Dews Construction Corp.

National Labor Relations Board - Board DecisionsDec 13, 1979

246 N.L.R.B. 945 (N.L.R.B. 1979)

I) A S (()NSIRt (I ()N ( '4ORP Dews Construction Corp., a subsidiary of The Aspin Group, Inc. and Federation of Employees Ulnion Lo- cal 1027 East Star Printing Corp.. and Ezekiel Davis. a sole proprietor, and as an Individual and Federation of Employees Union Local 1027. Cases 22 ('A 6903. 22 CA 7114. and 22 C(,A 7042 December 13. 1979 SUPPLEMENTAL DECISION AND ORDER On August 8. 1977. the National Labor Relations Board issued a Decision and Order' against Respon- dent Dews Construction Corp.. a subsidiary of lhe Aspin Group. Inc., herein called Respondent Dew. and Respondent East Star Painting Corp.. herein called Respondent East Star. in which the Board or- dered, in lcr alia. Respondent East Star to offer imme- diate and full reinstatement to Norris Holmes and that Respondent Dews and East Star jointly and sex- erally make Norris Holmes whole or anx loss of earnings he may have suffered as a result of his un- lawful discharge. which was found to he in violation of Section 8(a)(3) and ( I ) of the National Labor Rela- tions Act, as amended. On June 23. 1978. the United States Court of Appeals fir the Third Circuit entered its Judgment enforcing the Board's Order.: A contro- versy having arisen over compliance issues, including Respondent East Star's refusal to offer reinstatement to Norris Holmes and its corollary effect on the length of his backpay period and the amount of back- pay owned him, on November 20, 1978. the Regional Director for Region 22 issued and caused to be served on the parties his backpay specification and notice of hearing, alleging. inter hlia, the amount of backpav due Holmes. After extensions of time had been granted to file an answer to the backpay specification. Respondents Dews and East Star filed answers on December 6, 1978, and January 22. 1979. respec- tively. On May 1, 1979, counsel for the General Counsel filed with the Board a Motion for Summary Judg- ment with exhibits attached) Subsequently. on May 9, 1979. the Board issued an order transferring the proceeding to the Board and a Notice To Show Cause why the General Counsel's Motion for Summar, Judgment should not be granted. Respondents did not file a response to the Notice To Show Cause. Upon the entire record in this proceeding. the Board makes the following: 1 231 NlRB 182 (1977) 2578 2d 1374 'On March 20. 1979. the Regional D[)rct, r foir Region 22 isued an order postponing the hearing pending the Boards ruling on the (;eneral (Counscl', monon Ruling on the Motion for Sumnliarx Judgment Section 102.54(b) and (c) of the National Labor Relations Board Rules and Regulations. Series 8. as amended. provides as tfollow\s: (h) ('oit'len i ot i a w'r o Vt'cictllion. The answer to the specification shall be in writ- ing, the original being signed and sworn to hb the respondent or hb a duly authorized agent with appropriate power of attorne\ affixed. and shall contain the post office address of the re- spondent. The respondent shall specificall ad- mit. dens, or explain each and eery allegation of' the specification. unless the respondent is without knoswledge, in which case the respondent shall so state, such statement operating as a de- nial. Denials shall fairly meet the substance of the allegations oft the specification denied. \When a respondent intends to deny only a part of an allegation, the respondent shall specity so much of it as is true and shall dens only the remainder. As to all matters within the knowledge of the respondent. including but not limited to the var- ious factors entering into the computation of gross backpay, a general denial shall not suffice. As to such matters, if the respondent disputes either the accuracy of the figures in the specifica- tion or the premises on which the\ are based. he shall specifically state the basis for his disagree- ment, setting forth in detail his position as to the applicable premises and furnishing the appropri- ate supporting figures. (c) Effect o /fiilure to answer or lo plead specl/: icallv and i detail to the .Vecification.- If the re- spondent fails to file an5 answer to the specifica- tion within the time prescribed by this section. the Board may, either with or without taking evi- dence in support of the allegations of the specifi- cation and without notice to the respondent. find the specification to be true and enter such order as may be appropriate. If the respondent files an answer to the specification but fails to deny any allegation of the specification in the manner re- quired by subsection (b) of this section, and the failure so to deny is not adequately explained, such allegation shall be deemed to be admitted to be true, and may be so found by the Board without the taking of evidence supporting such allegation, and the respondent shall be precluded from introducing any evidence controverting said allegation. The hackpav specification duly served on Respon- dent states that "Respondent shall, within 15 days from the date of this Specification, file with the under- signed Regional Director. acting in this matter as an 246 NLRB No. 156 945 I)1 ( 1Is[()\S (1 N \ I IN() \1 IA.\BO()R RLt. A I() NS BO()ARI) agill o1' he Natiol lal hor Relaltions lBo;arl. an oTifitn Il IanIl t .(Tlt Copies oJ'f at ;ms1\1 to) ite Specifica- tiull." IC 1h. K pa spcitiicationl ;io stacs liat. to the etlent Illhal Rtespolndcnts ;in ers- to siil specificia- ion 'll lils to dcn. i ;lleations tof the Specilicalilon in li t II: rIIll I- Llilre'Cl d lldCer tile ,ald's Ruiles ;iill ICgulatLtiIs andl the t iltc to do s is lnotl AdCi 11i ll\ e\pliited. such all.e ations shall lie ldeesiiicled to e lid- mllill tol he true an11 the Resliondlent shall be re- lhuded I'tliT inli iodn. g \11 c e i ce tlittcc eCo llig til, tit' Ihe \ltion lot SIill;ir\ .it)l. elt allege s that the aI,\el I) the bLIckpal sleclli, ittion tiled \ R spIellllt I )esv s sttiles ilcrclx c gctteiral Idenial oi' ll 1hC :11 lii.11 llls i] TlCe spc ifica.titn)t. \\ 1ic1, is itIstilli- clent LIuni[ (he ritltlienientIs S.l torth i Sectioll 1) 2.4 tile Bolid', Rules ;illd ItRegLilati1ons. I Ile \lth , 10t1 SLiIllll/ '\ ItlKI lll ll t aIso ; elX, that lCi,.timn iIt I ;a1t Star stlhn/ilittel o l ganlll leiaiI ho L' t'I';li1 :ll I c tlollt , C litlie . ll tI lC. stiliCatil. alt thai JIt allcrcnl tlothel , asctitiit tha till- tiolln I'spcLt'll I/eksicl l)x Is as , iTdis ltial atc irrclIc\alt o the i1stailt pro.cceCdilg I e \Mlotion tor Stintililt\ t.luidglnt states thail the 1)ll ha;sis For tilt alSSC'tiOIlS is Res)Oltlenlt Last Starl's stttIlelte that it has cased doing usiness. ast Star',, assertiot)ns C- garding ihc drivatixe liabilit-\ of1 l)ais, states the mnolion are ippalrentlN based o its colitentions that due process cotSidcIrations har coulnsel i)r the (iCl- eral Counscl rom raising the issue of D)avis' delrii- tie Iiahilit for the first time in a backpa? proceed- ing. As to this contention. the Motion Ior Sumnis-\ IUdligtent asserts that its well established that de- rivative liahility for complitance with a Board torder ma, he imposed on parties not specifically naled in the initial proceedings and contends that Davis' op- cration as a sole proprietor is a continuation of' Last Star Corporation, that he is engaged in the same husi- ness as East Star. and that he employs the same em- ployees and uses the same equipment. Copies of' Respondent Dews' answer, and that of' Respondent ast Star, in which are incorporated ain- swers regarding the liability of' Davis, arc attached to the Motion for Summary Judgment as exhi as ibits and are not controverted by Respondents Dews and ast Star, nor by Davis. Respondent Dews' answer states only that it has no knowledge of the allegations con- tained in paragraph I of the specification and denies all the remaining allegations. The answer of Respon- dent East Star states only that it has discontinued doing business and denies the remaining allegations pertaining to it: the answer also states that the allega- tions relating to the activities of Davis as an individ- ual are irrelevant to these proceedings, and are repug- nant to concepts of' due process. The counsel fbr the General Counsel submits that the answers to the hackpa specification ail to com- ply with the requirements of Section 1)2,54(h); and (c) of the Bo)ard's Rules and Regulations. W'e agree a to t ile ans, es subhmittcd hb, Respotldent L[)e\s and Ei'at Star, except as to interim earnings. discussed belou: however Ir the reasons set forth below. we will not grant sunmn;lr jtLlgnient againsl I/ekiel )avis is aIS iddiv idl l a nll sole iprofprict ,r. ['he recortd dlnistlratc-s tlt l)'s is aIs a indiid- lIl snt ladC ;a[ paIrt\ ) o tilt he utIderl inc ntir labo p]cticC procc.ding in t, cis . I le did business ii] the crpoIrat trm under the st le Ilast Star Paint- ii (lporoltioll: tilre is no C Ide1ce alside froill tlhe bare alleations ot couinsel t,' lie (ieneral ('CounScl that IFaist Star ,is a shell ol, that )avis igiored tile corporate trnll anid operalted Ilast Star in such a m;an- ner is tojListit\ pirCCciIg the corporate ell. Sitmilarl\. there s 1io Cideuce on te record before its. other thain1 te AiCrietits of counsel Fo te (iln-ral (oun- sel. t iilcatleC thiat l)l is, doing business As l sole proprietor. or as a indildlIduaJl is eithilet a iuccc,sor to [Last Star or is acting as an a/tir (cgo in an attenipt to siphon o' assets of Last Star in order to enable it to as\oid its hackpa\5 oligation. As the Supreme Court reminiledC i its opinion in v I.1.. RB D. )cena .rtwatrc. Inc.. "lhec insulation o' a stockholder rom the debts and obligations of his corporation is the norm, not the exception.'" Because )ais was not made a part. to the under- \ingrig unfair lahor practice proceeding in this case, the record is devoid of ain! findings that would he neces- sar' in order ftr us to conclude that departure from this norm is appropriate. Accordingl . we shall den the Motion ft)r Suimniary Judgmnent against Davis as an individual and sole proprietor: however, we shall direct that a hearing be held in order to determine whether l)avis as a sole proprietor and an individual is a successr or an alter ego to ast Star Painting Corp., or has acted in some other m;anner that would justift' piercing the corporate veil and holding him liable ftr the hackpa owed Holmes bh :ast Painting C('orp. We also deny the Motion for Summary Judgment as to all parties on the issue of interim earnings. Both answers made general denials to that part of the backpay specification, and we find that these general denials are sufficient to send the issue to hearing. Section 102.54 of the Board's Rules states, inter a/ia, that "respondent shall specifically admit, deny' or explain each and every allegation of the [backpayl specification, unless the respondent is without knowl- edge, in which case the respondent shall so state, such statement operating as a denial." 4 361 .S 398. 402 403 ( 1960)1 citing Pullman, (r, (a., M '.lltinur i Pl,/, R ('. I S IS. 587. 589 (885). 1)t 'aS (()NSI RI (I I()N ( ()RF (Coiunsel for tlhe (;enerl ('ounsel argue that Sec- tion 102.54(h) nd (c) of' tile oard's Rules clearl provides that generalel denil does not suillice \s here respondent denies a l;latter uilhin its klnoas ldcde. a nd. since neither Respondent )eCs nor Respondent l ast Star provides alteriate torilaIs anld igl-ures tor ;alnx ot the backpa\ conlllprtltiOlls. their as elrS ;lre isut- ficient under the Boa rd rule. e a 'ree \ Ith iCOullnse t'or the General ('ounisel i\cpt is to the iiolnt of interim earnings. Ill Iattelr \, hlich \olld notl he , thitl Responllntis k nll x ledge. ' he ca ses cited h\ counsel or tile ( encrl.l ('ounsel. AhI .oIL h/Iin V[nllII,/clIaiIIioi, ( itp/rOlu'lII c ~l/. ;i1l. d (ItllIVtWi .I'c,'iCt' ( ',.' do not spIccliclll\ add'ress the interim earnlilngs issue. Il 1 1 Ohl,u i a hea l-ing o'n the backpa\ specitiition ll s held helorc an adminis- traltie la\ judIe: siii111Ct 11o11e Of tile I[Cspodcnts ip- peared at te heainlg lnd thus presel edl no s iidence inll support of theirl. po(itiO1. the \dininil1Staii C l.l\ Judege giranlted the ( ic eral ( oulnsl's \lotion lot StIi lll d tI"iiIllClt, I. \ldilg 1 o he discrllnI;it llce. thle all)ounlts o bhackpa g en in the hckpa\ specili- catioll, \iotIOt ruling on tilhle Stlticienc ot tile ll- swAers ith rgaid to 1inleril carningll s. \\c adopled tihalt decisioln. Inl (c11';,1 tlhe respondent ',as lihable otr hackpa becausLe it hid unlllafulIl chanliged tile w'age rates o(f its ctnpllo!ces. hc hlckpa\ specitica- tioLn as concernled oll\ ith the dilcrence inl tile rate tIl;lt shold ha.\e b en paid and the rale tile emll- ploCSees actllatJll' leceisced: interilml earnlings s1as not tactor ill the determination of backpli liahilit\. Ilowever, to cases cited in the (lle11vL [)ecision tdo address the issue of' interim earnings. I .S'out/rand Al,Ltaclii'Si ('. ? \\C adlopted an adinilistraltive law judge's decisionl s hilch found thatl ; general de- niial was insutlicieil t lraiSe issues as It interimni e;lll- ings. In Li. /L., WC found that a claiml ot Io knowledge as t interim earnings allegations , Aas also insufficient under Rule 102.54. More recentl. in Garrard (onva/xescenl Hlome, - crporaled we denied al Motion tfr SummarN Judg- ment on the issue of interim earnings here the an- swer to the backpa 3 specification was a general denial. We reasoned that interim earnings of a dis- criminatee would generall3 not be within the knowl- '219 NI RH 920 (197S ' 209 N RB 1 166 (1974) 1193 NLRB 1036. 1037 38 (1'971). 192 N R 827 i 971 2211 NIH RB 45( 197s) edge of t respondent and that a general ldenial \kith respect It Ithis issue is sfllticieit to idefeat a Motion for SLuinlr\ .lIudginlent under Rule 102.54 as to ilnterim e;irnllls. \'We find this reasionlg t he ththe hetter stan- dard. aml x\ c herch oxucrrile NSuilanihidi llianzul [tr- /1n ( rp .nlld I.q Il. Ii.. o tile e\telll the the\ ;lare inCOlntsisttl th itht his l)ecisioI1. Ap\1 ing tile (i/irrrd /standard to the instant case. sc note thatl Respondent I)es genera lls denied "ill the llegations as containetl in lParagraphs 2 [of' the slpeol!ictllc I and all 0of tlheir subparts inclusive : \c coIsider tltis 1 sufficient denial it' parag-raplhl 4(11h) t tile specificatioll \ hicl sets out lmes' ilnterim claril- inig. Respondent t.ast Star's ans,er illnicated that it denied "tile pr-priety of the colliptaiotlll lls il p.11t.l- graph 4. therch! deny!ing the prlpriet i the interim IlliS respolse to he a sufficient denial it tile Interim ;arniingls allegationll. ;alo . Accordlngl, . e sh1all deni the counsel for the (General (' Counsel's \lMotion to r SUllllnllarI .Iudgenlt as to Respondent l)\ks aind Ilist Star as uell. I o\ c er. the general detni;ls of Respondent )e sA and ast Star as to all other Issues in the hackpia specification1 are insufficien t under Section 102.54(h) and () Of' the oard's Rules and Regulations. ANs in- dicated, no) response to the Notice 'I) Shou (ase has heen filed h either of these Respondents. No good cause to the contrar\ being shou'n. the Board deems Respondent 1)' s a;nd Respondent [.ast Star to) ha e admitted all ther allegations of the hackpaN specification to he true. ccordingl . we shall order a heari ng limited to determi nationris of Davis' individual liabilit! and Ilolrles' interimi earnings. ORI)IDER It is herebh ordered that the General Counsel's Motion for Summar Judgment be, and it herehb is. denied. i 1 IS t ItiR O)RIIRtI) that this proceeding be, and it hereby is. remanded to the Regional Director for Region 22 for the purpose of arranging a hearing before an administrative law judge, limiting such pro- ceeding to determinations regarding the liability of Ezekiel Davis as a sole proprietor and an individual and the amount of Norris Holmes' interim earnings. and that the Regional Director be. and he herebh is. ;authorized to issue notice thereof.