B & J Plumbing, Inc.

National Labor Relations Board - Board Decisions

Jun 2, 1969

176 N.L.R.B. 293 (N.L.R.B. 1969)

B & J PLUMBING, INC.
B & J Plumbing , Inc., and Hagan Brothers, Inc. and
Local Union No. 249 , United Association of
Journeymen and Apprentices of the Plumbing and
Pipefitting Industry of the United States and
Canada , AFL-CIO. Case 17-CA-3668
June 2, 1969
DECISION AND ORDER
BY CHAIRMAN MCCULI OCH AND MEMBERS
FANNING AND JENKINS
On March 14, 1969, Trial Examiner A. Norman
Somers issued his Decision in the above-entitled
proceeding, finding that the Respondents, had
engaged in and were engaging in certain unfair labor
practices and recommending that they cease and
desist therefrom and take certain affirmative action.
as set forth in the attached Trial Examiner's
Decision. Thereafter, the General Counsel filed an
exception to the Trial Examiner's Decision.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
powers in connection with this case to a
three-member panel.
The Board has reviewed the rulings of the Trial
Examiner made at the hearing and finds that no
prejudicial error was committed. The rulings are
hereby affirmed. The Board has considered the Trial
Examiner's Decision, the exception, and the entire
record in this case, and hereby adopts the findings,
conclusions, and recommendations of the Trial
Examiner, except as modified herein.
THE REMEDY
We agree with the Trial Examiner's
Recommended Order insofar as it orders
Respondents to recognize the Union as the exclusive
bargaining representative of the plumbers,
pipefitters, and apprentices employed by them on
work performed in Salina, Kansas and vicinity, and
to honor the existing collective-bargaining
agreement executed by Respondent B & J
Plumbing, Inc., and the Union on August 13, 1968,
establishing the terms and conditions of employment
of such employees for a 2-year term commencing
July 1, 1968. However, although it is implicit in his
Recommended Order, the Trial Examiner does not
expressly state that Respondents should be ordered
to give retroactive effect to all terms and conditions
of the aforementioned contract, so that the Section
8(a)(5) violation herein found may be completely
remedied by assuring that Respondents in no
manner profit from their conduct. Accordingly, we
shall so modify the Trial Examiner's Recommended
Order.' Backpay, if any, shall be computed in
accordance with the formula set forth in F. W.
Woolworth Company, 90 NLRB 289, and shall bear
293
interest as prescribed in Isis Plumbing & Heating
Co., 138 NLRB 716, and all other fringe benefits
shall be paid to the appropriate recipients.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby adopts as its Order the
Recommended Order of the Trial Examiner, as
modified herein, and orders that Respondents, B &
J Plumbing, Inc., and Hagan Brothers, Inc., Salina,
Kansas, their officers, agents, successors, and
assigns , shall take the action set forth in the Trial
Examiner's Recommended Order, as so modified:
1. Substitute the following for paragraph 1(b) of
the Trial Examiner's Recommended Order:
"(b) Refusing to honor and fully apply,
retroactively and prospectively, the terms and
provisions of the collective-bargaining agreement
executed on August 13, 1968, by Respondent B & J
Plumbing, Inc. and the Union."
2. Insert the following as subparagraph (b) of
paragraph 2 of the Trial Examiner's Recommended
Order, and redesignate the succeeding
subparagraphs accordingly:
"(b) Honor and give retroactive effect, from July
1, 1968, to the terms and provisions of the
aforementioned collective-bargaining agreement,
including but not limited to the provisions relating
to wages and other employment benefits, and, in the
manner set forth in this Decision and Order entitled
"The Remedy," make whole their employees for
losses, if any, they may have suffered by reason of
Respondents' failure to honor and fully comply with
such agreement."
3. Substitute the following for the second indented
paragraph of the notice to the Trial Examiner's
Decision:
WE WILL honor, fully comply with, and give
retroactive effect to all terms and provisions of
the collective-bargaining agreement signed by B &
J Plumbing, Inc. with the said Union on August
13, 1968, including those provisions relating to
wages and other employment benefits to make
whole our employees for any losses they have
suffered.
'N.L.R.B v. Joseph T Strong, d/b/a Strong Roofing & Insulating
Company. 89 S. Ct 541 (1969); Ray Hopman d/b/a Ray Hopman
Plumbing and Heating . 174 NLRB No 64.
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
A. NORMAN SOMERS, Trial Examiner . This case was
heard before me in Salina , Kansas on December 4 and 5,
1968.' The complaint , issued by the General Counsel on
October 17 on a charge filed by the Union September 9,
The year is 1968 in all instances except where otherwise stated.
176 NLRB No. 43
294 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
alleges the violation of Section 8(aX5) and (1) of the Act,
by the refusal of B & J Plumbing, Inc., directly and
through Hagan Brothers , Inc., its alleged " alter .ego" to
bargain collectively with the Union as the exclusive
bargaining representative of the employees in the unit
involved, or to honor the collective-bargaining agreement
executed by B & J Plumbing, Inc., with the Union.' At
the time set for the opening of the hearing, Boyd Lee,
president of Respondent B & J, speaking for himself and
his brother, Charles Lee, president of Respondent Hagan,
stated that under arrangements made the preceding day
with their counsel, Respondents would handle the hearing
themselves, but counsel would represent them in the
subsequent steps in the proceeding. Since there had been
no communication from counsel to that effect, the
undersigned caused a telephone call to be made to
Respondents' counsel so that his (or his firm's) role in the
case might be clarified. On the telephone, counsel,
speaking to the official reporter in this case for
transcription in the record, substantially confirmed the
arrangements expressed by Iespondents themselves.
During the hearing, Boyd Lee, at the counsel table acted
as the "representative" or "counsel" for both
Respondents. He examined and cross-examined witnesses,
raised and argued objections and motions, and when all
parties rested, he presented oral argument. Though he
stated that when the record would be transcribed, their
lawyer would prepare and file the brief, the brief filed
before me is in the name only of Boyd Lee, as
"Representative of the Respondent." However,
Respondents' counsel (and his firm), pursuant to counsel's
statement on the telephone , are still retained in the case as
attorneys for Respondents. Counsel for the General
Counsel too has filed a brief and it has been duly
considered along with the brief filed for Respondents.
On the entire record (as corrected on an order issued on
notice to all parties) and my observation of the demeanor
of the witnesses, I hereby make the following:
FINDINGS OF FACT
1. THE BUSINESS OF THE RESPONDENTS
B & J Plumbing, Inc. (hereafter B & J), and Hagan
Brothers , Inc. (hereafter Hagan), are Kansas corpo -ations
located in Salina , Kansas, and are engaged in plumbing
and related operations.' Boyd Lee, president of B & J,
admitted that B & J during the period involved, received
at least $50,000 worth of supplies a year that originate out
of the State and that it is engaged in commerce within the
meaning of the Act. The commerce jurisdiction over B &
J extends to Hagan if the functional relationship of the
two calls for their being treated as one employer or for
the conclusion that Hagan was an instrument for B & J's
evasion of its bargaining obligation under the Act - a
matter to be treated on the merits.'
The caption in the complaint reads , "B & J Plumbing, Inc., and its
alter ego Hagan Brothers, Inc." I have stricken the term " its alter ego" in
the caption , since it thereby assumed a matter which calls for decision
within the litigation itself.
'This includes heating and air conditioning . Boyd Lee testified B & J is
(or until recently was) engaged in a limited sense in heating and air
conditioning , but that Hagan is engaged in plumbing only (though it may
well at a future time be engaged in heating and air-conditioning as well).
The point is that Hagan was established to perform whatever it was that B
& J performed in the Salina area. Such work as B & J had performed
outside the Salina area (and by that token outside the coverage of B & J's
contract with the Union , whose geographic jurisdiction is in the Salina
area only ) does not concern us here.
11. THE LABOR ORGANIZATION INVOLVED
The Charging Party, Local Union No. 249 of the
Plumbers Union AFL-CIO, is a labor organization within
the meaning of the Act.
III. THE UNFAIR LABOR PRACTICES
A. Issue
The issue ( as suggested in Part I above) is whether
Hagan , a newly-formed corporation, bears with B & J the
latter's liability for disregarding its bargaining obligations
with the Union, including the contract B & J signed with
the Union for the 2-year term commencing July 1, 1968.
B. The Facts
1. Synopsis
The principals of B & J are Boyd Lee, its president,
and M. J. Martin (sometimes referred to as "Jay"). They
started the enterprise as copartners, and since
incorporation (in 1964), have been 50-50 stockowners of B
& J and have operated the B & J enterprise together.
(Charles, brother of Boyd, was an employee of B & J
since 1963, and ceased being on B & J's payroll upon the
later described formation of Hagan.) B & J began
contractual relations with the Union in 1965. All
negotiations with the Union on behalf of B & J, including
the signing of contracts or other agreements, have been
conducted by Boyd Lee. In 1965, B & J signed a contract
for a 1-year term expiring June 30, 1966. This was
coterminous with the 2-year contract customarily signed
with the Union by the plumbing contractors in the Salina
area that deal with the Union. These plumbing contractors
in the Salina area (7 or 8 in number) negotiate the terms
of the contract with the Union together, but they sign the
contract singly, each in a separate document in which the
plumbing contractor there is named "the employer." In
1966, following such negotiations, B & J signed a 2-year
contract with the Union expiring June 30, 1968.
Negotiations for a succeeding contract to begin July 1,
1968, did not culminate in agreement by June 30, and so
on July 1, a strike occurred among the said employer
contractors in the Salina area, including B & J. On July
9, the strike was settled by a "letter of consent" signed
with the Union by all the above-mentioned employer
contractors in the Salina area, including B & J; and On
August 13 , B & J signed the formal contract for the
2-year term running consecutively from the expiration of
the last prior contract; i.e., from July 1.
B & J did not comply with the terms of the 1968
contract. At a grievance meeting held September 5, B & J
rejected the grievance, claiming that B & J's entire
personnel now worked for Hagan. Hagan was
incorporated on July 2, the day after the strike began. Its
incorporators were Boyd Lee and M. J. Martin, and also
Charles Lee, younger brother of Boyd, and until June 28
an employee of B & J. Charles Lee was named president
of Hagan. On June 28, before the actual incorporation of
Hagan and when the then current contract had a few days
to run, Boyd Lee, for B & J, and Charles Lee, for Hagan,
signed a paper, prepared by Boyd Lee, under which B & J
turned over to Hagan the "house plumbing contracts" and
'N.L R.B. v. Jordan Bus Company. 380 F 2d 219 (C.A. 10), and cases
cited
B & J PLUMBING , INC. 295
its accounts receivable on work already performed by B &
J, as well as all tools and equipment.
None of this was mentioned to the Union. On July 2,
the day Hagan was incorporated, Charles Lee saw
William Bachofer , business manager of the Union, at his
office. Charles said he wanted to give up his union card,
and told Bachofer he was setting up his own plumbing
shop, and though he was finishing some house plumbing
contracts of his brother's, he assured Bachofer that his
was an independent shop ( located in a storehouse in a
separate building from B & J) and totally unconnected
with his brother's shop. Boyd Lee, when he signed the
"letter of intent" on July 9 settling the strike, similarly
said that his brother's shop and B & J had no connection
with each other. On August 13, when Boyd signed the
formal contract for B & J for the term beginning July 1,
he told Bachofer he was not sure how long B & J would
stay in business , and that that was due to financial
troubles. (Boyd, on that score, mentioned that he had
recently been turned down by the bonding company on a
bid for a contract for work in a city outside the Salina
area - work that is not in the Union's geographic
jurisdiction or within the coverage of the contract with the
Union, since this contract covers plumbing and allied
work in "Salina and vicinity.")
The Onion, when it filed its grievances on September 5,
pointed out that it had interveningly received information
showing the interconnection of the two shops. Boyd
insisted that Hagan was independent of B & J, even
though the entire personnel of B & J in Salina was now
on Hagan's payroll, including Boyd Lee and M. J. Martin
themselves.
The Union, on September 9, filed charges of violation
of 8(a )(5) and ( 1), naming B & J and also Hagan. B & J
responded by a letter sent by Boyd Lee on September It,
cancelling the contract in its entirety. The ground stated
was that the employees of B & J who struck on July 1 did
not return to the job after the settlement of July 9. B & J
had not theretofore made such a complaint, and if it had
had any on that score, the established procedure was to
invoke the hiring 'hall provision of the contract by
requesting of the Union the help the employer needs.
Boyd Lee admitted he never made such a request of the
Union, nor could he have wanted to, since to do so would
be the reverse of what Boyd testified he wanted to
accomplish by the establishment of Hagan, - to get B &
J out from under the coverage of the contract with the
Union altogether.
At all events, it is not seriously disputed that B & J
disregarded its bargaining and its contract obligations, in
violation of Section 8(a)(5) and (1) of the Act. What
Respondents seek to avoid is Hagan ' s being held liable,
along with B & J, for B & J's violations of Sections
8(a)(5) and (1) of the Act and, particularly , being held
responsible along with B & J for remedying the violations.
2. Background: The prior attempt in 1967, through a
company called Blue Jay, to get B & J out of the
coverage of the then contract
The evidence abounds in admissions by Boyd Lee and
brother Charles Lee that a purpose, if indeed not the sole
purpose, in establishing Hagan was to remove B & J from
the coverage of B & J's contract with the Union.
This was not the first such effort by B & J. In 1967,
during the life of B & J's 1966 contract with the Union, B
& J turned over its Salina plumbing operations to Blue
Jay Company, a newly formed partnership composed of B
& J's principals, Boyd Lee and M. J. (Jay) Martin. B & J
changed the names on its trucks from B & J to Blue Jay,
and when the Union Qled a grievance based on B & J's
failure to comply with various requirements of the
contract (i.e. the hourly rate, the requirement that those
used in the plumbing work be journeymen plumbers or
apprentices, and the use of the hiring hall provision), Boyd
Lee claimed in 1967 in respect to Blue Jay as he was to
do in 1968 in respect to Hagan, that this was a separate
company and not involved in the collective- bargaining
agreement. However, in 1967, unlike what was to happen
in 1968, B & J accepted the grievance. It signed a paper
acknowledging that it had violated the wage requirements
and the exclusive hiring hmlll provision . It agreed that it
would "strictly adhere to the terms of the contract," and
specifically implemented the wage and exclusive hiring
hall provisions of the contract.' B & J further vouched
that "only regular fulltime qualified journeymen plumbers
and registered apprentices will be permitted to do work
within the jurisdiction of the [Union]" and further agreed
that "so long as the parties are obligated by this contract
or any other contract between the parties, the Employer
will conduct all plumbing business through [B & J]."
3. Identity of purpose of Hagan with that of Blue Jay
and the claim that the means used made the
difference in result
a. The contract and its geographic coverage: The
Salina area
It has been mentioned that the Union's geographic
jurisdiction is the Salina area. The contract, the one
signed 1966, like the one signed 1968, states in the
preamble that "the Employer is engaged in Plumbing [and
related work] throughout Salina and vicinity" and "the
Parties hereto desire to establish uniform working
conditions for Journeymen and Apprentices." The point
here is whatever plumbing and allied work B & J does in
the Salina area is covered by the contract with the Union.
Boyd Lee testified that B & J had until recently (when it
went a cropper on its ventures outside Salina) engaged in
commercial plumbing (i.e., bidding for bonded contracts
on commercial buildings) in cities outside the Salina area
- which, as stated, involved work and personnel outside
the concern of any contract with this union.
b. Transfer of B & is Salina area plumbing as
signifying its intention to get out of the contract
altogether
So if B & J wanted to use some set-up, whether it be
Blue Jay in 1967 or Hagan in 1968, in order to get out of
the coverage of its contract with the Union, it meant
turning over to such newly formed company its plumbing
and allied work in Salina and vicinity, whatever the
specific character of such plumbing. In the instances of
both Blue Jay and Hagan, Boyd Lee stressed that each
'Under the contract of 1966 (as in the one of 1968 ), the employer
informs the Union of the help it needs, and the Union refers the needed
worker to the employer on the basis of the applicant 's order in the hiring
hall list. The list is based on the worker 's fulfilling journeymen's and
apprentices ' qualifications. without relation to union membership. The
employer retains the right to reject the applicant referred . In the paper
signed to rectify B & J's aberrations via the Blue Jay route , B & J agreed
that in rejecting an applicant B & J would do so on reasonable grounds
stated in writing.
296 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
was used to do "house" or "residential" plumbing, and
that it, B & J, wanted to get out of "house" plumbing. At
the same time, Boyd made the point that he also wanted
B & J to get out of the coverage of the contract
altogether , from which either of two things would follow:
either that the only plumbing B & J had in the Salina
area happened to be house plumbing or that the term,
"house plumbing" semantically covered whatever
plumbing and allied work B & J had in Salina and
vicinity or had held itself out to perform in the Salina
area.
The breadth of Boyd Lee' s, i.e., B & J's purpose, in
forming Hagan in 1968 , and Blue Jay in 1967 came from
Boyd himself. He testified:
TRIAL EXAMINER: To the extent that there were
employees who would not be covered by the contract,
you retained, B & J retained that work.
THE WITNESS: Yes, Sir.
TRIAL EXAMINER : The only work that was, that B &
J did not retain but assigned to Hagan was work
involving employees that are covered by the agreement,
is that correct?
THE WITNESS' Yes, sir, which at the time this
assignment was made , there was no contract.
This last referred to the interval between July 1, when
the strike begin, and July 9, when it was settled. As Boyd
Lee admitted, the terms of the contract to succeed the one
of 1966 were in active negotiation during the strike and
the new contract by its terms runs from the time that the
1966 contract expired.'
The 1968 contract is in all other respects a replica of
the 1966 contract except in respect to the hourly wage
rate. The "letter of intent" of July 9, settling the strike
shows that under the new contract there was to be an
increase in the hourly rates over those in the 1966
contract. This, apparently, was what the strike had been
about, and the agreed increase in hourly rate is embodied
in the appropriate clause of the formal contract of 1968.
Boyd Lee acknowledged that negotiations for the 1968
contract continued after the 1966 contract expired. He
testified:
Q. And the reason for this was to avoid the
obligations under the union contract that B & J had
signed, isn't that correct?
A. At that time, there was no contract.
* * * *
TRIAL EXAMINER: And to avoid the obligation that
was then the subject of negotiation for another
contract?
THE WITNESS: Right, it was under negotiation at the
time B & J Plumbing Company had had it, they
wanted to do no house plumbing at all.
The inquiry then turned to whether Blue Jay and
Hagan had the same purpose. Boyd Lee testified'
Q. In other words, Blue Jay was set up for the same
reason Hagan Brothers were set up?
A. No, sir. Blue Jay was set up at that time to be
operated in conjunction with B & J Plumbing Company
The preamble of the 1968 contract has an additional paragraph, which
recalls the caveat in the paper signed in 1967 in the wake of the Blue Jay
venture . The third and new paragraph of the preamble of the 1968 contract
provides:
This agreement covers all work done by the Employers (sic], his
successors, assigns , subcontractors on the job-site, and all work done
under his direction and /or control directly or indirectly, and all work
performed in whole or in part with his equipment or employees
as a nonunion branch of that company.
Q. And nonunion was the main reason it was set up?
A. That was the only reason Blue Jay was set up.
Q. To avoid having to live up to obligations under
the union contract?
*
A. Yes, sir.
Boyd's "No, sir" was belied by his specific admission of
the purpose of forming Hagan:
TRIAL EXAMINER: Then the purpose for forming
Hagan Brothers was to take over the work of B & J
that was sought to be taken out of the contract with the
union.
WITNESS' Yes, Sir.
Boyd Lee was manifestly expressing a difference not in
purpose but in the means used: that Blue Jay was set up
as a "nonunion branch" of B & J, while Hagan was an
independent entity and not a "branch" of B & J.
4. The functional relationship of Hagan to B & J
In view of the admitted purpose of Hagan as the means
of B & J's getting out of its contract with the Union, the
details of the interconnection between B & J and Hagan,
while perhaps not essential, are mentioned only because of
the plethora of the evidence showing Hagan, was the
"disguised continuance,"' of B & J.
Boyd Lee, as his testimony indicates, thought B & J
had accomplished through Hagan what B & J had not
achieved through Blue Jay because it thought Hagan,
unlike Blue Jay, was not a "branch" of B & J, and that
this derived from the fact that Hagan was a corporate
entity, had a president other than Boyd and Martin, and
that Charles owned 98 of Hagan's 100 shares of stock
(while he and Martin owned 1 share apiece).
In all other respects, however, Hagan was the replica of
B & J. It was not only set up to do the work of B & J,
but it did so, and in connection with it, took over B & J's
entire Salina personnel (which included those engaged in B
& J's plumbing work in Salina as well as the principals of
B & J and also the secretary or bookkeeper of B & J). It
took over B & J's contracts, the amounts owing on work
already done and B & J's tools and equipment in that
work. Further, as appears, the performance of the work is
controlled by Boyd and Martin, the principals of B & J,
and the bidding or estimating on new contracts is done by
them and not Charles.
The paper signed on June 28 by Boyd and Charles
respectively for B & J and Hagan provided:
Due to the problems involved in continuing the
residential plumbing trade B & J Plumbing and Hagan
Bros. enter into the following agreement, Hagan Bros.
is to receive from B & J Plumbing all of their current
contracts, receivables, tools and what inventory is at
present in stock pertaining to the housing business.
In return for the foregoing items Hagan Bros. agrees
to assume the current liabilities for housing accounts at
Salina Supply Company for the months of May and
June and to finish all houses started by B & J
Plumbing and to maintain all houses previously finish
[sic] for a period not to exceed one year.
Boyd Lee and W.J. Martin are to receive one share
of stock in Hagan Bros. to insure that the maintainence
'Southport Petroleum Company v N.L.R B ., 315 U.S . 100, 106.
B & J PLUMBING , INC. 297
(sic) terms and the aforementioned liabilities are
properly paid.
This agreement entered into on the 28th day of June,
1968, shall become binding on all parties at 12 PM,
June 30, 1968.
Hagan Bros.
by /s/ Charles Lee
by /s/ Boyd Lee
B & J Plumbing, Inc.
by /s/ Boyd Lee by /s/
Boyd Lee
The accounts due on the tools and equipment came out
of the amounts due on the work, so that the receipts in
excess of the accounts due went to Hagan. The question
is, what was B & J getting for what it was giving Hagan?
Charles testified the quid pro quo was Hagan's warranting
the performance on the work. But the warranted
performance was achievable only through the principals of
B & J. A prerequisite for opening and conducting a
plumbing shop in Salina is that it have a licensed master
plumber. The master plumber passes on the product for
which the customer is to be billed. Charles, although he is
a journeyman plumber, is not a master plumber. (He had
well before there was a Hagan applied to be one without
success, and so far as appears, he never tried again.) The
licensed master plumber of Hagan is the licensed master
plumber also of B & J - Boyd Lee. It was not disputed
that there had been no prior instance in Salina where the
licensed master plumber of a plumbing shop is other than
an owner , and in any event where the licensed master
plumber is other than attached exclusively to only one
shop. So the very thing that B & J was supposed to be
getting in exchange for what it was giving up was the very
thing that B & J too was providing, the licensed master
plumber's imprimatur on the work done.
Then, there was the matter of how Hagan submits bids
for future work, i.e. for new contracts. Charles testified he
was hazy on the quantity and the amount of Hagan's new
contracts, but the one who had the information was his
"estimator ." Hagan ' s estimator , Charles testified , was his
brother Boyd. He later qualified this by indicating that M.
J. Martin too did some estimating. Boyd testified that he
and Martin were the estimators for Hagan as they had
been for B & J. (Boyd suggested that Charles does some
"light" estimating , despite Charles ' own admission that he
does none, but that suggestion of Boyd petered out on its
own in any event.) So the very capacities of Hagan to bid
on new contracts , i.e., to evaluate a bid on the work to be
charged in the light of the expenses of the business, both
current and prospective, hinge on the very persons who
performed the crucial work for B & J - Boyd Lee and
M. J. Martin.
Then what accounted for Charles' receiving nearly all
of the capital stock of Hagan? Charles prefaced his
explanation with a belittlement of the significance of the
capital stock - that it did not mean much, since Hagan
has no dividends and the three of them, Charles, Boyd
and Martin, receive $200 a week from Hagan which
indicates that that is their yield above the expenses. At
any rate, as to how Charles came to be the owner of the
capital stock, the evidence was as follows: Boyd testified
that to form a corporation the State requires a capital
investment of $1,000. Charles and Boyd testified that
Charles met that requirement by depositing $ 1,000 in the
bank in the name of Hagan, and that he, Charles,
deposited that $1,000 in the bank in cash. Charles had a
personal checking account in the bank of $250. He still
does. None of this $250 was touched when Charles
deposited the $1,000 as the requisite capital investment of
Hagan . Charles testified that the $1,000 came from a
cookie jar at his home, where he had accumulated F#me
$1,300 over several years. Asked why he had not put it in
savings, where it would draw interest, Charles replied,
"Some people have a thing about things like that, it is the
way I felt about it. I can save easier that way." As to the
remainder of the cookie jar's contents, Charles testified he
bought a "camper" with it. Asked how the attorneys who
drafted the incorporation papers were paid, that too came
in part from the cookie jar and in part from the $1,000
capital investment deposited in the Hagan name. At any
rate, the cookie jar since then has been an empty one.
Every reasonable inference is that even the $1,000 used in
Hagan 's capital investment had the same source as all else
that was used in setting up Hagan's - the resources of B
& J.
The explanation as to why Hagan was chosen to do B
& J's work was, in essence, as Boyd and Charles testified,
that the contract, under its "working rules," forbade the
"employer" (i.e., Boyd and Martin) from performing
employees' duties, except "emergency work," whereas
without a union contract all of them could perform
regular employees' duties. And so as Charles testified:
Q. All three of you got together and formed the
corporation called Hagan Brothers, Inc., so all three of
you could make some money, is that right?
A. Yes sir.
Q. And that they would go back in the house
business with you under the name of Hagan Brothers, is
that what you are trying to tell me?
A. Yes, sir, that is what it really amounts to.
Boyd Lee testified:
TRIAL EXAMINER: To what extent does Charles Lee,
does his work differ from the work he did with B & J,
aside from the fact he is named as president and so on,
really his actual work, does it consist of the same work
that he did with B & J?
THE WITNESS: His work is quite similar. He had
worked for B & J in a supervisory capacity on jobs.
TRIAL EXAMINER : His day-to-day form of operating
his business is just about the same now as it was under
B&J?
THE WITNESS: Yes, sir except now he has got the
total responsibility.
TRIAL EXAMINER: Let us say he worries more but he
does the same work.
THE WITNESS: Approximately yes, sir.
The extent of Charles' comprehension of the
responsibilities of Hagan, as distinguished from Boyd's,
already appears. On other matters Charles was corrected
by Boyd as to the following. He testified Hagan's officers
included himself as president and Boyd as vice-president.
Boyd testified the vice-president was Martin and he was
not an officer. Even the $200 a week that Charles testified
that he, his brother, and Martin received from Hagan did
not accord with Boyd' s version . Boyd, speaking for
himself, testified it was $150 a week and $50 for expenses,
"for tax purposes."
The brothers gave other testimony to suggest that
Charles, in addition to the above-described motive, had
another motive of his own in establishing Hagan -
298 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
namely to be in business for himself. This need hardly
detain us . Charles testified that in March 1968, he took
the first step toward having his own business by
purchasing motor vehicles from B & J in contemplation of
some day being an excavator. He never in fact embarked
on that venture and continued on B & J's payroll until the
signing of the B & J-Hagan paper of June 28. The
purported transaction in March is expressed in a paper in
which the installments on the payments owed by Charles
Lee to B & J are substantially met by the rental that B &
J agreed to pay on one of these vehicles (a tractor) that
Charles rented back to B & J. So far as appears, Charles
did not apply for certification of title for the vehicles until
July, which is after Hagan was formed. So the fair
inference is that this purported transaction of March was
retrospectively conceived in July to give verisimilitude to
the claim that Charles had for some time past wanted to
go into the business for himself, albeit as an excavating
company, and that that aspiration was realized by the
formation of Hagan, albeit as a plumbing company. To
similar effect is the testimony of Charles that he bought
new trucks well before Hagan was formed, one in April
and the other in June. He testified that for the truck he
bought in April he made a down payment of $1,000. He
testified that that $1,000 came not from the cookie jar but
from $1,000 B & J gave him as a bonus on a job he had
supervised. He did not think it extraordinary to receive
this handsome emolument from B & J, despite B & J's
own financial troubles to which he testified, or to investing
in an operation which had not yet been formed, whether
the ultimate venture be excavating or plumbing. There
was also the matter of how on June 28, when Hagan was
conceived and the Hagan-B & J paper signed, B & J
could have become the warrantor of the performance of B
& J's contracts, when the customers of B & J had not yet
agreed to the assignment of B & J's contracts to Hagan.
Charles explained that about 2 weeks earlier, he
approached these customers on his own because he had
heard B & J was in difficulty and they okayed his new
company's being the warrantor for performance of B &
J's contracts - though the customers signed no papers,
no new company existed, and none was conceived until
June 28, when he, his brother and Jay Martin thought of
it together.'
C. Conclusions
Since, as admitted, a purpose in forming Hagan was to
take B & J from out of the coverage of its contract with
the Union (both the one expiring on June 30 and the one
under negotiation for the term to commence the day after
June 30), and Hagan was itself a participant in that
purpose, it would follow that they are both jointly liable
for B & J's violations of its obligation to bargain
collectively with the Union and of its obligation to abide
by the contract terms. This conclusion is reinforced by the
combination of facts indicating that Hagan was a facade
for B & J itself. Hagan acquired the entire personnel of B
& J in Salina, its contracts on uncompleted work, the
accounts receivable on work performed, and the tools and
equipment for the work. The performance of the work and
the bids on contract for future work are controlled by the
'Charles added a piquant touch in explaining what inspired the names
used . The Blue Jay of 1967 stood for Boyd Lee and Jay Martin. The
Hagan of 1968 stood for a known and admired character in a TV western.
The brothers Lee, as did Jay Martin, were intrigued by the Hagan
designation and used it to symbolize the Lee brothers.
principals of B & J. B & J's functional role in Hagan's
operations would supersede whatever power inhered in
Charles Lee's title as president of Hagan or his status as
owner of its capital stock, assuming even the genuiness of
his role. That these items had no genuine reality is
manifest from the fact that Boyd Lee, president of B & J,
called every shot in the formation and establishment of
Hagan from its inception. Even the $1,000 capital
investment which was supposed to be the basis on which
Charles Lee owned the stock of Hagan is not rationally
accounted for by the cookie jar as distinguished from the
inference to be drawn from the fact that B & J was the
source of Charles' bounty as it was the source of Hagan's
bounty. This is in fact to say that Hagan is the alter ego
of B & J." But one need not go that far in concluding that
Hagan shares the liability of B & J for violating the
bargaining, as well as the contract, obligation with the
Union. Boyd Lee's characterization of the 1967-formed
Blue Jay Company as a "branch" of B & J is also
applicable to the 1968-formed Hagan." Yet even if one
were to conclude that Hagan was a separate company,
then at the very least Hagan, as the inheritor of B & J's
total personnel and the performer, present and future, of
all of the work embraced by B & J's contract with the
Union is B & J's successor," and since it was a conscious
instrument used in B & J's violation of its bargaining
obligation and of the contract, Hagan was a co-participant
with B & J in the violations. Additionally, Hagan,
through Charles Lee, and B & J through Boyd Lee,
misrepresented to union business manager Wachofer the
nature of the relationship between the old and the new
corporations, thereby violating the obligation of the
employer to notify the bargaining agent concerning
changes in the mode of operation of the business affecting
the employees.
It is found that B & J violated Section 8(a)(5) and (1),
and that Respondent Hagan is a co-participant with B &
J in said violations.
IV. THE REMEDY
It will be recommended that Respondents cease and
desist from the violations found and take the requisite
action to remedy them. What is called for under the facts
here existing is that B & J and Hagan cease and desist
from dishonoring the contract and its provisions, and
affirmatively bargain with the Union as the representative
of the employees engaged in the work covered by the
contract and to honor and comply with its terms.' 2
This remedial action is especially called for here, since
B & J for such plumbing operations as are performed in
Salina is now performed in the name of Hagan. Boyd Lee
testified that B & J's other operations, i.e., those outside
Salina, have ceased (assertedly because of inability to
obtain performance bonds on bids). However, B & J's
existence as a corporate entity has been retained, and,
according to Boyd Lee will continue. It is thus appropriate
to name B & J and Hagan in the order, as jointly
'Jenks d/b/a Glendora Plumbing , 172 NLRB No 197; Charles T.
Reynolds , Sr, d/b/a Charles T Reynolds Box Company. 139 NLRB 519
"N L R.B v. Jordan Bus Company, supra, fn. 4
"Randolph Rubber Company, Inc., 152 NLRB 496, 499, Maintenance,
Incorporated, 148 NLRB 1299, 1301.
"Cf. N.L.R.B. v. Strong . 393 U.S. 357, enfg . 152 NLRB 9; Jenks d/b/a
Glendora Plumbing . supra, fn. 9 See also Hackney Iron & Steel Co, 167
NLRB No. 84, as remanded in International Chemical Workers Union v.
N.L R.B. 395 F 2d 639 (C.A.D.C ).
B & J PLUMBING, INC. 299
responsible for its provisions."
On the findings above and on the entire record , I state
the following:
CONCLUSIONS OF LAW
1. Respondents , B & J Plumbing , Inc., and Hagan
Brothers , Inc., are a single employer engaged in plumbing
in Salina and vicinity , Hagan being either the alter ego of
B & J or a branch of B & J ' s enterprise.
2. The employees used by said Respondents in
connection with said plumbing and allied work in Salina
or vicinity are an appropriate unit for the purpose of
collective bargaining.
3. The Union is the exclusive collective bargaining
representative of said employees within the meaning of the
Act.
4. Respondents have failed and refused to bargain
collectively with the Union as the said bargaining agent
and have failed and refused to abide by the contract
signed by B & J Plumbing , Inc., and have repudiated said
contract , thereby engaging in unfair labor practices within
the meaning of 8(a)(5) and (1) of the Act, affecting
commerce within the meaning of Section 2(6) and (7) of
the Act.
On the findings and conclusions above and on the entire
record , the undersigned hereby recommends that the
Board issue the following
"Appendix."' ° Copies of said notice on a form provided
by the Regional Director of Region 17, after being duly
signed by Respondents' representatives shall be posted by
them immediately upon receipt thereof and be maintained
by them for 60 consecutive days thereafter, in conspicuous
places, including all places where notices to employees are
customarily posted. Reasonable steps shall be taken to
insure that said notices are not altered, defaced or covered
by any other material.
(c) Notify said Regional Director, in writing, within 20
days from the date of receipt of this Decision, what steps
Respondents have taken to comply therewith."
"In the event that this Recommended Order is adopted by the Board,
the words "a Decision and Order " shall be substituted for the words, "the
Recommended Order of a Trial Examiner" in the notice . In the further
event that the Board 's Order is enforced by a decree of a United States
Court of Appeals , the words "a Decree of the United States Court of
Appeals Enforcing an Order " shall be substituted for the words "a
Decision and Order."
"In the event that this Recommended Order is adopted by the Board,
this provision shall be modified to read "Notify said Regional Director, in
writing, within 10 days from the date of this Order, what steps
Respondents have taken to comply herewith."
APPENDIX
NOTICE TO ALL EMPLOYEES
ORDER
B & J Plumbing , Inc. and Hagan Brothers , Inc., their
officers, agents , successors, and assigns , shall:
1. Cease and desist from:
(a) Refusing on request, to bargain collectively with,
and in good faith, with the Union as the exclusive
bargaining representative of the unit of employees
employed by Respondents, or either of them, in
connection with plumbing and allied work in Salina and
vicinity, or to notify the Union, as such representative, of
any changes in the mode or structure of operations
affecting the employees in said unit.
(b) Refusing to abide by the terms and provisions of the
collective - bargaining agreement executed between
Respondent B & J Plumbing , Inc. and the Union.
(c) In any like or related manner interfering with,
restraining , or coercing its employees in the exercise of
rights guaranteed to them by Section 7 of the Act.
2. Take the following affirmative action which it is
hereby found will effectuate the policies of the Act:
(a) Upon request, recognize and bargain with the Union
as exclusive representative of all the employees in said
unit with respect to rates of pay, wages, hours of work,
and other conditions of employment and sign such
agreement as may be reached - consistently , however
with the additional requirement that Respondents honor
and comply with the said contract executed between B &
J Plumbing , Inc. and the Union.
(b) Post in the place of business of Respondents in
Salina, Kansas, copies of the notice attached hereto as
"An added element in Hagan 's own obligation is the provision under the
third paragraph of the preamble of the 1968 contract (supra, In. 6), which
embraces all work done by the employer, "his successor and assigns and
all work under his direction and/or control," or performance in whole or
in part with the employer's "equipment or employees."
Boyd Lee complains that compliance with the contract would be
financially difficult. That, however, does not abrogate a contract obligation
or its terms.
Pursuant to the Recommended Order of a Trial
Examiner of the National Labor Relations Board and in
order to effectuate the policies of the National Labor
Relations Act, as amended, we hereby notify our
employees that:
WE WILL NOT refuse to bargain and, on request, will
bargain collectively in good faith with Local Union no.
249, United Association of Journeymen and
Apprentices of the Plumbing and Pipefitting Industry of
the United States and Canada, AFL-CIO, as the
exclusive representative of the unit of employees
employed by B & J Plumbing, Inc., and/or Hagan
Brothers, Inc., in plumbing and related operations in
Salina and vicinity, in respect to hours, wages,
conditions of work, grievance or disputes, and sign such
agreement as may be reached, and further;
WE WILL honor and comply with the terms of the
contract signed by B & J Plumbing, Inc., with the said
Union on August 13, 1968, for the 2-year term
beginning July 1, 1968, and ending June 30, 1970;
WE WILL NOT in any other like or related manner
interfere with, restrain, or coerce employees in the
exercise of the rights guaranteed by the National Labor
Relations Act.
B & J PLUMBING, INC.
(Employer)
Dated By
(Title) (Representative)
Dated
HAGAN BROTHERS, INC.
(Employer)
By
(Title) (Representative)
This notice must remain posted for 60 consecutive days
from the date of posting, and must not be altered,
defaced, or covered by any other material.
300 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
If employees have any question concerning this notice East Twelfth Street , Kansas City , Missouri 64106,
or compliance with its provisions they may communicate Telephone 816-374-5282.
directly with the Board 's Office, 610 Federal Building, 601