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.
Engineered Steel
Concepts, Inc. and ESC Group Limited, Alter Egos and General Drivers, Warehousemen,
and Helpers Union Local 142, International
Brotherhood of Teamsters. Case 13–CA–43235
May
30, 2008
DECISION AND ORDER
By
Chairman Schaumber and Member Liebman
On
July
3, 2007, Administrative
Law Judge Eric M. Fine issued the attached decision. The Respondent filed exceptions and a supporting brief, and the
General Counsel filed an answering brief.
The
National Labor Relations 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 and to adopt the recommended Order.
ORDER
The
National Labor Relations Board adopts the recommended Order of the administrative
law judge and orders that the Respondents, Engineered Steel Concepts, Inc., and
ESC Group Limited, East Chicago, Indiana, their officers,
agents, successors, and assigns, shall take the action set forth in the Order.
Dated,
Washington, D.C.
May 30, 2008
______________________________________
Peter C. Schaumber, Chairman
______________________________________
Wilma B. Liebman, Member
(Seal) National Labor Relations Board
Lisa
Friedheim-Weis, Esq., for the General Counsel.
Steven A.
Johnson, Esq. and Jennifer J. Monberg,
Esq., of Merrillville,
Indiana, for the Respondents.
Steve
Parks, of Gary,
Indiana, for the Charging Party.
DECISION
Statement of the Case
Eric M. Fine, Administrative Law Judge. This case was tried in Chicago, Illinois,
on February 12 and 13, 2007. The charge
and amended charge were filed by the General Drivers, Warehousemen, and Helpers
Union Local 142, International Brotherhood of Teamsters (the Union or Local
142) on March 13 and 17, 2006, respectively, against Engineered Steel Concepts,
Inc. (ESC) and ESC Group Limited (Group), alter egos (jointly referred to as
Respondents).[4] The complaint was issued on November 30,
alleging that ESC established Group for the purpose of evading its
responsibilities under the National Labor Relations Act (the Act), and that ESC
and Group are alter egos. The complaint,
as amended at the hearing, alleges that Respondents through Martin Surdell
promised employees jobs with Group on the condition that they work for nonunion
wages and without union benefits in violation of Section 8(a)(1) of the Act,
that in February, Respondents discharged/laid off employees Anthony Miletich,
Marc Roop, and Steve Wagner in violation of Section 8(a)(1) and (3) of the Act;
that in February or early March, Respondents continued their operation of ESC
in the disguised continuance of Group, in order to avoid their collective-bargaining
obligation with the Union, that since that time Respondents have refused to
recognize the Union, have refused to abide by and repudiated their
collective-bargaining agreement with the Union, and have subcontracted
bargaining unit work, all without prior notice to the Union or giving it the
opportunity to bargain over the decisions or their effects on employees, and
that this conduct was violative of Section 8(a)(1) and (5) of the Act.
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
ESC, a
corporation, with a place of business in East
Chicago, Indiana, has
been engaged in the business of hauling by truck steel-related by products
within the steel industry. Group, a
corporation, with an office and place of business in East Chicago, Indiana,
has been engaged in the business of hauling by truck steel-related by products
within the steel industry. During the
past calendar year, ESC and Group have each provided services valued in excess
of $50,000 for Mittal Steel USA (Mittal), an enterprise itself directly engaged
in interstate commerce within State of Indiana. Respondents admit and I find that ESC and
Group are each employers engaged in commerce within the meaning of Section
2(2), (6), and (7) of the Act and the Union is
a labor organization within the meaning of Section 2(5) of the Act.
ii. alleged unfair labor practices
Tom Anderson is
the founder and sole owner of ESC. Anderson met Martin
Surdell and Ronald Callihan as fellow members of management while they were working
in the steel industry. Anderson’s most recent employer in the steel
industry was a company called LTV. Anderson left LTV in 2002
as a result of a plant shutdown. Anderson started ESC after
leaving LTV. Anderson testified ESC remained in existence
at the time of the unfair labor practice trial in February 2007. At that time, ESC supplied drill bits and
shafts to some Mittal Steel plants and to some other steel companies. Anderson
testified that ESC also provides technology to US Steel such as thermal and
visual cameras, tour monitoring devices, refractory monitoring, and furnace
technology.
Anderson was in an automobile
accident in April 2003, sustaining a brain injury. He testified the injury affects his short-
and long-term memory, temperament, and tolerance levels. Anderson
testified that, after the injury, Surdell helped him with the operation of
ESC. Anderson testified that Surdell “would drive
me around and attempt to help me in whatever needed to be done.” Anderson
testified Surdell was never employed by ESC and he never received a salary or
any compensation for his work. Anderson testified
Surdell helped him out until December 2006, when Surdell had back-related
surgery. Anderson estimated Surdell is 77 or 78 years
old. Surdell was given a business card
and title with ESC. Anderson testified Surdell made calls on
behalf of the Company, but claimed Surdell did not make the calls independently
stating, “He’d always checked with me first.”
ESC purchased
100,000 tons of c-fines on October 7, 2004, from International Steel Group
(ISG). C-fines are finely granulated
steel refuse that are recycled by steel mills.
ISG was eventually sold to Ispat-Inland, a steel company which at the
time of the hearing was taken over Mittal.
ESC did not have its own trucks or drivers at the time it purchased the
c-fines. Anderson used other trucking companies to
deliver the material. Anderson concluded if he delivered the
material with his own trucks there would be better service and possible cost savings. As a result, ESC purchased three trucks and
trailers.
Anderson contacted Local
142 to inquire about drivers for the trucks and he, along with Surdell, met
with Local 142 Business Agent Steve Parks on March 8, 2005, at the union
hall. On that date, Anderson, on behalf of ESC, signed a contract
with Local 142, entitled “General Construction of Building, Heavy & Highway
Projects.” The contract’s effective
dates were June 1, 2003, to May 31, 2006.
During the meeting, Anderson and Surdell presented their ESC business
cards to Parks listing Anderson as the general manager and Surdell as the
national sales manager. Parks credibly
testified that it was explained to him by Anderson and Surdell that Surdell
would be taking care of the day-to-day operations of ESC. Parks did not sign the collective-bargaining
agreement on behalf of the Union. Rather, it was presigned by the Union’s principal officers who did not attend the
meeting.
Parks credibly
testified that: During the March 8, 2005 meeting, Anderson and Surdell asked
Parks what contracts were available for the type of work they were going to
do. They explained that they were going
to be hauling commodities from one steel mill to the other, which at the time
was between ISG and Inland Steel. Anderson
mentioned something about having a contract for a large of amount of work, that
this was just going to be the first contract and that he hoped to have a good
relationship with the Union in the future. Parks explained the Union had a commodity
hauling agreement or ESC could also be placed under the Union’s
general construction agreement. Parks
stated he would rather see a commodity agreement for this type of work because
it really was not on-site construction work.
Anderson did not like the wage and benefit structure in the commodity
agreement for which employees are paid on a weekly basis as opposed to the
construction agreement in which they are paid for the hours worked. The commodity agreement also had seniority,
holiday, and vacation language not contained in the construction
agreement. Anderson preferred the construction agreement
since if he only had work for 3 or 4 days, then he only had to pay the benefits
on the hours actually worked. Parks went
along with Anderson’s
request for the construction agreement because he was trying to accommodate the
Company’s needs, and the wages were similar for hauling commodities from mill
to mill in both agreements. Parks testified
that he did not take any notes during the meeting. When asked on cross-examination if Anderson took notes, Parks
testified, “I, I don’t, I have no awareness of that.” When asked on rebuttal whether he saw Anderson taking notes
during the meeting on March 8, 2005, Parks testified, “No.”
Parks testified Anderson did not bargain
any provisions in the contract he signed.
Rather, Parks just gave him a choice of two contracts. Parks testified that he described each of the
contracts, but he did not steer Anderson
to either one of them. Parks testified
that he told Anderson
that if he signed the construction contract he could compete for construction
work and that if he signed the commodity contract with the construction
addendum, he could also compete for construction work. Parks testified that under either contract it
was anticipated that ESC might do construction work to keep the drivers
busy. Parks testified that, after the
deal was completed, Anderson and Surdell asked that now that they had the
agreement if they could get some highway work on I-94 as work was going to
begin soon on the interstate. Parks
responded they would have to talk to the contractors doing the work, and that
they should contact them. Parks testified
there was no discussion about the contract being an 8(f) contract prior to Anderson signing it. Parks denied telling Anderson that one of the benefits of the
construction contract was that he could walk away at the end of the
agreement. Parks denied telling Anderson that when he
sold his 100,000 tons he could terminate the collective-bargaining
agreement. Parks, a business agent with
Local 142 for 8 years at the time of his testimony, testified, “I’d be foolish
to say something like that.”
Parks testified
that he did not remember either Anderson or Surdell telling him that ESC had
previously used union commodity haulers from P&C and Jack Gray Trucking to
deliver their product. Parks testified
Jack Gray is a 50/50 company with 15 trucks in Gary,
Indiana, which are union and the other 200
trucks out of Detroit
which are nonunion. Parks testified he
did not know ESC was in existence before Anderson
contacted him. Parks testified he was
given the impression at the meeting that ESC was just starting with Local 142
drivers.
Parks testified
that, during the March 8, 2005 meeting, either Anderson or Surdell informed him
that Surdell would be Parks’ contact person for ESC hiring drivers, as well as
for union matters. Parks testified that
to his knowledge ESC did not have any employees at the time Anderson signed the contract. He testified it was his understanding that,
subsequent to the meeting, Parks referred ESC their initial employees through
the Union.
Parks testified that, after the drivers were hired, Parks had little if
any contact with Anderson. Rather, Parks’ contact was with Surdell about
ESC’s need for drivers. Parks testified
he received calls when ESC needed a fill-in driver for someone taking off, or
if they were in need of another driver.
Parks testified there was one occasion when the Union
placed nine drivers for ESC for work at U.S. Steel on an around the clock
shift. Parks testified he dealt with
Surdell on all of these calls. Parks
testified the Union’s construction agreement
does not contain an exclusive hiring hall provision. Parks testified that, prior to 2006, Parks
had one or two contacts with ESC on behalf of employees with a work-related
problem. On one of the occasions one of
drivers did not get his check in a timely fashion. Parks called Surdell and Surdell corrected
the situation. Parks testified that
during the fall of 2005 and early winter 2006, ESC employed three Local 142
members who were doing commodity hauling.
Steve Wagner
worked for ESC from March 2005 to February 2006 as a truckdriver. Parks told Wagner about ESC and Wagner was
the first driver hired there. Marc Roop
was the second driver to be hired. Parks made arrangements for Wagner’s
interview with ESC officials to be conducted at Local 142’s hall. Wagner was interviewed by Anderson and
Surdell. Wagner testified it was his
understanding that Surdell was part of management. Surdell told Wagner that he was hired either
the day of the interview or the next morning. Wagner has been a member of Local 142 on and
off since 1977. He testified there was a
collective-bargaining agreement between Local 142 and ESC and that his hourly
rate at ESC was the contractual rate equal to 80 percent of the rate for
semitruckdrivers. He testified that he
was correctly receiving the 80-percent rate under the Union’s
contract because they were performing stockpile work. Wagner testified his health and welfare and
insurance were also paid.
Wagner testified
that he hauled different products from one steel mill to the other for
ESC. Wagner drove a semitruck and the
products he hauled were loaded in a dump trailer. He testified the drivers get it loaded, take
it, and dump it off. They would usually
pick up the materials from MultiServ, a steel processing plant that processes
slag and other products for the steel mill.
MultiServ is located inside the ISG plant (Mittal West). From MultiServ the drivers took the material
to the Inland Steel Plant 2 (Mittal East).
As set forth above, at the time of the hearing both plants had been
taken over by Mittal. While working for
ESC, Wagner performed hauling for MultiServ on a daily basis. Wagner drove a red and black Volvo truck for
ESC. Wagner’s truck number was 311 which
appeared on the side of the truck. There
were also Engineered Steel Concepts magnetic signs on the doors of the cabs of
the ESC trucks, of which there were three of the same make, model, and
color. The other two ESC trucks were numbered
301 and 221.
Wagner testified
that: On a typical day, the ESC drivers picked up their trucks and trailers at
the MultiServ yard inside of ISG. Upon
arriving at the yard, most of the time drivers were issued an all day pass by
Surdell giving them permission to go in and out of the plant, or else Surdell
issued them any alternative assignment.
Most of the time the drivers hauled c-fines on a 5-mile route between
the two steel plants. Wagner testified
Surdell told him what to do on a daily basis, and Anderson only gave him a
daily gate pass when Surdell was not present, which was around 2 or 3 percent
of the time. Wagner testified he did
other work at ESC besides hauling c-fines.
He testified they hauled scrap, iron ore pellets, and slag. He testified they worked once at U.S. Steel
hauling iron ore pellets inside the plant.
He testified there was there was an occasion when they hauled some dirt
for another company. On a typical day, Wagner made about seven or
eight round trips between the steel plants loading and dumping the materials
there. The other ESC drivers performed
the same work as Wagner. At the end of
the day, Wagner parked his truck in the MultiServ yard. Wagner left all the scale tickets in the
truck, or Surdell would pick them up.
Wagner called off work once or twice and spoke to Surdell. Surdell approved the time off during the
call.
Wagner testified
that, prior to November or December
2005, the ESC drivers usually worked 5 days a week, at least 40
hours. Beginning in November or December
2005, the work slowed down, and they went down to about 3 or 4 days a
week. Wagner testified that during this
time period neither Anderson nor Surdell said anything about closing ESC, laying
off the drivers, or having no more work for them.
Wagner credibly
testified that on February 8, Surdell called him at home after work. Surdell told Wagner ESC had no more work for
the drivers as Inland was complaining about the price of the material and they
were going to try to get authorization to buy the material and then the drivers
could go back to work. On February 9, Surdell came to Wagner’s home
to drop off his paycheck. Surdell told
Wagner that he hoped it would not take too long, that they had nothing the
drivers could do until they got authorization.
Wagner testified that after this conversation he never worked for ESC
again. Roop testified that on February
8, Surdell called Roop at home. Surdell
told Roop that there was no work the rest of the week and possibly the
following week. Surdell said they had
some contracts coming up they were hoping to close and Surdell would call Roop
if there was any work.
Roop credibly
testified Surdell called Roop at home on March 6. Surdell told Roop that they were reorganizing
ESC and were going to start it over under another name, nonunion. Surdell told Roop the name of the company,
but Roop could not recall it. Surdell
told Roop they hired someone out of a temp agency, and Surdell offered Roop a
job as a truckdriver for $18 an hour, nonunion, no benefits. Roop declined the offer. Roop testified he called Wagner and Parks
notifying them of Surdell’s call.
Wagner credibly
testified he called Surdell in the morning on March 13, and asked him what was
going on. Surdell replied they had filed
for bankruptcy, opened up under a new company called Engineered Group Limited,
and that they could not afford to pay union benefits any more. Surdell said they had work for Wagner if he was
willing to work nonunion at $18 an hour, but that was all they could offer
him. Surdell said he wanted Wagner to
come to work for the new company. Wagner
said that he could not do that because he worked too hard to get his benefits
and retirement from the Union. Surdell said they had hired a new driver from
a temp agency and they had 90 days to keep him or get rid of him.
Wagner went to
the union hall on March 13, where he spoke to Parks. Parks testified that Wagner informed him of
the content of Wagner’s call with Surdell.
Parks credibly testified that: Parks called Surdell from the speaker
phone in Parks’ office, in Wagner’s presence.
Parks asked Surdell why he laid off Parks’ drivers. Surdell said the Company was going out of business,
they were bankrupt, and they no longer were going to be a union company. Parks asked what Surdell meant, and Surdell
said there was a new company called Engineered Group Limited. Parks said thank you and that now he knew
what to put on the picket signs. Parks
told Surdell that he never notified the Union of the closing, gave the Union an opportunity to bargain, or for recognition with
the new company. Surdell said he had one
employee working that day for the new company, who was from a temporary
service. Parks told Surdell there would
be grievances and probably Labor Board charges filed immediately. Parks testified that following the phone
call, Wagner filed a grievance against ESC, which Parks faxed to ESC on March
13. The cover letter was addressed to Anderson’s attention. The grievance, signed by Wagner, stated, “Non
union drivers doing my job.”
After sending
the grievance on March 13, Wagner and Parks drove to Mittal West, to the
MultiServ parking lot. Parks testified
they saw two ESC red Volvo truck cabs and about five trailers parked in the
yard. Parks testified he saw truck cabs
221 and 301 there. He testified the
truck cabs had ESC signs on them. Parks
testified they also saw ESC truck 311 driving past the scales at MultiServ
loaded with c-fines. Parks testified
that both he and Wagner identified the product.
Parks testified the cab on truck 311 was red, with ESC signs on the
doors. Parks did not recognize the
driver. Parks took four pictures of
truck 311, with a trailer attached thereto on March 13. Parks took notes on the pictures to identify
the date and location of the truck confirming truck 311’s operation and route. Parks testified they observed truck 311 exit
the gate at Mittal West. They followed
the truck out of the plant through public streets to the Inland plant (Mittal
East), where the truck proceeded to dump the product. They followed the empty truck back to ISG, or
Mittal West. After taking the pictures
and following the truck, Parks and Wagner returned to the union hall, where
Parks wrote and faxed the initial charge against the Respondents to the NLRB.
The Union received a fax from ESC later on in the afternoon
on March 13. The fax was sent from Surdell,
stating ESC Trucking has gone out of business and the following drivers are
laid off: Wagner, Roop,and Anthony Miletich.
On March 14, Parks met with Roop at the union hall at which time Roop
filed a grievance stating, “nonunion workers in trucks.” Parks faxed the grievance on that date to ESC
to Anderson’s
attention. On March 15, Parks saw two
ESC trucks in the morning loaded with what appeared to be c-fines on a public
road in East Chicago. The trucks were red and had ESC Steel signs
on them. Parks did not recognize either
of the drivers. On March 17, Wagner and
Roop filed separate grievances alleging “unjust termination.” The grievances were faxed on March 17, to ESC
to Anderson’s
attention. Parks received no response
from ESC to any of the grievances that were filed. On March 17, Parks faxed a letter to ESC and
Group to Anderson’s
attention. Parks stated it was the Union’s position that Group is an alter ego of ESC, and
was covered by the current labor agreement.
Parks stated the Union was requesting recognition by Group, and that the
Union’s members be returned to work immediately. Parks received no response.
By letter to the
Union, dated March 28, sent by overnight mail, Paul Cummings of Blankenship
Associates, stated, “I have been authorized and instructed” by ESC to serve
notice that it was terminating the collective-argaining agreement with the
Union, “as of its termination on May 31, 2006,” pursuant to aticle 30 of the
agreement. The letter was copied to
Anderson and the FMCS. Cummings asked
in the letter that the Union notify the Health
& Welfare and Pension Fund. Parks
testified that since the uion members were laid off, ESC did not apply the
collective-argaining agreement, and he has received no contact from Group. By letter dated September 12, ESC informed
the Union’s pension plan that it had no hours
to report since February 2006. Parks
identified checks to the pension plan from ESC dated March 13. He testified those checks would have been for
February hours, and that it was his understanding those were the last checks
the pension plan received.
On April 5,
2006, Parks was at Mittal East (Inland).
Parks saw two of ESC’s trucks, 301 and 311, operating there as he saw
ESC signs on the trucks red cabs. Parks
took pictures of the trucks. Roop, while
working for another trucking company, saw trucks containing signs listing ESC’s
new name performing hauling work at Mittal West in November and December
2006. Roop saw, depending on the day,
one to two ESC trucks loading red dust.
The trucks had ESC Group on them, but were using the same truck numbers
they had with ESC. One of the trucks had
the same 301 number that Roop had driven for ESC. Roop did not recognize any of the drivers. The Group drivers were hauling red dust from
Mittal West to the Newton County Landfill.
Harland Ronk
works for MultiServ at the Mittal West facility. Aside from the various name changes at Mittal
West, Ronk has worked at that location for over 33 years as a loader operator. Ronk testified ESC trucks are parked at the
mill across from MultiServ’s office.
Ronk started loading ESC trucks in the latter part of 2005. During the November 2005 to early 2006
timeframe the trucks said ESC on the cab.
Ronk thought trucks 301 and 311 were also on the side of two of the
trucks. He testified that ESC had three
red trucks during that time period. Ronk
testified that, after February 2006, the ESC trucks had different drivers. Ronk testified that, at the time of the
hearing in February 2007, two of the red trucks were still operating at the
mill. He testified the third red truck
remained parked at the mill with a tarp over it. Ronk testified that in addition to the two
red trucks, the Company had a couple of white trucks in operation at the
mill. Ronk testified all the trucks now
have Group’s name on them rather than ESC.
The yard where the ESC then Group trucks and trailers are kept parked is
close to MultiServ’s office. Ronk
testified that, at the time of the hearing, there were four trucks being used
by Group off and on, depending on the amount of material to be loaded. Ronk testified that the Group trucks were
hauling case iron loaded by cranes, and B scrap which Ronk loads. Ronk thought they were hauling to Mittal
East. Ronk testified that, prior to
February 2006, the ESC trucks were hauling c-fines the majority of the
time. Ronk testified that after February
2006, he did load c-fines in ESC or Group trucks and that this occurred during
the summer of 2006. He testified the
last time he loaded c-fines in the ESC or ESC Group trucks was around a month
prior to the hearing.
Ed Teffeau works
for Mittal as the transportation sourcing manager for three steel plants, two
of which are Mittal East, formerly Inland, and Mittal West, formerly LTV and
ISG. Teffeau negotiates freight rates
and executes contracts with motor carriers for various transportation
services. Teffeau testified Mittal purchased
ISG in April 2005. As part of his job,
Teffeau contacts a transportation company to solicit a rate by email, phone, in
person, or in writing. A quote from a
carrier is generally faxed to Teffeau.
He is the only person for the three Mittal facilities who negotiates
freight rates with carriers.
Teffeau testified
that ESC had a contract for hauling with the ISG plant prior to Mittal taking
over the plant. Teffeau learned of ESC
around the middle of 2005 when an invoice for freight services arrived at his
office. Upon Mittal’s receipt of ESC’s
invoice, ESC was contacted and the process began of obtaining a Mittal vendor
code for ESC so ESC could get paid for its services. Teffeau testified a new carrier for Mittal
has to fill out a supplier application form in order to receive a vendor
code. Anderson signed this form as the general
manager and contact person for ESC on May 19, 2005, and Teffeau signed on
behalf of Mittal on May 20, 2005. ESC
was provided separate Mittal vendor codes for the Mittal East and West
facilities because each Mittal facility has its own computer system. Teffeau testified that Mittal does not permit
one company to use the vendor codes of another company.
Teffeau
testified Anderson
is his primary contact for ESC when
Teffeau wants to use ESC’s services. At
the time of the hearing, Teffeau last called Anderson in January 2007 pertaining to work
for Mittal. Teffeau testified that when
he called Anderson in January 2007, he
understood Anderson
was working for ESC stating, “In my mind, there had been no change.” Teffeau testified he was never informed of a
change of ESC to Group, although Teffeau testified that “[w]e did receive some
different stationary later on in our relationship, around January of 2007.” Teffeau testified that he was never informed
there was a new company replacing ESC or asked for a new vendor code for Group
from Mittal. Teffeau testified Group is
still using the same supplier number as that given to ESC.
Teffeau received
a price quote from ESC, dated January 5, 2006, for some hauling requested by
Mittal. Surdell signed the quote of
behalf of ESC. Teffeau testified he
signed off on and accepted ESC’s quote for this work. Teffeau testified Surdell is “another one of
the contacts that I am familiar with at Engineered Steel Concepts.” Teffeau testified Surdell was Teffeau’s
secondary contact for ESC. He testified
he would call Surdell if he could not reach Anderson.
Teffeau testified that the work in question was to be hauled between
different sections of Mittal. Teffeau
received another quote from ESC under Surdell’s signature dated February 24,
2006, for the hauling of c-fines for MultiServ Mittal West to Mittal East. Surdell’s letter was in response to a verbal
request for a quote that Teffeau made to Anderson. Teffeau approved ESC’s quote and they
received the work. Surdell also signed
off on quotes to Teffeau on documents dated April 24 and November 1, 2006.
Teffeau
testified he met Ron Callihan once when Callihan came to Teffeau’s office to
obtain a drive in pass allowing his entrance into the plant. Callihan was accompanied during the visit by
Anderson and Surdell. Teffeau was told
during the meeting, “This is Ron Callihan, he works for Engineered Steel
Concepts.” Teffeau testified that they
did not say anything about a company called ESC Group, LLC. Teffeau identified Callihan’s application for
a driving pass with Mittal, dated June 28, 2006, the company identified on the
application was “Engineered Steel Concepts, Inc.”
By letter dated
December 12, 2006, under company name of Group, Teffeau received and approved a
quote for work under the signature of Callihan.
Teffeau testified he was not familiar with a separate company called
Group. He testified Mittal has never received
a supplier application from a company with that name. Teffeau testified that aside from issuing the
June 28, driving pass, he never had any contact with Callihan prior to Teffeau’s
receipt of the December 12 letter.
Teffeau testified that, prior to December 12, he primarily spoke to
Anderson, and occasionally Surdell when Teffeau solicited a bid for work. Teffeau testified that when he spoke to Anderson in December 2006 to solicit the bid, Anderson did not say anything
about ESC going out of the hauling business or about the existence of a company
called Group. Teffeau initially
testified he never had contact with Callihan after he received the December 12,
2006 letter. However, he admitted to
receiving another response to a request for a quote, dated January 31, 2007,
under Callihan’s signature, under the company name Group. Teffeau testified he talked to Anderson to solicit the
price quote, and that Teffeau did not speak to Callihan. Teffeau testified that when he saw Group on
the company letter head, he did not require the company to obtain a new Mittal
invoice number because, “In my eyes, I was still dealing with Engineered Steel
Concepts.” Teffeau explained, “I’d never
been notified to the contrary.”
Teffeau had
prepared an invoice summary of the work performed by Respondents for Mittal
from June 2005 to January 23, 2007. He
testified that each vendor has its own unique vendor identification for motor
carriers which he called the SCAC code, which Teffeau thought was issued by the
National Trucking Association. He
testified that one company cannot use another’s SCAC code. Teffeau testified the SCAC code for ESC was
the same from 2005 to 2007, and that Group continued to use ESC’s SCAC
code. He also testified that Group
continued to use ESC’s vendor codes issued by Mittal throughout the time period.
ESC sent an
invoice, dated March 15, to Mittal for work performed from March 9 to 13,
2006. The invoice lists ESC as the employer
with ESC’s SCAC code on the invoice, as well as ESC vendor number issued by Mittal. The product moved was c-fines. Jack Gray is the trucking company shown on
most of the gate passes attached to the invoice, meaning that although ESC
billed for the work Jack Gray actually performed the hauling for the dates it
is listed on the gate passes. The gate
passes show that ESC driver Dion Thomas hauled several of the loads in truck
311 on Marc 13. Teffeau testified that
it was Mittal’s assumption that the work was subcontracted to Jack Gray by ESC
on the dates that Jack Gray’s name appeared on the gate passes. Since the bill was submitted on ESC’s invoices,
ESC was paid by Mittal for all of the work.
Respondents
continued to submit payment invoices to Mittal with ESC letterheads through May
2006. In June 2006, the letterhead on
the invoices changed to ESC Group, LLC and that letterhead was used through December
2006. However, the Group invoices
contained the same SCAC code and Mittal vendor identification number that had
been used by ESC. The Group invoices
contained the same post office box, phone, and fax numbers previously used on
the ESC invoices. Teffeau testified that
Group was never issued a new vendor code by Mittal, nor did Mittal ever receive
a new remit address for Group. He
testified that ESC was paid for all the work billed Mittal by Group.
A. Respondents’ Witnesses
Anderson testified that
when ESC was operating in 2005 and early 2006, the primary material ESC hauled
was c-fines. Anderson testified that the majority of the
work performed by ESC drivers in 2005 was hauling material from one steel facility
to another. Anderson testified he contacted Local 142 and
set up a meeting with Parks to obtain drivers.
Parks, Surdell, and Anderson attended the March 8, 2005 meeting. Anderson
testified to the following: During the
March 8, 2005 meeting Anderson
explained to Parks that he had a contract to deliver 100,000 tons of
material. Anderson
told Parks that Anderson had been using
subcontractors, but Anderson felt he could be
more reliable in meeting the customer’s needs if Anderson delivered the material himself. Anderson
told Parks the delivery schedule was somewhat erratic that the customer may
need 5000 tons in a few days and then a couple days they would not take anything. Anderson
asked Parks what contracts were available.
The response was the Union had a
commodity agreement and a construction agreement. Parks told Anderson the commodity agreement paid on a
weekly basis the same amount of pay regardless of the number of hours
worked. Parks told Anderson
the construction agreement would cover the type of material Anderson was moving and that, with the 80-94
highway construction going on, there would be some work opportunities possible
to keep the trucks and drivers busy.
Parks told Anderson that Parks knew some
of the companies working the construction job and if necessary, Parks could
give Anderson
some phone numbers. Parks told Anderson that section 7 of
the construction agreement covered stockpile to stockpile movement, which was
ESC’s hauling contract. Parks told
Anderson that, under the construction contract, the pay was 80 percent of the
construction hourly rate for commodities hauling, which would have been $21.72
per hour and the benefits were a 100 percent per hours worked. Anderson
testified that Parks, “said the construction agreement was—could be ended at
any time. Contract completion, equipment
sold, business shut down, et cetera. He
said the contract ends May 31st of ‘06.
No wait he said that or I picked it out of the agreement that he had in
front of me.” Anderson testified Parks told him that the construction
agreement might be the most economical for the work ESC was doing. Anderson
testified Parks told him there was there was no seniority for drivers. Anderson
testified Parks told them that if they wanted to replace drivers just tell them
there was no more work, and call Parks for a replacement, or if Parks was not
available call the union president. Anderson testified Parks
said he would arrange for interviews with the drivers for March 9, and that ESC
would pick which ones to employ. Anderson testified he returned
to the union hall on March 9, 2005, to interview drivers. Anderson
testified that ESC primarily relied on Parks for drivers during the time ESC
had a relationship with the Union.
Anderson testified it
was important to him at the conclusion of the sale of the 100,000 tons of
c-fines to be able to terminate the agreement with the Teamsters. He testified he did not anticipate the need
for Teamsters drivers once the sale of the 100,000 tons was completed. Anderson
testified, in response to a leading question, that Parks told him the
construction agreement was an 8(f) agreement that could be ended at any
time. Anderson testified he selected the
construction agreement.
I did not find Anderson’s testimony concerning
the content of the March 8, 2005 meeting to be credible. He testified it was his practice, due to his
accident, to take notes of meetings. He
testified he took notes during the March 8, meeting, and he identified detailed
notes, and claimed that due to his accident he could not testify about the
substance of the meeting without reliance on the notes. Yet, Anderson
admittedly failed to mention that he had notes of the meeting when he gave his
pre-hearing affidavit to the Board agent on October 23, 2006, wherein he also
testified about the March 8, 2005 meeting.
I find his contention that he made notes during the meeting to be highly
unlikely given his failure to apprise the Board agent that the notes even
existed, when he gave prior sworn testimony about the meeting. Considering the witnesses’ demeanor, I have
credited Parks’ testimony that Anderson did not
take notes during the March 8, 2005 meeting over Anderson’s claim to the contrary. Despite having 8(f) referenced in his notes, Anderson testified, only
in response to a leading question, that Parks said the construction agreement
was an 8(f) agreement that could be ended at any time. In fact, Anderson admitted he was aware at the meeting
that the contract had a May 31, 2006 termination date. I find by Anderson’s admission that he was informed by
Parks or noticed on his own that the construction contract had a May 31, 2006
termination date and this serves to undercut his incredible claim that Parks
told him the contract could end at any time.
Anderson’s claim that he was told by Parks that Anderson could terminate
the contract at any time is further undermined by ESC’s March 28, 2006 letter
to the Union through ESC’s then representative seeking to end the contract as
of its May 31, 2006 termination date referenced in article 30 of the collective-bargaining
agreement. Thus, no claim was made in
the letter that ESC had a right to terminate the contract other than by the
means and date set forth in the agreement.
Accordingly, I
have credited Parks’ testimony that he never discussed Section 8(f) of the Act
or informed Anderson that Anderson
could terminate the agreement at any time prior to Anderson’s signing the contract. I also credit Parks’ testimony that Anderson elected to sign the Union’s construction contract
over the commodity contract solely because of the pay and benefit structure of
that agreement, as opposed any 8(f) considerations that Anderson has subsequently claimed.
Anderson testified he
began taking delivery of the 100,000 tons of c-fines around November or December
2004. Anderson testified that, after the 100,000
thousand tons of c-fines had been delivered, ESC had no other contracts, “so we
told the drivers that there was no more work until we could find something
else.” Anderson testified that he instructed Surdell
to tell the Teamster drivers that ESC had no more work at the time and that
this was Surdell’s only instruction.
However, Anderson also testified that
Surdell did not act independently and that Anderson gave Surdell instructions when to
talk to people and he told Surdell what to say.
Given the fact that I found Roop and Wagner to be credible witnesses,
and considering the timing of Surdell’s conversations with the employees, and
the witnesses’ demeanor, I do not credit Anderson’s
claims that he was not aware of and did not authorize the content of Surdell’s
conversations with Roop and Wagner.
Particularly, since Surdell made offers of employment to the two
individuals if they would shed their union status and work without the benefit
of a union contract, wages, and fringe benefits. In this regard, Surdell gave Wagner and Parks
the name of the new company, and then sent a fax to the Union on March 13 stating
that ESC was going out of business, and that the three employees referred by
the Union were laid off. Given the nature of Surdell’s actions, I have
concluded that Anderson told Surdell more than Anderson was willing to admit at the hearing, and that Anderson authorized
Surdell to make the remarks to Roop and Wagner that they testified to. I also find that he had been apprised of the
content of Surdell’s phone call with Parks shortly after the conversation took
place, and that he authorized Surdell’s March 13 fax to the Union announcing
that ESC had gone out of business and that the three employees were laid off.
Anderson testified that,
after the completion of the delivery of the 100,000 tons of c-fines, he wanted
to sell the equipment and get out of the trucking business. Anderson
testified ESC owned the trucks. He
testified they were used trucks, and that there were three of them. Anderson identified a one-page typewritten
documented entitled “Purchase Agreement of ESC Group LLC,” dated March 6, 2006,
and signed by Anderson and Callihan. Anderson testified he
drafted the agreement and Callihan reviewed it.
In the agreement, ESC is referred to as the Seller and Callihan is the
buyer. The agreement states in
consideration of $5000 paid by the buyer to the seller, the receipt of which is
acknowledged the seller grants the buyer the right to acquire ESC Group LLC located
at 3001 Dickey Road East Chicago, Indiana. It is stated the buyer will acquire all stock
in ESC Group, equipment, good will and other assets. It states equipment shall include three white
GMC trucks, and three dump trailers with the VIN numbers of each listed. The agreement states that the sales price
shall be $60,000, with the balance due on or before June 30, 2006. The agreement provides that the buyer shall
carry on the business in the usual manner to and including the closing date of
the sale, and that the agreement could only be amended in writing signed by
both parties.
Despite the fact
that purchase agreement stated it could only be amended in writing, Anderson testified that, “in
transferring the assets to ESC Group, Engineered Steel retained 55 percent of
the stock and gave the rest away to Mr. Callihan.” Anderson
testified that in his mind he owned 55 percent until Callihan paid for the
equipment. Anderson was not precise on the split testifying
at one point that he owned 50 to 55 percent of Group. Respondents’ counsel stipulated that there
was no written documentation of a percentage split of ownership between
Anderson and Callihan. Anderson claimed that Callihan manages
Group. He testified that neither
Anderson nor Callihan were taking a salary from Group as expenses were very
high due to attorney’s fees, litigation costs, and maintenance costs.
Anderson testified that
the purchase by Callihan of Group was never completed in that it was put on
hold when Anderson
received the NLRB charge on March 13. He
testified that whether Callihan elects to go ahead with the purchase of Group
is dependent upon the outcome of the NLRB litigation. When asked what consideration Callihan had
given for the 45 percent of the business, Anderson
testified, “I think he paid $5,000 for consideration.” Anderson
testified that, at the time they entered into the agreement, Callihan owed him
$60,000 for the trucks and the name of the business. Anderson
testified he was not receiving payments at the time of the hearing. When asked if Callihan opts out if Anderson had to give him the $5000 back, Anderson replied, “We haven’t gotten that
far.” Anderson could not recall if Callihan gave
him the $5000 by check or cash. Anderson testified that Group owns the trucks now, although
Anderson had
received no additional payments beyond the $5000. Anderson
testified he still owned 55 percent of Group at the time of the hearing in
February 2007. He testified that as
result of the Board charge, they did not change the company stationary from ESC
to Group, and they did not change ESC’s trucking codes for the new company, and
as well as a number of issues because they did not know the status of the
company. Anderson testified rather than selling the
trucks, he now leased the trucks to Callihan until the charge was resolved.
Anderson identified a
document entitled “Indiana Agreement to Lease Equipment (with Limited Warranty)
dated March 31, 2006, as the agreement he and Callihan used to replace the
purchase agreement due to the filing of the unfair labor practice charge. The Lease Agreement, states it is an
agreement to lease equipment between ESC the lessor and Group, the lessee. Yet, a subsequent provision of the agreement
states that the equipment is and shall at all times be and remain the sole and
exclusive property of Group. The term of
the lease was from March 6 to December 31, 2006, or as agreed by the
parties. The rate of the lease was $20
per truck per day. Anderson signed the agreement on behalf of
ESC and Callihan signed on behalf of Group.
Anderson
testified that the $20-a-day rental fee was not actually being paid. Rather, credits for the use of the trucks
were being accrued, and Callihan was going to pay the lease rate credits if he
ended up purchasing the company for the time that Group used the trucks. Anderson
testified that if Callihan did not purchase Group, the $20-a-day accumulation
rate would remain with Group, and it would go back to whoever buys it or
becomes the new owner. Anderson testified they had not reached the
point of deciding whether Callihan would owe the rental money if he decided not
to purchase Group.
Anderson testified he
created Group, but that previously it had performed no work, and was just a corporate
shell. Anderson
testified he sold Group to Callihan when he sold the three trucks and trailers
to Callihan. While Anderson
testified the management or control of Group was under Callihan, he admitted
that Teffeau had contacted Anderson concerning
business since Anderson
sold Group to Callihan. Anderson
testified Teffeau called and asked if Anderson
knew of any trucks available to move some material because he needed a
quote. Anderson testified that he would call
Callihan and tell him they were looking for a quote on some material. Anderson
testified that, depending if he was busy, sometimes Callihan would say could
you send it for me.
Anderson testified that Anderson has the
exclusive authority to sign checks for ESC.
He testified that both he and Callihan can sign checks for Group. Anderson
testified that ESC did not have a location, but that they parked the trucks
primarily wherever the work was located to minimize travel time. ESC and Group share a post office box, and