NOTICE: This opinion is subject to formal revision before publication in the bound volumes of NLRB decisions. Readers are requested to notify the Executive Secretary, National Labor Relations Board, Washington, D.C. 20570, of any typographical or other formal errors so that corrections can be included in the bound volumes.

Glens Falls[1] Building and Construction Trades Council and International Union of Bricklayers and Allied Craftsmen, Local Union No. 6 and International Brotherhood of Carpenters and Joiners of North America, Local Union No. 229 and International Association of Heat and Frost Insulators and Asbestos Workers, Local Union No. 40 and International Association of Bridge, Structural and Ornamental Ironworkers, Local Union No. 12 and Laborers International Union of North America, Local Union No. 157 and International Brotherhood of Electrical Workers, Local Union No. 438 and International Union of Operating Engineers, Local Union No. 106 and International Brotherhood of Painters, Allied Trades and Glaziers, Local Union No. 466 and Sheet Metal Workers International Association, Local Union No. 83 and United Association of Journeymen and Apprentices of the Plumbing Industry and Pipefitting Industry of the United States and Canada, Local Union No. 773[2] and Indeck Energy Services of Corinth, Inc.; Indeck Corinth Limited Partnership; Indeck Energy Services, Inc.[3] Case 3–CE–55

July 31, 2007

DECISION AND ORDER

By chairman Battista and Members
Schaumber and Kirsanow

A. Introduction

The complaint in this case alleges violations of Section 8(e) of the Act[4] by the Respondent Unions. Specifically at issue are the Respondents’ February 20, 1992 letter agreement with Indeck and a subsequent 1992 agreement with Indeck’s contractor, CRS Sirrine, Inc. (Sirrine), as they relate to the construction of a power cogeneration facility in Corinth, New York. Both agreements prohibited Indeck’s contractor from subcontracting or permitting subcontracting of any work on the Corinth project to a company that was not itself a party to a project labor agreement (PLA) with the Respondents and that did not agree to perform all work on the project under the terms of the PLA.

The Respondents are alleged to have violated Section 8(e) by entering into the union signatory subcontracting provisions of the above agreements and by reaffirming them when filing a civil breach of contract action against Indeck in New York State Supreme Court on November 9, 1993. Under Section 8(e), the subject provisions are unlawful secondary restrictions on doing business unless, as the Respondents contend, they are exempt from the general prohibitions of Section 8(e) under the construction industry proviso to that section. We find the Respondents have failed to prove the affirmative defense of proviso coverage because the subject agreements did not arise in the context of a collective-bargaining relationship between the Respondents and Indeck and were not executed for the purpose of preventing conflict between union and nonunion labor on a common construction situs. We therefore find that the Respondents violated Section 8(e) as alleged.[5]

B. Procedural Background

On August 7, 1996, Administrative Law Judge James F. Morton issued a decision in which he concluded that Indeck is an employer in the construction industry within the meaning of the 8(e) proviso and that the Respondents had not violated Section 8(e). On July 16, 1998, the Board remanded the proceeding to reopen the record for additional evidence, some of which Judge Morton had erroneously excluded. 325 NLRB 1084 (Indeck I). In remanding, the Board addressed only the judge’s evidentiary rulings. It did not pass on any other issues. Id.

Judge Morton having retired, the case was assigned on remand to Administrative Law Judge Eleanor MacDonald. On February 15, 2000, she issued the attached supplemental decision, in which she concluded, like Judge Morton, that Indeck is an employer in the construction industry within the scope of the 8(e) proviso and that the Respondents had not violated Section 8(e) by entering into and reaffirming the letter agreement.[6]

The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel.

The Board has considered the decisions and the record in light of the exceptions and briefs[7] and has decided to affirm the judges’ rulings, findings,[8] and conclusions only to the extent consistent herewith.

C. Factual Background

Indeck designs, owns, and operates power cogeneration (“cogen”) facilities, producing both steam for sale to manufacturers and electricity for sale to public utilities. Most of its work force consists of engineers. It does not employ workers in the building and construction trades. In the early 1990s, Indeck was planning to build cogens in Corinth, Olean, Yonkers, and Kirkwood, New York. The Corinth facility would provide steam power to a nearby International Paper Plant and electricity, transmitted through Niagara Mohawk Power lines, to Consolidated Edison.

In September 1991, the Southwestern New York Building and Construction Trades Council (which is not one of the Respondents here) filed an objection to Indeck’s environmental impact statement for the Olean project. In an October 2, 1991 meeting in Olean attended by Indeck President Russell Lindsay, Trades Council Attorney Michael Reilly, and local Trades Council representatives, the union representatives told Lindsay that they had plenty of people available, that those people were out of work, and that they would stop every Indeck project in New York unless it went union. Lindsay told them he had no objection to using a union contractor as long as it was competitive.

In an October 11, 1991 letter, Lindsay told Reilly that Indeck was committed to doing the Olean project with a union contractor who would use union labor in the building and construction trades. In return for these assurances, the Unions agreed to withdraw their environmental objections to the project and to support the project in letters to the New York State Department of Environmental Conservation (DEC). Reilly subsequently wrote to the DEC, withdrawing the Trades Council’s objections to the Olean project and expressing support for it.

Similar discussions took place concerning the planned Corinth cogen construction. Respondent Trades Council President (also Carpenters Local 229 Business Agent) Phil Allen testified that around November 1991 he noticed that environmental impact hearings were scheduled for Indeck’s Corinth cogen project. He then called Indeck President Lindsay and told him that in several earlier conversations Lindsay had not given Allen any indication whether or not Indeck wanted to “work with” the Respondents. Allen asked Lindsay, “What side of the table do you want us to sit on?” Lindsay replied that he definitely wanted the Respondents on Indeck’s side of the table.

In December 1991, Paul Fingland, business representative of Plumbers & Steamfitters Local 267 and also an official of the New York State Pipe Trades Association (neither of which organizations are respondents in this case[9]), told Lindsay that the Respondents had trained people available to work on Indeck’s proposed projects, the Respondents would like to become involved in the projects, and the Respondents would try to do anything they could to help Indeck. Fingland told Lindsay that the Respondents had reservations about the quality of the employees and the safety problems of some of the nonunion contractors that were building plants in the area. Lindsay “indicated” to Fingland that it was Indeck’s intention that the projected New York cogens would be “built union” or they would not be built at all. Lindsay asked for Fingland’s help in “pushing the projects along in local government.” A December 13, 1991, letter from Lindsay to Fingland repeated Indeck’s commitment to use union labor on the cogen projects.

On January 15, 1992, union attorney Reilly sent Lindsay a copy of a proposed PLA for construction of Indeck’s Olean cogen by Stone & Webster Engineering Company. By this time, however, Indeck had selected Sirrine as the successful bidder to construct the Olean cogen. On the same day, Lindsay faxed this draft PLA to Sirrine Vice President Jerry Calloway. In discussions with Calloway, Lindsay told him that “we wanted the projects to be done with union labor and this [draft PLA] was what the union was expecting [Sirrine] to sign, something similar.” Lindsay testified that “[t]his is what the building trades were looking for. That’s the only reason I sent it down though.”

In late January 1992, Lindsay attended, but did not actively participate in, a meeting in which Sirrine and the Olean Trades Council negotiated a PLA for the Olean cogen. The cogen was eventually built under the terms of this PLA. Also in January, Allen told Indeck Vice President John Gillick that the DEC was going to conduct a public hearing about the Corinth project on February 5, that the building trades were getting “nervous,” and that they wanted something in writing from Indeck stating that the Corinth project would be built with the Respondents’ members. Allen asked Gillick to issue a letter from Indeck “basically laying out [Indeck’s] intentions of how we as the owner were going to have our project at Corinth constructed.”

Gillick wrote back to Allen on January 30, stating in pertinent part that Indeck was committed to perform the construction on the Corinth project utilizing a contractor who would employ the Respondents’ members. Gillick testified that he wrote this letter to indicate Indeck’s commitment to build the project on a union basis, primarily in exchange for the Respondents’ agreement not to intervene to “try to kill the project” and instead to help Indeck in the remaining permitting and clearance procedures before various regulatory bodies, and secondarily in exchange for the Respondents’ help in supplying Indeck’s construction contractor with the labor needed for the project.[10]

On February 5, Gillick met with Fingland, Allen, and about 15-20 local union business agents at the Carpenters Union Hall in Glens Falls. Gillick described the Corinth project, assured the Respondents that a PLA would be worked out for the project, and asked for the Respondents’ public support, including at an upcoming public meeting. There was no collective bargaining or discussion of terms and conditions of employment at this meeting. That evening, at a DEC public hearing held in Corinth to consider Indeck’s application, David Kirkpatrick, a member of Respondent Operating Engineers Local 106, spoke briefly in favor of Indeck’s application to build the Corinth cogen.[11]

After this meeting, Fingland told Gillick that Indeck’s January 30 commitment letter was not “strong enough,” and he asked Gillick to give the Respondents a firmer commitment for a PLA. Fingland told Gillick that in return for a stronger commitment letter the Respondents would not try to stop the Corinth project but would instead support it in the local community and before the local regulatory and permitting agencies. During several ensuing conversations, Fingland and Gillick discussed revisions sought by Fingland to Indeck’s January 30 commitment letter. Internally, Gillick and Lindsay also discussed revisions.

On February 20, Gillick sent a revised letter agreement, which Fingland found to be an acceptable expression of Indeck’s commitment to use union labor on the Corinth project. Gillick wrote:

In our earlier correspondence, Indeck has committed to construct our project in Corinth utilizing members of the Glens Falls Construction and Building Trades Council.

To further insure our commitment and good faith intentions, Indeck will instruct its contractor to execute the National Construction Stabilization Agreement as the Project Agreement.

In issuing the contractor this direction, it is understood by all parties that it is the Contractor’s and Building and Construction Trades Council’s responsibility to mutually agree on any modifications to this agreement prior to its execution.

We trust this further defines Indeck’s intentions relating to the Building and Construction Trades labor involvement in the execution of our Project.

Gillick testified that in return for the January 30 letter and the February 20 letter agreement, he was assured by Allen and Fingland that the Unions would do all that they could to support the project and that they would not hamper or intervene in regulatory proceedings that were going on at the time in regard to Indeck’s efforts to obtain permits to build the prospective New York State cogens. Gillick also testified that an advantage of a union contractor over a merit shop contractor was that a union contractor could provide a good flow of skilled craftsmen to do the project. He further testified, however, that he had “very little discussion with Fingland about supply of manpower.”

Fingland testified that the language in the letter agreement “seemed to be the best agreement that we were able to get. I thought this would be acceptable to the building trades.” He had told Gillick that if a PLA was not reached on, inter alia, the Corinth project, “we would do everything legally within our power to try to get Indeck’s attention and bring them to the table.” Fingland testified that after Indeck sent the letter agreement, he wrote a letter to the local town board, advising it that the Respondents had reached an agreement with Indeck and that the Respondents were “not planning on moving forward on any comments to the EPC [Environmental Planning Commission] hearing.”

Indeck formally contracted with Sirrine to build the Corinth cogen on June 8. On July 1, officials for the Respondents and Sirrine negotiated a PLA for Corinth subcontractors that was modeled on Sirrine’s existing PLA at Olean rather than the National Construction Stabilization Agreement mentioned in Indeck’s February 20 letter. This was the only meeting between Sirrine and the Respondents about the Corinth PLA. No one from Indeck attended.

In September, Sirrine and the Respondents concluded the alleged 8(e) Sirrine - Trades Council agreement (which is not the PLA itself). This agreement identifies Sirrine as the “Project Manager” for construction of the Corinth cogen. The agreement states in pertinent part:

Sirrine agrees that any contractor or subcontractor which is employed on the Project shall be a signatory to and abide by all of the terms contained in the Project Labor Agreement for the Indeck - Corinth Limited Partnership Cogen Project, Corinth, New York (hereinafter “The Project Agreement”). A copy of the Project Agreement negotiated by Sirrine and the [Respondent Trades Council] is attached. Sirrine will not be a signatory to the Project Agreement itself.

The Corinth PLA, attached to the Sirrine - Trades Council agreement, states in pertinent part as follows:

Article XIX, SUBCONTRACTING

Section 1. The Employer agrees that neither it nor any of its subcontractors will subcontract any work to be done on the project except to a person, firm, or corporation party to this Agreement. Any contractor or subcontractor working on a project covered by this Agreement shall, as a condition to working on said project, become signatory to and perform all work under the terms of this Agreement.

The PLA was signed by all of the Respondents. Neither Sirrine nor Indeck were signatories. It was understood that Sirrine and Indeck would not be employing any workers in the construction and building trades on the Corinth jobsite.

Before any construction work was done on the project, a dispute developed between Indeck and Sirrine over the size of a contractually-generated escalation in the price that Indeck would pay Sirrine for a delayed start. In April 1993, Indeck declared Sirrine in default and canceled its contract for Sirrine to build the Corinth cogen. In July 1993, Indeck selected CNF Constructors, Inc. (CNF) to replace Sirrine. Unlike with Sirrine, Indeck did not require CNF to agree that CNF’s subcontractors would be signatory to a PLA with the Respondents. CNF, itself a merit shop contractor, completed the Corinth cogen construction with a combination of union and nonunion labor.

The Respondents filed a breach-of-agreement lawsuit against Indeck in state court in November 1993, seeking $12 million in damages. As an affirmative defense to the lawsuit, Indeck alleged that the February 1992 letter agreement was unenforceable and void under Section 8(e) of the Act. Consistent with that defense, Indeck subsequently filed its 8(e) charge in the instant case. The lawsuit was removed to the United States District Court, Northern District of New York, where it was stayed pending resolution of this case.

D. Analysis

Preliminarily, we affirm Judge Morton’s finding, for the reasons set forth in the “Analysis” section of his decision in Indeck I, 325 NLRB at 1095, that the complaint is not time-barred under Section 10(b) of the Act, and that the Respondents reaffirmed and reentered into their February 20, 1992 letter agreement with Indeck by filing their state court breach-of-contract lawsuit. We also affirm Judge Morton’s finding that Indeck’s promise to the Respondents in the February 20, 1992 letter agreement, i.e., that Indeck’s contractor on the project in question would deal only with subcontractors who had or would enter into a collective-bargaining agreement with the Respondents, is within the scope of the prohibitions of Section 8(e) because it constitutes an implicit agreement by Indeck not to do business with another person—specifically, any contractor who would subcontract to nonunion subcontractors. Id.

We now turn to the central issue in this case, i.e., whether the otherwise prohibited letter agreement and the Sirrine - Trades Council agreement were protected under the construction industry proviso of 8(e). The Respondents, who bear the affirmative defense burden of proving proviso coverage, contend that the agreements and the lawsuit to enforce them were protected by the proviso because (1) Indeck is an employer in the construction industry within the scope of the proviso, and (2) the agreements were negotiated within a collective-bargaining context or (3) the agreements were specifically negotiated and executed to resolve the problems involved in permitting union and nonunion employees to work side by side at a common construction site.

The first prong of the Respondents’ defense relates to the express statutory requirement limiting proviso coverage to agreements “between a labor organization and an employer in the construction industry.” Depending on the circumstances, an employer can be in the construction industry for a particular construction project even if it is not primarily engaged in the construction business. See, e.g., Carpenters Local 743 (Longs Drug), 278 NLRB 440 (1986). Both judges in this case have concluded that Indeck was a construction industry employer within the meaning of the proviso for the Corinth cogen project. However, we find no need to pass on this issue and place no reliance on the judges’ decisions inasmuch as we find that the Respondents have failed to prove either the second or third prongs of their defense, which relate to the nonstatutory test for proviso coverage set forth by the Supreme Court in Connell Construction Co. v. Plumbers Local 100, 421 U.S. 616 (1975).

Although Connell was an antitrust case brought by nonunion contractors alleging a concerted refusal to deal with them, it was necessary for the Court to decide whether a union signatory subcontracting agreement between a general construction contractor and a “stranger union” that did not represent the signatory contractor’s employees was lawful under the 8(e) proviso and therefore entitled to the nonstatutory labor exemption from antitrust law. The Court found that the proviso did not apply. It stated that the proviso “extends only to agreements in the context of collective-bargaining relationships and, in light of congressional references to the Denver Building Trades problem, possibly to common-situs relationships on particular jobsites as well.” 421 U.S. at 633.

Neither Indeck’s February 20 letter agreement with the Respondents nor the Respondents’ subsequent agreement with Sirrine arose in the context of a present or prehire collective-bargaining relationship. While the Respondents claim an intent to represent Indeck’s employees, the record clearly shows that at all relevant times the parties involved understood that Indeck had no employees in the building and construction trades and that Indeck and Sirrine would not employ anyone in those trades on the Corinth cogen jobsite. Nothing in either agreement purported to relate to terms and conditions of employment for any Indeck or Sirrine employees. The sole purpose of those agreements was to bind Indeck to select a contractor who, in turn, would subcontract work only to employers who signed the Corinth PLA. Indeck and Sirrine were not themselves signatory to the PLA. Accordingly, the Respondents have failed to prove that the challenged agreements and the lawsuit to enforce them are entitled to protection under the 8(e) proviso based on the collective-bargaining relationship prong of the Connell test.

In the above-quoted language from Connell, the Court suggested, in dicta, that secondary union-signatory clauses might be protected by the proviso even without a collective-bargaining relationship if they were directed toward the reduction of friction that may be caused when union and nonunion employees of different employers are required to work together at the same jobsite.[12] The Board has yet to determine whether an alternative basis for proviso coverage exists under this Connell common-situs dictum,[13] and we find no need to do so here. The Respondents have failed to prove that the Indeck letter agreement and the resultant agreement with Sirrine were executed for the purpose of avoiding tensions that might arise if union and nonunion workers of different employers were to work side by side on the Corinth cogen site. Nor do they establish any other valid purpose cognizable under the proviso. On the contrary, the record shows that Indeck’s purpose was to remove the threat of union opposition to Indeck’s efforts to secure regulatory approval of its cogen construction plans, and secondarily, to provide a steady labor source for jobsite subcontractors. The Respondents, for their part, wanted a labor monopoly at a major construction site to provide employment for their out-of-work members.

Based on the foregoing, we conclude that the February 20, 1992 letter agreement between Indeck and the Respondents, the July - September 1992 Sirrine - Trades Council agreement, and the Respondent’s lawsuit seeking to compel Indeck’s compliance with these agreements were not protected by the construction industry proviso. Consequently, the Respondents violated Section 8(e) as alleged.

Conclusions of Law

1. Each of the Respondents is a labor organization within the meaning of Section 2(5) of the Act.

2. Indeck is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act.

3. The February 20, 1992 letter agreement between Indeck and the Respondents is within the scope of agreements prohibited by Section 8(e) of the Act, and is not exempt from the prohibition of Section 8(e) of the Act under the first proviso to that section.

4. The Respondents have violated Section 8(e) of the Act by entering into the February 20, 1992 letter agreement and the July - September 1992 Sirrine - Trades Council agreement pursuant to the February 20, 1992 letter agreement, and by reaffirming the provisions of those agreements and applying them to Indeck by filing a civil action against Indeck in New York State Supreme Court on or about November 9, 1993 (alleging that Indeck breached the February 20, 1992 letter agreement and caused a breach of the July - September 1992 Sirrine - Trades Council agreement), thus entering into, maintaining, and giving effect to an agreement in which Indeck agreed not to handle or otherwise deal in the products of another employer, or agreed not to do business with another person.

Remedy

Having found that the Respondents have engaged in unfair labor practices, we shall order that they cease and desist therefrom and that they take certain affirmative action designed to effectuate the policies of the Act.[14]

ORDER

The National Labor Relations Board orders that the Respondents, Glens Falls Building and Construction Trades Council; International Union of Bricklayers and Allied Craftsmen, Local Union No. 6; International Brotherhood of Carpenters and Joiners of North America, Local Union No. 229; International Association of Heat and Frost Insulators and Asbestos Workers, Local Union No. 40; International Association of Bridge, Structural and Ornamental Ironworkers, Local Union No. 12; Laborers International Union of North America, Local Union No. 157; International Brotherhood of Electrical Workers, Local Union No. 438; International Union of Operating Engineers, Local Union No. 106; International Brotherhood of Painters, Allied Trades and Glaziers, Local Union No. 466; Sheet Metal Workers International Association, Local Union No. 83; and United Association of Journeymen and Apprentices of the Plumbing Industry and Pipefitting Industry of the United States and Canada, Local Union No. 773, their officers, agents, and representatives, shall

1. Cease and desist from entering into the February 20, 1992 letter agreement and the July - September 1992 Sirrine - Trades Council agreement pursuant to the February 20, 1992 letter agreement, and from reaffirming the provisions of those agreements and applying them to Indeck by filing a civil action against Indeck in New York State Supreme Court on or about November 9, 1993 (alleging that Indeck breached the February 20, 1992 letter agreement and caused a breach of the July - September 1992 Sirrine - Trades Council agreement), and thus from entering into, maintaining, and giving effect to an agreement in which Indeck agreed not to handle or otherwise deal in the products of another employer, or agreed not to do business with another person.

2. Take the following affirmative action necessary to effectuate the policies of the Act.

(a) Seek dismissal of their action in the United States District Court, Northern District of New York, Civil Action No. 93-CV-1534 (TJM/DJH), seeking an award of damages for Indeck’s alleged breach or causation of breach of the above-described agreements.

(b) Within 14 days after service by the Region, post at their respective offices and meeting halls copies of the attached notice marked “Appendix.”[15] Copies of the notice, on forms provided by the Regional Director for Region 3, after being signed by the Respondents’ authorized representative, shall be posted by the Respondents and maintained for 60 consecutive days in conspicuous places including all places where notices to members are customarily posted. Reasonable steps shall be taken by the Respondents to ensure that the notices are not altered, defaced, or covered by any other material.

(c) Within 21 days after service by the Region, file with the Regional Director a sworn certification of a responsible official on a form provided by the Region attesting to the steps that the Respondents have taken to comply.

Dated, Washington, D.C. July 31, 2007

Robert J. Battista , Chairman

Peter C. Schaumber, Member

Peter N. Kirsanow Member

(seal) National Labor Relations Board

APPENDIX

Notice To Members

Posted By Order of the

National Labor Relations Board

An Agency of the United States Government

The National Labor Relations Board has found that we violated Federal labor law and has ordered us to post and obey this notice.

FEDERAL LAW GIVES YOU THE RIGHT TO

Form, join or assist a union

Choose representatives to bargain with employers on your behalf

Act together with other employees for your benefit and protection

Choose not to engage in any of these protected activities.

We will not enter into, reaffirm, maintain, or give effect to our February 20, 1992 letter agreement with Indeck Energy Services of Corinth, Inc.; Indeck Corinth Limited Partnership; and Indeck Energy Services, Inc. or our July - September 1992 agreement with CRS Sirrine Engineers, Inc., and WE WILL NOT reaffirm the provisions of those agreements and apply them to Indeck by maintaining our civil court action against Indeck.

We will seek dismissal of our civil action in the United States District Court, Northern District of New York, Civil Action No. 93-CV-1534 (TJM/DJH), seeking an award of damages for Indeck’s alleged breach or causation of breach of the above-described agreements.

Glens Falls Building and Construction Trades Council; International Union of Bricklayers and Allied Craftsmen, Local Union No. 6; International Brotherhood of Carpenters and Joiners of North America, Local Union No. 229; International Association of Heat and Frost Insulators and Asbestos Workers, Local Union No. 40; International Association of Bridge, Structural and Ornamental Ironworkers, Local Union No. 12; Laborers International Union of North America, Local Union No. 157; International Brotherhood of Electrical Workers, Local Union No. 438; International Union of Operating Engineers, Local Union No. 106; International Brotherhood of Painters, Allied Trades and Glaziers, Local Union No. 466; Sheet Metal Workers International Association, Local Union No. 83; and United Association of Journeymen And Apprentices of The Plumbing Industry And Pipefitting Industry of The United States and Canada, Local Union No. 773

Alfred M. Norek, Esq., for the General Counsel.

Francis J. Martorana, Esq. and Gerard M. Waites, Esq. (O’Donoghue & O’Donoghue), of Washington, D.C., for the Respondents.

Richard J. Reibstein, Esq. (Wolf, Block, Schorr and Solis-Cohen LLP) of New York, New York, for the Charging Party.

SUPPLEMENTAL DECISION

Statement of the Case

Eleanor Macdonald, Administrative Law Judge. This case was reopened pursuant to a Remand Order issued by the Board on July 16, 1998 at 325 NLRB 1084. The reopened hearing took place in New York, NY on six days from December 14, 1998 to February 9, 1999. The General Counsel, the Charging Party and the Respondents filed briefs on June 18, 1999. This Supplemental Decision is based on the entire record made before me pursuant to the remand, including my observation of the witnesses who testified before me, and the briefs. In addition, I have examined the exhibits introduced in the prior hearing before Administrative Law Judge James F. Morton and I have read the testimony of some of the witnesses who appeared before Judge Morton where the testimony of those witnesses was relevant to the issue dealt with by the Board’s Remand Order.1

The Board’s Remand Order directed the taking of evidence from expert witnesses concerning what it defined as a “central issue” in the case: “whether Indeck is an employer in the construction industry within the meaning of the proviso to Section 8(e).”2 In writing this Supplemental Decision I shall deal only with the issue placed before me by the Board’s Order. I shall not repeat the myriad factual findings made by Judge Morton except where necessary to explain my own findings. I shall assume that any reader of this Supplemental Decision has already read Judge Morton’s Decision.

In addition to directing me to hear the testimony of expert witnesses, the Board also directed that I hear the testimony of Jerry Calloway and the continued testimony of Victor Ranaletta. Their testimony is relevant to the issue whether Indeck is an employer in the construction industry.

i. the proviso and its legislative history

The relevant portion of Section 8(e) provides:

It shall be an unfair labor practice for any labor organization and any employer to enter into any contract or agreement, express or implied, whereby such employer ceases or refrains or agrees to cease or refrain from handling, using, selling, transporting or otherwise dealing in any of the products of any other employer, or to cease doing business with any other person, and any contract or agreement entered into heretofore or hereafter containing such an agreement shall be to such extent unenforceable and void: Provided, that nothing in this subsection (e) shall apply to an agreement between a labor organization and an employer in the construction industry relating to the contracting or subcontracting of work to be done at the site of the construction, alteration, painting, or repair of a building, structure, or other work.

The legislative history of Section 8(e) is based primarily on the statements of two Senators who favored passage of the 8(e) proviso. Senator Morse said:

The case of the building and construction industry represented probably the most flagrant injustice, where a general contractor is, in effect, entirely in control of the kind of labor relations taking place on a jobsite which he runs. He lets subcontracts based upon price, responsibility, and the ability to handle labor relations.

He lets those contracts, very well knowing the kind of labor relations which may exist within any of the subcontractor companies…. He is not innocent of any unfair labor policies on the part of a subcontractor. Vol. II, Legislative History of the Labor-Management Reporting and Disclosure Act of 1959, p. 1425(1).

Senator Kennedy said on page 1433(3):

Agreements by which a contractor in the construction industry promises not to subcontract work on a construction site to a nonunion contractor appear to be legal today. They will not be unlawful under section 8(e). The proviso is also applicable to all other agreements involving undertakings not to do work on a construction project site with other contractors or subcontractors regardless of the precise relation between them.

The legislative history does not contain any discussion of the definition of “an employer in the construction industry.”

The comments of Senators Morse and Kennedy indicate that Congress wished to deal with a situation where an employer promised to use union labor on a construction site but then reneged on its promise and had the work done by another contractor using non-union labor. Senator Morse’s comment characterized this as a “flagrant injustice” because the first contractor was “entirely in control” of labor relations on the jobsite and had given the work to the second contractor with full awareness of its labor relations. The proviso to Section 8(e) was intended to make the promise to use union labor enforceable. Clearly, the element of control of labor relations was key in the legislative scheme: an employer in the construction industry that controlled labor relations on the jobsite by its ability to select contractors and subcontractors could be held to its promise to employ union labor.3

It seems fair to conclude that Congress used the term “employer in the construction industry” to signify an employer with control over the labor relations of construction site employees.

ii. case precedents

In its remand decision, the Board summarized the state of the law defining what is “an employer in the construction industry” within the meaning of the proviso to Section 8(e) by citing and quoting from Carpenters Local 743 (Longs Drug), 278 NLRB 440, 442 (1986). The Board stated that under its existing precedents resolution of this issue “is dependent on the degree of control over the construction-site labor relations” the employer elected to retain and also “on the circumstances of each situation, rather than on the principal business of the employer.” The Board’s remand decision observed that “there are only a very limited number of relevant Board decisions and none of them involve the construction of a cogeneration plant or a project of similar magnitude.”

The relevant Board decisions begin with Columbus Bldg. & Construction Trades Council (Kroger Co.), 149 NLRB 1224 (1964). Kroger, the operator of a chain of retail food stores and itself an employer of union members, arranged for an investor to build a shopping center which Kroger would lease after it was completed. The investor hired a non-union contractor to construct the shopping center, and the Respondent unions engaged in various types of conduct designed to require Kroger to see to it that the investor used a union general contractor. The record showed that after the non-union contractor completed construction of the shopping center, the Respondent unions continued their picketing and, after an injunction was obtained, Kroger used its own union employees and three union subcontractors to install equipment and fixtures at the store. There was no discussion by the Board or the Trial Examiner of the criteria necessary to meet the statutory definition of “an employer in the construction industry.” The Trial Examiner apparently assumed that Kroger was not in the construction industry, and the Board merely stated that Kroger was a prospective lessee and store operator and not an employer in the construction industry.

In Los Angeles Bldg. Indust. (Church’s Fried Chicken). 183 NLRB 1032 (1970), the Board adopted the Trial Examiner’s finding that Church’s Fried Chicken was engaged in the business of operating retail stores and “engaged in the construction, through the use of various specialty contractors and suppliers,” of stores for its own use. There was no dispute that Church’s acted as its own general contractor. A Church’s employee was the construction superintendent who hired the subcontractors, oversaw their performance and approved their bills. The Trial Examiner rejected the General Counsel’s contention that Church’s was not an employer in the construction industry because its primary business was to sell food to its customers and because it did not perform construction work for others. The Trial Examiner analyzed the “meager” legislative history and concluded that Congress was concerned with agreements relating to the subcontracting of work on the construction site. Employers in the construction industry were exempted from the prohibition of Section 8(e) because of the control that contractors have over their subcontractors’ labor relations. Church’s was found to be an employer in the construction industry because it was able to control the labor relations of its subcontractors.

In Carpenters Local 743 (Longs Drug), supra, the Board affirmed without comment the finding of the Administrative Law Judge that the employer was not in the construction industry within the meaning of the proviso to Section 8(e). In Longs Drug, the employer operated numerous drug stores of which it was the owner or lessee. The employer engaged a non-union general contractor to construct a new store; it did not select any of the subcontractors used on the project. The employer’s own union employees were used to perform onsite installation of fixtures during the last two weeks of the construction period. The employer engaged an architect to design the project and it used its own project manager and project coordinator to oversee the project. During the eight months it took to complete the work, the employer’s project manager and project coordinator visited the site for a total of 28 days, a frequency which the ALJ termed “sporadic”. The actual day-to-day supervision of the construction was performed by an employee of the general contractor. The ALJ stated that the degree of control over the construction-site labor relations an employer elected to retain determines whether the employer is in the construction industry. If the employer acted as its own general contractor it would retain “absolute control” over construction-site labor relations. If the employer retained a general contractor but nonetheless regularly made “decisions, including the selection of subcontractors, normally within the scope of a general contractor’s duties and authority” the employer would be “tantamount” to a general contractor. Based on the limited scope of the employer’s actual construction work with its own employees and its lack of involvement in labor relations until the final two weeks of the project, the ALJ found that Longs was not an employer in the construction industry.

The Rowley-Schlimgen company sells office supplies, furniture and draperies and designs office interiors. Included in its services is the sale and installation of contract floor covering at construction and other commercial sites. At the time relevant to the litigation discussed below, the company subcontracted the work of installing the flooring to a non-union contractor owned and operated by a person whom it employed part-time as a scheduler of floor covering installation. The company was a signatory to the Association of General Contractors Commercial Carpenters Agreement. The District Council of Carpenters sought to enforce that part of the agreement mandating union-signatory subcontracting by filing grievances and a court action which resulted in a decision by the 7th Circuit.

In District Council of Carpenters v. Rowley-Schlimgen, 2 F.3d 765 (7th Cir. 1993), the court reviewed Board precedents and what it termed the “vague and inconclusive” legislative history. Rejecting the employer’s argument that the proviso is applicable only to employers who act as their own general contractors the court held that

[T]he availability of Sec. 158(e)’s exemption in favor of the construction industry must be driven by its purposes: the desire to reduce construction site tensions and the development of a uniform and ready supply of skilled labor. Accordingly, we conclude that whenever an employer is able to determine the nature of the workers who will be employed at a construction site through its selection of a subcontractor, the employer is, to that extent, an “employer in the construction industry” within the meaning of [the] proviso.4 2 F.3d at 769

After the court’s decision was rendered, the Board decided the unfair labor practice case in District Council of Carpenters (Rowley-Schlimgen), 318 NLRB 714 (1995). Reaffirming its earlier holdings that whether an employer is in the construction industry is dependent on the circumstances of each situation, the Board held that as long as an employer performs more than a de minimis amount of construction site work it may be covered by the 8(e) proviso. The employer will be covered if it exercises control over labor relations at the construction site. The Board held that although the company was neither a general contractor nor a direct employer of the construction site employees, it was nevertheless an employer in the construction industry because it controlled the work force through its relationship with the contractor who installed the flooring. Moreover, the company was aware of the labor relations of the contractor because its bids and prices were based in part on the contractor’s labor costs.5

iii. indeck literature

The Indeck Energy Services, Inc. brochure is directed at its customers: “electric utilities, industrial energy users and communities they serve.”6 The first page of text in the brochure introduces Indeck as a “developer, owner and operator” of cogeneration plants offering “full scope project development and execution.” This page lists the advantages to electric utilities of choosing Indeck: Indeck provides low cost power “and undertakes the construction and operation risks.”

The brochure describes Indeck’s “Development and Engineering” expertise as being due to “a comprehensive engineering staff at the corporate headquarters covering mechanical, electrical, environmental, chemical and civil/structural disciplines. In fact, 75% of Indeck’s professional staff is made up of engineers. . . .”

A section of the brochure entitled “Construction Management” states that “[T]he detailed engineering and construction of Indeck’s plants is performed by experienced design/build contractors under the close scrutiny of Indeck’s construction management staff.” Indeck “prepares the specifications and selects major equipment. . . . ” Indeck “assigns site management and headquarters staff to the project throughout its construction to provide overall management.” The brochure lauds “Indeck’s expertise in construction and construction management” and cites the fact that Indeck’s first cogen projects “were also constructed directly by Indeck as the general contractor.”

An insert to the brochure describes the Corinth cogen which was apparently in the early stages of construction at the time of printing. The Corinth cogen “will be the first of several projects following Indeck’s standard design for gas turbine combined cycle plants in the 125 MW class.” The insert states that “Indeck will be constructing a 6.5 mile natural gas line to provide fuel to the facility” and a “3.5 mile transmission line will also be constructed by Indeck for interconnection to the local electric utility. . . .”

iv. selected contracts

The witnesses for the Charging Party and the Respondents agreed that there were three major components of the Corinth cogen: a power plant, a gas transmission pipeline and an electrical transmission line. Some of the witnesses characterized the modifications to the two Niagara Mohawk substations as another major component of the cogen, but some witnesses regarded these modifications as a lesser part of the project. As described by Judge Morton in his Decision, Indeck entered into numerous contracts for all the major and minor parts of the construction of the cogen. My discussion of the construction contracts is designed only to supplement Judge Morton’s detailed description of these contracts.

A. Gas Facilities Interconnection Agreement

The Gas Facilities Interconnection Agreement between Indeck-Corinth Limited Partnership and Niagara Mohawk Power Corporation dated January 27, 1993 obligated Indeck to construct a gas pipeline so that Niagara Mohawk could transport gas to the cogen pursuant to the gas transportation agreement of the same date. Niagara Mohawk was to “own, operate, repair and maintain” the pipeline and related facilities while Indeck was responsible for the “design and construction” subject to Niagara Mohawk’s approval. Indeck had to obtain Niagara Mohawk’s approval for the selection of consultants and contractors, for the periodic review of design milestones and for the acceptance of calculations and drawings. Indeck was obligated to acquire the rights of way for the pipeline and to conduct soil studies for the presence of hazardous substances on the rights of way. Once Indeck had obtained the required regulatory approvals, the agreement required that the pipeline “shall be constructed . . . by Indeck-Corinth or by a third-party contractor” selected by Indeck and approved by Niagara Mohawk. The agreement provided milestone payments from Niagara Mohawk to Indeck according to a detailed construction schedule. Indeck was responsible for costs it incurred in excess of the payments provided in the agreement. Indeck was responsible for completion of construction by the end of 1993: in the event it was unable to achieve completion Niagara Mohawk had the right to “remove Indeck-Corinth as construction contractor. . . .” If Indeck were removed, and Niagara Mohawk completed the pipeline itself, then Indeck would be responsible for costs and expenses to the extent that they were in excess of Niagara Mohawk’s expected costs “if Indeck-Corinth had not been removed as construction contractor.” The Interconnection Agreement provided that Indeck had to pay financial penalties to Niagara Mohawk if it failed to achieve completion of construction within 6 months from the start. Niagara Mohawk could terminate the Agreement if construction was not complete by July 5, 1995. Ranaletta testified that Niagara Mohawk paid Indeck a lump sum for the construction of the pipeline. The amount of the payment was redacted out of the Interconnection Agreement as admitted into evidence. Indeck and not Otis Eastern, the contractor which supplied most of the labor to build the pipeline, purchased the over $400,000 worth of pipe required to construct the pipeline.

After Indeck selected Otis Eastern to perform construction work on the pipeline, Indeck conducted a preconstruction meeting with representatives of Otis Eastern and Niagara Mohawk on November 12, 1993. At the meeting, David Rubado was designated as the person to receive emergency calls relating to construction of the gas pipeline. Rubado would respond to an emergency call by visiting the site of the complaint. He would also relay information about the calls to Niagara Mohawk and Otis Eastern. Ranaletta testified that Indeck performed the construction management for the pipeline.7

B. Electric Interconnection Facility Agreement

The Electric Interconnection Facility Agreement dated June 12, 1992 provided for Niagara Mohawk to transmit electricity produced by Indeck to Con Ed, the purchaser of the electric power. In order for Niagara Mohawk to fulfill this function, Indeck was obligated to “design and construct” an interconnection facility, to be owned, operated and maintained by Niagara Mohawk. Indeck was required to post a deposit which Niagara Mohawk would retain if Indeck failed “to achieve commencement of construction” by a certain date or failed “to meet the commercial operations date” of the plant. The interconnection facility consisted of a transmission line from the cogen to the Niagara Mohawk Spier Falls Substation, a new breaker at the Spier Falls Substation and modifications to the Mohican substation. The final design of the interconnection facility was subject to Niagara Mohawk’s approval. Indeck was obligated to acquire the rights of way for the transmission line, to conduct soil testing for hazardous materials, and to obtain necessary permits. After completion of the transmission line, Indeck was to convey it to Niagara Mohawk. Niagara Mohawk was to design and construct the modification at its Spier Falls substation at Indeck’s expense. Indeck purchased and arranged for the delivery of some of the major equipment required for this project such as the transmission structures and the relay panels and breakers for the substation modifications.8 Indeck attended project meetings with Niagara Mohawk during the construction of the transmission line and the work on the Spier Falls and Mohican substations and it made commitments that were to be executed by Seaward, the contractor supplying the labor for the project. Ranaletta testified that Indeck performed the construction management for the transmission line.

v. ownership of the cogen

Indeck was required to file certain documents with the Federal Energy Regulatory Commission in order to maintain its status as a qualifying cogeneration facility under PURPA. The application for recertification filed June 7, 1994 restated and expanded upon information provided in previous filings with FERC. The application set forth the following facts concerning the building of the Corinth cogen: In the 1980’s, International Paper had intended to build a cogen to serve the thermal energy needs of its Corinth plant. Eventually, IP decided not to build the cogen and it reached an understanding whereby Indeck would “construct, own and operate” the cogen. Indeck’s application of 1994 stated that “The Town of Corinth Industrial Development Agency (“IDA”) holds legal title to the Facility, pursuant to a financing transaction in which Indeck sold the Facility to the IDA. The IDA has issued bonds to the construction lenders to the Facility evidencing its obligation to repay the construction loans. . . .” Indeck was committed to repurchase the cogen through fixed periodic installment payments to the IDA. Ranaletta testified that the financial closing for the cogen took place on November 29, 1993. On that date the lender, GE Capital, provided funds to complete the cogen and reimbursed Indeck for money already paid to CNF and other contractors. It would seem that the IDA would have taken title to the cogen on the same date as the financial closing.

vi. indeck exercise of control over labor relations

As discussed in Judge Morton’s Decision, Indeck wished to build four cogens in New York State and it entered into planning and preliminary execution for all four of the cogen projects at the same time. As will be shown below, CRS Serrine (hereafter CRSS), was bidding for work on the Olean and Corinth projects as a lump sum package and it also bid on the Kirkwood and Corinth projects as a lump sum package.

As set forth in detail in Judge Morton’s Decision, Indeck’s president Russell Lindsay conducted two meetings with representatives of the Olean building trades unions during which Lindsay agreed to build the Olean cogen with union labor and the unions agreed to support the cogen before governmental agencies. On October 3, 1991 Michael E. Reilly, Esq., the attorney for the Trades Council, sent Lindsay a sample project labor agreement and a list of wages and benefits for trades relating to the Olean cogen. A few days later, Reilly sent Lindsay a copy of the current collective bargaining agreement for each of the trades relevant to the Olean cogen project. Lindsay testified that he made a business decision to use union contractors on the Olean project. It was understood that the union contractor had to be competitive and the union representatives said that they would work with the contractor to make sure the project was competitive. Contrary to its usual practice, Indeck issued requests for proposals for the Olean project requiring the use of union labor and it sent sample project labor agreements to the various contractors who bid on the project. Lindsay also testified that he conducted a third meeting with the Olean building trades on January 29, 1992 which was attended by Murray Lane of CRS Sirrine. Lane and the building trades went over a labor agreement section by section “and when they were all done they had an agreement.”9 By that time, Indeck had chosen CRSS to construct the Olean cogen. Lindsay said, “there was no question” that CRSS knew that the job had to be union in order for it to be awarded to CRSS. Lindsay attended the meeting to make sure that the union people and Lane “got along and to show my support to the Union.” Lindsay did not want to “lose the support of the unions through some slipup of Sirrine or some misunderstanding between Sirrine” and the unions.

Lindsay testified that Indeck had awarded a contract to CRSS for Olean, Kirkwood and Corinth on “the same basis, to use union labor.” Lindsay had instructed CRSS to build all three projects with union labor because “[w]e did not want the unions opposing the projects and we wanted their support.”

As set forth in Judge Morton’s Decision, Lindsay spoke by telephone with Paul Fingland, one of the Respondents’ business representatives. Lindsay told Fingland that all the Indeck projects in New York would be built with union labor and he asked for Fingland’s support in obtaining governmental approval for the projects. Lindsay testified that he recalled speaking to Fingland about the Corinth plant but that he turned over responsibility for dealing with Fingland to John T. Gillick, the Indeck Vice President of Project Management & Construction. Lindsay stated that Gillick reported on the Corinth project mainly to Forsythe.

By letter of January 30, 1992 Gillick wrote to Philip Allen, President of the Glen Falls Building & Construction Trades Council:

As we discussed this morning, Indeck is committed to perform the Construction on our Corinth Project utilizing a contractor who will employ members of the Glen Falls Bldg. and Construction Trades Council.

At this time, we are not able to name our chosen contractor, however, you have our assurance that an Agreement between the parties will be reached.

I look forward to meeting with you and members of the council next week to discuss our project and how we can assist each other.

On February 5, 1992, the New York State Department of Environmental Conservation held a hearing on the Indeck proposal to build the Corinth cogen. A representative of the operating engineers spoke in favor of the project.

Lindsay testified that the building trades in Glen Falls were not satisfied with Gillick’s January 30 letter. As a result, Lindsay and Gillick drafted another letter which was sent on February 20, 1992 to James Bulman, the vice president of the Glen Falls Building & Construction Trades Council:

In our earlier correspondence, Indeck has committed to construct our project in Corinth utilizing members of the Glen Falls Construction and Building Trades Council

To further insure our commitment and good faith intentions, Indeck will instruct it’s (sic) contractor to execute the National Construction Stabilization Agreement as the Project Agreement.

In issuing the contractor this direction, it is understood by all parties that it is the Contractor’s and Building and Construction Trades Council’s responsibility, to mutually agree on any modifications to this agreement prior to its execution.

This letter constitutes the alleged unlawful agreement that is the substance of the instant proceeding.

As set forth by Judge Morton, CRSS and the Respondents negotiated a project labor agreement for the Corinth project in July 1992. The Charging Party’s witness, CRSS project manager Eli Hine, testified that Lane negotiated with the Glen Falls unions on behalf of CRSS using the recently negotiated Olean Project Labor Agreement as a model. Hine testified that he knew that Lindsay had instructed Calloway that a PLA similar to the one in Olean was to be negotiated for Corinth.

Jerry C. Calloway, the CRSS senior vice president handling the Indeck construction, was called by the Charging Party to testify at the reopened hearing in support of the Charging Party’s contention that Indeck did not dictate the use of union labor at Corinth.

Calloway testified that CRSS vigorously and aggressively pursued Indeck as a source of business and was awarded the EPC contracts for both the Olean cogen and the Corinth cogen.10

The record shows that on January 15, 1992, Lindsay received from union attorney Reilly and then transmitted to Calloway a sample Project Labor Agreement.11 The cover sheet addressed to Calloway from Lindsay stated:

Olean must be done according to this union contract. Similar contracts must be negotiated at Kirkwood and Corinth. Your price shall be based on this condition.

Testifying on December 15, 1998 in response to questions on direct examination by Counsel for Indeck, Calloway stated that he did not recall and had not seen the January 1992 cover sheet from Lindsay. Calloway testified that he recalled the Stone & Webster PLA because CRSS had already done its own labor survey when he received the PLA from Lindsay. Calloway explained that CRSS usually contracts work to local contractors: it hardly ever performs construction using directly hired labor. Calloway stated that the first or second time he spoke with Lindsay about Indeck’s upstate New York cogen projects, Lindsay asked him for pricing. In order to begin estimating the cost of the projects CRSS had to know what its labor costs would be. Calloway was aware that Indeck wanted the work to be done under a PLA. CRSS began a labor survey for the Olean and Corinth projects several weeks before receiving the Stone & Webster PLA. Although he could not recall the exact date the labor survey was performed, Calloway said it was in 1992. Calloway testified that by the time the Stone & Webster PLA arrived, Murray Lane, the CRSS vice president of construction, had already done a labor survey of the upstate New York labor market and that CRSS “had determined our labor posture would be a union labor agreement. . . .”12 Calloway said that he does not normally read fax cover sheets and that his secretary hides them from him. Calloway recalled that after he got the Stone & Webster Olean PLA he gave it to Lane to use as a reference to show that CRSS was doing its own due diligence. Calloway testified that he and Lane decided to use their own format for a PLA but that they would look at the Stone & Webster document to see “if there was something in there that made sense we would also try to live with it as close as we could. . . .” Calloway stated that he took no direction from Indeck as to what should be in the PLA. He testified that he could not recall what he and Lane said to each other when they discussed the Stone & Webster PLA. But Calloway recalled that when he and Lane discussed that PLA they were already pricing the Corinth project and had independently decided to use a PLA.

On cross-examination by Counsel for the Respondent, Calloway stated that a client’s preference about whether a job should be done union or non-union was not a primary factor in a CRSS decision whether to use union labor. Calloway made the determination based on what the area provided in terms of the quality of craftsmen. But Calloway acknowledged that if CRSS wanted to get the job, the client’s preference would be a primary factor in his decision. Calloway also acknowledged that when he received the PLA from Lindsay the cover sheet may have been attached to it. Calloway recalled that Lindsay told him that Stone & Webster had given him a price for the project and that CRSS had to beat that price. Calloway recalled using the Stone & Webster PLA as a reference.

After testifying as described above, Calloway was shown a September 26, 1991 letter to him from Wayne R. Grayczyk, Indeck’s vice-president for purchasing. The letter states:

This is to confirm our verbal offer of September 25, 1991 in which Indeck Energy Services, Inc. offers to enter into contract negotiations with CRS Sirrine Engineers, Inc., for the engineering-procurement-construction services for the Indeck Olean and Corinth . . . plants for an aggregate total of . . . $117,000,000.00, utilizing union construction labor.

Calloway maintained despite this letter that CRSS had decided on its own to use union labor and that Indeck did not instruct CRS that it had to use union labor. Calloway did not explain this major inconsistency in his testimony: he maintained that a labor survey done in 1992 had independently convinced him and Lane to utilize union labor while the documentary evidence shows that as early as September 1991 Indeck was instructing him that negotiations would be based on utilizing union labor.

On November 15, 1991 Lindsay wrote to Calloway accepting the lump sum price of $119,600,000 for the Olean and Corinth plants “for engineering, procurement and construction of said projects, utilizing union construction labor in accordance with Indeck’s statement of work for Olean and Corinth, both dated August 19, 1991.” The price for the Corinth cogen was set as $71,200,000. The letter provided that CRSS “understands that the . . . projects are third party financed and agrees that until a Notice to Proceed is issued. . . no obligations, financial or otherwise, are incurred by Indeck to CRSS except as follows: Indeck will immediately issue a Limited Notice to Proceed on the Olean project and a Notice to Proceed for Corinth no later than June 1, 1992.”

On February 26, 1992 Indeck sent identical letters to Calloway at CRSS and to another company named Zurn/NEPCO requesting proposals for construction of the Corinth cogen “to furnish equipment, material, labor, tools, permits, licenses, insurance, supervision . . . for the complete design, construction and testing of the facility . . . . Price to include union construction labor.”13

Calloway did not recall this letter.

When pressed again to recall when CRSS began its labor survey, Calloway stated that CRSS did not start its labor survey before Indeck said it wanted the project done with union labor.

On March 16, 1992 Lindsay wrote to Calloway accepting a lump sum price for the Corinth and Kirkwood cogens of $116,000,000. The