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.

Summit Express, Inc., Summit Truck Leasing, Inc., and Great Lakes Building Materials, Inc., a Single Integrated Enterprise and SG Construction, LLC, an Alter Ego and/or Joint Employer and International Brotherhood of Teamsters and Allied Trades, Local 673,[1] and National Amalgamated Workers Union, Local 711, Party-In-Interest and Frank J. Caputo, Petitioner, S.G. Construction Employee Association, Party-In-Interest. Case 13–CA–41938–1

August 10, 2007

DECISION AND ORDER

By Chairman Battista and Members Liebman
and Schaumber

On August 4, 2005, Administrative Law Judge David L. Evans issued the attached decision. The Respondent filed an exception and a supporting brief, and the General Counsel filed limited exceptions and a supporting brief. The Respondent and the General Counsel each filed an answering brief to the other party’s exceptions.

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

The Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge’s rulings, findings, and conclusions, only to the extent consistent with this Decision and Order.^[2]

i. introduction

The judge concluded that Summit Express, Inc. (Summit Express), Summit Truck Leasing, Inc. (Summit Truck), and Great Lakes Building Materials, Inc. (Great Lakes) (collectively Summit/Great Lakes) constitute a “single employer.” No exception was filed to that finding, which we adopt. The judge found that Respondents Summit/Great Lakes and Respondent SG Construction, LLC (SG Construction) were not “joint employers.” We agree with the judge’s finding, for the reasons set forth in his decision.[3]

The judge concluded also, however, that Respondents Summit/Great Lakes and Respondent SG Construction were “alter egos.” We disagree, for the reasons set forth below, and reverse the judge’s finding.

The judge further found that the Respondents committed numerous 8(a)(1),(2), and (3) violations. No exceptions were filed to these findings of violations.[4] Based on his conclusion that the Respondents were “alter egos,” he held that all the Respondents were jointly and severally liable for the violations. Because we reverse the judge’s “alter ego” finding, the Respondents are not jointly and severally liable for all violations. Furthermore, certain violations that the judge found had been committed by Respondent SG Construction were predicated on his finding that it was an “alter ego” of Summit/Great Lakes. Those violations are accordingly dismissed.[5]

ii. background

A. Summit Express, Summit Truck, and Great Lakes

Richard Catrambone is the sole owner of the three companies comprising Summit/Great Lakes. All three companies operated out of the same combined office and warehouse in Aurora, Illinois. Before June 7, 2004, Great Lakes sold drywall to commercial and industrial customers; Summit Truck leased trucking equipment to Great Lakes for the delivery of the drywall, and Summit Express supplied drivers and warehousemen to Great Lakes to prepare and make those deliveries.

Kevin O’Connor was vice president of Summit Express and supervised the drivers and directed their work for Great Lakes. Sam Catrambone, Richard Catrambone’s cousin, had some inventory-control responsibility with Summit Express, but did not have any supervisory responsibilities with Summit Express.

B. SG Construction

SG Construction is owned by Salvatore Gagliano. On June 7, 2004, SG Construction took over handling and delivering drywall for Great Lakes pursuant to a June 1, 2004 agreement between Great Lakes and SG Construction. There is no evidence about SG Construction’s prior business. SG Construction’s only customer is Great Lakes, and it admittedly had no employees before June 7, 2004.

On June 21, 2004, Sam Catrambone became the director of operations and human resources for SG Construction and was in charge of supplying and scheduling employees on a day-to-day basis. No one other than Gagliano and Sam Catrambone is alleged or has been found to be a supervisor of SG Construction’s employees. Sam Catrambone was not alleged or shown to have any ownership interest in SG Construction or Summit/Great Lakes.

On February 1, 2003, Summit Express and Teamsters’ Local 777[6] entered into a collective-bargaining agreement covering Summit Express drivers and warehousemen. In February 2004,^[7] the secretary-treasurer of Teamsters’ Local 673 (Charging Party) met with Richard Catrambone and the president of Local 777. He told them that he believed that, within the Teamsters organization, Local 673 had geographical jurisdiction for all drywall deliveries in the Aurora area and that the labor contract between Summit Express and Local 777 was invalid. Catrambone responded that he would not recognize Local 673 and stated he would seek out another union to deal with as the bargaining representative of the Summit Express employees, if Local 777 was not going to represent them.

Local 673 filed a jurisdictional-dispute grievance with the Teamsters’ Chicago-area joint council and also began organizing the Summit Express employees. In May, Local 673 informed Richard Catrambone that Local 673 had won the jurisdictional grievance. Also in May, Local 777 confirmed that Local 673 had won the grievance and disclaimed interest in representing the Summit Express workers. Catrambone received Local 777’s letter on June 1. On the same day, Great Lakes entered into a contract with SG Construction to supply warehousemen and drivers to Great Lakes.

The June 1 contract between Great Lakes and SG Construction is for a 5-year term, beginning June 7. Services are to be provided by “agency,” SG Construction, at Great Lakes’ request, with the cost not to exceed the limitation specified by Great Lakes. SG Construction is to be paid the labor rates specified in the June 1 agreement plus a 5-percent service fee. The contract specifies that “[l]abor provided will be Union members with full benefits.” Under the agreement, Great Lakes has “sole discretion” to determine “minimum qualifications” of all employees supplied by SG Construction and to determine whether their performance is satisfactory. SG Construction agreed to “immediately withdraw” any employee whom Great Lakes deemed to be unsatisfactory.

On Monday, June 7, Richard Catrambone discharged all but 1 of Summit Express’ 22 truckdrivers and warehousemen. The judge found, as the complaint alleged, that Respondents Summit/Great Lakes violated Section 8(a)(3) by discharging 9 of the 21 employees. The complaint did not allege that the discharge of the 12 other Summit Express employees violated the Act. Those 12 Summit Express employees were immediately hired by SG Construction and received the same rates of pay as they had received as Summit Express employees. The nine discriminatees were later hired by SG Construction during the week of June 21 when Sam Catrambone became its supervisor.

On June 7, Gagliano, on behalf of SG Construction, entered into a collective-bargaining agreement with the National Amalgamated Workers Union, Local 711 (Local 711), recognizing Local 711 as the exclusive bargaining representative of SG Construction’s truckdrivers and warehousemen.^[8] The parties stipulated that, pursuant to the collective-bargaining agreement’s checkoff clause, SG Construction deducted dues and initiation fees from employees who signed a checkoff authorization and transmitted the dues and fees to Local 711.^[9]

The judge found that Gagliano and Sam Catrambone unlawfully threatened and coerced employees into signing authorization cards designating Local 711 as their bargaining representative. Hence, Local 711 never represented an uncoerced majority of SG Construction employees, and SG Construction’s recognition of Local 711 and its execution of the collective-bargaining agreement with Local 711 were unlawful.

iii. discussion

Alter Egos

The judge found that SG Construction is an alter ego of Summit/Great Lakes. He noted that the Board “generally has found alter ego status where the two enterprises have ‘substantially identical’ management, business purpose, operation, equipment, customers, and supervision, as well as ownership.” Denzel S. Alkire, 259 NLRB 1323, 1324 (1982), enf. denied 716 F.2d 1014 (4th Cir. 1983). He also observed that consideration is given to “whether the purpose behind the creation of the alleged alter ego was legitimate or . . . was to evade responsibilities under the Act.” Fugazy Continental Corp., 265 NLRB 1301 (1982), enfd. 725 F.2d 1416 (D.C. Cir. 1984).

In the present case, the judge specifically found that the element of common supervision was missing in this case. The judge also specifically found that there was no evidence of common ownership between Summit/Great Lakes and SG Construction but held that common ownership was not indispensable to an alter ego finding, citing American Pacific Concrete Pipe Co., 262 NLRB 1223 (1982). His conclusion that Summit/Great Lakes and SG Construction are alter egos rests on his findings of an unlawful motive on the part of Summit/Great Lakes.[10] The judge supported that finding by drawing the “strongest possible adverse inference” against the Respondents because of their unexplained failure to call Gagliano.

In addition, the judge found that the Respondents offered no proof of SG Construction’s corporate existence before March or April 2004. Further, the only proof offered was filings with the State of Illinois and the Internal Revenue Service, indicating merely that an entity named “Advantage Wholesale, LLC” had changed its name to “SG Construction, LLC.” No evidence was offered that Gagliano ever made any capital investment in the business.

SG Construction also had only one customer, Great Lakes.[11] Before June 7, it was otherwise an empty shell of a corporation without any employees. The judge considered that the seemingly recent formation of SG Construction suggested it was a maneuver by Richard Catrambone to avoid obligations under the Act which he likened to the situation in Continental Radiator Corp., 283 NLRB 234 (1987). In Continental Radiator, the Board found a newly formed company to be an alter ego where it previously had not employed any employees and then hired employees principally from another company whose owner wanted to get rid of the prounion work force and avoid responsibilities under the Act. He found that SG Construction similarly had no employees before June 7, but on that day hired 12 Summit Express employees and later hired the 9 alleged discriminatees.^[12]

The judge concluded that, even without evidence of common ownership and supervision, Summit/Great Lakes and SG Construction are alter egos. The Respondents except to this finding.^[13]

We find merit in the Respondents’ exception. The General Counsel had the burden of proving the existence of the alter ego relationship. Based on the record, we conclude that there is insufficient evidence of common ownership or control to establish that Summit Express/Great Lakes and SG Construction are alter egos.

As the judge correctly observed, the Board will find alter-ego status where two entities have “substantially identical” management, business purpose, operations, equipment, customers, supervision, and ownership. Crawford Door Sales, 226 NLRB 1144 (1976). The Board also looks to “whether the purpose behind the creation of the alleged alter ego was legitimate or whether, instead, its purpose was to evade responsibilities under the Act.” Fugazy Continental Corp., supra at 1302.^[14] No single factor is determinative of alter ego status, and not all the indicia need be present to conclude that a finding of alter ego status is appropriate. See, e.g., Fugazy, 265 NLRB at 1301. Nevertheless, the Board generally has not found an alter ego relationship in the absence of common or related ownership between the two entities. Superior Export Packing Co., 284 NLRB 1169, 1170 (1987), enfd. mem. 845 F.2d 1013 (3d Cir. 1988).

Significantly, although the Board has on occasion found that two entities are alter egos despite the lack of common ownership, on those occasions, “either the businesses in question were wholly owned by members of the same family or nearly entirely owned by the same individual, or the older business exerted substantial control over the business supposedly sold to the new company.” Hill Industries, 320 NLRB 1116 fn. 1 (1996). Accord: Superior Export Packing Co., supra. See also Reigel Electric & Central Electric Services, 341 NLRB 198, 201 (2004) (absent common ownership, old company must exercise “very substantial control” over new company to support alter ego finding). Here, the judge specifically found, and we agree, that the elements of common ownership and substantial control are not present.[15] Those findings are inconsistent with a conclusion that Summit/Great Lakes and SG Construction are alter egos.

The judge’s reliance on American Pacific Concrete Pipe Co., supra, for concluding that common ownership was not indispensable, is misplaced. As the judge himself acknowledged, that case is distinguishable. In that case, the respondent Ampac hired Dean to supply drivers to evade its duty to recognize its employees’ union. The Board found that, even though Ampac did not own Dean, Ampac and Dean were alter egos. The Board relied in part on contractual provisions in the agreement between Ampac and Dean similar to those in this case,[16] and on the fact that drivers for Dean continued to use Ampac’s equipment (SG Construction employees continued to use Summit Truck’s equipment).

Critically, however, the Board in American Pacific also found that Ampac’s supervisors hired and supervised Dean’s drivers and Ampac’s supervisors participated “in the actual day-to-day operations and labor relations of Dean Trucking.” Id. at 1226. Thus, Ampac “exercised a degree of control over Dean so as to obliterate any separation between them.”^[17] Id. In contrast here, the judge noted that the General Counsel offered no evidence that Summit/Great Lakes played any role in SG Construction’s hiring process. As discussed above, the judge expressly rejected the General Counsel’s evidence of continuing supervision by Summit/Great Lakes over SG Construction’s employees. The judge’s findings here, unlike those in American Pacific, contradict any suggestion that SG Construction was controlled by Summit/Great Lakes.

Likewise, in the other cases relied on by the judge there were clear findings of either common ownership or control by one entity over the other to support the “alter ego” finding. In Fugazy, supra, the evidence showed that Fugazy had a financial interest in the purchaser of its service shop and that Fugazy continued an active role in the purchaser’s business. Moreover, in Continental Radiator, supra, unlike the present case, the Board found that there was substantially identical ownership of the two companies found to be alter egos and that the principal owner of both companies was the “dominant force” in both companies.

The General Counsel had the burden of proving the existence of the alter ego relationship but did not present direct evidence of common ownership or control of SG Construction by Summit/Great Lakes to support that finding.[18] Accordingly, we conclude that the record does not establish that Summit/Great Lakes and SG Construction are “alter egos.”

Our colleague makes much of the fact that Richard Catrambone told the SG Construction employees that they were hired. However, the fact that Catrambone conveyed the message that they were hired does not establish that he made the decision to hire the employees at SG Construction.

Our colleague also says that the contract between Summit/Great Lakes and SG Construction gives Summit/Great Lakes “sole discretion” over hiring. That is not so. Summit/Great Lakes had the authority to set minimum qualifications for hirees. However, given the fact that SG Construction employees would be performing delivery services for Summit/Great Lakes, this provision is not surprising or unusual. It certainly does not show alter ego status.

Similarly, the fact that Summit/Great Lakes could insist on the discharge of an unsatisfactory SG Construction employee simply reflects the point that Summit/Great Lakes wanted satisfactory delivery of its products.

Finally, our colleague suggests that Catrambone set the starting pay for SG Construction employees because SG Construction continued paying them the same rates. Concededly, the contract between Summit/Great Lakes and SG Construction refers to the labor rates that would be paid. However, this does not establish that Catrambone dictated, or even sought, those rates.

In sum, as stated above, absent evidence of common ownership and substantial control, the Board will not find alter ego status. As to the former, there is no evidence of common ownership, and no evidence that the owner of Summit/Great Lakes even invested in SG Construction. As to control, although Summit/Great Lakes had some control, that control is not inconsistent with the interest of a company that hires another company to perform services for it.

We recognize that Summit/Great Lakes may have had an unlawful motive in ceasing to make its own deliveries of drywall and hiring a contractor to do the work. However, that does not establish that Summit/Great Lakes and the contractor are the same person. For all that the record shows, SG Construction is independently owned, and Summit/Great Lakes has no financial interest in it.

Because the Respondents are not “alter egos,” they are not jointly and severally liable for all violations. Each of the Respondents is liable only for the violations attributable to the unlawful conduct of its own supervisors.

Accordingly, we find that Summit/Great Lakes has committed the following 8(a)(1) violations: threatening employees with discharge, plant closure, and unspecified reprisals for supporting Local 673; interrogating employees about their union activities; and creating the impression of surveillance of its employees’ union activities. Summit/Great Lakes has also violated Section 8(a)(3) by discharging the nine employees on June 7, 2004.

SG Construction has violated Section 8(a)(1) as follows: threatening employees with discharge, loss of health insurance benefits, and unspecified reprisals for failing to support, or to sign bargaining authorizations for, Local 711; instructing employees to sign bargaining authorizations for Local 711; and instructing employees to sign checkoff authorizations for Local 711.

SG Construction has also violated Section 8(a)(2) by: instructing employees to sign bargaining and checkoff authorizations for Local 711; threatening employees with discharge or other reprisals if they refused to sign such authorizations for Local 711; and recognizing, bargaining, and signing a collective-bargaining agreement with Local 711 when it did not represent an uncoerced majority of SG Construction’s employees. Finally, SG Construction has violated Section 8(a)(3) by executing and enforcing a collective-bargaining agreement requiring employees to join and pay dues and fees to Local 711 even though that union did not represent an uncoerced majority of SG construction’s employees.

Amended Remedy

Having found that the Respondents have engaged in certain unfair labor practices, we shall order them to cease and desist and to take certain affirmative action designed to effectuate the purposes and policies of the Act. Specifically, in addition to the appropriate remedial relief prescribed by the judge running against the Respondents in accordance with the amended conclusions of law, having found that the Respondent SG Construction is not an alter ego of Summit/Great Lakes, and that Summit/Great Lakes alone has violated Section 8(a)(3) by unlawfully discharging nine Summit Express employees, we shall also order Summit/Great Lakes alone to offer full reinstatement to Edwin Chapa, Fermin Chapa, Shawn Decker, Richard Grethe, Joe Huerta, John Mitchell, Troy Sharp, Daniel (Joey) Wright, and Dennis Wright to their former jobs or, if those jobs no longer exist, to substantially equivalent positions, without prejudice to their seniority or any other rights or privileges previously enjoyed. Further, we shall order the Respondent Summit/Great Lakes to make them whole for any loss of earnings and other benefits, computed on a quarterly basis from date of the discharge to the date of a proper offer of reinstatement, less any net interim earnings, as prescribed in F. W. Woolworth Co., 90 NLRB 289 (1950), plus interest as computed in New Horizons for the Retarded, 283 NLRB 1173 (1987).

Amended Conclusions of Law

1. The Respondents, Summit Express, Inc., Summit Truck Leasing, Inc., Great Lakes Building Materials, Inc., and SG Construction, LLC, are employers that are engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act.

2. International Brotherhood of Teamsters and Allied Trades, Local 673, and National Amalgamated Workers Union, Local 711 are labor organizations within the meaning of Section 2(5) of the Act.

3. Summit Express, Inc., Summit Truck Leasing, Inc., and Great Lakes Building Materials, Inc. constitute a single employer under the Act, and each is therefore jointly and severally responsible for the remedy for the unfair labor practices of the others.

4. By the following acts and conduct, Respondents Summit Express, Inc., Summit Truck Leasing, Inc., and Great Lakes Building Materials, Inc. have violated Section 8(a)(1) of the Act:

(a) Threatening employees with discharge, plant closure, and unspecified reprisals because they were known by the Respondents to support, or suspected by the Respondents of supporting, Local 673.

(b) Interrogating employees about their union activities.

(c) Creating among their employees the impression that their union activities were being kept under surveillance.

5. By the following acts and conduct, Respondents Summit Express, Inc., Summit Truck Leasing, Inc., and Great Lakes Building Materials, Inc. have violated Section 8(a)(3) and (1) of the Act:

(a) Discharging the following named employees on June 7, 2004: Edwin Chapa, Fermin Chapa, Shawn Decker, Richard Grethe, Joe Huerta, John Mitchell, Troy Sharp, Daniel (Joey) Wright, and Dennis Wright.

6. By the following acts and conduct, Respondent SG Construction has violated Section 8(a)(1) of the Act:

(a) Threatening employees with discharge, loss of health insurance benefits, and unspecified reprisals because they had failed to sign bargaining authorizations for, or because they otherwise failed to support, Local 711.

(b) Instructing employees to sign authorizations that designate Local 711 as their collective-bargaining representative.

(c) Instructing employees to sign checkoff authorizations for Local 711.

7. By the following acts and conduct, Respondent SG Construction has violated Section 8(a)(2) and (1) of the Act:

(a) Instructing employees to sign bargaining and checkoff authorizations for Local 711..

(b) Threatening employees with discharge or other reprisals if they refused to sign bargaining and checkoff authorizations for Local 711.

(c) Recognizing and bargaining with, and signing a collective-bargaining agreement with, Local 711 at a time when the labor organization did not represent an uncoerced majority of any unit of the Respondent’s employees.

8. By the following acts and conduct, the Respondent SG Construction has violated Section 8(a)(3) and (1) of the Act:

Executing and enforcing a collective-bargaining agreement pursuant to which employees are required to join Local 711 and pay dues and fees through checkoff to that union, even though that union has never represented an uncoerced majority of any unit of the Respondent’s employees.

9. The Respondents have not otherwise violated the Act as alleged in the complaint.

ORDER

A. The National Labor Relations Board orders that the Respondents, Summit Express, Inc., Summit Truck Leasing, Inc., and Great Lakes Building Materials, Inc., Aurora, Illinois, its officers, agents, successors, and assigns, shall

1. Cease and desist from

(a) Threatening employees with discharge, plant closure, or unspecified reprisals because they were known by the Respondents to support, or suspected by the Respondents of supporting, Local 673.

(b) Interrogating employees about their union activities.

(c) Creating among their employees the impression that their union activities are being kept under surveillance.

(d) Discharging employees because they have become members of, or given assistance or support to, Local 673.

(e) In any like or related manner interfering with, restraining, or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act.

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

(a) Within 14 days from the date of this Order, insofar as it has not already done so, offer Edwin Chapa, Fermin Chapa, Shawn Decker, Richard Grethe, Joe Huerta, John Mitchell, Troy Sharp, Daniel (Joey) Wright, and Dennis Wright full reinstatement to their former jobs or, if those jobs no longer exist, to substantially equivalent positions, without prejudice to their seniority or any other rights or privileges previously enjoyed.

(b) Make whole Edwin Chapa, Fermin Chapa, Shawn Decker, Richard Grethe, Joe Huerta, John Mitchell, Troy Sharp, Daniel (Joey) Wright, and Dennis Wright in the manner prescribed in the “Remedy” section of this decision.

(c) Within 14 days from the date of this Order, remove from its files any reference to the June 7, 2004 discharges of Edwin Chapa, Fermin Chapa, Shawn Decker, Richard Grethe, Joe Huerta, John Mitchell, Troy Sharp, Daniel (Joey) Wright, and Dennis Wright and, within 3 days thereafter, notify them in writing that this has been done and that the discharges will not be used against them in any way.

(c) Preserve and, within 14 days of a request, or such additional time as the Regional Director may allow for good cause shown, provide at a reasonable place designated by the Board or its agents, all payroll records, social security payment records, timecards, personnel records and reports, and all other records, including an electronic copy of such records if stored in electronic form, necessary to analyze the amount of backpay due under the terms of this Order.

(e) Post in conspicuous places at their Aurora, Illinois, facility copies of the attached notice marked “Appendix.”[19] Copies of the notice, on forms provided by the Regional Director for Region 13, after being signed by the Respondents’ authorized representative, shall be posted by the Respondents immediately upon receipt and maintained for 60 consecutive days in conspicuous places including all places where notices to employees 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. In the event that, during the pendency of these proceedings, the Respondent has gone out of business or closed the facility involved in these proceedings, the Respondent shall duplicate and mail, at its own expense, a copy of the notice to all current employees and former employees employed by the Respondent at any time since May 31, 2004.

(f) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Respondents have taken to comply.

(g) Substitute the attached separate notice, appendix A, for that of the administrative law judge.

B. The National Labor Relations Board orders that the Respondent, SG Construction, LLC, Aurora and Barrington, Illinois, its officers, agents, successors, and assigns, shall

1. Cease and desist from

(a) Threatening employees with discharge, unspecified reprisals, loss of health insurance benefits, or other reprisals because they had failed to sign bargaining authorizations for, or because they otherwise failed to support, Local 711.

(b) Instructing or requesting employees to sign bargaining or checkoff authorizations for Local 711 or any other labor organization.

(c) Recognizing and bargaining with, and signing a collective-bargaining agreement with, Local 711, or any other labor organization, as a collective-bargaining representative of any of their employees at a time that Local 711, or such other labor organization, does not represent an uncoerced majority of any unit of the Respondent’s employees.

(d) Executing and enforcing a collective-bargaining agreement pursuant to which employees are required to join Local 711, or required to pay dues or fees through checkoff to that union, even though that union has never represented an uncoerced majority of any unit of the Respondent’s employees.

(e) Recognizing and bargaining with Local 711, or any successor thereto, as the collective-bargaining representative of their employees, unless and until that labor organization is certified by the National Labor Relations Board as the exclusive representative of an appropriate unit of the Respondent’s employees.

(f) Maintaining or giving any force or effect to their June 7, 2004 collective-bargaining agreement with Local 711, or to any modifications, extensions, supplements, or renewals thereof; or maintaining or giving any force or effect to any Local 711 deduction-authorizations that have been executed by their employees; or maintaining or giving any force or effect to any other contract, agreement, or understanding entered into with Local 711, or any successor thereto, covering their employees with respect to rates of pay, wages, hours of employment, or other terms and conditions of employment; provided, however, that nothing in this Order shall be construed to require the Respondent to vary or abandon any wage increase or other beneficial terms or conditions of employment that they have established in performance of the agreement.

(g) Deducting union fees, dues, assessments, or other moneys from the wages of their employees on behalf of Local 711, or remitting the union fees, dues, assessments, or other moneys to Local 711, unless and until Local 711 is certified by the National Labor Relations Board as the exclusive bargaining representative of the Respondent’s employees, and the employees thereafter execute uncoerced authorizations for the deduction of the union fees, dues, assessments, or other moneys from their wages pursuant to a valid collective-bargaining agreement.

(h) Rendering assistance and support to Local 711 by soliciting their employees to execute Local 711 membership or dues-checkoff authorization cards.

(i) Rendering assistance and support to Local 711 by threatening their employees with discharge if they did not sign Local 711 membership or dues-checkoff authorization cards.

(j) In any like or related manner interfering with, restraining, or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act.

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

(a) Withdraw and withhold recognition from Local 711, or any successor thereto, as the collective-bargaining representative of their employees, unless and until Local 711, or any successor thereto, is certified by the National Labor Relations Board as the exclusive representative of an appropriate unit of the Respondent’s employees.

(b) Reimburse, with interest, all of their present and former employees for any dues, initiation fees, assessments, or other moneys deducted from their wages on behalf of Local 711.

(c) Preserve and, within 14 days of a request, or such additional time as the Regional Director may allow for good cause shown, provide at a reasonable place designated by the Board or its agents, all payroll records, social security payment records, timecards, personnel records and reports, and all other records, including an electronic copy of such records if stored in electronic form, necessary to analyze the amount of backpay due under the terms of this Order.

(d) Post in conspicuous places at its Aurora, Illinois facility copies of the attached notice marked “Appendix.”[20] Copies of the notice, on forms provided by the Regional Director for Region 13, after being signed by the Respondent’s authorized representative, shall be posted by the Respondent immediately upon receipt and maintained for 60 consecutive days in conspicuous places including all places where notices to employees are customarily posted. Reasonable steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or, covered by any other material. In the event that, during the pendency of these proceedings, the Respondent has gone out of business or closed the facility involved in these proceedings, the Respondent shall duplicate and mail, at its own expense, a copy of the notice to all current employees and former employees employed by the Respondent at any time since June 7, 2004.

(e) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Respondent has taken to comply.

(f) Substitute the attached separate notice, appendix B, for that of the administrative law judge.

Dated, Washington, D.C. August 10, 2007

Robert J. Battista,	Chairman
Peter C. Schaumber,	Member

(Seal) National Labor Relations Board

Member Liebman, dissenting in part.

Richard Catrambone and Kevin O’Connor, the sole owner and vice president, respectively, of Respondents Summit/Great Lakes, repeatedly threatened employees that they would take any action necessary—including discharging all employees and closing shop—to avoid having to deal with Teamsters Local 673. Catrambone said that he would “change the name of the company” to avoid having to deal with Local 673. Catrambone made good on his threats when he fired all but one of Summit Express’s employees, and transferred their work to SG Construction, a company which until then had no employees and no customers, and over which Catrambone exercised substantial control. Unlike the majority, I would draw the obvious inference that SG Construction is the alter ego of Summit/Great Lakes, and I would adopt the judge’s finding that Summit/Great Lakes is therefore liable for the unfair labor practices committed by SG Construction.

i.

A brief review of the facts is in order. They make clear that SG Construction was simply a disguised continuance of Summit/Great Lakes.

As early as February 2004,1Catrambone, responding to a union-jurisdictional dispute, stated that he would not recognize Local 673 in place of Teamsters Local 777, the incumbent representative of the Summit Express warehouse/delivery employees. He said that he would find a third union to deal with instead. Later, through multiple threats made during May and early June, Catrambone and O’Connor made it clear to the employees that a third union was coming in (National Amalgamated Workers Union Local 711), and that, if the employees did not join this union, they would all be fired and the warehouse/delivery operation would close. In one of these instances, Catrambone commented on the lengths to which he would go to avoid recognizing Local 673: “I have a lot of money and . . . I’ll shut these trucks down before I go 673. . . . I will change the name of the company if I have to.” As the judge observed, Catrambone and O’Connor were threatening a “package deal” pursuant to which coerced membership in Local 711 would be paired with employment by an alter ego company.

On June 1, Catrambone was informed that the jurisdictional issue had been resolved, that Local 673 would have undisputed jurisdiction to represent the employees, and thus that Summit/Great Lakes would have to recognize and bargain with Local 673. On the same day, Summit/Great Lakes signed an employment-services contract with SG Construction requiring it to supply Summit/Great Lakes with drivers and warehousemen beginning on June 7. Up until June 1, SG Constructions had been, as my colleague’s aptly describe it, “an empty shell of a corporation” with no employees or customers.

Catrambone signed the contract on behalf of Summit/Great Lakes; signing for SG Construction was its purported owner, Salvatore Gagliano. The contract provided Summit/Great Lakes with ultimate control, i.e., “sole discretion,” over hiring, termination, and evaluation of the employees provided by SG Construction, and it effectively gave Summit/Great Lakes authority to set the starting pay for any such employee. Moreover, although the contract was for a 5-year period, Summit/Great Lakes could effectively terminate the relationship at will by declining to request employees. In that event, SG Construction would have no customers, and no cash flow. Finally, there was no contractual provision requiring that Summit/Great Lakes use SG Construction as its sole source of drivers and warehousemen.

On June 7, Catrambone discharged 21 Summit Express employees—virtually the entire complement of drivers and warehousemen. However, 12 of the 21 employees were immediately hired by SG Construction. Thus, as of June 7, these former Summit Express employees, now working for SG Construction, performed what had been Summit Express’s warehouse/delivery operation. Also on that day, as part of the “package deal” threatened by Catrambone and O’Connor, SG Construction recognized Local 711 as the collective-bargaining representative of its newly hired warehouse and delivery employees.

Later in June, the other nine Summit Express employees who were discharged on June 7 were invited to the facility to discuss employment with SG Construction. When they arrived, they were met not by purported owner Gagliano, but by Catrambone. Although he ostensibly had no formal position with SG Construction, Catrambone told employees that they could have their jobs back. Unsure, the employees called Gagliano, who told them to “do what Rich tells you and go back to work.” They eventually agreed. When they started work the next day, Catrambone, accompanied by his cousin Sam Catrambone,2 met with them. They told the nine that their employment conditions would be the same as before, and that they did not have to fill out job applications or submit W-4 documents.

Subsequently, Catrambone and O’Connor, who also claimed to have no formal position with SG Construction, twice threatened SG Construction employees with discharge because of their support of Local 673. Catrambone advised an employee that if Local 673 tried to get into SG Construction he would “shut the doors down.” In another instance, O’Connor told an employee that, if employee support for Local 673 at SG Construction continued, Catrambone would close the warehouse/delivery operation, and that the employees “would all be fired, again.” Obviously, as the judge put it, Catrambone “did not want his alter ego to run the risk of having to deal with Local 673 any more than he had wanted Summit Express to.”

From late June on, both Catrambone and O’Connor made deliveries themselves when SG Construction employees were unable to complete their assignments. On one occasion, O’Connor appeared to be directly supervising SG Construction employees’ work at a jobsite.

ii.

Each case alleging that companies are alter egos “must turn on its own facts.”3 The Board considers multiple factors in evaluating alter ego allegations,4 and the analysis requires evaluation of “the sum total of the factors, viewed together.”5 But the Board does not insist on the presence of each factor to conclude that companies are alter egos.6 Thus, common ownership, by itself, is not a requirement. Rather, “the crucial element . . . is a finding that the older company continued to maintain a substantial degree of control” over the new company.7

Summit/Great Lakes’ “substantial degree of control” over SG Construction turns on the following facts. Catrambone signed the June 1 contract with SG Construction on the same day that he learned that the union he did not want, Local 673, would be the employees’ representative at Summit/Great Lakes. The contract allowed Catrambone to conduct the operations of Summit/Great Lakes through another company, and to avoid dealing with Local 673. In light of Catrambone’s and O’Connor’s prior threats to discharge the employees and engage in corporate manipulation in order to avoid Local 673, the timing of the contract raises a “strong suspicion” that the transaction was not legitimate.8 Furthermore, the terms and circumstances of the contract were overwhelmingly favorable to Summit/Great Lakes: in effect, it was in position to control both SG Construction’s hiring and the employment terms and conditions of the employees SG Construction hired. Moreover, because it was SG Construction’s sole customer, Summit was in position to dominate SG Construction economically. Accordingly, SG Construction existed virtually “at the sufferance” of Summit/Great Lakes.9

With the contract providing a formal basis for Summit/Great Lakes, at its discretion, to exert control over SG Construction’s operations, Catrambone and O’Connor’s conduct after June 7 demonstrates substantial control in fact. Thus, although Gagliano is ostensibly the owner of SG Construction, he held out Catrambone as the person in charge of hiring when the nine employees terminated on June 7 were rehired later in June. Moreover, strikingly similar to their roles before June 7, Catrambone and O’Connor presented themselves as de facto managers of SG Construction, in terms of routine operation of the new company, setting terms and conditions of employment for the nine employees hired later in June, and dictating which employment papers they needed to complete. Imbued with the apparent authority granted by Gagliano, Catrambone also threatened to terminate the employment of the SG Construction employees.

The reality is that almost nothing of substance changed after June 7 concerning Summit/Great Lake’s warehouse and delivery operation, with one crucial exception: Local 673 had been removed as the potential representative of the employees. The record confirms that Catrambone successfully carried out his earlier threat: he shut down the warehouse/delivery operation of Summit/Great Lakes, terminated its employees, transferred the work to another company, and avoided having to deal with Local 673.

In summary, there is overwhelming evidence of unlawful motive in this case. There is also evidence of continued substantial control, and commonality of business purpose, operations, equipment, customers, and employees. Under the precedent cited above, this is more than sufficient evidence to find a prima facie case that SG Construction is the alter ego of Summit/Great Lakes.

The evidentiary burden therefore shifted to the Respondents to prove that SG Construction was not in fact an alter ego of Summit/Great Lakes. Gagliano, SG Construction’s purported owner, was a potential witness who appeared to be in a prime position to rebut the General Counsel’s case. He was uniquely in position to testify regarding the ownership and control of the company he allegedly owned. But the Respondent did not call Gagliano as a witness and ask him to testify as to why the arrangement between Summit/Great Lakes and SG Construction was something other than what it appeared, namely a transparent attempt to avoid having to deal with Local 673. The judge drew an adverse inference from the Respondents’ failure to call Gagliano; this was entirely appropriate.10

In short, contrary to the majority’s view, the only reasonable inference to be drawn from the evidence is that Catrambone created SG Construction as the alter ego of Summit/Great Lakes. Accordingly, I dissent from the majority’s reversal of the judge’s alter ego finding, and its consequent failure to affirm the additional unfair labor practices found by the judge.

Dated, Washington, D.C. August 10, 2007

Wilma B. Liebman,

Member

National Labor Relations Board

APPENDIX A

Notice To Employees

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 us 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 discharge you, or otherwise discriminate against you because of your membership in, sympathies for, or activities on behalf of International Brotherhood of Teamsters and Allied Trades, Local 673 (Local 673).

We will not threaten you with discharge, plant closure, or unspecified reprisals because you are known by us to support, or are suspected by us of supporting, Local 673.

We will not interrogate you about your union activities.

We will not create among you the impression that your union activities are being kept under surveillance.

We will not in any like or related manner interfere with, restrain, or coerce you in the exercise of the rights guaranteed to you by Federal law.

We will, within 14 days of the Board’s Order, make the following named employees whole, with interest, for any loss of earnings and other benefits resulting from our unlawful discharges of them on June 7, 2004, less any net interim earnings: Edwin Chapa, Fermin Chapa, Shawn Decker, Richard Grethe, Joe Huerta, John Mitchell, Troy Sharp, Daniel (Joey) Wright, and Dennis We will, within 14 days of the Board’s Order, offer Edwin Chapa, Fermin Chapa, Shawn Decker, Richard Grethe, Joe Huerta, John Mitchell, Troy Sharp, Daniel (Joey) Wright, and Dennis Wright full reinstatement to their former jobs or, if those jobs no longer exist, to substantially equivalent positions, without prejudice to their seniority or any other rights or privileges previously enjoyed.

We will, within 14 days of the Board’s Order, remove from our files any reference to the June 7 2004 discharges of the following named employees, and we will, within 3 days thereafter, notify them in writing that this has been done and that the discharges will not be used against them in any way: Edwin Chapa, Fermin Chapa, Shawn Decker, Richard Gret