CONCRETE MANUFACTURING COMPANY
Concrete Manufacturing Company and its Directors,
Officers and Agents; James C. Bailey, John
Barrett, Julian Davis, Aldine Walker, Charles
Ledford; the Retirement Committee of Concrete
Manufacturing Company of Dekalb Retirement
Plan and Local Union 8, Georgia Bricklayers,
Masons, Plasterers, International Union. Cases
10-CA-11213, 10-CA-11271, 10-CA-11380,
and 10-CA-11580
July 8, 1982
RULING ON MOTION AND SECOND
SUPPLEMENTAL DECISION AND
ORDER
BY CHAIRMAN VAN DE WATER AND
MEMBERS FANNING AND JENKINS
On April 29, 1976, Administrative Law Judge
John F. Corbley issued a Decision finding that Re-
spondent Concrete Manufacturing Company of
DeKalb and Respondent Concrete Manufacturing
Company, a single employer, hereinafter referred
to as Respondent Company, violated Section
8(a)(3) and (1) of the National Labor Relations
Act, as amended, by discriminatorily discharging
employees Calvin Jones and Alfred Lee Shealey.
The Administrative Law Judge issued a recom-
mended Order requiring Respondent Company to
reinstate the discriminatees and make them whole
for any loss of earnings they may have suffered by
reason of the discrimination practiced against them.
As no exceptions were filed to the Administrative
Law Judge's findings or recommendations, the
Board, on June 10, 1976, summarily adopted the
Administrative Law Judge's Decision and Order in
its entirety.' Thereafter, on January 30, 1978, the
United States Court of Appeals for the Fifth Cir-
cuit enforced the Board's Decision and Order.2 On
June 29, 1979, following issuance of a backpay
specification and notice of hearing by the Regional
Director for Region 10, Administrative Law Judge
Robert C. Batson issued a Supplemental Decision
which recommended that Respondent Company be
ordered to pay certain backpay sums to the two
discriminatees, and further recommended that the
Board reserve the determination as to whether any
individual might be personally liable to satisfy the
backpay award pending court enforcement of the
Supplemental Decision and a plea of Respondent
Company and its officers and agents of inability to
comply therewith due to a lack of assets to satisfy
the award. On September 11, 1979, the Board
adopted the Supplemental Decision and recom-
' Not reported in bound volumes of Board Decisions
I N.LR.B. v. Concrete Manufacturing Company of DeKalb, No. 77-
3265 (5th Cir. 1978).
mended Order in its entirety. 3 Subsequently, the
United States Court of Appeals for the Fifth Cir-
cuit issued an order enforcing the Board's Supple-
mental Decision.4 On August 31, 1981, counsel for
the General Counsel filed directly with the Board a
"Motion for Determination of Personal Liability"
alleging that Respondent James C. Bailey, herein-
after referred to as Respondent Bailey, and Re-
spondent John Barrett, hereinafter referred to as
Respondent Barrett, wrongfully converted assets of
Respondent Company to their personal use. Coun-
sel for the General Counsel requested that the
Board find that Respondents Bailey and Barrett
were personally liable to satisfy the court-enforced
backpay award. Thereafter, on November 6, 1981,
the Board issued a notice that the parties show
cause why the General Counsel's "Motion for De-
termination of Pcrsonal Liability" should not be
granted. Only Respondent Bailey Filed a response
to the Notice To Show Cause.
Pursuant to the provisions of Secti:)n 3(b) c.f the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
Upon the entire record in this proceeding, in-
cluding Respondent Bailey's response to the Notice
To Show Cause, the Board makes the following
findings:
The sole issue in this proceeding is whether Re-
spondent Bailey and Respondent Barrett are per-
sonally liable to satisfy the Board's court-enforced
backpay order. For the reasons set forth below, we
find, in agreement with the General Counsel, that
those individual Respondents are personally re-
sponsible to satisfy the backpay award.5 Accord-
ingly, we shall grant the General Counsel's motion.
In early March 1976, following the unfair labor
practice hearing before Administrative Law Judge
Corbley, but before his Decision issued, the Citi-
zens and Southern National Bank, hereinafter re-
ferred lo as Citizens Bank, instituted foreclosure
proceedings against Respondent Company. Shortly
thereafter, on April 6. 1976, the physical assets of
Respondent Company were sold by Citizens Bank
to satisfy Respondent Company's indebtedness.
3 244 NLRB 975.
4N.LR.B v Concrete Manufactur:ng Company of DcKalb, No. 80-
7634 (5th Cir 1980).
s We find no ment to Respondent Bailey's assertion that the Board is
without jurisdiction to determine the issues raised by the instant motion.
In N.LR.B. v. CCC. A.ssociatcs. Inc., er al. 306 F.2d 534 (2d Cir. 1962),
the court clearly upheld the authority of the Board to conduct post-deci-
sional inquiries relating to questions of derivative liability. That case is
squarely applicable herein. See also Riley ,eronautics Corporation. et al.,
178 NLRB 495 (1969). Moreover, our first Supplemental Decision in this
case specifically reserved jurisdiction to consider the issue of personal lia-
bility at a later date. Under these circumstances, we find Respondent Bai-
ley's challenge to our jurisdiction to be groundless.
262 NLRB No. 92
727
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Since that date, Respondent Company has been de-
funct and, except as noted below, without assets to
satisfy the Board's backpay award to the discrimin-
atees.
At the time of the foreclosure, Respondent Com-
pany had in existence a retirement plan having
assets in excess of $30,000. The retirement plan,
created in 1963, was totally funded by Respondent
Company for the benefit of certain of its employ-
ees. Approximately 5 years after the retirement
plan was created, Respondent Company entered
into a trust agreement with a local bank wherein
that bank became trustee of the retirement plan. In
1972, Citizens Bank assumed the trust agreement
and at all times thereafter functioned as trustee.
Following foreclosure, Citizens Bank, as trustee of
the retirement plan, disbursed to all vested partici-
pants in the retirement plan their pro rata shares of
the corpus of the trust. After such distribution,
there remained in the trust approximately $17,000
which had accrued by virtue of contributions made
on behalf of employees whose benefits had not
vested. It is this $17,000 "surplus" which the Gen-
eral Counsel contends are assets of Respondent
Company which can be reached to satisfy the
backpay liability. However, on May 12, 1977, Re-
spondent Company's board of directors, consisting
of Respondent Bailey, Respondent Barrett, and Re-
spondent Bailey's wife, authorized and directed the
chairman of Respondent Company's retirement
committee s to cause the distribution of the retire-
ment plan surplus to the plan's vested beneficiaries.
The following day, Respondent Bailey, as chair-
man of the retirement committee, instructed Citi-
zens Bank, as trustee, to distribute the retirement
plan surplus in accordance with the board of direc-
tors' instruction. On or about June 1, 1977, trustee
Citizens Bank filed an action in interpleader in the
United States District Court for the Northern Dis-
trict of Georgia7 seeking that the named defend-
ants interplead and settle among themselves their
rights to the retirement plan surplus. The complaint
named the following defendants: Respondent Com-
pany; the retirement committee; and Respondent
Bailey, Respondent Barrett, Julian Davis, Aldine
Walker, and Charles Ledford, as beneficiaries of
the retirement plan. On July 11, 1977, all of the
named defendants filed a joint answer and state-
ment of claims in which Respondent Company and
the retirement committee disclaimed all interests in
the surplus moneys, and the individual defendants
called for distribution among themselves. On the
e The retirement 'committee consisted of Respondent Bailey, Respond-
ent Barrett, and Respondent Bailey's wife. Respondent Bailey was chair-
man of the committee.
I Citizens and Southern National Bank. Truste v. Concrete Manufactur-
ing Company of DeKalb et at, No. C77-903A (N.D. Ga. 1977).
same date, the court granted the trustee's motion
for judgment on the pleadings and, since all de-
fendants agreed upon the manner in which the sur-
plus was to be distributed, ordered that the surplus
be distributed as follows: to Respondent Bailey,
$12,651.37; to Respondent Barrett, $1,009.11; to
Julian Davis, $151.71; to Aldine Walker, $1,680.71;
and to Charles Ledford, $1,522.87.
Based on the foregoing facts, the General Coun-
sel contends that the acts of Respondents Bailey
and Barrett, taken at a time when those Respond-
ents had actual knowledge of the Board's Order re-
quiring backpay be paid to discriminatees Jones
and Shealey, constituted wrongful depletion of
assets belonging to Respondent Company for the
purpose of defeating that backpay award. We
agree.
Initially, we find that the moneys constituting
the retirement plan "surplus" are assets of Re-
spondent Company. Article IX of the retirement
plan states, inter alia, that: "If the assets of the Plan
are more than sufficient to provide 100% of the
benefits for all priority Classes, the remainder shall
revert to the Company."8 Respondent Bailey con-
cedes, as he must, that this provision indicates that
the approximately $17,000 surplus in its retirement
plan is an asset of Respondent Company, but con-
tends that article X of the trust agreement is in
direct conflict with that provision. Respondent
Bailey argues that the trust agreement, written
some years after the retirement plan, must control
over the retirement plan itself. We find it unneces-
sary to pass on this contention since, in our view,
the trust agreement is not in direct conflict with
the retirement plan. Article X of the trust agree-
ment provides as follows:
The Company reserves the right at any time
and from time to time (a) to modify or amend
· ..any or all of the provisions of this Agree-
ment, or (b) to terminate this Agreement upon
sixty (60) days prior notice in writing to the
Trustee; provided, however, that the Company
shall certify in writing to the Trustee that such
termination, modification, or amendment prior
to the satisfaction of all liabilities with respect to
Participants . . . does not permit any part of
the corpus or income of the Fund to be used
for, or diverted to, purposes other than the ex-
clusive benefit of the Participant.... In the
event of termination of the Trust, all cash, se-
curities and other property then constituting
the Fund, less any amounts constituting
charges and expenses payable from the Fund,
shall be paid over or delivered by the Trustee
Art. IX, "Amendment and Termination," sec. 2, p. 24.
728
CONCRETE MANUFACTURING COMPANY
to or on order of the Committee. [Emphasis
supplied.]
The quoted language, hardly an exemplar of clarity
in drafting, does not rebut the clear language of ar-
ticle IX of the retirement plan, set forth above.
Viewed in the light most favorable to Respondent
Bailey, the quoted language is, at best, ambiguous.
At worst, the quoted language is fully consistent
with the retirement plan's provision that moneys
remaining in the trust fund after all vested benefits
have been paid revert to Respondent Company.
Accordingly, we find that the approximately
$17,000 remaining in the trust fund after satisfac-
tion of all vested benefits was an asset of Respond-
ent Company reachable by the Board or the courts
to satisfy any liabilities of Respondent Company,
including a backpay award.
Having found that the retirement plan "surplus"
was an asset of Respondent Company, there re-
mains for consideration the issue of whether, in
view of the subsequent distribution of that surplus
to the beneficiaries of the retirement plan, the par-
ticular facts of this case warrant the extraordinary
action of the Board "piercing the corporate veil"
and imposing personal liability on the individual
Respondents for the backpay awarded the discri-
minatees. In deciding this issue, we are guided by
the principles set forth in Chef Nathan Sez Eat
Here, Inc., et al., 201 NLRB 343 (1973), and Riley
Aeronautics Corporation, et al., 178 NLRB 495.9 In
Riley, the Board adopted an Administrative Law
Judge's statement of the applicable law, as follows:
[T]he corporate veil will be pierced whenever
it is employed to perpetrate fraud, evade exist-
ing obligations, or circumvent a statute....
Thus, in the field of labor relations, the courts
and Board have looked beyond organizational
form where an individual or corporate em-
ployer was no more than an alter ego or a "dis-
guised continuance of the old employer" . . .
or was in active concert of participation in a
scheme or plan of evasion ... or siphoned off
assets for the purpose of rendering insolvent
and frustrating a monetary obligation such as
backpay . . . or so integrated or intermingled
his assets and affairs that "no distinct corpo-
rate lines are maintained." [Id. at 501.]
Applying these principles to the instant case, we
find that Respondent Bailey and Respondent Bar-
rett are personally liable for the backpay due the
discriminatees. We do not make this determination
of personal liability lightly, but rather believe that
it is mandated by the particular facts of this case.
9 See also Metropolitan Bureau of Investigation Inc.. et al., 246 NLRB
544, fn. I (1979).
Respondents Bailey and Barrett, together with Re-
spondent Bailey's wife, composed both the board
of directors and the retirement committee of Re-
spondent Company. Respondent Bailey was presi-
dent of both corporate entities composing Re-
spondent Company. Respondent Barrett was plant
manager of Respondent Company's DeKalb facili-
ty. As recited above, the Board's original Decision
and Order, directing that Respondent Company
make whole the discriminatees for their lost wages,
issued on June 10, 1976. Over 11 months later, on
May 12, 1977, Respondents Bailey and Barrett
joined in a unanimous consent of the board of di-
rectors of Respondent Company authorizing and
directing Respondent Bailey, as chairman of the re-
tirement committee, to cause the distribution of the
retirement plan "surplus" for the personal use of
the retirement plan's beneficiaries, including Re-
spondents Bailey and Barrett. Obviously, then, the
board of directors' action occurred at a time when
it had actual knowledge of the Board's Decision
providing for backpay to the discriminatees.' ° By
taking the action they did and converting assets of
Respondent Company to their own personal use,
Respondent Bailey and Respondent Barrett acted
to frustrate this Board's directions by rendering Re-
spondent Company insolvent and thus incapable of
satisfying the Board-ordered backpay relief.1I We
find that this action warrants "piercing the corpo-
rate veil," and imposing personal liability on Re-
spondents Bailey and Barrett under the principles
set forth in Chef Nathan Sez Eat Here, supra, and
Riley Aeronautics, supra. 1 2
ORDER
It is hereby ordered that the General Counsel's
"Motion for Determination of Personal Liability"
be, and it hereby is, granted.
IT IS FURTHER ORDERED that Respondent James
C. Bailey and Respondent John Barrett shall, to the
extent indicated herein, be personally liable to satis-
fy the backpay liability of Respondent Concrete
tO Indeed, Respondent Bailey admitted that he had knowledge of the
Board's Order shortly after it issued and well prior to the unanimous
action of the board of directors.
" Our decision to impose personal liability is not affected by the fact
that the distribution of Respondent Company's assets was carried out
under the color of a court order, since the order noted on its face that it
was entered by consent of the parties.
" In view of the sum certain originally available to satisfy our back-
pay award, the parameters of the extent to which Respondent Bailey and
Respondent Barrett are liable to satisfy that award are limited to the sums
received by them for their personal use, plus interest. Thus. Respondent
Barrett's liability shall be limited to S1,009.11 plus interest, and that of
Respondent Bailey shall be limited to $12,651.37 plus interest. In order to
effectuate most fully the purposes and policies of the Act, we direct that
such liability shall be joint and several in nature. Interest on the sums re-
ceived by Respondent Bailey and Respondent Barrett shall be computed
in the same manner as interest on the backpay owed the discriminatees.
729
730 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Manufacturing Company as set forth in the Board's Supplemental Decision and Order reported at 244
NLRB 975 (1979).
