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.

San Luis Trucking, Inc. and its alter ego Servicios Especializados Del Colorado, S.A. De C.V., and Factor Sales, Inc., all a single employer and/or joint employers and United Food and Commercial Workers Union, Local 99. Cases 28–CA–20387, 28–CA–20469, 28–CA–20559, 28–CA–20643, and 28–CA–20743

February 29, 2008

DECISION AND ORDER

By Members Liebman and Schaumber

On May 8, 2007, Administrative Law Judge Joseph Gontram issued the attached decision. The Respondent filed exceptions and a supporting brief, the General Counsel filed an answering brief and a limited cross-exception, and the Respondent filed a reply.1

The National Labor Relations Board2 has considered the decision and the record in light of the exceptions and briefs, and has decided to affirm the judge’s rulings, findings,3 and conclusions as modified4 and to adopt the recommended Order.5

ORDER

The National Labor Relations Board adopts the recommended Order of the administrative law judge and orders that the Respondents, Factor Sales, Inc. and San Luis Trucking, Inc., San Luis, Arizona, and Servicios Especializados Del Colorado, S.A. De C.V., their officers, agents, successors, and assigns, shall take the action set forth in the Order.

Dated, Washington, D.C. February 29, 2008

Wilma B. Liebman, Member

Peter C. Schaumber, Member

(seal) National Labor Relations Board

Johannes Lauterborn, Esq. and Mara-Louise Anzalone, Esq., for the General Counsel.

Gerald Morales, Esq., Lisa Coulter, Esq., and Scott Schwartz, Esq. (Snell & Wilmer), of Phoenix, Arizona, for San Luis Trucking, Inc. and Factor Sales, Inc.

DECISION

Statement of the Case

Joseph Gontram, Administrative Law Judge. This case was tried in San Luis and Somerton, Arizona, on November 7–9, December 5–8, 2006, and January 9 and 10, 2007. United Food and Commercial Workers Union, Local 99 (the Union or the Charging Party) filed the charges and amended charges between July 22, 2005, and April 2, 2006. The consolidated complaint was issued July 31, 2006, and was amended September 19, 2006,^[1] and at the start of the hearing (the complaint).

The events at issue in this case occurred after the Union won an election, on January 29, 2005, to represent the employees of San Luis Trucking, Inc. (San Luis Trucking or SLT) for collective-bargaining purposes. An election was initially held in July 2004. However, that election was set aside because of SLT’s unlawful conduct in connection with the election.

The complaint alleges that SLT is the alter ego of Servicios Especializados Del Colorado, S.A. De C.V. (SEC) and Factor Sales, Inc. (Factor Sales), and that these three entities (the Respondents) are a single employer and are joint employers. The complaint alleges that the Respondents unlawfully interrogated their employees and prohibited their employee drivers from speaking to their employee mechanics, in violation of Section 8(a)(1) of the National Labor Relations Act (the Act). The complaint alleges that since approximately March 2005, and without notifying or bargaining with the Union, the Respondents have subcontracted bargaining unit work to third-party enterprises, have imposed more onerous and rigorous terms and conditions of employment on their employees, and have reduced the work hours of specified employees, resulting in the discharge of the employees, in violation of Section 8(a)(5), (3), and (1) of the Act. The complaint alleges that the Respondents, without notifying or bargaining with the Union, closed SLT because SLT’s employees had elected to be represented by the Union, and to discourage other employees of the Respondents from seeking union representation, in violation of Section 8(a)(5), (3), and (1) of the Act. The complaint also alleges that the Respondents have refused to provide the Union with requested information relating to the closure of SLT and the alleged financial reason for the closure of SLT.

On the entire record, including my observation of the demeanor of the witnesses, and after considering the briefs filed by the General Counsel and the Respondents, I make the following

Findings of Fact

i. jurisdiction

SLT, a corporation, is a trucking company that transports goods in interstate commerce, and maintains an office and facility in San Luis, Arizona. In conducting its business, SLT performed services valued in excess of $50,000 in States other than the State of Arizona during the year immediately preceding the filing of the complaint. Factor Sales, Inc., a corporation, is engaged in the retail sale of groceries and related products in various stores throughout the Yuma, Arizona area, and maintains an office and place of business in San Luis, Arizona. During the year immediately prior to the filing of the complaint, Factor Sales derived gross revenues in excess of $500,000, and purchased and received at its facilities goods valued in excess of $50,000 directly from points outside the State of Arizona. SLT and Factor Sales admit and I find that they are employers engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act and that the Union is a labor organization within the meaning of Section 2(5) of the Act. SEC is a trucking company located in Mexico, and it transports goods between Mexico and the United States.

ii. alleged unfair labor practices

A. Subpoenaed Records Relating to the Charges
and Issues

The complaint was issued on September 19 and listed a hearing date of October 17. On September 29, the General Counsel served subpoenas on SLT, Factor Sales, and SEC. The subpoenas called for the production of documents relating to the issues in this case. The subpoenaed documents were listed in separately numbered paragraphs and were further delineated according to the issues raised in the complaint. The Respondents filed petitions to revoke the subpoenas. SLT and Factor Sales also filed a motion to extend the date of the hearing because of the large number of subpoenaed documents, many of which were allegedly at SEC’s facility in Mexico and would need to be translated. The Respondents’ motion to continue the hearing date was granted and the hearing date was extended from October 17 until November 7.

By letter dated November 2, which was faxed to counsel, this administrative law judge notified counsel for the Respondents that, notwithstanding the petitions to revoke the subpoenas, the Respondents were required to bring the subpoenaed documents to the hearing, in accordance with the commands of the subpoenas, and that the documents must be produced in accordance with the separately numbered paragraphs in the subpoenas. This judge advised counsel that their petitions would be decided at the start of the hearing. See McAllister Towing & Transportation Co., 341 NLRB 394 (2004) (in which the judge, with Board approval, followed a similar procedure).

At the start of the hearing on November 7, the Respondents’ petitions to revoke the subpoenas were denied. However, the Respondents did not produce any documents at the hearing as required by the subpoenas and by this judge’s previous direction to the Respondents. Moreover, SEC did not enter an appearance at the hearing, in spite of the Respondents’ representation in seeking a continuance of the hearing date of their need to examine and produce documents from SEC’s facility in Mexico.

The Respondents contend that they produced the documents to the General Counsel the day before the start of the hearing. On November 6, at 1:30 p.m., the Respondents permitted attorneys for the General Counsel, together with an assistant, to come to the offices of SLT and Factor Sales to inspect documents. Armando Gonzalez, who represented himself as Factor Sales’ supervisor of records, escorted Government counsel to a trailer in which 288 boxes of documents were stored. Gonzalez represented that these boxes contained records from June 2005 to the present. Gonzalez then escorted Government counsel to a Factor Sales warehouse that contained grocery goods for use in Factor Sales grocery operations. However, this warehouse also contained 36 pallets holding 60 boxes per pallet. Gonzalez represented that these boxes contained Factor Sales’ records from 1998 to 2005. Gonzalez then escorted Government counsel to an SLT trailer, which contained 23 boxes of documents.

Respondents’ counsel represented at the hearing that the documents in the warehouse were not documents responsive to the subpoenas, and that the Respondents “simply showed counsel where all documents for the companies were maintained.” (Tr. 22.)[2] With due respect to counsel, this representation is not credible. The Respondents provided no reason why they would display for Government counsel the location where they kept unsubpoenaed documents. Moreover, counsel’s representation contradicts Gonzalez’ representation that the warehouse documents included Factor Sales’ records for 2004 and 2005. These were the very documents that were subpoenaed. Moreover, Gonzalez did not mention to the General Counsel when he displayed the thousands of boxes that the boxes were not relevant to the demands in the subpoenas and that he was displaying the boxes for Government counsel’s general information.

Thus, the Respondents’ alleged compliance with the subpoenas was to display 2471 boxes of documents to Government counsel in the afternoon on the day before the start of the hearing. This display did not include personnel records that had also been subpoenaed and that were contained in Factor Sales’ human relations department. In addition, and despite Gonzalez’ representation of the contents of the boxes, this display of stored boxes containing records would not have contained Factor Sales’ records relating to its current operations. Nor did this display apparently include any records from SEC.

A person responding to a subpoena for documents shall produce the documents “as they are kept in the usual course of business or shall organize them to correspond with the categories in the demand.” Fed.R.Civ.P. 45(d). This requirement is similar to the requirement on a party responding to a request to produce documents. A party, unless the court otherwise orders, “shall produce them as they are kept in the usual course of business or shall organize and label them to correspond with the categories in the request.” Fed.R.Civ.P. 34(b)(i).

The Respondents’ contention that they complied with the subpoenas by making 2471 boxes of documents “available” to the General Counsel on the afternoon before the start of the hearing is inexplicably based on Federal Rule of Civil Procedure 34, which relates to a party’s request for production of documents, rather than Federal Rule of Civil Procedure 45, which relates to subpoenas. Nevertheless, the wording of the two rules is virtually identical in relation to the party’s (or person’s) compliance obligation being limited to two options, viz., to produce the documents as they are kept in the usual course of business or to organize the documents in accordance with the request or demand.

The Respondents have made no showing that the documents in the 2471 boxes of documents that were kept in Factor Sales’ trailer and warehouse were kept in the usual course of business. “As to the documents in storage, they are no longer kept in the ‘usual course of business,’ they are kept in the usual course of ‘storage,’ and the option granted by the first clause of Rule 34(b) no longer exists. That leaves the producing party with the obligation to ‘organize and label’ the documents to correspond to the document requests.” In re Sulfuric Acid Antitrust Litigation, 231 F.R.D. 351, 363 (ND IL 2005). Moreover, 5 days before the start of the hearing in this case, this judge directed the Respondents to produce the documents at the hearing, consistent with the second clauses of Rule 34(b) and Rule 45(d)(1)(A), viz., in accordance with the document requests in the subpoenas.

The Respondents were served with the subpoenas approximately 5 weeks before the hearing date, which had been continued because of the Respondents’ representation that they needed additional time to secure the documents. Accordingly, they had sufficient time in which to organize their documents in accordance with the requests in the subpoenas. In addition, when the Respondents appeared at the start of the hearing without any of the requested documents, they did not claim, nor do they presently claim, that they did not have sufficient time to comply with the subpoenas, or with the Federal Rules of Civil Procedure, or with this judge’s direction.

The party producing documents has the burden to produce the documents requested rather than simply dumping large quantities of unrequested materials onto the requesting party along with the documents actually sought. Rothman v. Emory University, 123 F.3d 446, 455 (7th Cir. 1997); 8A Wright, Miller, & Marcus, Federal Practice and Procedure § 2213 (2006). The Respondents made no effort to separate requested materials from unrequested materials. They simply displayed to the Government 2471 boxes of stored documents, which presumably constitute all of the Respondents’ documents in storage, and maintain that such a display conforms to the subpoenas’ demands because, like the needle in the haystack, many or most of the subpoenaed documents must be somewhere in those 2471 boxes. Such actions do not constitute compliance with the subpoenas served on the Respondents.

The Respondents also contend that they did not produce any records at the hearing because they should not have been required to produce records until this judge ruled on their petitions to revoke. This claim is misplaced and disingenuous. The claim is misplaced because a subpoenaed party’s petition to revoke does not automatically suspend or stay the commands of the subpoena. Moreover, if the Respondents were unsure of the continued viability of the subpoenas, they should have advised this judge or the General Counsel. They did not.

The Respondents’ claim is disingenuous for the following reason. The Respondents’ petitions to revoke were denied at the start of the hearing on November 7. The Respondents failed to produce any of the documents on November 7, in accordance with the subpoenas and as they had been directed by this judge, or at any time during that week. The hearing lasted until November 9, and then was continued until December 5. The Respondents failed to produce any of the subpoenaed documents on December 5 or at any time during the resumed hearing that week. On December 8, the hearing was again continued until January 9, 2007. Again, the Respondents failed to produce any of the subpoenaed documents on January 9 or at any time during the resumed hearing that week.

Thus, to claim that the Respondents felt or believed that they should not have to produce subpoenaed documents until after the judge ruled on their petitions to revoke, and that pursuant to this feeling or belief, the Respondents did not produce the documents, fails to account for the period of 2 months after the judge’s ruling that the Respondents’ petitions were denied. The Respondents could have and should have produced the subpoenaed documents at the start of the hearing. Their failure to comply with the subpoenas was compounded by their continued failure to comply with the subpoenas during the 2-month period after their petitions were denied, during which they steadfastly refused to produce the subpoenaed documents.

In addition, the subpoenas commanded the Respondents to produce documents at the hearing. The obligations imposed by the subpoenas do not depend on and are not lessened by the subpoenaed party filing a petition to revoke before the due date of the subpoenas. The Respondents do not cite any provision of law or authority that mitigates their obligations under these circumstances. The Respondents’ filings of petitions to revoke do not and did not operate to stay or suspend their obligations pursuant to the subpoenas. The Respondents assumed the risk that their petitions to revoke would be denied, and they elected to refuse to obey the subpoenas at the start of the hearing and throughout the hearings, in spite of the subpoenas’ commands, and this judge’s written direction to the Respondents before the hearing, and the denial of their petitions to revoke at the start of the hearing.

The Respondents produced documents to the Board during the Board’s investigation of this case, and they asserted in response to the trial subpoenas that they had already produced some of the documents demanded in the subpoenas. However, the General Counsel represented that it was not seeking any documents that had already been produced. Still, the Respondents refused to produce any documents at the hearing pursuant to the subpoenas. Accordingly, this judge ordered that the Respondents were prohibited from offering any documents into evidence that they had not turned over to the Board during its investigation.

Nevertheless, to force the Government to rely on the documents that the Respondents saw fit to produce during the investigation, while being denied the relevant documents lawfully subpoenaed for trial, places an unwarranted burden on the Government and casts doubt on the integrity and completeness of the documents that the Respondents had previously produced. These documents were offered, by the Government and the Respondents, and received into evidence during the hearing. The parties were advised at the hearing (Tr. 40) that, where appropriate, adverse inferences might be drawn and the parties should address the matter in their posthearing briefs, which they have done. McAllister Towing & Transportation Co., 341 NLRB 394, 394 (2004); Teamsters Local 776 (Pennsy Supply), 313 NLRB 1148, 1154 (1994); see Auto Workers v. NLRB, 459 F.2d 1329 (D.C. Cir. 1972).

I have determined that adverse inferences should be drawn in certain limited situations where relevant documents were subpoenaed, the documents would have assisted in resolving the factual issue in question, and the Respondents would likely have such documents. (The Respondents have not asserted that they do not possess the subpoenaed documents.) Such adverse inferences are addressed in connection with the respective factual findings to which the inferences relate.

B. Background

All facts found in this decision are based on the record as a whole and on my observation of the witnesses. The credibility resolutions have been made from a review of the entire testimonial record and exhibits with due regard for logic and probability, the demeanor of the witnesses, and the teaching of NLRB v. Walton Mfg. Co., 369 U.S. 404 (1962). Many witnesses testified during the two hearing sessions in this case, and it would be unproductive, inefficient, and confusing to address the testimony given by every witness concerning the factual matters covered in this decision. Nevertheless, it should be noted that as to those witnesses testifying in contradiction of the findings, their testimony has been discredited, either as having been in conflict with the testimony of reliable witnesses or because it was incredible and unworthy of belief or as more fully explained in the text. With respect to the testimony regarding what occurred at meetings or discussions with the Respondents’ management, I have also taken into account the economic dependence of employees on employers, with awareness of an employee’s attentiveness to intended implications of the employer’s statements which might be more readily dismissed by a disinterested party. See NLRB v. Gissel Packing Co., 395 U.S. 575, 617 (1969).

1. Factor Sales

For approximately the past 20 years, Factor Sales has operated grocery stores in the Yuma, Arizona area. Factor Sales currently operates nine stores, all of which are located within a 25-mile radius of Yuma. Factor Sales employs approximately 500 employees in its stores. The stores currently operate under the names of IGA, Del Sol, Factor Warehouse, King Market, and other names. (See, e.g., GC Exh. 19, title page.) Factor Sales previously operated stores under the name of Maxi. That store has reopened under the name of Factor Warehouse. Factor Sales also owns Factor Sales of Mexico, Inc., which operates several grocery stores in Mexico.

Victor Salcido is the majority shareholder of Factor Sales. The remaining two shareholders are Carmen Salcido, who is Victor Salcido’s wife, and Rosa Maria Valencia, who is married to Victor Salcido’s brother, Rosendo Valencia. The directors of Factor Sales are Victor Salcido and Jose Luis Mendoza, Victor Salcido’s brother-in-law. The officers of Factor Sales are Victor Salcido, president, Jose Luis Mendoza, vice president and treasurer, and Carmen Salcido, secretary. SLT, discussed below, has the same directors and officers as Factor Sales.

Salcido owns and manages Factor Sales. Valencia is in charge of maintenance for the Factor Sales vehicles and the transportation of groceries between and among the stores. Salcido was careful to stress that Valencia did not hold a management position in Factor Sales. (E.g., Tr. 68, 1089.) However, that testimony is not credible. Valencia is Salcido’s brother and close confidant. Valencia has been associated with Salcido, through family, business ownership and work, in the Factor Sales’ businesses for over 20 years. Valencia holds management positions in each of Factor Sales’ subsidiaries—SLT (general manager), SEC (general manager), and Factor Sales of Mexico (store coordinator, who is the person in charge of running all the stores). Valencia would often give directions to Factor Sales’ in-house accountants and human resource officials. If Valencia did not have the title of manager in Factor Sales (and there is no credible evidence he did not), he functioned as a manager. Indeed, in the management hierarchy of Factor Sales, Valencia was second only to Salcido.

In addition, the General Counsel subpoenaed Factor Sales’ documents that would assist in determining Valencia’s management position and functions. (GC Exh. 3, pars. 24, 89–97.) From the Respondents’ failure to produce these documents, I infer that the documents would confirm that Valencia held a managerial position with Factor Sales. This inference supports the determination of Valencia’s management position.

Valencia is the general manager of SLT. He testified that he spent approximately 80 percent of his time on SLT business and 20 percent of his time on Factor Sales business, during the time that SLT was operating. (Tr. 893.) Although these percentages correspond exactly to what Salcido’s stated (Tr. 147), both testimonies fail to account for the time Valencia spent managing SEC and managing the stores for Factor Sales of Mexico. In considering their demeanor and the substance of their testimony, it is likely that Salcido and Valencia, brothers, business associates, and co-owners, had conferred before the hearing and had agreed, in general and in particular, on the substance of their respective testimonies. They faithfully followed this line, without regard to the importance of the testimony or its plausibility or accuracy. Salcido and Valencia did not have the demeanor or appearance of witnesses who were trying to be honest without regard to consequences. They were neither straightforward nor candid. Salcido and Valencia were not credible witnesses.

Assuming that Valencia spent 20 percent of his time doing work for Factor Sales, he performed this work from his office at SLT. Factor Sales sent him reports relating to his Factor Sales duties. Moreover, Factor Sales employees transported Factor Sales vehicles to SLT’s facilities. These vehicles were stored at SLT’s facilities, and they were maintained and repaired by SLT employees, all under the orders and oversight of Valencia.

2. San Luis Trucking

SLT is a wholly owned subsidiary of Factor Sales. Victor Salcido formed SLT in 1993 for the purpose of transporting merchandise for Factor Sales and for other companies. Victor Salcido is the president of SLT and has complete authority over the affairs of SLT. His brother, Rosendo Valencia, is SLT’s manager and handles its day-to-day affairs. However, Salcido explained this apparent management structure by testifying, “I managed the business [SLT] through Rosendo Valencia.” (Tr. 100.) Factor Sales comprised the majority of SLT’s business. From early 2004 until July 2005, Factor Sales comprised approximately 80 percent of SLT’s business.[3] Approximately 75 percent of this business consisted in transporting grocery goods from Unified Western Grocers (Unified) in Los Angeles to Factor Sales’ stores and warehouse.

As an American corporation, SLT is able to transport goods within the United States, and from the border town of San Luis Rio Colorado, Mexico, into the United States. SLT is not permitted to transport goods from within Mexico to places within the United States, or visa versa.

Valencia manages SLT. His duties include supervising SLT’s employees and assigning trips to the drivers. He discusses with Salcido all the important matters and decisions involving SLT’s business operations. Valencia assigns San Luis drivers their routes. He is the single person responsible for obtaining business for SLT.

SLT’s facilities are located in San Luis, Arizona, about a mile from Factor Sales’ main offices. SLT’s facilities, the land and buildings, are owned by Factor Sales. However, Factor Sales does not charge SLT any rent for the use of its property and there is no lease to designate the parties’ respective duties and liabilities concerning the property and the use of the property. Salcido testified that he did not feel it was worth the trouble to charge and collect rent for SLT’s use of the facilities, which includes offices, maintenance for the trucks, and parking for the many trucks. This testimony was not credible. The real reason that Factor Sales did not bother to collect rent from SLT was that the two companies were operated as one and there was not an arms’-length relationship between Factor Sales and SLT. Only in these circumstances is it reasonable to forego rental income because the funds remain with the same person, Salcido, without regard to any payment.

SLT transports grocery goods from the United States-Mexican border to Factor Sales stores, and between Phoenix, Arizona, Los Angeles, San Diego, and Oakland, California, to the Factor Sales warehouse and Factor Sales stores. SLT also transports grocery goods between Factor Sales stores. When SLT drivers deliver grocery goods to Factor Sales stores, the drivers are subject to directions and orders from Factor Sales store managers. The store managers order the drivers to help unload the trucks, to stock the merchandise in the stores, and to haul away trash from the stores. When SLT drivers deliver goods to the Factor Sales’ warehouse, the drivers are subject to directions and orders from the warehouse manager. For example, the Factor Sales warehouse manager directs the drivers to move cartons of merchandise within the warehouse and to load the trailers.

SLT drivers perform other functions for Factor Sales, such as collecting shopping carts and hauling garbage from the stores. Factor Sales also maintains and regularly uses a workshop on SLT’s site where Factor Sales’ employees work to repair equipment used in the Factor Sales stores.

SLT does not have an accounting department. Factor Sales’ accountants do all of the accounting for Factor Sales and for its subsidiaries, including SLT and SEC. Factor Sales’ accounting staff members work at the San Luis facilities, sometimes several days a week. Nevertheless, SLT did employ a bookkeeper, Diana Tenorio.

In August 2003, Tenorio applied for accounting work at Factor Sales. She worked briefly as a cashier at a Factor Sales store, but resigned. She asked Iliana Murrieta, an employee in Factor Sales human resources department, to contact her if an accounting position became available. Murrieta called Tenorio in November 2003, and said that Factor Sales had an opening in SLT, one of Factor Sales’ affiliates. Tenorio reported to Factor Sales’ offices and was interviewed by Angelica Zamora, the head of Factor Sales’ accounting department for the past 11 years. Zamora coordinates all the accounting for Factor Sales and its affiliates. Zamora hired Tenorio. Zamora introduced Tenorio to Valencia as Tenorio’s immediate supervisor. Whenever Tenorio had questions regarding her responsibilities, she called Zamora for advice. Occasionally, Zamora also worked at SLT’s offices.

Tenorio’s responsibilities included sending invoices to customers who shipped goods with SLT or SEC. Customers would tell Tenorio to bill them from either SLT or SEC, without regard to the company that actually performed the service. Tenorio would then prepare the invoice on either SLT or SEC letterhead. The customers of SLT and SEC sent their payments to Tenorio at SLT’s offices. Tenorio regularly sent the checks payable to SEC to SEC’s accountant in Mexico. Tenorio was also responsible for collecting customers’ outstanding accounts, and she followed the same procedure, including dunning letters, without regard to whether it was an SLT or an SEC bill.

Tenorio maintained SEC’s financial records, including checks and invoices, at SLT’s offices. Valencia approved expenses for SEC and SLT before payment. Zamora instructed Tenorio in late 2005 to stop submitting SEC’s expenses to Factor Sales for payment and to compile a list of SEC’s expenses that SLT had paid. The list was prepared, but SEC has not fully paid SLT for these expenses. SLT did not charge any interest on these payments or impose any terms of repayment on SEC. Moreover, although Tenorio stopped submitting SEC’s expenses to Factor Sales for payment pursuant to Zamora’s instructions, Tenorio continued to submit insurance bills for SLT’s trucks to Factor Sales for payment. SLT closed in February 2006. When it closed, SEC still owed SLT approximately $60,000 to $70,000.

The diesel fuel expenses of the drivers for SLT and SEC were handled through a petty cash fund. Drivers reported their fuel expenses to Adela Vigil, SLT’s dispatcher. If there was insufficient money in the petty cash fund, Vigil would bring the expenses to Tenorio. Tenorio would then prepare a check for cash or petty cash, which was taken to Zamora and Gonzalez for their signatures. The signed check was sent to Tenorio, who gave it to Vigil. Vigil then cashed the check at a Factor Sales store and replenished her petty cash fund with the proceeds. The Factor Sales store did not charge a fee for cashing the check.

As dispatcher, Vigil was responsible for assigning trips to SLT and SEC drivers, coordinating the drivers’ trips, and handling their fuel expenses. The dispatcher also told drivers when to report for work and was authorized to issue written warnings to drivers who arrived late. Vigil also prepared shipping documents after receiving the necessary information from Valencia, or Valencia himself would prepare the shipping documents. The shipping documents were then taken to Tenorio to prepare an invoice to send to the customer.

Vigil left her job at SLT in May or June 2005, and was replaced by Raimundo Salcido. (The evidence fails to establish whether Raimundo Salcido is related to Victor Salcido.) Valencia then started a new procedure in which the dispatcher’s duties were split between Raimundo Salcido, who was responsible for handling the SLT drivers, and Saul Rivera, formerly a driver for SEC, who would handle the SEC drivers.

Tenorio was not authorized to sign any checks. When paying the expenses for SLT and SEC, Tenorio first checked the balance in SLT’s bank account. If there was a sufficient balance to cover the payments, she prepared checks and sent the checks to Factor Sales for signature by Salcido (alone) or Zamora and Armando Gonzalez (together). Gonzalez is the financial manager for Factor Sales. He supervises Factor Sales’ financial division, including the accounting department. The signed checks were then returned to Tenorio who gave the checks to the SLT and SEC drivers or mailed the checks to out-of-town recipients. Occasionally, Gonzalez also worked at SLT’s offices.

When the balance in SLT’s bank account was not sufficient to cover SLT or SEC’s expenses, Tenorio advised Valencia. Valencia then directed Tenorio to ask Zamora at Factor Sales for a loan, or Valencia would go directly to Factor Sales for the money. Zamora confirmed the amount needed and the urgency of the request, and then authorized the payment from Factor Sales to SLT. SLT generally repaid these advances in approximately 30 days. However, there were no loan documents and no terms to the loans. No interest was charged.

SLT also paid SEC’s drivers for their trips in the United States by creating fictitious documents to give the appearance that the trips were done by a third party transportation company rather than by SEC. SLT drivers normally did these trips. However, when SEC drivers did trips for SLT, the SEC drivers completed logs of their trips and handed the logs to Valencia or Rivera. Valencia or Rivera then contacted Manuel Romero of MC Freight to create invoices that would reflect the amounts to be paid to the SEC drivers. Valencia or Rivera handed the invoices to Tenorio, who prepared checks for signatures by Factor Sales. When the signed checks were returned, Tenorio handed them to Romero and Rivera, and they, in turn, cashed the checks at a Factor Sales store. Rivera took the proceeds from the checks, returned to SLT’s facilities, and paid the SEC drivers or gave the money to Valencia to pay the SEC drivers.

There is no evidence that Vigil participated in this scheme to hide and falsify the shipping information for SLT trips performed by SEC drivers. Moreover, the scheme was furthered by Valencia’s splitting the dispatcher’s duties between SLT and SEC. Accordingly, I conclude that the scheme was instituted by Valencia, in conjunction with Rivera, in approximately May or June 2005.[4]

Factor Sales also lent money to SLT to purchase trucks. For example, in 2004, after Valencia had discussed the loan with Factor Sales’ front office, Factor Sales loaned SLT $60,000 for the purchase of two trucks. SLT repaid the loan in approximately 4 months. There were no loan documents and no terms to the loan. No interest was charged. Factor Sales also lent money to SLT for SLT’s legal expenses in fighting the Union’s organizing campaign and election.

SLT does not have a human resources department. Instead, Factor Sales’ human resources department handles SLT’s personnel responsibilities. When employees apply for work at SLT, they report to Factor Sales offices where they obtain and complete applications and are interviewed by Factor Sales human resource officials. Indeed, when some employees, like Tenorio, apply for work at Factor Sales, they are interviewed by Factor Sales employees, but then are assigned a position at SLT. All of the applications for employment at SLT are on Factor Sales forms. When SLT applicants are hired, they are notified of their hiring by Factor Sales’ human resources officials in letters or memoranda using Factor Sales letterhead.

In these letters or memoranda, Factor Sales notifies the new employee that (1) he (or she) is being hired by Factor Sales in its department or installation known as SLT; (2) he is required to follow Factor Sales’ policies, but if he fails to do so, Factor Sales will terminate his employment; (3) he is directed to report to Valencia who will assign work hours and duties to the new employee; and (4) Factor Sales could change the new employee’s department or store depending on Factor Sales’ needs. The hiring letter then welcomes the new employee to the Factor Sales group.

New SLT employees are also required to sign a Factor Sales form promising to return to Factor Sales various items of clothing and equipment that Factor Sales issues to new employees, depending on the employees’ jobs. SLT employees promise to return to Factor Sales the nametag and waist guard that Factor Sales issues to them for their employment. SLT employees also agree that Factor Sales will deduct from their final paychecks the cost of these items if the employees do not return the items to Factor Sales.

After being hired by Factor Sales, the new SLT employees attend orientation classes with other, new employees hired by Factor Sales to work in its stores or in its corporate offices. Factor Sales’ human resources department employees conduct these orientation classes. New SLT employees also receive the same Spanish-language employee handbook that Factor employees receive. The handbook contains policies and directives, with the word “Factor” displayed at the top of each page, concerning personnel and labor relations matters such as absenteeism, inappropriate behavior, and security. The handbook distributed to SLT employees contained several additional pages relating to their responsibilities as drivers.

Factor Sales continued to monitor SLT employees’ job performance throughout their employment. Factor Sales’ human resources department counseled SLT employees on work rules and on individual work performance. Factor Sales also issued instructions to SLT employees on various aspects of their jobs. For example, Factor Sales issued instructions to SLT drivers that they were required to keep a detailed logbook, they should not drive trucks that had mechanical problems, and they should report any mechanical problems to the Factor Sales’ human resources department.

Lourdes Salcido, the niece of Victor Salcido and the current manager of Factor Sales’ human resources department, attested to the foregoing information concerning Factor Sales’ human resources department instructions to SLT employees. However, she only admitted these facts because they were contained in memoranda issued by Factor Sales’ human resources department. (E.g., GC Exh. 16.) She had previously testified that Factor Sales instructed SLT drivers on their job performance only if Valencia asked for help. (Tr. 221.) Lourdes Salcido’s testimony was, at best, less than candid. In general, Lourdes Salcido did not testify in a forthright manner, and she was not a credible witness.

The personnel records for SLT employees are kept and maintained by Factor Sales in its human resources department. When Factor Sales sends letters or memoranda to SLT employees, it uses Factor Sales or SLT letterhead. The Respondents did not explain why Factor Sales employees signed documents on behalf of SLT or why documents to SLT employees were transmitted on Factor Sales documents.

SLT employees participate equally with Factor Sales employees in benefits and programs provided by Factor Sales to Factor Sales employees. For example, SLT employees are invited to Factor Sales’ annual picnic and Christmas party. SLT employees receive discounts when making purchases at Factor Sales stores. SLT employees are eligible for loans from Factor Sales, just like Factor Sales employees. Factor Sales supervises these benefits and programs for SLT and Factor Sales employees.

SLT employees are also eligible for Factor Sales’ employee-of-the-month awards, which award the winning employees cash and food vouchers at Factor Sales’ stores. In July 2004, SLT driver Antonio Macias was named Factor Sales’ employee-of-the-month, and his photograph was posted at Factor Sales’ headquarters office and several of the stores. SLT mechanic Jose Vera was also awarded the Factor Sales’ employee-of-the-month citation.

Factor Sales publishes a monthly newsletter titled Factorizate. Factorizate contains articles and news about Factor Sales, SLT, and SEC, and the employees of these Factor Sales companies. Factorizate is distributed to employees of Factor Sales, SLT, and SEC, as well as the Respondents’ clients. SLT and SEC are listed on the title page of Factorizate as being a part of Factor Sales, no different than the grocery stores operated by Factor Sales. (E.g., GC Exh. 18–20.) Recipients of Factor Sales’ employee-of-the-month award were profiled in Factorizate, including Macias and Vera. Factorizate publishes articles about all departments of Factor Sales, including personnel and accounting, and including SLT and SEC. Factorizate carries announcements of birthdays, promotions, and anniversaries of Factor Sales employees, including employees of SLT and SEC.

Factor Sales handles workers compensation and unemployment compensation matters for SLT employees. Factor Sales coordinates SLT employees’ vacations, conducts exit interviews for SLT employees, and implements layoffs and discharges of SLT employees. Factor Sales also participated in the bargaining sessions between SLT and the Union. Factor Sales was represented in those bargaining sessions by Glenda Moreno—who trains prospective managers of Factor Sales stores and who is Salcido’s personal assistant and translator—and by Lourdes Salcido, the chief of Factor Sales’ human resources department.

3. SEC

SEC is a company organized under the laws of Mexico and is based in San Luis Rio Colorado, Mexico, which is located across the border from San Luis, Arizona. Victor Salcido is the president of SEC and Rosendo Valencia is SEC’s general manager. Salcido and Valencia are shareholders in SEC, and Salcido admits to being a “major” shareholder. However, in violation of the subpoenas, the Respondents produced no documentary evidence to establish the extent of their and Salcido’s family’s holdings.

Salcido holds approximately 58 percent of the shares of SEC in his name. (GC Exh. 1(xx), p. 2, fn. 1.) However, Salcido testified that he does not know the exact percentage of the shares of SEC that he owns. He also testified that he was not sure if his brother owned any shares. These statements are either true, which would tend to show that Salcido has complete authority over the affairs of SEC because the percentage of his and family members’ ownership is not important to him. Or, the statements are false, and Salcido knows precisely the number of shares in his own name and the number of shares he has placed in the name or names of his family members.

Salcido was not a credible witness. He spoke very slowly and deliberately. He frequently evaded answering questions asked of him by the Government, and instead engaged in repeated statements on his recurrent themes of (1) disassociating himself from any involvement in or knowledge about the affairs of SLT, and (2) expounding that the reason he closed SLT in February 2006 had nothing to do with the Union’s certification of SLT’s employees in February 2005. Salcido was shown a proposed affidavit that the Board had sent to him during its investigation. Before admitting he had previously seen the affidavit (which he possessed and had kept for several months), he took an inordinately long time to review (although he could have been memorizing) every line of every page in the affidavit. Salcido slowly, carefully, and fastidiously corrected what he claimed were incorrect statements in the proposed affidavit, and the affidavit was then placed into the record. (Tr. 60–98.) Then, after the passage of a month and the opportunity to discuss the matter with his counsel and others, Salcido testified during the second resumed hearing that he had uncovered additional corrections to the affidavit. Salcido was not credible as a witness, and he was not credible in this testimony.

Salcido testified so slowly and deliberately that he appeared to be befuddled and unable to understand the questions (from Government counsel, but not from his own attorney) or the proceedings, or both. Yet, Salcido owns and operates corporations, in the United States and Mexico, and a chain of grocery stores that employs approximately 500 people. He started two trucking companies, one in Mexico and one in the United States, that transport grocery items for his grocery stores, as well as goods for other companies. Salcido’s befuddlement was entirely inconsistent with the entrepreneur and intelligent businessman the evidence shows him to be. Salcido’s slow, meek, hesitating, and confused manner appeared to be contrived. He did not appear to be credible or interested in testifying truthfully. He appeared interested only in making sure his testimony did not hurt his position in this case, without regard to credibility or plausibility.

For example, it is not plausible that Salcido did not know the extent of his own ownership or the extent of the ownership of family members to whom Salcido had provided shares of ownership. Moreover, Salcido’s professed general ignorance of SEC’s affairs and ownership tracks his professed general ignorance of SLT’s affairs. SLT was closely aligned with SEC in the transportation of grocery goods. And, as noted above, Salcido consistently testified in a manner that disassociated him from SLT.

Salcido also displayed a suspicious inability to remember events and circumstances that the owner of Factor Sales and the creator and effective owner of SLT would know. (E.g., Tr. 75, 81, 82, 84, 86, 89, 92, 93, 94, 95, 97, 121, 127, 130, 131, 135, to cite only the instances in his first day of testimony.) On the other hand, when Salcido was asked questions by his own attorney, he never failed to remember. (Tr. 1085, et seq.) Of course, Salcido’s transformation into a person who was able to remember everything asked of him by the Respondents’ attorney could also be attributed to careful trial preparation by the Respondents’ attorney. However, even conceding that point, Salcido’s demeanor throughout his testimony showed a person who was not forthright and was not credible. On balance, I conclude that Salcido is the real and effective owner of SEC and that he has complete authority over the affairs of SLT and SEC.

SEC was formed for the purpose of transporting goods between cities in Mexico, and from cities in Mexico to the United States border. SEC was eventually permitted to transport goods to destinations within the United States. Salcido and Valencia used SEC to transport goods among Factor Sales stores in Arizona, and from locations in Arizona and California to Factor Sales stores. No evidence was presented on whether SLT, an American corporation, possessed the same rights to transport goods within Mexico as SEC, a Mexican company, possessed to transport goods within the United States. Nevertheless, such evidence might not be particularly important, at least as far as the Respondents are concerned, because SLT and SEC are owned and controlled by the same person, Salcido, who could and did use either company to transport goods depending on Salcido’s desires and interests.

Despite the initial purpose of SEC, its drivers were occasionally assigned trips within the United States, trips that normally were assigned to SLT drivers. Valencia was the general manager of SEC. His duties for SEC included supervising SEC’s employees and assigning trips to the drivers. Because Valencia had the same position and performed the same functions for SLT, he had the authority to and did assign SLT trips to SEC drivers.

SEC leased its trucks from SLT. SLT had purchased these trucks for between $4000 and $100,000 each. SEC paid SLT $300 per month for each truck it leased from SLT. SEC did not sign lease agreements for its leases of these trucks from SLT.[5] Thus, other than the amount of the monthly payment (which itself is not set forth in any document), there are no terms to SEC’s lease of the trucks or any listing of the respective rights and obligations of SEC and SLT. SLT did not lease trucks to anyone else.

Despite the fact that SEC leased the trucks from SLT, when SLT registered the trucks with the State of Arizona, it claimed that SLT leased the trucks from SEC.

C. Representation Elections

In early 2004, the Union began to organize the employees of SLT and Factor Sales. When Salcido learned of the organizing efforts, he hired consultants to assist him in handling and responding to the campaign. The Union filed a representation petition to represent the employees of Factor Sales on June 28, 2004. One day later, the Union filed a petition to represent the employees of SLT.

An election was held in July 2004 for the employees of SLT, and the Union lost that election. A second election was held for the employees of SLT in January 2005.[6] The Union won that election and, on February 11, 2005, was certified as the exclusive collective-bargaining representative of SLT’s employees in the following unit:

All full-time and regular part-time truck drivers, mechanics, dispatcher, and accountant assistant employed by the Respondent San Luis Trucking; excluding all other employees, guards, and supervisors as defined in the Act.

On March 11 and 12, 2005, an election was held for the employees of Factor Sales. The Union lost that election. However, the hearing officer sustained an objection and recommended setting aside the election because he found that Factor Sales had engaged in objectionable conduct. On July 31, 2006, the Board overruled the objection and certified the results. Factor Sales, Inc., 347 NLRB No. 66 (2006).

Before the first election in July 2004, Salcido held a series of meetings with the employees of Factor Sales and SLT. SLT employees attended the first meeting, which was held approximately May 2004 in the Factor Sales offices.[7] Salcido cautioned the employees to be careful in deciding how to vote in the upcoming election because if the Union came in to SLT, he would close down SLT the same way he had closed down Maxi. Maxi is the name of a former grocery store owned and operated by Factor Sales.

Salcido held meetings with employees until the day before the first election, on which he held two meetings. Salcido also told the employees immediately before the election that he was going to close a B-Mart store, one of Factor Sales’ stores. Salcido said that he regretted closing the store, but it was not producing.

One of the consultants who Salcido retained to deal with the organizing campaign and election was Michael Penn. On July 30, the day before the first election, Valencia took Ignacio Sandoval, an SLT driver, to the Factor Sales office in order to meet with Penn. Penn told Sandoval that the Union was no good and did not help anyone. Penn told Sandoval that Salcido had a lot of money and Salcido “could just pick up his marbles and go and rest.” (Tr. 513.) Also, on the day before the election, Salcido sent a letter to all SLT employees in which he made veiled promises about improving the working conditions, and he urged the employees to vote against the Union.

These actions by Salcido are noteworthy not only for their bearing on Salcido’s animus, but also on his credibility. Salcido gave the distinct impression in his testimony that it was immaterial to him whether the employees decided for or against being represented by a union. “I always said that whatever they [the employees] decided was fine.” (Tr. 120.) This is a misrepresentation. Quite clearly, Salcido did not want the Union to represent his employees. He held meetings with his employees to persuade them to vote against the Union. He sent a letter to all employees urging them to vote against the Union. He utilized Factorizate to spread antiunion messages. The Respondents spent a considerable amount of money in legal fees and consulting fees to fight the Union’s organizing campaign and the election. Yet, in the face of these actions, Salcido swore in the hearing that whatever the employees decided regarding union representation was fine with him. Salcido’s testimony is not candid or credible.

D. Respondents’ Actions After the Union was Certified
to Represent SLT’s Employees

1. Discipline and absence reports

When an SLT employee is absent from work or engages in misconduct, SLT prepares a report and places the report in the employee’s file. The report is generally issued by Valencia, but occasionally is issued by the dispatcher.

The first such report issued by SLT is dated May 25, 2004, about 2 months before the first representation election. This report was an absence report and was issued to Jose Quezada, a driver. Quezada started working for SLT in 1998 and had never before received such a report.

Valencia testified that he had issued such reports in the past. However, he did not cite any instances and could not remember any other reports that he might have issued. The subpoenas requested copies of personnel files and discipline actions issued to employees since 2001. (GC Exhs. 3, 5, and 7, pars. 84 and 85.) I infer from the Respondents’ failure to produce such documents that the documents do not exist.

The next time such reports were issued to SLT employees was in September 2004 (three discipline reports) and October 2004 (one absence report). These reports, which include the first discipline reports that SLT issued, were issued after the commencement of the Union’s organizing campaign and during the period when the union’s objections to the July 2004 election were pending. Of the reports issued in September, one was issued to Eduardo Siqueiros, who began working for SLT in 1994, and one was issued to Jesus Aguilera, who began working for SLT in 1997.[8] The October report was issued to Raimundo Salcido, who began working for SLT in 2004. Again, these employees had never before received such reports.

The next time absence or discipline reports were issued to SLT employees was on March 8, 2005, within 1 month of the Union’s certification as representative of SLT’s employees. Three reports were issued in March, four in April, four in June, one in July, seven in August, one in September, and two in November. These reports were issued to seven different employees who had worked at SLT since 1994 or later. These employees had never before received such reports. The Respondents did not notify the Union about their issuance of these reports or the increased number of reports.

Despite these reports, no disciplinary action was taken against any of the employees cited in the reports. Indeed, one employee, Antonio Macias, was issued five reports; another employee, Jorge Gonzalez, was issued five reports; and another employee, Blas Martinez, was issued four reports. However, no action, such as suspension or termination, was taken against Macias, Gonzalez, Martinez, or any other employee as a result of these reports.

The Respondents claim that on January 28, 2005, Factor Sales began taking photographs of damaged or disheveled merchandise that SLT drivers delivered to the Factor Sales warehouse. The Respondents claim that the pictures demonstrate the SLT drivers’ poor performance. Pictures were taken on January 28, March 30, July 14, and August 27, 2005. Jorge Urrea, Factor Sales’ warehouse manager, took most of the pictures. Urrea was the warehouse manager from about March 30, 2005, until November 2005. Antonio Ballesteros preceded Urrea and was the warehouse manager from 2003 until March 29, 2005.

Curiously, the only evidence of such poor performance as reflected in the photographs, even from the Respondents’ witnesses, relates to the period immediately before and soon after the January 29 representation election that the Union won. Ballesteros testified that he had never experienced any problems with the condition of the goods delivered by SLT at the Factor Sales warehouse. Moreover, Ballesteros’ testimony contradicts the Respondents’ claim that SLT drivers delivered damaged goods on January 28, 2005, because Ballesteros was the warehouse manager until March 29, 2005, and he had never experienced problems with the condition of the goods.

Given Factor Sales’ long history of no problems with the condition of goods delivered by SLT drivers, it is not credible that suddenly, and immediately before and soon after the union’s election, the SLT drivers would start delivering goods in a damaged or disheveled condition. The Respondents’ photographs of alleged damaged goods are not credible for this reason and this unlikely coincidence. In addition, the incredibility of the Respondents’ claim regarding poor performance by SLT’s drivers is enhanced by the testimony that no problems in the condition of goods had occurred during the time that some of the photographs were taken and by the absence of documentary evidence to show that Factor Sales took any action regarding such damaged goods.

Whether the photographs were staged, or reflect damage caused by other employees in Factor Sales’ warehouse, or reflect merchandise delivered by some transportation company other than SLT, or have some other explanation, cannot be determined. Nevertheless, under all the circumstances, the credible evidence does not substantiate the claim that SLT drivers delivered damaged and disheveled merchandise to Factor Sales’ warehouse.

Nevertheless, Ballesteros testified that during the period 2003 and 2004 SLT drivers continually arrived late and many times would deliver merchandise that should not have been delivered to Factor Sales. Ballesteros asserts that he told Valencia about these alleged continual problems. However, there is no evidence that Valencia ever took any action regarding these alleged problems. Valencia did not discipline the drivers or even speak to them about these problems. Nor is there any evidence that Salcido, the owner of Factor Sales, took any action regarding these alleged problems. Such a complete lack of response on the part of management and ownership to alleged problems, which supposedly occurred continually and over a substantial period, undermines the credibility of the claim. It must be remembered that these were deliveries to Factor Sales, which owned SLT. Surely, if any entity could and would make efforts to address or correct problems of this nature, it would be Factor Sales and Salcido. Yet nothing was done and there is no evidence that anything was ever attempted. Accordingly, I conclude that the SLT drivers did not deliver merchandise late or deliver the wrong merchandise to Factor Sales, or, if SLT did make such deliveries, that such deliveries were insignificant and were not a problem for Factor Sales.

2. Interrogations

After the Union won the election in January 2005 and was certified as the employees’ representative, Valencia approached Quezada at SLT’s facilities and asked Quezada what he thought about the Union and what was he going to do. Quezada replied that he just wanted to keep his job and move forward. Valencia asked Quezada similar questions, approximately on a weekly basis, until the end of Quezada’s employment at SLT in July 2005. There is no evidence that Quezada had, at any time, disclosed to management his attitude toward the Union.

3. Rule on employees talking to each other

SLT employed two mechanics, Jose Vera and Jose Marquez. Vera had longer experience with SLT and functioned as Marquez’ supervisor. Vera and Marquez maintained and repaired SLT’s trucks and Factor Sales’ equipment and vehicles. Vera was against the Union, and the Respondents’ management knew he was against the Union. For example, Vera did not attend any union meetings during the organizing campaign; however, he did attend meetings held by Factor Sales. Factor Sales and Salcido held meetings during the organizing campaigns to urge the employees of Factor Sales and SLT to vote against the Union. Moreover, after SLT was closed, Factor Sales retained Vera to continue repairing Factor Sales’ vehicles, similar to what Vera had done when he worked for SLT. In contrast to Vera, Marquez was not against the Union.

SLT’s mechanics and drivers regularly speak to each other at SLT’s facility. Indeed, they are required to communicate so that the drivers could explain any problems with the trucks that should be addressed or repaired by the mechanics. Prior to June 2005, SLT did not have any rules, policies, or instructions restricting discussions between SLT’s mechanics and drivers.

In June 2005, Aguilera, a driver, spoke to Marquez at SLT’s facility concerning problems that Aguilera had with a truck. After their conversation, Valencia told Marquez that he was not allowed to speak to the drivers unless Vera was present. Valencia told Aguilera that he was not allowed to speak with Marquez. Valencia told Aguilera that if Aguilera had a problem with any of the trucks, he should tell Valencia who would, in turn, tell the mechanics.

4. Contractual negotiations

In March, April, and May 2005, the Union, SLT, and Factor Sales met for the purpose of negotiating a collective-bargaining agreement, for a total of three meetings during this period. In the April meeting, SLT was represented by Barry Olsen, Esq. and Valencia. Moreno and Lourdes Salcido were present for Factor Sales. Paul Rubin, the secretary-treasurer of the Union, Martin Hernandez, a union organizer, and two SLT employees, Sigueiros and Aguilera, represented the Union.

Olsen started the meeting by stating that SLT was losing a great deal of money, which he blamed on competition from Mexico and an unexplained Supreme Court decision. Olsen did not mention the job performance of SLT drivers—such as late deliveries, cargo damaged in transit, or cargo delivered to the wrong location—as being a factor in SLT’s losses. Indeed, these alleged problems were not mentioned at all. After the parties talked about, but did not agree on, a contract, Rubin asked Olsen if SLT would open its books because of Olsen’s claim that SLT was losing money. Olsen replied, “possibly.” (Tr. 300.)

The parties met again on May 26, 2005. Olsen represented SLT, and Moreno and Lourdes Salcido were again present for Factor Sales. Rubin, Nancy Mortazavi (a union representative), Aguilera, and Ignacio Sandoval, an SLT driver, represented the Union.

Olsen repeated his claim concerning SLT’s poor financial condition. Again, Olsen mentioned nothing about the job performance of SLT’s drivers as being a factor in SLT’s claimed losses. Rubin questioned whether the financial data on which Olsen was relying was accurate or trustworthy. Rubin reminded Olsen that Factor Sales owned SLT, and those companies could structure their business dealings to assign all the profits from their dealings to Factor Sales, leaving SLT with a loss. Olsen did not respond to Rubin’s question on the accuracy or trustworthiness of SLT’s records regarding its claimed loss. Olsen said that SLT could not reasonably raise its prices because Factor Sales was then negotiating with Unified for a delivery price that was equal to the price being charged by SLT. Olsen claimed that he did not think SLT would be financially able to survive the summer of 2005.

Rubin said that the work hours of SLT’s employees were rapidly decreasing, and that SLT’s work was being subcontracted. Olsen replied that SEC and SLT had similar ownership, and that SEC was paying SLT a fee to use SLT’s facilities and trucking permits. Olsen added that SEC was making deliveries to Factor Sales in the United States. Rubin then mentioned other companies to whom SLT was subcontracting work. These companies included Santa Fe Trucking, Gala Trucking, Valenzuela Trucking, San Luis Freight, and Royal Trucking. Moreno responded that she did not know these companies, except that Gala Trucking was actually San Luis Cooling. Olsen said he did not want to meet again with the Union until certain financial figures became available. In fact, the parties did not meet in another bargaining session.

On July 28, Rubin sent Olsen a letter requesting that SLT stop outsourcing work that was performed by bargaining unit members. Without denying that SLT had subcontracted bargaining unit work, Olsen asked Rubin to “please clarify the exact instances of ‘outsourcing of work.’” (GC Exh. 28.) Olsen’s request for this information was disingenuous. Olsen knew the outsourcing of work that Rubin described because Rubin had already told Olsen the names of companies, including SEC, to whom SLT had given bargaining unit work. Olsen did not deny that outsourcing was occurring and he did not need to be cited a particular instance of such outsourcing to know that SLT was subcontracting work. Olsen’s response to Rubin’s July 28 letter constitutes an admission by the Respondents that SLT was indeed subcontracting bargaining unit work.

5. Subcontracting

SLT subcontracted transportation work since approximately 2004. (Tr. 1338.) The companies that received the subcontracted work include MC Freight, M. Ruiz Trucking, and San Luis International Freight Services. The Respondents claim that subcontracting occurred only when SLT drivers were not available to do the work. The credible evidence does not support this claim. Vigil testified that when the SLT assigned driver was unable to make a trip, the trip would then be subcontracted. Accordingly, the credible evidence does not show that when the assigned SLT driver was unable to make a trip, Valencia or the dispatcher would first offer the trip to other SLT drivers before subcontracting the trip. (Tr. 1337–1338.)