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,
Cimato Brothers,
Inc. and Cimato Brothers Construction, Inc. and
International
June 30, 2008
DECISION AND ORDER
By Chairman Schaumber and Member
Liebman
On July 18, 2007, Administrative
Law Judge Michael A. Rosas issued the attached decision. The Respondents filed exceptions and a supporting
brief, the General Counsel filed an answering brief, and the Respondents filed
a reply brief.1
The National Labor
Relations Board has considered the decision and the record in light of the
exceptions2 and briefs and has decided to affirm
the judge’s rulings, findings,3 and conclusions
only to the extent consistent with this Decision and Order.4
The principal issues in
this case are whether the Respondents, Cimato Brothers, Inc. (Cimato 1) and
Cimato Brothers Construction, Inc. (Cimato 2), violated Section 8(a)(5) of the
Act by: (1) failing to apply the terms and conditions of the collective-bargaining
agreements with the Union to employees of Cimato 2; (2) dealing directly with
employees of Cimato 2; and (3) failing to provide the Union with requested information
concerning the relationship between Cimato 1 and Cimato 2. Resolution of these issues turns on whether,
as alleged in the amended complaint, the Respondents are a single employer or,
alternatively, on whether Cimato 2 voluntarily adopted the
collective-bargaining agreements with the
i. facts
The facts, set forth more fully in
the judge’s decision, are summarized as follows.
Brothers Anthony, Carmen,
and Pasquale Cimato formed Cimato 1 in 1963 to perform sewer construction
work. In the 1980s, Cimato 1 also became
involved in residential construction and real estate development. Around 1995, the Company ceased performing
sewer and residential construction work and was thereafter involved almost
exclusively in buying, selling, and developing real estate. At the time of the hearing in April 2007,
Anthony Cimato owned 60 percent of the stock of Cimato 1, and he was the only
shareholder active in the Company’s operations.
Anthony Cimato and his five
adult children formed Cimato 2 in 1996 to perform residential construction
work. The new company purchased
construction equipment and vehicles from Cimato 1 for the sum of $601,000.5
The shareholders of Cimato 2 at the time of its incorporation were
Anthony Cimato (50 percent), Ferdinando Cimato (10 percent), Francesca Cimato
(10 percent), Robert Cimato (10 percent), Anthony Cimato Jr. (10 percent), and
Maria Cimato-Circulli (10 percent).6 Since its inception, Ferdinando Cimato has
been the president of Cimato 2, Anthony Cimato Jr. has been the vice president,
and Anthony Cimato Sr. (Anthony Cimato) has been the secretary treasurer.
In 1976, Anthony Cimato
formed the Council of Utility Contractors, Inc. (the Council) and, since its
inception, has been its president and chief negotiator. The Council and the
At all times material,
Cimato 1 has been a member of the Council, to which it has delegated authority
to negotiate and administer collective-bargaining agreements with various labor
organizations, including the Charging Party Union.
By contrast, Cimato 2 has
never been a member of nor delegated its bargaining authority to the Council,
and it has never been signatory to a collective-bargaining agreement with the
By letter dated June 16,
2006, addressed to Cimato 2, the
ii. judge’s decision
The judge found that the
Respondents violated Section 8(a)(5) and (1) of the Act by failing to apply the
terms and conditions of the 2005–2008 collective-bargaining agreements with the
Union to employees of Cimato 2, dealing directly with employees of Cimato 2,
and failing to provide the Union with requested information concerning the
relationship between Cimato 1 and Cimato 2.
In finding these violations, the judge first concluded that Cimato 1 and
Cimato 2 are a single employer and that Cimato 2 was obligated to recognize the
iii. discussion
A. Single-Employer
Status
In determining whether two
nominally separate employing entities constitute a single employer, the Board
examines four factors: (1) common ownership, (2) common management, (3)
interrelation of operations, and (4) common control of labor relations. No single factor is controlling, and not all
need be present. Rather, single-employer
status ultimately depends on all the circumstances. It is characterized by the absence of an arm’s-length
relationship among seemingly independent companies. Bolivar-Tees,
Inc., 349 NLRB No. 70, slip op. at 1 (2007); Mercy Hospital of Buffalo, 336 NLRB 1282, 1283–1284 (2001); and Dow Chemical Co., 326 NLRB 288
(1998).
Applying this four-factor test to
the record before us, we find, contrary to the judge, that the General Counsel
has failed to demonstrate that Cimato 1 and Cimato 2 constitute a single employer.
1. Common
ownership
Because Anthony Cimato is a
majority owner of Cimato 1 and a minority owner of Cimato 2, some degree of
common ownership is present. However,
common ownership alone does not establish a single-employer relationship.
2. Common
management
The judge found that
Anthony Cimato is active in the day-to-day operations of both Cimato 1 and
Cimato 2. In finding that Anthony Cimato
is active in the operations of Cimato 2, the judge relied heavily on publicly
filed documents obtained from the Web sites of the Federal Election Commission
and the New York Department of State.
Based on those documents, the judge found that Anthony Cimato has held
himself out to the public as an executive, owner, board member, or manager of
Cimato 2. The judge also relied on
Anthony Cimato’s presence at Cimato 2 jobsites and his testimony in an
arbitration proceeding involving Timothy Ells, an employee of Cimato 2.
Contrary to the judge, we
find that this evidence is insufficient to establish common management. The record does not show whether Anthony
Cimato supplied or approved the information on the Web site documents. Regardless, the public filings alone do not
establish that Anthony Cimato actually exercises management authority.
Common management exists
where one of the nominally-separate enterprises exercises actual or active control,
as distinguished from potential control, over the other’s day-to-day
operations. See Dow Chemical Co., supra at 289.
Accord:
We are not persuaded that
Anthony Cimato’s testimony in the Ells arbitration establishes actual or active
control over the day-to-day operations of Cimato 2. First, the arbitration took place in 2002,
but the amended complaint alleges that the Respondents violated the Act by
their conduct on and after April 1, 2005.
The test for single-employer status therefore applies only to the relationship
between the Respondents on and after that date; evidence of their prior
relationship would be relevant only to the extent it cast light on their
subsequent relationship. Richmond Convalescent Hospital, Inc.,
313 NLRB 1247, 1249–1950 (1994). Second,
the recitation of facts in the arbitration award indicates that Anthony Cimato
testified as an “observer” of the events underlying the grievance, and that it
was Ferdinando Cimato who dealt with the
3. Centralized
control of labor relations
Centralized control of
labor relations is not present here because Cimato 1 had no statutory employees
during the relevant time period. This circumstance
does not necessarily bar a single-employer finding.9 Yet, it is significant that, with regard to
Cimato 2, the record demonstrates that Ferdinando Cimato decides which employees
to hire, sets their wages and benefits and, together with his brothers,
supervises employees and makes decisions regarding discipline and
discharge. There is scant evidence of
Anthony Cimato’s involvement in any of these matters.10
Nevertheless, the judge
drew the inference that Anthony Cimato exercises control over the labor
relations of Cimato 2 based on his role as president of the Council. However, as noted, Cimato 2 has never been a
member of nor delegated its bargaining authority to the Council. Cimato 2 appeared on the Council’s membership
list for several years, but, as explained below, this appears to have been a
mistake. In any event, Cimato 2 was removed
from the list in 2002, see footnote 3, supra, long before the alleged unlawful
conduct in this case. In these circumstances,
we find no basis for inferring that, through his role as Council president, Anthony
Cimato controls or even shares responsibility for the labor relations policies
of Cimato 2.
4. Interrelation
of operations
We also find that the
General Counsel has not demonstrated interrelation of operations. In essence, the Respondents are engaged in different
businesses. Cimato 1 is involved in the
buying, selling, and developing of real estate, and Cimato 2 is involved in
residential construction. There is no
evidence of employee interchange or commingling of books, records, or financial
information.
It is true, as the judge
found, that Cimato 1 and Cimato 2 share the same office facility, office
equipment, and support staff. But the
record reflects that Cimato 2 pays rent for the use of the office facility to
Anthony Cimato, the owner of the facility.
The record also reflects that Cimato 1 reimburses Cimato 2 for its share
of office expenses, in the amount of $6750 per year. There is no evidence that the amount paid by
Cimato 2 for rent or the amount paid by Cimato 1 for office expenses is any
more or less than fair market value.11 In the absence of any indication that these arrangements are not
arm’s length, we
do not find that they detract from the corporate independence of the entities. See, e.g.,
In finding interrelation of
operations, the judge relied heavily on the testimony of Hector Titus, the
executive director of the Council. Titus
testified that in 1996 he replaced Cimato 1 with Cimato 2 on the list of
Council members after he received notice of an address change for “Cimato
Brothers Construction,” which led him to assume that Cimato 1 had changed its
name. Titus testified further that he
was informed in 2002 by Anthony and Ferdinando Cimato that Cimato 1 and Cimato
2 are separate entities and that Cimato 2 was not a member of the Council. As a result, in November 2002, Titus removed
Cimato 2 from the Council’s membership list and put Cimato 1 back on the list.12
We are unwilling to infer
from this testimony the degree of interrelation of operations necessary to
support a finding of single-employer status.
Significantly, there is no suggestion in the record that Titus’ belief
that the Respondents were a single entity was based on anything other than his
receipt of a change of address form for Cimato 2. In sum, Titus’ belief that Cimato 1 and Cimato
2 were a single entity does not substitute for the required proof.
5. Conclusion
Although there is some
degree of common ownership, the General Counsel did not adduce sufficient
evidence of the other three factors of the single-employer test. Accordingly, he has not met his burden of proving
that Cimato 1 and Cimato 2 are a single employer.
B. Adoption by
Conduct
We next consider whether
Cimato 2, by its conduct, voluntarily adopted the 2005–2008
collective-bargaining agreements. A
binding 8(f) agreement may be formed even when the parties have not reduced to
writing their intent to be bound if the employer has engaged in “conduct
manifesting an intention to abide by the terms of an agreement.” E.S.P.
Concrete Pumping, Inc., 327 NLRB 711, 712 (1999). However, the voluntary payment of wages and
benefits equivalent to those specified in a collective-bargaining agreement does
not “alone” establish an intent to be bound.
See, e.g., E.S.P., supra at
714 fn. 13 (stating that nothing in
the Board’s decision should be read to hold that an employer is bound by an
8(f) agreement merely because it has paid wages and benefits equivalent to
those specified in the agreement).
Rather, the “formation of a binding contract on the theory of adoption
or notification must be based on some element of mutual consent and obligation.” Cab
Associates, 340 NLRB 1391, 1401–1402 (2003). Whether particular conduct in a given case
demonstrates adoption of a contract is a question of fact. DST Insulation, Inc., 351 NLRB No. 3 (2007).
Applying the foregoing
principles, we find that Cimato 2’s conduct, viewed as a whole, is insufficient
to establish an intent to be bound. For
example, the record reveals, as reflected in the judge’s own factual findings,
that Cimato 2 did not apply the collective-bargaining agreements to employees
who were not union members, and it dealt directly with both member and nonmember
employees regarding wages and benefits.
The record also reveals that Cimato 2 has consistently maintained that
it is not bound by any collective-bargaining agreements with the
The amended
complaint is dismissed.
Dated,
Peter
C. Schaumber,
Chairman
Wilma
B. Liebman,
Member
(seal) National
Labor Relations Board
Ron
Scott, Esq., for the General Counsel.
James I.
Myers, Esq. (Myers, Quinn & Schwartz, LLP), for the Respondent.
John Lichtenthal, Esq. (Lipsitz, Green, Scime & Cambria, LLP), for the Charging Party.
DECISION
Statement of the Case
Michael A. Rosas, Administrative
Law Judge. This case was tried in
The complaint,
as amended,[1] alleges
that Cimato Bros. Inc. (Cimato 1) and Cimato Bros. Construction, Inc. (Cimato
2) have been affiliated business enterprises with common ownership, management,
supervision, personnel, operations, facilities, and labor policy, have held themselves
out to the public as single-integrated business enterprises, and are, therefore,
a single employer within the meaning of the National Labor Relations Act (the
Act). The complaint further alleges that Cimato 2 agreed, by its actions on or
about April 1, 2005, to be bound by the terms of a collective-bargaining
agreement between the Council of Utility Contractors (the Council) and the
Union, and granted recognition to the Union as the exclusive
collective-bargaining representative of the unit without regard to whether the
Union attained majority status. It is further alleged that the Respondents have
violated Section 8(a)(1) and (5) of the Act by failing and refusing to bargain
in good faith with the Union as the exclusive collective-bargaining
representative of its employees as follows: by failing and refusing, since on
or about April 1, 2005, to apply the terms and conditions of the collective-bargaining
agreements to work performed by employees in the unit; by bypassing the Union,
since on or about April 1, 2005, and dealing directly with unit employees by
offering them a choice of having their contractually-required fringe benefit
fund contributions remitted to the Union, or having an equivalent amount invested
in their behalf in a 401(k) plan; by failing and refusing since, on or about
June 16, 2006, to furnish the Union with requested information, which was
relevant to the Union’s duties as the unit’s exclusive bargaining representative.
The Respondents admit that there is some overlapping of officers and
shareholders, but essentially deny the rest of the allegations.[2]
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 Respondent, I make
the following
Findings of Fact
i. jurisdiction
Cimato 1, a
corporation, with an office and principal place of business in
Cimato 2, a
corporation, with an office and principal place of business in
The Union is an
organization that files grievances, takes care of its members, and negotiates
contracts for the wages, hours, and terms and conditions of employment of heavy
equipment operators within the
Accordingly, I
find that Cimato 1 and Cimato 2 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.[4]
ii. alleged unfair labor practices
A. Cimato 1
Cimato 1 was
incorporated on July 5, 1963, by three brothers: Anthony, Pasquali, and Carmen
Cimato. The three Cimato brothers were the sole shareholders of Cimato 1 until
at least 1980. Sometime in the 1980s, Pasquale Cimato disposed of his shares.
At that point, Anthony and Carmen Cimato became equal 50-percent shareholders
of Cimato 1. Anthony Cimato presently owns 60 percent of the shares, and serves
as secretary and a director of Cimato 1. Carmen Cimato owns the remaining 40
percent of Cimato 1’s stock ownership. They are Cimato 1’s only directors.
Until the 1980s,
Cimato 1’s business consisted almost exclusively of sewer construction.
Sometime in the 1980s, Cimato 1 became involved in residential development.
Cimato continued engaging in both types of activities until 1995 or 1996, when
Carmen Cimato suffered a heart attack and retired from the active operation of
Cimato 1. Thereafter, Cimato 1 focused on real estate development, while its
residential construction work was essentially assumed by Cimato 2. Cimato 1’s
presence in the residential construction industry, however, did not disappear.
An example of the interrelationship between the two companies on subsequent
real estate construction projects is demonstrated on an Employer’s remittance
agreement and report, dated September 23, 2002, and submitted by Cimato 1 to
Local 210. That form was signed by Anthony Cimato, as secretary, on behalf of
Cimato 1. Anthony Cimato, however, was secretary of Cimato 2, not Cimato 1.
Moreover, the check submitted along with the remittance form was signed by Anthony
Cimato and drawn on the account of Cimato 2. The circumstances indicated that
Cimato 1 acted as a layer between Cimato 2 and the labor organizations.[5]
Cimato 1’s
principal place of business is located in a portion of a building located at
B. Cimato 2
Cimato 2 was
formed at or around the time that Cimato 1 turned its focus to real estate
development. It was incorporated on January 4, 1996, and has engaged almost
exclusively in residential construction work.[8]
With a loan from Anthony Cimato, the new Company acquired equipment and
construction vehicles from Cimato 1 for the sum of $601,000.[9]
The shareholders at the time of incorporation were Anthony Cimato and five of
his children—Ferdinando, Francesca, Robert, Anthony, and Maria Cimato-Circulli.
Anthony Cimato was a 50-percent shareholder, while each of his children had a
10-percent stock share. Since Cimato 2’s inception, Ferdinando Cimato has
served as president, Anthony Cimato Jr. as vice president, and Anthony Cimato
as secretary-treasurer.
Since December
2000, Anthony Cimato has made a series of gifts of his Cimato 2 stock to his
children. As of January 3, 2004, Anthony Cimato was a 40-percent shareholder in
Cimato 2, while each of his five children held a 12-1/2-percent stock share. By
February 1, 2006, Anthony Cimato’s stock in Cimato 2 was reduced to a
10-percent share, while the stock share of each of five aforementioned children
increased to 17.4 percent, and another sibling, Dominic Cimato, was added to
the ownership mix with a 3-percent stock share. Cimato 2’s directors have
always been Ferdinando Cimato, Anthony Cimato, and Anthony Cimato Jr.[10]
In addition to
continuing to maintain an ownership interest, Anthony Cimato remains Cimato 2’s
secretary-treasurer. In publicly filed documents with the Federal Elections
Commission and the New York Department of State, Anthony Cimato has held
himself out as an executive, owner, or board member of Cimato 2.[11]
Since 2000, the
only construction work performed by Cimato 2 for Cimato 1 was on the Meadows
North Subdivision development project, with invoices dated August 3 and December
28, 2001. Anthony Cimato does not have the right to hire and fire employees,
but has been active with respect to Cimato 2’s construction work, as evidenced
by his presence at Cimato 2’s construction site in
C. The Council
The Council of
Utility Contractors (the Council) was formed as an employer association in or
around 1976, primarily for the purpose of bargaining collectively with various
labor organizations on behalf of its employer-members.[13]
In order to become a member, an employer is required to submit an application
and a form designating the Council as its bargaining agent in negotiating and
administering collective-bargaining agreements with the
Hector Titus has
been employed by, and responsible for the day-to-day operations of, the Council
since 1991. When first hired, Titus was designated as the Council’s secretary.
His title subsequently changed to executive director, but his responsibilities
remained the same. Upon arriving in 1991, virtually all of the Council’s
records, including membership applications and bargaining designation forms,
were missing. Titus was unable to get an explanation from the members of the
Council as to the absence of such records.[15]
The Council has,
however, maintained membership lists since Titus’ employment in 1991. The
Council membership lists, dated 1991 and February 2, 1996, listed Cimato 1 as a
Council member.[16] In
1996, after Cimato 1 stopped performing construction work, Cimato 2 took Cimato
1’s place on the Council membership lists provided to the
On November 26,
2001, Mark Kirsch, the
Titus’ belief
that Cimato 1 and Cimato 2 were the same company was evident from his work on
behalf of both companies in connection with an arbitration proceeding held on
February 22, 2002. The employer listed in the caption of that arbitration
decision was Cimato 1. However, Titus’ August 6, 2001 letter in support of the
employer’s position referred to Cimato 2 as the grievant’s employer.[19]
Sometime after March 4, 2002, Ferdinando and/or Anthony Cimato informed Titus,
for the first time, that Cimato 1 and Cimato 2 were separate companies, and
that Cimato 2 was not a member of the Council. This directive was precipitated
solely by their response to the result of the arbitration award, since Anthony
Cimato, as Council president, presided over several labor negotiations prior to
that point, knew or had reason to know that Cimato 2 was on the list as a
member, and took no action to correct the membership list.[20]
As a result, Titus removed Cimato 2 from the Council membership list and added
Cimato 1. This change is reflected in the Council’s November 2002 and February
2005 Council membership lists. At some point after April 1, 2005, and prior to September
2005, Anthony Cimato orally instructed Titus to remove Cimato 1 from the
Council’s membership list. Anthony Cimato’s explanation was that Cimato 1 was
inactive in construction.[21]
D. The Collective-Bargaining Agreements
During the
period of time that Cimato 1 performed sewer construction work, it applied the
Council’s collective-bargaining agreements with the
Contrary to the
practice of Cimato 1, Cimato 2 has never actually signed a
collective-bargaining agreement with the
This letter will reiterate that is [Cimato 2’s] position
that [Cimato 2] is not now nor has it ever been a party to any Collective
Bargaining Agreement between the [Council] and [the
In accordance with the Settlement Agreement dated 2/13/03, this letter will further serve as written notice that [Cimato 2] is withdrawing from bargaining with Local 210 and will not be a signatory at the expiration of the Collective Bargaining Agreement.
This letter will also provide notice that [Cimato 2] does not intend to become a member of [the Council] and therefore in the event [Council] and [Local 210] enter into future collective bargaining agreements, [Cimato 2] will not be a party to that agreement.[24]
As previously
noted, Cimato 1 was on the Council’s February 2005 membership list submitted to
the Union for collective bargaining in 2005. However, prior to those
negotiations, union representatives reasonably believed that “Cimato Brothers”
and “Cimato Brothers Construction” were names used interchangeably to denote
the same Company.[25]
On or about
April 1, 2005, the Council and the
All employees performing work as
described in the “Working Conditions” section set forth at page 1 of the
2005–2008 “building agreement” between the Union and the Council of Utility
Contractors, Inc. (Council), in Article II, section 1 of the 2005–2008 “heavy
and highway” agreement between the Union and the Council, and in Article I of
the 2005–2008 “utility” agreement between the Union and Council.
Although Cimato
2 has never formally executed a collective-bargaining agreement with the Union,
Cimato 2 has employed members of the Union without any consultation with, or
referral by, the
Joseph Kerlin
and James Mulholland are two union members who have been employed by Cimato 2.
Cimato 2 paid them paid $28.86 an hour—the prevailing wage set forth in the
By submitting this remittance report
and/or contributions to the Funds, the Employer agrees that it is bound to a
Collective Bargaining Agreement with the International Union of Operating
Engineers Local Union No. 17, 106, 463, 545, and/or 832 and the Agreements and
Declarations of Trust of the Engineers Joint Welfare, Pension, Supplemental
Unemployment Benefit, and Training Funds, the Agreement and Declarations of the
Central Pension Fund of the International Union of Operating Engineers and
Participating Employers, and any restatements or amendments thereof and any policies
adopted thereunder. By submitting this report, the Employer certifies that it
does not include any owners, partners, sole proprietors, or independent contractors.[27]
On or around
June 10, 2006, suspecting that Cimato 1 may have been subcontracting bargaining
unit work to a nonunion contractor, Franz visited a residential construction
site in
Franz, who was
unaware, prior to this conversation, of any distinction between Cimato 1 and
Cimato 2, responded that he was present at the 2005 negotiations, which Anthony
Cimato led on behalf of the Council, and the Council membership list presented
to the Union included Cimato 1. He also told Anthony Cimato that Cimato 1 sent
fringe benefit contributions to the Union on behalf of union members, which the
Franz
immediately called Titus about his conversation with Anthony Cimato and insisted
that “they” were bound by the collective-bargaining agreement. Titus said he
would speak with Anthony Cimato and get back to Franz. After speaking with
Anthony Cimato, Titus called Franz back. He told Franz that neither Cimato 1
nor Cimato 2 was a signatory to the collective-bargaining agreement, were not
bound by it, and that payments to the Union on behalf of union members was
simply one option given to them regarding benefits. Franz also mentioned that
Anthony Cimato, as the lead negotiator for the
On June 16,
2006, the Union’s counsel, Richard D. Furlong, Esq., sent a letter to Cimato 2,
specifically to the attention of Anthony and Ferdinando Cimato, responding to
Anthony Cimato’s contention that Cimato 2 does not have a collective-bargaining
agreement with the
We are also currently investigating what clearly appears to be a single employer/alter-ego relationship between Cimato Bros. Construction, Inc. and Cimato Bros., Inc. It is that latter firm, Cimato Bros, Inc., that has been a member of the Council of Utility Contractors, Inc., going back many years, and most recently during the collective bargaining negotiations that transpired in the spring of 2005. Therefore, as Cimato Bros., Inc. is clearly bound by the Council of Utility Contractors, Inc.—Local 1—collective bargaining agreement, Cimato Bros. Construction, Inc. is similarly bound by virtue of its single employer/alter-ego status with Cimato Bros., Inc. And presumably, you share this analysis as evidenced, by among other proofs, the Taft-Hartley contributions that Cimato Bros. Construction, Inc. periodically tenders.
In any event, we await to get back the signed agreement from Cimato Bros. Construction, Inc. An appropriate unfair labor practice charge will be filed if we do not receive the document back, fully executed, by the close of business Friday, June 23, 2006. And, in the event that you deny that there is a single employer/alter-ego relationship between the two aforementioned firms, an unfair labor practice charge will, similarly, be filed.
Lastly, enclosed is a questionnaire which you are required to complete and return to the undersigned. Please supply the information, together with the signed collective bargaining agreement, once again, by the close of business Friday, June 23, 2006.[29]
The
By submitting this remittance report
and/or contributions to the Funds, the Employer does not agree that it is bound to a Collective Bargaining
Agreement with the International Union of Operating Engineers Local Union No.
17, 106, 463, 545, and/or 832 and the Agreements and Declarations of Trust of
the Engineers Joint Welfare, Pension, Supplemental Unemployment Benefit, and
Training Funds, the Agreement and Declarations of the Central Pension Fund of
the International Union of Operating Engineers and Participating Employers, and
any restatements or amendments thereof and any policies adopted thereunder by
submitting this report, the Employer certifies that it does not include any
owners, partners, sole proprietors, or independent contractors. [Emphasis provided.][30]
Based on the
fringe benefit forms submitted by Cimato 2 to the Union and a conversation with
union member Kerlin, Franz knew that Kerlin and Mulholland were still working
for Cimato 2 at the
At this point,
Anthony Cimato walked across the jobsite and joined the conversation. Franz told Anthony Cimato that he was there
to work things out. Anthony Cimato explained
that Cimato 2 would be at a disadvantage in competing with other contractors if
it had to pay the higher wage rates required by the collective-bargaining
agreement for residential construction work. Although the
iii. legal analysis
A. Cimato 2’s Responsibilities Under the
Collective-
Bargaining Agreement By Virtue of Cimato 1’s
Council Membership
The complaint
alleges that Cimato 1 and Cimato 2 violated Section 8(a)(5) of the Act by
failing and refusing to apply the terms and conditions of the collective-bargaining
agreement with respect to operating engineers employed by Cimato 2. The
Respondents do not deny refusing or failing to comply with the April 2005
collective-bargaining agreement. Cimato 1 contends, however, that it neither
had a collective-bargaining agreement with the
An employer
commits an unfair labor practice in violation of Section 8(a)(5) by refusing to engage in collective bargaining
with its employees’ representative. Neither Cimato 1 nor Cimato
2 had an agreement with a majority of the employees in a covered bargaining
unit. Due to the occasional nature of employment in the construction industry,
however, Section 8(f) permits a construction industry employer to enter into
collective-bargaining agreements with a labor organization, even where the
union’s majority status has not been established. Progressive Construction Corp., 218 NLRB 1368 (1975). Such agreements are enforceable through their term, unless
repudiated by the unit employees in a secret ballot election. John Deklewa
& Sons, 282 NLRB 1375, 1377 (1987), enfd. 843 F.2d 770 (3d Cir. 1988), cert. denied 488 U.S. 889 (1988).
Moreover, a construction employer may be bound to successive 8(f)
contracts if it expressly gives continuing consent to a multiemployer
association to bind it to future contracts. The only exception is where the
employer withdraws its consent from the association in a timely and unequivocal
manner. Den-Ral, Inc., 315 NLRB 538 fn. 2 (1994); Retail Associates,
120 NLRB 388, 393 (1958).
The General
Counsel contends that an 8(f) relationship between Cimato 2 and the Union
existed by virtue of Cimato 1’s Council membership, Cimato 1’s designation of
the Council as its bargaining representative for the April 2005 collective-bargaining
agreement, the Council’s April 2005 collective-bargaining agreement with the
Union, and Cimato 1 and Cimato 2’s collaboration as a single employer.
The applicable
collective-bargaining agreement became effective on April 1, 2005. The most
recent Council membership list prior to that date was the one generated in
February 2005 and submitted to the
Anthony Cimato
did, at some time after the April 2005 collective-bargaining agreement became
effective and before September 2005, direct Titus to remove Cimato 1 from the
Council membership list that was used for bargaining with Local 210 on the
ground that the Company was inactive. Cimato did not, however, provide timely
written notice to the
The more complex
issue, however, is whether Cimato 2 should be held to apply the terms of the
collective-bargaining agreement because it, in fact, operates with Cimato 1 as
a single employer. The
Board has traditionally deemed two employers to be a single employer if they are, in fact, a single-integrated enterprise. See Penntech
Papers, Inc. v. NLRB, 706 F.2d 18 (1st Cir. 1983), cert. denied 464 U.S.
892 (1983). In such instances, the Board considers whether the two companies
have: (1) common ownership; (2)
common management; (3) functional interrelation of operations; and (4)
centralized control of labor relations. Not all of these criteria need to be
present, however, and single-employer status is generally determined based on
all the circumstances of a case and the absence of an arms-length relationship. Communication Systems
Corp., 350 NLRB No. 15, slip op. at 3
(2007); Park Maintenance, 348 NLRB No. 98, slip op. at 20–21 (2006); and Mercy
Hospital of Buffalo, 336 NLRB 1282, 1283–1284 (2001).
Cimato 1 and
Cimato 2’s operations are functionally interrelated. They share the same
business facility, office equipment, and support staff. Their joint office is
located in a building owned by Anthony Cimato. While there was proof that
Cimato 1 reimburses Cimato 2 for its portion of the office expenses, there was
no evidence as to what, if anything, Cimato 2 paid Anthony Cimato, as building
owner, in rent. Most telling is Titus’ belief, at all times prior to April
2005, that Cimato 1 and Cimato 2 were names used interchangeably to denote the
same Company. In any event, he certainly believed that one or the other was a
Council member.
Regarding common
management, Cimato 1’s only active employee is Anthony Cimato. He serves,
however, as president of Cimato 1 and secretary-treasurer of Cimato 2, and is
active in the operations of both companies. As illustrated in the Ellis
arbitration decision, and in several publicly filed documents with the Federal
Elections Commission and the New York Department of State, Anthony Cimato has
held himself out, at various times, as an executive, owner, board member, or manager
of Cimato 2. He has also been present at Cimato 2 construction jobs.
Cimato 1 and
Cimato 2 have common ownership. Anthony Cimato is a majority owner in Cimato 1
and a minority shareholder in Cimato 2. He became a minority owner of the
latter, however, only after gradually granting gifts of shares to each of his
children. Moreover, there is no evidence that his children have been required
to pay back the loan he gave them to purchase equipment from Cimato 1.
Lastly, there is
a centralized control of labor relations between Cimato 1 and Cimato 2 as
illustrated by Anthony Cimato’s actions as Council president. Since Cimato 1
formally joined the Council, but Cimato 2 never did, it must be inferred that
Anthony Cimato, as the Council’s president and lead negotiator, knowingly approved
the Council’s membership list, which listed Cimato 2 and was used during
several collective-bargaining sessions prior to April 2005. In the negotiations
for the April 2005 collective-bargaining agreement, Cimato 1 was, once again,
on the membership list.
Under the
circumstances, it is clear that: (1) Cimato 1 was a Council member as of April
1, 2005; (2) Cimato 1 did not effectively timely withdraw from the April 2005
collective-bargaining agreement and is, therefore, bound, by its terms and
conditions; (3) Cimato 1 and Cimato 2 have operated as a single employer since
the late 1990s through the present and, thus, Cimato 2 is also bound by the
collective-bargaining agreement.
B. The Implications of Cimato 2’s
Remittances to the
The complaint
alleges that Cimato 2, by remitting fringe benefits to the Union on behalf of
union members, “granted recognition to the Union as the exclusive bargaining
representative of the unit without regard to the majority status of the unit
and without regard to whether the majority status of the Union had ever been
established under the provisions of Section 9(a) of the Act.” Cimato 2 concedes
that it remitted fringe benefit contributions to the Union on behalf of union
members, but denies that such payments amounted to recognition of the
As previously
noted, Section 8(f)(l) allows employers and labor organizations in the
construction industry to enter into collective-bargaining agreements without
the union having to establish that it has the support of a majority of
employees in the applicable unit. An 8(f) relationship may, however, be terminated
by either the labor organization or the employer upon the expiration of their
collective-bargaining agreement. Madison
Industries, 349 NLRB No. 114, slip op. at 2 (2007), citing John Deklewa & Sons, 282 NLRB 1375,
1386–1387 (1987), enfd. sub nom. Iron
Workers Local 3 v. NLRB, 843 F.2d 770 (3d Cir. 1988).
It is undisputed
that Cimato 2 remitted union benefit fund contributions and dues payments to
the Union prior to, around the time of, and long after the effective date of
the April 2005 collective-bargaining agreement. The forms were submitted
unsigned, but that is of no consequence, as the forms expressly stated that, by
“submitting this remittance report and/or contributions to the Funds, the
Employer agrees that it is bound” to a collective-bargaining agreement with the
C.
The
Section 8(d) requires an
employer to comply with the terms and conditions of any collective-bargaining
agreement that it has agreed to. In its answer, Cimato 2 asserted that it did
not provide such information because it did not have a relationship with the
Conclusions of Law
1. Cimato
Brothers, Inc. and Cimato Brothers Construction, Inc. are employers engaged in
commerce within the meaning of Section 2(2), (6), and (7) of the Act.
2. The
International Union of Operating Engineers, Local Union No. 17 (the
3. By failing
and refusing to deal with the Union and dealing directly with its employees in
the unit regarding wages and fringe benefits, and failing and refusing to
furnish the Union, upon request, with information that is relevant and necessary
to the Union’s function as the exclusive collective-bargaining representative
of employees of the unit, the Respondents have engaged in unfair labor
practices affecting commerce within the meaning of Section 8(a)(5) and Section
2(6) and (7) of the Act.
Remedy
Having found
that the Respondent has engaged in certain unfair labor practices, I find that
it must be ordered to cease and desist and to take certain affirmative action
designed to effectuate the policies of the Act.
On these findings
of fact and conclusions of law and on the entire record, I issue the following
recommended[32]
ORDER
The Respondents,
Cimato Brothers, Inc. and Cimato Brothers Construction, Inc.,
1. Cease and
desist from
(a) Failing and
refusing to apply the terms and conditions of the 2005–2008 building, utility
and heavy/highway agreements between the Union and the Council of Utility
Contractors (the Council), and any successor agreements thereto, unless and
until they timely and effectively withdraw from multiemployer bargaining
through the Council, to its employees in the bargaining unit set forth in the
attached notice.
(b) Bypassing
the
(c) Failing and
refusing to furnish the Union, upon request, with information that is relevant
and necessary to the
(d) In any like
or related manner, failing or refusing to bargain collectively with
International Union of Operating Engineers, Local 17 as the recognized exclusive
collective-bargaining representative of employees in the unit.
2. Take the
following actions necessary to effectuate the purposes and policies of the Act.
(a) Adhere to the terms and conditions of the 2005–2008 building, utility and heavy/highway agreements betwe