Circuit has explained:
Rumors or suspicions will not do; nor is it relevant when an unlawful
decision was actually made, if the decision was not communicated to the
affected party until later. Moreover, the decision must be final, and not
subject to further change; knowledge that another party might commit an
unfair labor practice when the time is right will not start the 10(b) period.
While the victims of an unfair labor practice should be encouraged to file a
charge with the NLRB as soon as possible, individuals should not be forced
to file anticipatory or premature charges, challenging tentative or merely
hypothetical decisions, in order to protect their statutory rights. The 10(b)
period does not commence until an aggrieved party has knowledge of the
facts necessary to support a present, ripe, unfair labor practice charge.
Esmark, Inc. v. NLRB, 887 F.2d 739, 746 (7th Cir. 1989) (footnotes omitted); accord NLRB v. Glover
Bottled Gas Corp., 905 F.2d 681, 684 (2d Cir. 1990); A&P Brush Mfg. Corp., 323 N.L.R.B. 303, 309
(1997) (“The equivocal, vague nature of the statements – [the employer’s] telling the employees that
he was intending to establish a nonunion operation, without stating how or when this entity would
commence operations, is not sufficient to provide the Union with the requisite clear and unequivocal
notice of a violation of the Act.”) (quotation marks and citation omitted). Indeed, at any point up
until it placed the advertisement without first notifying the Union, Greer and Associates could have
decided to honor the collective bargaining agreement and seek its initial employees through the
Union. Although Union employees may have suspected that Greer and Associates would violate the
collective bargaining agreement, any charge filed before August 21, 2003 would have been premature
and purely anticipatory. In short, prior to Greer and Associates’s making some effort to fill its
16
employment positions without involving the Union or expressly repudiating its agreement, there was
no unfair labor practice on its part.
Greer and Associates also argues that it provided constructive notice of its repudiation of the
collective bargaining agreement when it failed to comply with some of the agreement’s express
provisions, none of which are directly linked to hiring practices. Specifically, Greer and Associates
claims that it did not comply from the time of incorporation with three of the agreement’s sections:
Section 2.03, which states that a bound employer recognizes the Union as the exclusive representative
of all its employees; Section 1.02(a), which states that an employer desiring to change or terminate
the agreement must provide 90 days written notice; and Section 2.05, which requires bound
employers to post a surety bond. As an alter ego of Crossroads, Greer and Associates was bound by
all of the terms of the collective bargaining agreement. Thus, according to Greer and Associates, by
forming a new company which did not provide the Union with recognition, a bond, or notice of
termination of the agreement, Greer and Greer and Associates constructively gave notice to the Union
that it was violating the agreement.3
3
The Board did not find that Greer and Associates violated these provisions. Although Greer
and Associates argues that the Board found that it had violated every provision in the agreement,
this argument is unsupported by the administrative record. The Board held that Greer and
Associates and Crossroads engaged in unfair labor practices when Greer and Associates placed an
advertisement in the newspaper for employees without seeking referral from the Union, hired two
employees without “referr[al] by the Union,” “fail[ed] to compensate employees on the basis of the
classifications set out in the collective bargaining agreement,” and failed to make “contractually
required Fund contributions.” There is no mention by the Board of contractual violations of
Sections 1.02(a), 2.03, and 2.05. Thus, contrary to Greer and Associates’s assertion, the Board did
not find that Greer and Associates violated those provisions. Nor is there any evidence in the record
that Greer and Associates brought these provisions to the Board’s attention. On appeal, Greer and
Associates offers no authority which would prompt this court to find contractual violations that were
not alleged by the Union nor determined by the Board.
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Greer and Associates’s failures to provide the Union with recognition, a bond, or written
notice of termination were not violations of the agreement, or at least they were not violations which
could have provided the Union with notice. With regard to recognition and the bond, as the alter ego
of Crossroads, there was no contractual reason for Greer and Associates to recognize the Union or
post a surety bond, because Crossroads had already done these things. Thus, there were no
contractual violations in this regard. With regard to the 90 day notice, although it is true that neither
Crossroads nor Greer and Associates provided the Union with written notice of its desire to change
or terminate the agreement, the failure to properly provide notice obviously cannot give notice.
Finally, even if Greer and Associates’s conduct did violate the agreement and the Union had actual
or constructive notice of the violations, such isolated contract violations do not constitute repudiation
of a Section 8(f) agreement. See Gary's Electric Service Co., 227 F.3d at 657 (“The repudiation by
conduct doctrine typically requires something more than mere breach of the 8(f) contract, in that the
employees and the parties must be put on notice that the contract was void.”). These alleged contract
violations, unrelated to the unfair labor practices at issue in this case, did not provide the Union with
constructive notice of Greer and Associates’s labor violations.
III.
For the foregoing reasons, we grant the Board’s application to enforce its order.
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