Marbro Co.

National Labor Relations Board - Board Decisions

Apr 21, 1993

310 N.L.R.B. 1145 (N.L.R.B. 1993)

1145
310 NLRB No. 195
MARBRO CO.
1 The Respondent has requested oral argument. This request is de-
nied as the record, the exceptions, and the briefs adequately present
the positions of the parties.
2 The Respondent has excepted to some of the judge’s credibility
findings. The Board’s established policy is not to overrule an admin-
istrative law judge’s credibility resolutions unless the clear prepon-
derance of all the relevant evidence convinces us that they are incor-
rect. Standard Dry Wall Products, 91 NLRB 544 (1950), enfd. 188
F.2d 362 (3d Cir. 1951). We have carefully examined the record and
find no basis for reversing the findings.
Marbro Company, Inc., and its alter ego and/or
successor, R. Marinucci & Sons, Inc. and Local
77, International Union of Operating Engi-
neers, AFL–CIO. Case 5–CA–12572
April 21, 1993
SECOND SUPPLEMENTAL DECISION AND
ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
DEVANEY AND OVIATT
On April 13, 1992, Administrative Law Judge Mi-
chael O. Miller issued the attached supplemental deci-
sion. The Respondent filed exceptions and a supporting
brief,1 and the General Counsel filed cross-exceptions
and a supporting brief. Both the Respondent and the
General Counsel filed answering briefs to the other
party’s exceptions.
The National Labor Relations Board has delegated
its authority in this proceeding to a three-member
panel.
The Board has considered the decision and the
record in light of the exceptions and briefs and has de-
cided to affirm the judge’s rulings, findings,2 and con-
clusions as modified herein and to adopt the rec-
ommended Order as modified.
1. Based on his reading of the Board’s original deci-
sion reported at 284 NLRB 1303 (1987), the judge
found that the Respondent had lawfully withdrawn rec-
ognition from the Union and, accordingly, its bar-
gaining obligation ceased at that time. For this reason,
the judge found no reason to extend the Respondent’s
liability beyond $57,664.04, the backpay amount deter-
mined due by the Board on December 22, 1989, and
subsequently enforced by the United States Court of
Appeals for the Fourth Circuit on November 29, 1990.
The General Counsel excepts to the judge’s finding re-
stricting liability and urges us to order the Respondent
to fully comply with the remedy fashioned by the
Board in 1987. In this regard, the General Counsel as-
serts that more backpay may be due in the case of
three former Marbro strikers who continued their em-
ployment with R. Marinucci & Sons, Inc.
We find merit in the General Counsel’s exceptions.
The judge misread footnote 3 of the Board’s 1987 de-
cision and the corresponding pertinent parts of Admin-
istrative Law Judge Benard’s underlying decision.
Contrary to the judge’s findings here, Judge Benard’s
dismissal of the 8(a)(5) allegation, which the Board
adopted in the absence of exceptions, was based on her
finding that Marbro Company, Inc. had actually met its
bargaining obligation for a separate agreement with the
Union. Thus, neither Judge Benard nor the Board made
any finding that union recognition had been withdrawn
lawfully or otherwise. Accordingly, we shall specifi-
cally modify the judge’s Order to require full compli-
ance with the Board’s 1987 decision, including the
posting of the notice to employees and the payment of
benefit fund contributions for any returned striker for
periods when they may have been carried on the pay-
roll of R. Marinucci & Sons, Inc.
2. In adopting the judge’s conclusion that R.
Marinucci & Sons, Inc. (RMS) is the alter ego of
Marbro Company (Marbro), we find Alkire v. NLRB,
716 F.2d 1014 (4th Cir. 1983), denying enf. 259
NLRB 1323 (1982), factually distinguishable from the
situation presented here. In Alkire, the court refused to
hold the old company (Alkire) responsible for the un-
fair labor practices committed by the new company
(Mountaineer) because, even assuming that Alkire and
Mountaineer may have been controlled by the same
entity or individual, there was insufficient evidence
that an expected or reasonably foreseeable benefit from
the transfer of the business was related to the elimi-
nation of Alkire’s labor obligations.
Here, in contrast, the judge found, and the record
supports his finding, that John Dowd and Rosario
Marinucci have possessed significant control over both
Marbro and RMS at all relevant times. Dowd had an
intimate role in Marbro’s affairs before he became
president of RMS and there is no indication whatso-
ever that Marinucci exercised any day-to-day manage-
ment while Dowd served as Marbro’s president. Then,
after his wife died, Marinucci became the major inves-
tor in RMS and acted as its principal loan guarantor.
Dowd’s testimony reveals that Marinucci was not a si-
lent money giver but was instrumental in having RMS
agree to serve as a subcontractor and complete several
unfinished projects of Marbro, representing something
in the range of $150,000 and $180,000, in order to re-
tain Marinucci’s good reputation in the community. In
addition, the emergence of RMS, unlike the transfer to
Mountaineer in Alkire, also brought about an important
reasonably foreseeable potential economic benefit to
the owner of the old company as noted by the judge.
Thus, absent a finding of alter ego, with the formation
of RMS, the Marinucci family could stay in the sewer
and utility construction business but not have their fu-
ture projects saddled with the obligation to pay any
union benefit fund contributions on behalf of returning
1146 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
3 In adopting the judge’s alter ego findings, we reject the Respond-
ent’s contention that the judge’s statement that Marbro Company
‘‘experienced a bona fide discontinuance’’ is necessarily inconsistent
with an alter ego finding. The judge was merely stating in different
terms what he had stated in the previous sentence—that there were
reasons for the discontinuance other than a desire to discontinue sat-
isfying its ‘‘labor relations obligations.’’
4 Because the provisions of employee benefit funds are variable
and complex, we will leave to further compliance proceedings the
question of whether the Respondent must pay any additional
amounts into the benefit funds in order to satisfy our Order. Depend-
ing on the circumstances of each case, these additional amounts may
be determined by reference to provisions in the documents governing
the fund at issue and where there are no governing provisions, by
evidence of any losses directly attributable to the unlawful with-
holding, which might include the loss of return on investment of the
portion of the fund withheld, additional administrative, costs, etc.,
but not collateral losses. See Merryweather Optical Co., 240 NLRB
1213, 1216 fn. 7 (1979).
1 284 NLRB 1303 (1987).
2 No. 87-3663, unpublished.
3 297 NLRB No. 69 (Dec. 22, 1989) (unpublished).
strikers in accordance with the Board’s Order issued
on July 24, 1987.3
We also adopt the judge’s conclusion that RMS is
a Golden State successor to Marbro and, thus, liable
additionally under that theory to remedy the unfair
labor practices previously committed by Marbro.
ORDER
The National Labor Relations Board adopts the rec-
ommended Order of the administrative law judge and
orders that the Respondent, Marbro Company, Inc. and
R. Marinucci & Sons, Inc., Beltsville, Maryland, its of-
ficers, agents, successors, and assigns, shall take the
action set forth in the Order and pay $57,644.044 to
the appropriate union benefit funds.
IT IS FURTHER ORDERED that the Respondent shall
fully comply with the Board’s July 24, 1987 Order. In
particular, the Respondent is responsible for benefit
fund payments for any returned strikers for periods
when they may have been carried on either Marbro’s
or RMS’s payrolls until the Respondent negotiates in
good faith with the Union to an agreement or to a
good-faith impasse or until the Union refuses to bar-
gain. The Respondent is also required to post the no-
tice to employees set forth in the Board’s original deci-
sion reported at 284 NLRB 1303 (1987), but with both
Marbro Company, Inc. and R. Marinucci & Sons, Inc.
listed as the named employer.
Angela S. Anderson, Esq., for the General Counsel.
John William Mannix, Esq., for the Respondent.
Robert P. Horst, Business Representative, for the Charging
Party.
SUPPLEMENTAL DECISION
STATEMENT OF THE CASE
MICHAEL O. MILLER, Administrative Law Judge. This
matter was heard in Rosslyn, Virginia, on September 19 and
20, 1991, and January 13 and 14, 1992, based on a compli-
ance specification and notice of hearing which was issued by
the Regional Director for Region 5 of the National Labor Re-
lations Board (the Board), on December 21, 1990, and an an-
swer to the specification which was timely filed on January
22, 1991, on behalf of R. Marinucci & Sons. Inc. (RMS). No
answer was filed and no appearance was entered on behalf
of Marbro Company, Inc. (Marbro).
The specification alleged, and RMS’ answer denied, that
RMS is the alter ego of, or the successor to, Marbro and, as
such, is liable to remedy unfair labor practices which Marbro
was previously found to have committed.
On the entire record, including my observation of the de-
meanor of the witnesses, and after considering the briefs
filed by the General Counsel and Respondent RMS, I make
the following
I. FINDINGS OF FACT
A. Background
The original charge in this matter was filed on September
5, 1980, and resulted in the issuance of a complaint on Octo-
ber 22 of that year. The complaint alleged that Marbro had
violated Section 8(a)(5) and (1) of the National Labor Rela-
tions Act by its untimely withdrawal from an multiemployer
bargaining association, refusing to honor and abide by the
terms of an agreement negotiated by that association and
Local 77, International Union of Operating Engineers, AFL–
CIO (the Union or Charging Party), withdrawing recognition
from the Union, and unilaterally discontinuing payments to
that Union’s fringe benefit trust funds on behalf of its em-
ployees.
The administrative law judge’s decision issued on June 18,
1982. On July 24, 1987, the Board issued its Decision and
Order, adopting the administrative law judge’s decision to
the extent that she had found that Marbro’s unilateral dis-
continuance of fringe benefit fund contributions on behalf of
returning strikers violated Section 8(a)(5) and (1).1 Marbro
was ordered to make those employees whole by the payment
to them of any losses resulting from the unilateral change
and the payment of appropriate contributions to the fringe
benefit funds on their behalf, continuing the contributions
until Marbro negotiated with the Union in good faith to an
agreement or impasse or a refusal to bargain by the Union.
Enforcement of the Board’s Decision and Order was grant-
ed, without Marbro’s answer or opposition, by the Fourth
Circuit Court of Appeals on April 28, 1988.2
Following enforcement, a compliance specification and no-
tice of hearing issued, alleging that Marbro had failed to pay
a total of $57,664.04 to the Union’s pension, health & wel-
fare and Apprenticeship funds on behalf of 13 named em-
ployees. Marbro filed no answer, the undenied allegations of
the specification were deemed to be true, and the Board, on
December 22, 1989, issued its Order, directing Marbro, its
officers, agents, successors, and assigns to make those pay-
ments, ‘‘plus any additional amounts computed in the man-
ner described in Merryweather Optical Co., 240 NLRB 1213
fn. 7 (1979), accrued to the date of payment.’’3 That Supple-
mental Decision and Order was enforced by the Fourth Cir-
1147MARBRO CO.
4 Marbro no longer recognized any unions as representing its em-
ployees and had no collective-bargaining agreements at this point in
time.
5 The record refers to a line of credit with the Maryland National
Bank as well as a line of credit with the equipment supplier. It is
not clear whether there were one or two lines of credit guaranteed
by Rosario Marinucci.
6 Dowd testified that RMS paid $20,000 to $35,000 each for these
trucks and trailers. At another point in his testimony, he claimed that
RMS rented them and then took over the payments. The record con-
tains evidence that RMS paid Rosario Marinucci approximately
$117,000 in a series of checks issued between mid-December 1986
and mid-March 1987; no one was asked, or explained, what obliga-
tions those checks satisfied.
cuit Court of Appeals on November 29, 1990, without
Marbro’s opposition.
Marbro having ceased to function as a going concern (dis-
cussed in greater detail, infra), the General Counsel issued
this second compliance specification alleging that RMS was
the alter ego of, or successor to, Marbro and should therefore
be required to comply with the affirmative remedy provisions
of the Board’s Orders, as enforced.
B. Demise of Marbro and Birth of R. Marinucci &
Sons, Inc.
Marbro was a Maryland corporation wholly owned by
Rosario Marinucci, its president. His wife, Ida, was Marbro’s
secretary-treasurer. In the last few years of its operations, at
least, his sons, Steven and Michael, were corporate directors;
one son-in-law, John Dowd, was the comptroller. His sons
and sons-in-law (the above and Joseph Farrell) also occupied
supervisory positions within the firm; however, they held no
ownership interests.
In addition to Marbro, Rosario Marinucci was the sole
owner of several other corporations or enterprises which
leased trucks, equipment, and real property to Marbro.
In its inception, Marbro was primarily engaged in sewer
construction. Much of this work was performed in the Wash-
ington metropolitan area for the Washington Suburban Sani-
tary Commission (WSSC). Its sewer work included major
utility jobs, including the laying of large (up to 108-inch di-
ameter) pipe under multimillion dollar contracts. In about
1978, with its principal business declining, Marbro began to
expand into other areas of heavy construction, including
bridge building, tunneling, and road and airport runway con-
struction. Some of this work was outside of the Washington
metropolitan area, including sites in West Virginia and Geor-
gia. By early 1985, Marbro had increased its work force to
as many as 450–500 employees, including up to 75 heavy
equipment operators.4 Each of the Company’s divisions,
bridge, highway, tunneling, and utility work, had a separate
vice president; these vice presidents were not family mem-
bers and they owned no part of the Company.
Marbro, it appears, overextended itself with respect to
these new endeavors. In particular, the recession in 1981–
1982, and its bidding of large projects at 1981 prices which
were then performed at the increased costs of subsequent
years, created serious financial difficulties by 1983 and 1984.
The banks began to foreclose on loans secured by Marbro’s
construction equipment, and it was completing its various
projects with the forbearance of the lenders on cash infused
by the bonding companies. It was, however, unable to secure
new bonds necessary to take new work.
In the same period, around 1985, Ida Marinucci was diag-
nosed with a terminal illness. As a result, Rosario turned the
operation of Marbro (and all of his other business organiza-
tions) over to John Dowd as president so that he could de-
vote more attention to his wife. Steven replaced his mother
as secretary-treasurer. Michael became vice president.
Dowd’s orders, it was testified, were to act at Rosario’s di-
rection, with the responsibility to wind the business down
pursuant to the work out agreement with the banks and bond-
ing companies. As projects were completed, the employees
were terminated and the equipment sold. Approximately $4
million worth of construction equipment, 99 percent of what
Marbro had owned, was sold.
In the summer of 1986, with Marbro jobs running down,
the four sons and sons-in-law met with Rosario Marinucci to
decide what direction the younger generation should take for
their respective futures. Given the experience of three of
them in the construction industry, and their family ties, it
was decided that they would start a new company, to do
sewer/utility work. Allegedly to honor the pater familias,
they named the new enterprise R. Marinucci & Sons, Inc. It
was incorporated in July 1986. Each of the four paid in an
equal but nominal ($5000 or less) amount for 25 percent of
the voting common stock. Rosario advanced them ‘‘seed
money,’’ $250,000, for which he was issued nonvoting pre-
ferred stock. He also guaranteed a $1 million line of credit
so that they could lease equipment.5
John Dowd became the president of RMS. Michael
Marinucci and Steven Marinucci assumed the positions of
vice president and secretary-treasurer, respectively. Rosario
Marinucci did not become an officer. He was and is a direc-
tor, however, along with the four sons and sons-in-law. Ac-
cording to Dowd’s testimony, Rosario has no operational
functions in RMS. He has never been called upon, as the
guarantor, to meet any of RMS’ financial obligations.
None of Marbro’s vice presidents came over to RMS.
They apparently left Marbro as their divisions completed
whatever work they had.
There is no evidence that Marbro was ever formally dis-
solved. Counsel for Marbro contends that by not filing an-
nual reports after fiscal 1987, Marbro dissolved by operation
of law. Its last personal property return, filed with the State
of Maryland on April 18, 1988, lists Dowd as president, Mi-
chael and Steven Marinucci as vice president and secretary-
treasurer, respectively, and Michael and Rosario Marinucci
and Cristina Farrell (his daughter and Joseph Farrell’s wife)
as directors.
When RMS began its operations, it leased its heavy equip-
ment from an equipment supplier, with Rosario as guarantor.
It acquired some small tools, equipment, and vehicles from
Marbro, valued at about $150,000, and bought five dump
trucks and trailers from Steven Rental, Marbro Trucking, or
Rosario Marinucci.6 Steven Rental and Marbro Trucking
were concerns owned by Rosario which had leased those ve-
hicles, and several others, to Marbro. These vehicles and
trailers remain titled in the names of Steven Trucking and
Rosario Marinucci; Dowd testified that they were never re-
titled. Steven Rental’s drivers of three of those trucks be-
came RMS employees. RMS also rented the office building
and separate equipment yard which Rosario owned and had
1148 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
7 Perma Vinyl was expressly approved by the Supreme Court in
Golden State Bottling Co. v. NLRB, 414 U.S. 168 (1973).
8 In Alkire v. NLRB, 716 F.2d 1014 (1983), a majority of the
Fourth Circuit held that an alter ego could not be established without
rented to Marbro. There was no written lease; RMS allegedly
paid Rosario $5000 per month for this property until 1988,
when the rent increased to $10,000; the record contains no
checks from RMS to Rosario or Marbro after March 1987.
As Marbro shut down, it subcontracted about six of its
smaller projects to RMS; none exceeded $50,000. Steven
Marinucci signed the subcontracting agreements for Marbro;
Dowd signed for RMS.
During his tenure at Marbro, Steven Marinucci had served
as pipe foreman of the utility crew. At RMS, he takes care
of the shop and serves as field superintendent over one of
the larger field projects. Dowd, who was Marbro’s comp-
troller, is basically responsible for the office functions, in-
cluding bidding, of RMS. Farrell, who had been a field su-
perintendent for Marbro, retains that function at RMS. The
record does not indicate the extent of Michael Marinucci’s
responsibilities for Marbro; he is a superintendent over exca-
vation crews for RMS.
RMS works solely within the Washington metropolitan
area, performing work for WSSC and private contractors. Be-
cause of its limited ability to secure bonds, most of its jobs
are relatively small, in the range of $200,000 to $300,000 in
value. It has had some jobs valued between $500,000 and
nearly $2 million. For the most part, its projects involve the
laying of small plastic pipe, 8 inches in diameter; occasion-
ally, RMS lays storm drains up to 36 and 48 inches in size.
It has not laid any 108-inch pipe because such jobs, if done
for WSSC, require larger bonds than RMS can secure. RMS
does not perform any bridge, highway, airport, or tunnel
work.
Marbro had 78 on its payroll as of late September 1986
and about 50 in early January 1987, including managers and
office employees. At that time, it had three or four sewer
crews and it ceased to have any employees by February
1987. RMS had 18 field employees on its September 27,
1986 payroll and 58 total employees as of January 10, 1987.
The three sewer crews which it initially employed were un-
changed from their composition at Marbro. RMS currently
employs about 61 workers, including 9 heavy equipment op-
erators (3 crews of 3 operators each). At one point in the
summer of 1990, its work force was up to 150. When it
began to hire, most of its employees came from Marbro. Ac-
cording to Dowd, Marbro was laying off and thus was a log-
ical source of employees whose qualities were known to
RMS.
According to backhoe operator Leo Colaw, a Marbro em-
ployee since 1958, the employees were simply told that
Marbro was going out of business and coming back as RMS.
He was never told that he was terminated by Marbro and
learned that he was on the RMS payroll from his paycheck.
He and his son, who had a similar experience, suffered no
hiatus in their employment. Neither did they see any reduc-
tion in pay or related fringe benefits. They continued to do
the same work at the same sites. Virtually all of the RMS
employees on the payroll in September 1986 and January
1987 were employees from the Marbro payroll. The majority
of them were carried on both payrolls throughout that period.
The foremen and superintendents on the RMS payroll for
January 10, 1987, were virtually all former employees of
Marbro; based on their rates of pay, it appears that most of
them had occupied supervisory positions at Marbro, as
Colaw testified.
II. ANALYSIS
A. Contentions
In Perma Vinyl Corp., 164 NLRB 968, 969 (1967),7 the
Board held:
To further the public interest involved in effectuating
the policies of the Act and achieve the ‘‘objectives of
national labor policy, reflected in the established prin-
ciples of federal law,’’ we are persuaded that one who
acquires and operates a business of an employer found
guilty of unfair labor practices in basically unchanged
form under circumstances which charge him with notice
of unfair labor practice charges against his predecessor
should be held responsible for remedying his prede-
cessor’s unlawful conduct.
It placed this responsibility on the ‘‘bona fide purchaser’’ of
such a business as well as ‘‘a successor or assign who oper-
ates as a disguised continuance of the old employer or to
whom the business has been transferred as a means of avoid-
ing liability under the Act.’’
Similarly, in Coast Delivery Service, 198 NLRB 1026,
1027 (1972), the Board found the imposition of ‘‘derivative
liability’’ in a supplemental proceeding, upon one who had
not been a party to the original unfair labor practice pro-
ceeding, to be appropriate. What was required was that that
party be ‘‘sufficiently closely related to the party found to
have committed the unfair labor practices.’’ Such parties
have been described by the Board and the courts as ‘‘suc-
cessor,’’ ‘‘single employer,’’ and ‘‘alter ego.’’
Counsel for General Counsel argues that RMS is the alter
ego of, or successor to, Marbro and should therefore be held
responsible for remedying Marbro’s unfair labor practices.
RMS does not contest the basic principles cited above but
disputes their applicability to the instant situation. Specifi-
cally, RMS contends that it is neither a successor to nor alter
ego of Marbro, that there is no evidence that RMS’ creators
knew of Marbro’s unfair labor practices, and that a balancing
of the interests weighs against a finding of successor liabil-
ity.
B. Alter Ego or Successorship
The Board finds an alter ego or disguised continuance
where two enterprises have substantially identical manage-
ment, business purpose, operation, common premises, equip-
ment, customers, supervision, and ownership. Additionally
considered is whether the new corporation or business entity
was formed to avoid the former entity’s labor relations obli-
gations. Market Place, Inc., 304 NLRB 995, 1002 (1991);
Goldin-Feldman, Inc., 295 NLRB 359, 371 (1989); Mar-Kay
Cartage, 277 NLRB 1335, 1341 (1985). None of these fac-
tors, taken alone, is the sine qua non of alter ego status.
Fugazy Continental Corp., 265 NLRB 1301 (1982); Goldin-
Feldman, supra at fn. 2; Hiysota Fuel Co., 280 NLRB 763
fn. 1 (1986) (absence of evidence of unlawful motivation);
Mar-Kay Cartage, supra.8 Also considered is the nature and
1149MARBRO CO.
proof of both continued control by the original employer and em-
ployer motivation to secure some benefit ‘‘related to the elimination
of its labor obligations.’’ See also NLRB v. McAllister Bros., 819
F.2d 439 (4th Cir. 1987). With due respect to the Fourth Circuit, the
administrative law judge is obligated to apply established Board
precedent which the Supreme Court has not reversed. Waco, Inc.,
277 NLRB 746 fn. 14 (1984). Under established Board law these
factors are relevant but not essential to an alter ego conclusion.
9 In John Fender Electric Co., 244 NLRB 957 (1979), relied on
by RMS, the Board, in affirming the judge’s conclusion that two
companies were not alter egos, expressly noted, at fn. 1, that ‘‘apart
from the substantially different ownership of the two companies and
other factors, [they had] markedly divergent labor relations and oper-
ational structures.’’ RMS’ operational structure was similar to that
of Marbro’s utility division before Marbro’s demise; there was no
evidence proffered on labor relations. In A-1 Schmidlin Plumbing
Co., 284 NLRB 1506 (1987), similarly cited by RMS, no alter ego
was found but the Board held the new entity to be the successor to
the original, notwithstanding a substantial change in ownership inter-
ests.
10 A-1 Schmidlin Plumbing Co., 284 NLRB 1506 (1987), is inap-
posite. There, the son of the owner of the alleged predecessor busi-
ness, who became the co-owner of the alleged successor, was the
‘‘titular . . . vice president’’ of the former. As such, he worked,
with no independent authority, under the active management of his
father, who controlled the day-to-day operation and then of his step-
mother, who was president and principal owner, engaged in active
management, after his father’s death. In contrast, Dowd appears to
have run the business, following only general parameters laid down
by his father-in-law who sought to be relieved of active and con-
tinuing day-to-day management.
extent of the negotiations and formalities surrounding the
transaction; the absence of formalities and arm’s length deal-
ing between the parties tending to indicate the existence of
a disguised continuance. Fugazy Continental Corp., supra at
1301–1302. As the Board stated in latter case, the question
is ‘‘whether the employers constitute the same business in
the same market.’’
RMS contends that under either the Board’s tests for alter
ego status or the test applied by the Fourth Circuit Court of
Appeals, the General Counsel fails to meet its burden.
First, it argues, and I agree, that RMS was not created to
avoid Marbro’s labor relations obligations. Rather, it experi-
enced a bona fide discontinuance. The evidence demonstrates
that Marbro ‘‘gave up the ghost’’ because it was in severe
financial difficulty, unable to secure essential bonding or fi-
nancing. Secondarily, it appears, Rosario Marinucci had lost
the desire to continue in an active business capacity with the
loss of his spouse. Marbro had earlier ceased to recognize
the Union and had functioned for several years without labor
agreements. Its potential liability under the unfair labor prac-
tice charge then pending before the Board on exceptions
from the decision of the administrative law judge does not
appear to have been a material factor in its dissolution.
Nonetheless, Marbro did benefit from the transition in that
it avoided the judgment against it.
The remaining factors are less clear. Rosario Marinucci
was the sole owner of Marbro. He is the major investor in
RMS with an initial investment, not considering his loan
guarantees, more than 12 times greater than that of all the
other owners who had put up only nominal initial invest-
ments. Considering the extent of his investment and his po-
tential control through the ‘‘power of the purse,’’ he is a
substantial owner in RMS, notwithstanding that he holds
none of the voting shares. Even if, as RMS’ counsel asserts,
his investment in the preferred stock was ‘‘really a loan’’ (of
which there is no evidence), the unbalanced ratio of debt to
equity would have given him as much control as he wished
to exercise. Rosario Marinucci remained an owner of the
new enterprise, although not the sole owner, as he had been
in Marbro.9
Similarly, the evidence with respect to the continuity of
management and supervision, while mixed, is weighted to-
ward an alter ego or successorship finding. Thus, at the mo-
ment of RMS’s conception, and for more than a year preced-
ing it, John Dowd, who became RMS president, was presi-
dent of Marbro. It is alleged that his instructions were to act
at Rosario Marinucci’s direction. However, the record con-
tains no indication that Rosario continued to exercise day-to-
day management during these personally difficult times.10
Michael and Steven Marinucci each assumed the same cor-
porate offices in RMS that they had held in Marbro during
the same period, vice president and secretary-treasurer.
Moreover, the sons and sons-in-law of Rosario Marinucci
assumed managerial positions in RMS essentially equivalent
to what each had done at Marbro. Moreover, RMS’ initial
crews came over from Marbro with both their employee and
supervisory complements intact. That Marbro’s vice presi-
dents did not come over to RMS is of little significance inas-
much as RMS was smaller than Marbro had been in its hey-
day and the divisions for which those vice presidents were
responsible disappeared in Marbro’s economic decline. With
the sons and sons-in-law continuing to oversee the actual
projects and with the same first level supervisors overseeing
their same crews, there was clearly continuity and substantial
identity in both management and supervision, as well as in
the work force.
Counsel for RMS argues that RMS is engaged in a sub-
stantially different business than Marbro, one which was lim-
ited to small pipe laying jobs within the Washington metro-
politan area with a limited number of employees, as distin-
guished from Marbro’s broad-based heavy construction work
spread over a wide geographical area, which employed up-
wards of 400 employees. If one looks at what Marbro was
between 1978 and 1985, when Marbro was engaged in var-
ious forms of heavy construction, there is a wide disparity.
However, Marbro was initially a sewer utility company be-
fore it undertook its fatal expansion. And, at the time when
RMS came into being, Marbro was in the process of
downsizing, giving up its nonutility work as its projects were
completed. When RMS began its operations, it was very
nearly identical to what Marbro had evolved into by that
time. It was also similar to what Marbro had been before its
expansion, although it was not yet financially capable of un-
dertaking the large projects which Marbro had specialized in
before experiencing its economic decline.
The differences between Marbro and RMS in regard to the
nature and size of its operations and of the projects under-
taken do not militate against an alter ego or successorship
finding. In Custom Mfg. Co., 259 NLRB 614 (1981), a new
business entity was found to be an alter ego notwithstanding
that it was smaller than its predecessors, operated at a dif-
ferent location, and sold goods manufactured by others rather
than made by its employees, to a commercial accounts rather
than to private residences, as the predecessors had. The
1150 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
11 See also NLRB v. Ozark Hardwood Co., 282 F.2d 1 (8th Cir.
1960), enfg. 119 NLRB 1130 (1957).
12 Counsel for RMS, citing Alkire v. NLRB, supra, notes that it is
common for one business to occupy ‘‘the niche in the economic
order’’ previously occupied by another entity which has failed and,
in doing so, to utilize the same facilities and equipment. In Alkire,
however, there was a formal sales agreement, executed by the par-
ties, providing for the new entity to do so; no such formality exists
here.
13 I agree with RMS that this factor is of lesser significance inas-
much as WSSC is the principal source of sewer work in the metro-
politan area. Anyone doing this work would, of necessity, do it for
WSSC.
Board pointed out that the new business was a spinoff of the
former businesses, tempered by the available economic re-
sources, and amounted essentially to an evolution of the
business such as could be expected to occur in that business
field and under the prevailing economic conditions. A like
result is found in Hot Bagels & Donuts, 244 NLRB 129
(1979), where the successor, although smaller than the prede-
cessor had once been, was similar in operation to what the
predecessor had become at the time of its collapse.11
With respect to the question of premises and equipment,
I note that RMS occupies the same facilities, both the office
and the separate yard, as Marbro had and acquired the use
of those premises from Marbro’s owner without the formality
of leases. It has also acquired trucks from that owner’s other
businesses, without the formality of changing the titles.12 In
addition to showing continuity, these facts further evidence
Rosario Marinucci’s potential for controlling the direction
and activities of RMS.
When RMS began its operations, it completed jobs which
Marbro had begun, under subcontract from Marbro. There-
after, a substantial portion of its work came from the WSSC,
for which Marbro had also worked.13
Finally, I take note that RMS, by virtue of its name, ‘‘R.
Marinucci & Sons,’’ has held itself out to the public as a
continuation of Marbro. It thereby gained the benefits, if any,
of Rosario Marinucci’s reputation in the industry.
Based on all the foregoing, I would find RMS to be the
alter ego of Marbro, responsible for remedying the judgment
which Marbro avoided by the transition to RMS. As dis-
cussed above, the two enterprises enjoyed substantially iden-
tical management, business purpose, operation, supervision
and common premises. There was, moreover, commonality
of ownership, with the sole owner of Marbro being the major
investor.
However, even if the foregoing facts are deemed to fall
short of meeting either the Board’s or the Fourth Circuit’s
tests for alter ego, I am satisfied that RMS is sufficiently
closely related to be deemed Marbro’s successor, with
knowledge of the unfair labor practices, and thus liable to
remedy those unfair labor practices.
In Hot Bagels, supra, the Board, quoting Miami Industrial
Trucks, 221 NLRB 1223, 1224 (1975), stated that: ‘‘The
keystone in determining successorship is whether there is
substantial continuity of the employing industry.’’ In this
case, as discussed more fully above, and at the risk of being
redundant, the evidence discloses that the same employees
continued to do the same work, with some of the same
equipment or with similar equipment leased under the guar-
antee of the prior owner, under the same management and
supervision, with the same wages and benefits, for an em-
ployer who operated out of the same two locations, with
common officers and, to a significant degree, common own-
ership, which held itself out to the public as having main-
tained a continuity with the former business entity. The req-
uisite continuity is patent.
In Robert G. Andrew, Inc., 300 NLRB 444 (1990), the
Board stated as follows:
In Golden State Bottling Co. v. NLRB, supra, the Su-
preme Court held that an employer who acquires sub-
stantial assets of a predecessor and who continues with-
out substantial change the predecessor’s business oper-
ations, can be required to remedy the predecessor’s
unremedied unfair labor practices if it is on notice of
the predecessor’s unlawful conduct. It is now settled
that, once the General Counsel establishes an employ-
er’s successorship status, the burden is on that suc-
cessor to show that it lacked knowledge of its prede-
cessor’s unfair labor practices. [Citations omitted.] Fur-
thermore, in determining whether the successor has
made that showing, the Board is not bound by a succes-
sor’s denials of knowledge. It may conclude that the
successor had the requisite knowledge if reasonable in-
ferences from the record as a whole support such a
finding. Golden State Bottling Co. v. NLRB, supra, 414
U.S. at 172–174.
In the instant case, the presumption applies and is but-
tressed by the facts that: (1) Rosario Marinucci retained a
significant interest in the successor; (2) the owners of RMS
are two sons and two sons-in-law of Rosario Marinucci and
are likely to have learned of the unfair labor practice charges
and the judge’s decision in the course of family discussions;
and (3) Dowd, who was Marbro’s comptroller and then its
president, became president of RMS.
On brief, counsel for RMS asserted that RMS lacked
knowledge of the unfair labor practices. The record, how-
ever, contains no clear denial of knowledge. Dowd only testi-
fied that he had no knowledge of union contracts or negotia-
tions during his tenure at Marbro, beginning in 1983. Such
testimony is inadequate to rebut the presumption or to shift
the burden back to the General Counsel.
Even the answer, which of course is not evidence, con-
tained no denial; it only denied that RMS had knowledge
that the Board would contend that it was responsible for pay-
ment of the judgment against Marbro. Moreover, Rosario
Marinucci and Steven Marinucci failed to respond to valid
subpoenas. Rosario, at least, might have been able to offer
testimony respecting this issue. His failure to appear warrants
an inference that, if he had appeared, he would have been
unable to rebut the presumption of knowledge. Martin Luther
King, Sr., Nursing Center, 231 NLRB 15 fn. 1 (1977).
RMS further argues that the successorship doctrine should
not apply because there was no acquisition of Marbro’s as-
sets by RMS and no sale of assets by Marbro to RMS. In
fact, RMS, retaining Rosario’s name in its title, and con-
tinuing to operate out of the same office, acquired whatever
good will Marbro possessed in the industry, at no cost. Addi-
tionally, it acquired its operating capital and loan guarantees
from Rosario, Marbro’s sole owner. That there was no sale
militates, if in either direction, in favor of finding liability.
1151MARBRO CO.
14 If no exceptions are filed as provided by Sec. 102.46 of the
Board’s Rules and Regulations, the findings, conclusions, and rec-
ommended Order shall, as provided in Sec. 102.48 of the Rules, be
adopted by the Board and all objections to them shall be deemed
waived for all purposes.
RMS acquired Marbro’s business, and Rosario’s financial
backing, with little investment of capital. They did not have
to balance the potential liability against any acquisition costs.
Even if it had bargained with Rosario for Marbro’s assets,
it could not have gotten a better deal than it did.
RMS argues that inasmuch as the liability here is to the
Union’s funds, not present employees, no potential for labor
unrest exists such as might warrant imposition of liability.
And, finally, it argues that a judgment against RMS could
threaten its continued viability and possibly cost RMS’
present employees their jobs. As to the former, RMS, as alter
ego and successor is subject to union pressure to secure pay-
ment of the judgment. There exists a potential for labor un-
rest. The short answer to the final contention is that Marbro
should have met its obligation when it arose. Any adverse
impact on RMS now is the fault of Marbro and its officers,
not the National Labor Relations Board.
C. Extent of Liability
The orders of the Board and the Court require that
Marbro, its officers, agents, successors, and assigns pay des-
ignated amounts to the appropriate union benefit funds plus
any additional amounts computed in the manner described in
Merryweather Optical Co., 240 NLRB 1213 fn. 13 (1979).
In Merryweather the Board noted that it did ‘‘not provide at
the adjudicatory stage . . . for the addition of interest at a
fixed rate’’ for unlawfully withheld fund payments because
the provisions of employee benefit plans were variable and
complex. Rather, it provided for such additional amounts to
be added to the benefit funds as may be necessary to make
the funds whole, as determined at the compliance stage de-
pending on the circumstances of the case. The additional
amounts are those which may be determined by reference to
the trust documents or losses directly attributable to the un-
lawful withholding, including the loss of return on invest-
ment and additional administrative costs. No such additional
amounts have been established here and the General Counsel
seeks the liquidated amounts unlawfully withheld, plus inter-
est. The Board has long recognized the propriety of interest,
without the need for additional proof, as an appropriate ele-
ment of a make-whole order. See Isis Plumbing & Heating
Co., 138 NLRB 716 (1962). Accordingly, I shall limit RMS’
liability to the amount stated in the backpay specification,
$57,664.04, plus interest as computed in accordance with
Florida Steel Corp., 231 NLRB 651 (1977).
Counsel for the General Counsel also seeks to extend
RMS’ liability, pursuant to the language of the original
Board Order, ‘‘until the Respondent negotiates in good faith
with the Union to an agreement or to a good faith impasse
or until the Union refuses to bargain.’’ However, that same
Board Order noted, in footnote 3, that no exceptions were
taken to the judge’s conclusion that Respondent did not un-
lawfully withdraw recognition from the Union in violation of
Section 8(a)(5). As recognition was lawfully withdrawn,
there was no continuing obligation to bargain. Accordingly,
I can find no basis for such an extension of liability.
CONCLUSIONS OF LAW
1. R. Marinucci & Sons, Inc. is the alter ego of, and suc-
cessor to, Marbro Company.
2. R. Marinucci & Sons, Inc. and Marbro Company, their
officers, agents, successors, and assigns, are jointly and sev-
erally liable to remedy the unfair labor practices committed
by Marbro Company.
On these findings of fact and conclusions of law and on
the entire record, I issue the following recommended14
ORDER
The Respondents, Marbro Company and its alter ego and
successor R. Marinucci & Sons, Inc., Beltsville, Maryland,
their officers, agents, successors, and assigns, shall, jointly
and severally, pay to the appropriate union benefit funds the
sums set forth in the Order of the National Labor Relations
Board at 297 NLRB No. 69, slip op. at 4 (Dec. 22, 1989),
as enforced by the Fourth Circuit Court of Appeals on No-
vember 29, 1990, on behalf of the employees named in the
Board and court orders, plus interest.