National Electrical Contractors Association, Inc., Sacramento Valley Chapter

National Labor Relations Board - Board Decisions

Sep 29, 1989

296 N.L.R.B. 872 (N.L.R.B. 1989)

872 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Grason Electric Company; Amos J. Walker, Inc.;
Rex Moore Electrical Company; Harold E.
Nutter, Inc.; Myers Electrical , Inc.; Four Star
Electric; Branstner Electric ; Stage I Electrical
Contractor; National Electrical Contractors As-
sociation, Inc., Sacramento Valley Chapter and
International Brotherhood of Electrical Work-
ers Local Union 340 , AFL-CIO and National
Association of Independent Unions, Party in In-
terest. Case 20-CA-16872(E)
September 29, 1989
ORDER
The recommended Order of the administrative
law judge is adopted and the applications are
denied.
We therefore find it unnecessary to pass on the judge 's discussion of
other issues , including whether the General Counsel was substantially
justified in issuing the complaint . We disavow the judge's finding that
consolidating the unfair labor practice and representation cases was inap-
propriate
DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
CRACRAFT AND DEVANEY
On March 29, 1989, Administrative Law Judge
Jay R. Pollack issued the attached second supple-
mental decision . The Applicants filed exceptions
and a supporting brief, and the General Counsel
filed cross-exceptions , a supporting brief, and an
answering brief. The General Counsel also filed a
motion to strike portions of the Applicants' brief.'
The National Labor Relations Board has delegat-
ed 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
decided to affirm the judge' s rulings, findings,2 and
conclusions3 and to adopt the recommended
Order.
i We grant the General Counsel 's motion to strike insofar as it pertains
to a document entitled "Declaration of Mark R . Thierman ," which is at-
tached to the Applicants' brief. The document makes assertions that are
not part of the record and are disputed by the General Counsel . Further,
the document is unsigned and unsworn We therefore shall not rely on
the document or any assertions related to the document.
2 The judge discussed Pacific Metal Trades Council (Foss Launch), 271
NLRB 1165 ( 1984), in the supplemental decision . The Board, which re-
manded Foss Launch to the judge, reaffirmed its original holding in
adopting the judge 's second supplemental decision in that case. 295
NLRB 156 (1989)
a We rely only on the judge 's findings and conclusions that , under the
circumstances of this case , the net worth of the employer-members of
National Electrical Contractors Association , Inc., Sacramento Valley
Chapter (NECA) should be aggregated to determine the Applicants' eli-
gibility As the judge found , even though technically the multiemployer
association may not have affiliates under the Board 's Rules, Sec.
102 143(g) provides that financial relationships other than those specifical-
ly defined in the rule may constitute special circumstances making the
award of attorney fees unjust For the reasons the judge discusses in the
supplemental decision and second supplemental decision , we believe that
this case presents special circumstances warranting aggregating the em-
ployer-members' net worth to determine the Applicants ' eligibility "Par-
ties that meet the eligibility standard only because of technicalities of
legal or corporate form , while having access to a large pool of resources
from affiliated companies , do not fall within [the] group of intended bene-
ficiaries " Noel Produce, 273 NLRB 769 (1984)
The judge found that there was no claim that NECA was tax exempt
under Sec . 501(a) of the Internal Revenue Code We note , however, that
NECA produced an affidavit claiming 501(c)(3) status Assuming ar-
guendo that NECA would qualify as a "party" regardless of its net
worth (see EAJA 5 U S C. § 504(b)(1)(B)), we nevertheless conclude, for
the reasons stated by the judge , that it would be unjust and contrary to
the purposes of EAJA to treat NECA as a separate entity
SECOND SUPPLEMENTAL DECISION
STATEMENT OF THE CASE
JAY R. POLLACK, Administrative Law Judge. On De-
cember 18, 1986, Grason Electric Company (Grason),
Amos J. Walker, Inc. (Walker ), Rex Moore Electrical
Company (Moore), Harold E. Nutter, Inc. (Nutter),
Myers Electric, Inc. (Myers), Four Star Electric (Four
Star), and National Electrical Contractors Association,
Inc., Sacramento Valley Chapter (NECA) (the Appli-
cants), each filed an application for fees and expenses
pursuant to the Equal Access to Justice Act, Pub. L. 96-
481, 94 Stat. 2325 (EAJA) and Section 102.143 of the
Board's Rules and Regulations . On April 28, 1987, I
issued the attached supplemental decision ' granting the
General Counsel 's motion to dismiss the applications. On
August 4, 1987, the Board remanded the case for consid-
eration of other issues raised by General Counsel's
motion to dismiss.
The underlying unfair labor practice case was based
on a charge filed on January 28, 1982, by International
Brotherhood of Electrical Workers Local Union 340,
AFL-CIO (Local 340) against the nine Respondents
listed in the caption, the seven applicants plus two other
employers , Branstner Electric and Stage I Electrical
Contractor.2 On October 1, 1982, the Regional Director
for Region 20 of the Board issued a complaint and notice
of hearing alleging that NECA and its employer-mem-
bers had violated Section 8(a)(2) and ( 1) of the National
Labor Relations Act by entering into a contract with the
National Association of Independent Unions (NAIU), on
or about October 1, 1981, at a time when Local 340 had
filed valid representation petitions with the Board seek-
ing to represent employees of 17 employers formerly in
the NECA-Local 340 multiemployer bargaining unit.
Valid representation petitions had been filed by Local
340 for representation of the employees of Branstner and
Stage I but no petition had been filed for the employees
of the Applicants . NECA is a multiemployer association
and has no bargaining unit employees of its own.
The 17 representation petitions , whose validity was at
issue in the unfair labor practice case, were the subject of
proceedings in Arden Electric, et al., Cases 20-RC-15401
through 20-RC-15417. By an unpublished Order dated
December 16, 1982, the Board in Washington , D.C., or-
dered that the preelection representation case in Arden
i Appendix A.
2 Branster and Stage I did not file EAJA applications.
296 NLRB No. 111
GRASON ELECTRIC CO.
Electric be consolidated for hearing before me with the
unfair labor practice case in Grason Electric. The consoli-
dated hearing was held in January and February 19833
and, on February 28, 1983, I issued an order closing the
record and transferring the Arden representation cases to
the Board for determination.4
On August 31, 1983, I issued my decision in the under-
lying unfair labor practice case .5 I found that Branstner
and Stage I had violated Section 8(a)(2) and ( 1) of the
Act by entering into a NECA multiemployer contract
with the NAIU at a time when Local 340 had filed valid
representations seeking to represent their employees. I
further found that NECA had violated the Act insofar as
its actions purported to bind Branstner and Stage I to the
NECA-NAIU bargaining agreement . I found no viola-
tion by Grason, Walker, Moore, Nutter, Myers, and
Four Star in signing with the NAIU because no petition
was pending regarding the employees of any of these six
employers. Further, no violation was found to have been
committed by NECA for signing on behalf of its em-
ployer-members who were not named as Respondents in
the underlying charge or in the complaint.
I further found that all of the nine named Respondents
except Myers had violated Section 8 (a)(2) and ( 1) of the
Act by certain acts of unlawful assistance to NAIU.6 I
found no violation of any kind to have been committed
by Myers. At the time of my decision the Board had not
yet issued its Arden Electric decision . All parties involved
in the case took exceptions and cross -exceptions to my
decision . The Board did not , and will not pass on that
decision , because the unfair labor practice case was with-
drawn in November 1986, pursuant to motion.
While my decision in the unfair labor practice case
was pending before the Board on exceptions , the Board
issued its Arden Electric decision , 275 NLRB 654 ( 1985).
The Board found that the multiemployer bargaining as-
sents upon which NECA relied to bind its constituent
employers to the multiemployer unit were not applicable
to any union other than an IBEW local and that, there-
fore, the multiemployer unit had dissolved as of the time
of Local 340's disclaimer and NECA's acceptance of that
disclaimer . Accordingly , the Board found that the single-
8 The consolidation of the preelection representation case with the in-
stant unfair labor practice case arises again here with respect to the issues
of prevailing parties and substantial justification
4 The Board issued its decision in Arden Electric, 275 NLRB 654
(1985), on June 4, 1985 The Board found that the single-employer peti-
tions were filed in appropriate units and remanded the cases to the Re-
gional Director of Region 20 for further processing As it related to the
Grason Electric cases, the Arden Electric decision found that valid repre-
sentation petitions were pending at the time of NECA's recognition of
NAIU
5 JD-(SF)-190-83 A copy of that unpublished decision is attached as
Appendix B
6 In the instant EAJA proceeding the Applicants contend that if the
General Counsel simply pursued the allegations that I found meritorious
the case would have settled The Applicants contend that "but for" the
General Counsel 's insistence on setting aside the entire NECA-NAIU
agreement the case would have been resolved short of hearing The Ap-
plicants argue that the violations I found were minor and that the central
and critical issue was the validity of the NECA-NAIU agreement binding
55 or 38 employers (depending on the outcome of the Arden Electric
case ) The General Counsel does not take issue with that underlying
premise but argues that her position was correct or at least substantially
justified
873
employer petitions were filed in appropriate units and re-
manded the cases to the Regional Director for further
processing.7
Pursuant to the Arden Electric decision , the Regional
Director held several days of hearing on the representa-
tion petitions in March and April 1986 . In certain of the
cases, stipulations for elections were entered into, while
the other petitions , including the petition regarding Stage
I, were withdrawn.
On August 26, 1985, after issuance of the Arden Elec-
tric decision and while exceptions were pending, the Re-
spondents filed a motion to dismiss for lack of jurisdic-
tion. On August 31, 1986, by an unpublished Order, the
Board denied the motion to dismiss but remanded the
case to me for further proceedings on the issue of juris-
diction "in light of the Board 's decision in Arden Elec-
tric." The case was withdrawn prior to the issuance of
any supplemental decision by me.
While the case was pending for a supplemental deci-
sion on jurisdiction , on November 17, 1986 , the General
Counsel moved for approval of the withdrawal of the
complaint based upon Local 340's request to withdraw
the underlying unfair labor practice charge . On Novem-
ber 18 , 1986, 1 granted the General Counsel's motion, ap-
proved the withdrawal of the complaint and ordered that
the case be closed . It should be noted that this was not a
settlement . The charge and complaint were withdrawn
unilaterally , without any consideration from Respond-
ents.
As mentioned earlier, on December 18, 1986 , the Ap-
plicants filed the seven separate applications for an
award of fees and expenses under EAJA . On December
20, the Board referred this matter to me for appropriate
action . On April 28, 1987, I issued my supplemental de-
cision granting the General Counsel 's motion to dismiss
the applications . I found , in sum , that it would be unjust
and contrary to the purposes of EAJA to treat NECA as
a separate entity . Rather, the net worth of the employer-
members of NECA should be aggregated for purposes of
determining eligibility under EAJA. As the net worth of
all 42 employer-members was not shown, I found that
the Applicants had failed to establish their eligibility
under EAJA. I, therefore, dismissed the case for lack of
jurisdiction.8
The Board, in an unpublished Order dated August 4,
1987, remanded the case to me "to rule on the General
Counsel 's other arguments [contained in the motion to
dismissal], including but not limited to whether the Ap-
plicants are ineligible because the General Counsel was
substantially justified in issuing complaint and litigating
the underlying proceeding." The Board ordered that I
address additional issues, including but not limited to
whether the General Counsel was substantially justified
in issuing complaint and litigating the underlying pro-
ceeding, and to reopen the record if necessary. It was
further ordered that I prepare and serve on the parties a
second supplemental decision setting forth findings, in-
7 NECA and its employer -members lost on the critical and central
issue of the representation proceeding However, preelection representa-
tion hearings are not adversary hearings and are not covered by EAJA
8 See Appendix A, pp 4-7
874 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
cluding credibility resolutions if necessary, and conclu-
sions.
The General Counsel's motion to dismiss was denied
on August 10, 1987, and thereafter, the General Counsel
filed a timely answer to the applications. Pursuant to the
pleadings filed by the General Counsel and Applicants a
hearing in this matter was scheduled for May 1988 by
agreement of all parties.9 By letter dated March 14,
1988, the Applicants indicated that they would present
no further evidence on the issue of eligibility and re-
quested that I issue the second supplemental decision
without further hearing. On March 16, 1988, the General
Counsel responded and agreed that a decision should
issue in accordance with the remand without further
hearing. Accordingly, on March 30, 1988, the EAJA
hearing was cancelled.
The General Counsel contends, in substance that the
Applicant is not eligible under EAJA because their assets
must be aggregated with the assets of all the employer-
members of NECA; that the Applicants were not pre-
vailing parties; that the complaint was substantially justi-
fied; that special circumstances make an award of fees
and expenses unjust ; and that the claims for fees and ex-
penses are replete with defects.
Upon consideration of the entire record in this supple-
mental proceeding, including the record in the underly-
ing unfair labor practice case, I make the following find-
ings and conclusions.
1. Prevailing party
Under Section 102.143(b) of the Board's Rules, a pre-
vailing party is a respondent in an unfair labor practice
case "who prevails in that proceeding, or in a significant
and discrete substantive portion of that proceeding and
who otherwise meets the eligibility requirements" for an
award under EAJA.
The General Counsel contends that the Applicants
were not prevailing parties apparently because I found
violations by all Applicants except Myers in my August
31, 1983 decision in the unfair labor practice case. How-
ever that decision was not a final order. The withdrawal
of the charge and complaint in November 1986 served to
close the case without any decision on the merits. My
decision has significance on the issue of substantial justifi-
cation but has no bearing on the prevailing party issue.
The Applicants were prevailing parties because the
charge and complaint were withdrawn, no order or
remedy issued against the Applicants and the outcome
was the same as a complete dismissal of the complaint.
As Judge Thomas A. Ricci stated in Crandon Health
Care Center, 280 NLRB No. 28, JD slip op. at 2 (1986)
(not published in Board volumes):
If a party who walks out of a courtroom after a
trial and finds himself in exactly the same position
he was in before the complaint issued, is not the
9 Among the issues set for hearing was whether the Applicants would
Still meet the eligibility requirements even if all NECA members were
treated as affiliates. The Applicants waived their right to present evi-
dence on this issue but maintained their legal position that it is improper
to combine the net worth of all employer-members of NECA
winner , is not the "prevailing" party, I do not know
what the word prevail means.
The legislative history of EAJA reveals Congress'
intent to define prevailing party in the broadest sense and
not to limit its application to those cases in which an ap-
plicant receives a favorable decision after hearing.
Shrewsbury Motors, Inc., 281 NLRB 486 (1986); H.R.
Rep. No . 96-1005 , Part 1 at 9 ( 1980); H .R. Conf. Rep.
No. 96-1434 at 21-22 (1980); H.R. Rep . No. 99-120 at 13
(1985).
In Shrewsbury Motors, supra , the Board found that
when the Regional Director approved withdrawal of a
charge and unilaterally withdrew the complaint the re-
spondent became a prevailing party within the meaning
of EAJA, irrespective of the reasons for withdrawal.
The Board noted that substantial justification was a sepa-
rate issue . In Shrewsbury Motors, as in the instant case,
the respondent gave nothing in return for the withdrawal
of the complaint.
The General Counsel further contends that the Appli-
cants were not prevailing parties because they did not
prevail in the Arden Electric representation cases. The
General Counsel argues that "IBEW Local 340, the
Charging Party, could be said to have achieved its aim
and 'prevailed ' in the litigation in Grason by virtue of the
Board 's decision in Arden , allowing it to have elections
in individual units ." I find that argument to have no rel-
evance to the question of whether the Applicants pre-
vailed in the subject adversary adjudication.
First, the consolidation ' ° of a preelection representa-
tion hearing with an adversary adjudication is contrary
to the Act" and the Board's Rules and Regulations.' 2
Secondly, the General Counsel seeks to use her own im-
proper consolidation to disqualify the Applicants from
any award . Third, EAJA applies to the unfair labor
practice case and does not apply to the representation
case . Thus, the Arden Electric cases may be relevant to a
determination of reasonable fees and expenses but are to-
tally irrelevant to the prevailing party issue. It should be
10 On December 6, 1982 , upon motion by counsel for Respondents, I
severed the representation cases from the unfair labor practice cases and
remanded the representation cases to the Regional Director . On Decem-
ber 16 , the Executive Secretary, by order of the Board , issued an order
directing that the representation cases be consolidated for hearing with
the unfair labor practice case On December 21, 1982 , 1 issued an order
consolidating the cases and rescheduling the representation cases for
hearing with the unfair labor practice case.
The consolidated hearing took 19 days beginning on January 13 and
ending on February 11, 1983 Absent consolidation , I estimate the unfair
labor practice case would have taken approximately 2 weeks and the rep-
resentation hearing would have taken 4 weeks
11 Sec . 9(c)(1) of the Act forbids a hearing officer in a preelection rep-
resentation hearing from making any recommendations to the Board. In
issuing my decision I made findings and recommendations including, but
not limited to , jurisdiction and labor organization I further made credi-
bility resolutions necessary for the determination of the unfair labor prac-
tice case
The only apparent harm done by the consolidation was to prolong the
unfair labor practice case . The representation case could have avoided
duplication without consolidation by simply taking official notice of the
record in the unfair labor practice case I could find no record of the
Board consolidating a preelection case with an unfair labor practice case
since the passage of the Taft-Hartley amendments in 1947
12 See Board 's Rule 102 69(d).
GRASON ELECTRIC CO.
quite clear that the Applicants were prevailing parties in
the unfair labor practice case , having had the case with-
drawn without any order or remedy issuing and without
the Applicants giving any consideration for the with-
drawal.
2. Substantial justification
EAJA provides that an administrative agency award
to a prevailing party certain expenses incurred in connec-
tion with an adversary adjudication, unless the agency
finds the position of the government is "substantially jus-
tified." The Board has held that the test is one of reason-
ableness. Where the government can show that its case
had a reasonable basis both in law and fact, no award
will be made. Enerhaul, Inc., 263 NLRB 890 (1982),
remedy 710 F.2d 748 (11th Cir. 1983); Shellmaker, Inc.,
267 NLRB 20 (1983). After the 1985 amendments to
EAJA the Board has held that "substantially justified"
means more than "mere reasonableness." See, e.g., Lee-
ward Auto Wreckers, 283 NLRB 574 (1987). After the
U.S. Supreme Court's decision in Pierce v. Underwood, 56
USLW 4806 (June 27, 1988), the Board now holds that
phrase "substantially justified" means "justified to a
degree that could satisfy a reasonable person," or "rea-
sonable basis both in law and fact." See, e.g., Jansen Dis-
tributing Co., 291 NLRB 801 (1988).
In the instant case, the General Counsel argues that
the issuance of complaint was substantially justified. The
General Counsel notes that the case involved an unusual
factual situation and that the case law under which the
General Counsel issued complaint was recent and untest-
ed. The General Counsel correctly argues that her legal
theories need not be finally established in order to be
considered substantially justified. See, e.g., Union Carbide
Building Co., 276 NLRB 1410 (1985); Craig & Hamilton
Meat Co., 276 NLRB 974 (1985); Shellmaker, Inc., supra.
The theory of the complaint was based upon the
Board's then recent decisions in Bruckner Nursing
Home13 and RCA Del Caribe, Inc.14 I found in my
August 31, 1983 decision that the 17 employers for
whose employees representation petitions had been filed
could not recognize and execute a contract with
NAIU.15 I found in accordance with the General Coun-
sel that the filing of such petitions supported by a valid
showing of interest barred recognition of NAIU regard-
less of whether the Board would ultimately find the unit
inappropriate in the Arden Electric cases. Thus, I found
merit to the General Counsel's theory.
Although the General Counsel prevailed on her legal
theory, that theory only had proper application to
Branstner and Stage I and indirectly to NECA. The
General Counsel had no support then or now for arguing
that the employer-members of NECA who were not sub-
ject to a petition could not lawfully recognize and bar-
gain with NAIU. Nor did the General Counsel offer
anything to justify issuing an order against any of the 15
employers who were the subject of petitions but were
not named or served with a charge. Accordingly, while I
19 262 NLRB 955 (1982)
14 262 NLRB 963 (1982)
15 See Appendix B for a full discussion of these 8 (a)(2) issues
875
found merit to the General Counsel 's case I dismissed the
allegations of unlawful recognition against Grason,
Walker, Moore, Nutter, Myers, and Four Star because
there were no petitions regarding the employees of those
six employers. In neither the unfair labor practice case
nor this EAJA case has the General Counsel explained
how these employers could have bestowed unlawful rec-
ognition. Accordingly, if the Board were to find jurisdic-
tion herein, I would find that the allegations of unlawful
recognition by Grason, Walker, Moore, Nutter, Myers,
and Four Star were not substantially justified.
I further found that Nutter, Four Star, Grason,
Walker, and Moore withheld dues from employees either
in advance of written authorization or without written
authorization . I found a violation of Section 8(a)(2) and
(1) by a supervisor of Nutter and by a supervisor of
Walker . More important , I found no evidence of a viola-
tion by Myers. The General Counsel has offered no justi-
fication for including Myers in this complaint and I can
find none. Thus, if the Board found jurisdiction, I would
find that the allegations of unlawful assistance against
Myers were not substantially justified.
3. Special circumstances
The General Counsel contends that special circum-
stances make the granting of an award unjust . Specifical-
ly, the General Counsel argues that even if the employ-
er-members "are not affiliates within the meaning of the
Board's Rules and Regulations, the group nature of the
action comprises special circumstances which would
make granting an award unjust."
Section 203(a)(1) of EAJA (5 U.S.C. 504(a)(1)) pro-
vides for an award of attorneys ' fees to a "party" pre-
vailing in an adversary adjudication before a Federal
agency unless it is shown that the government 's position
was "substantially justified " or that "special circum-
stances" make an award of attorney fees unjust. In defin-
ing a "party" entitled to recover expenses incurred in an
administrative proceeding , 5 U.S.C. 605(b)( 1)(B), which
is the applicable subsection of EAJA, reads in relevant
part:
"party" means a party as defined in 5 U.S.C. 551(3),
who is . . . (ii) any owner of an unincorporated
business, or any partnership , corporation , associa-
tion, unit of local government , or organization, the
net worth of which did not exceed $7,000,000 at the
time the adversary adjudication was initiated, and
which had not more than 500 employees at the time
the adversary adjudication was initiated; . . . except
that an organization described in section 501(c)(3)
of the Internal Revenue Code of 1954 (26 U.S.C.
501(c)(3) exempt from taxation under section 501(a)
of such Code, or a cooperative association as de-
fined in section 15(a) of the Agricultural Marketing
Act (12 U.S.C. 1141j(a)), may be a party regardless
of the net worth of such organization or coopera-
tive association.
Section 102.144 of the Board 's Rules and Regulations
states : "An award will be reduced or denied if the appli-
cant unduly or unreasonably protracted the adversary
876 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
adjudication or if special circumstances make the award
sought unjust."
The committee reports indicate that at least part of the
reason for this provision was to give "the court discre-
tion to deny awards where equitable considerations dic-
tate an award should not be made ." Senate Report 96-
253, 96th Cong., 1st Sess . at 7; House Report 96-1418,
96th Cong., 2nd Sess . at 11. Further, Section 102 .143(g)
provides that the number of employees of the applicant
and all of its affiliates shall be aggregated to determine
eligibility . In addition to ownership or control of, or by,
the affiliate , "financial relationships of the applicant other
than those described in this paragraph may constitute
special circumstances that would make an award unjust."
In my supplemental decision of April 28, 1987, which
is the subject of the instant remand , ' e I found that the
net worth of the 48 employer-members of NECA who
financed this litigation should be aggregated for purposes
of EAJA eligibility . I continue to hold that opinion.
I reached that decision , not based on membership in
NECA, but rather on the joint participation in the con-
duct which gave rise to the adversary adjudication and
the joint participation in the litigation (and payment
thereof). In this case , 48 employer-members of NECA
shared the legal expenses of the Arden Electric represen-
tation cases and the instant Grason Electric unfair labor
cases." The employer-members paid a share of the legal
expenses based on the number of employees as a percent-
age of the number of employees in the total bargaining
unit . 18 This was true whether an individual employer
was a named respondent in the unfair labor practice case
or a named employer in the representation cases. This
method of financing the litigation results in a most un-
usual situation.
Myers should not have been the subject of an unfair
labor practice complaint . There was no evidence of any
wrongdoing by that company. On its face it appears to
be the classic EAJA situation . The Government improp-
erly issued a complaint against Myers without substantial
justification . However, the Government's action in in-
cluding Myers in the complaint did not increase Myers'
legal fees . Based on the NECA formula for financing this
litigation , Myers' legal fees were the same whether or
not named in the complaint . This does not justify the
government 's actions , but does illustrate the collective
action which formed the basis of this unusual case.
Collectively NECA and 48 of its 55 members 19 sought
to establish the validity of their recognition of and con-
16 See Appendix A for the full basis for these conclusions
19 In addition to the cases consolidated for hearing herein there were
numerous other cases involving employer -members of NECA where the
opposing party was Local 340. All of these cases were financed by the
employer-members of NECA based on their representative number of
employees in the bargaining unit
19 Each of the seven Applicants seeks one-seventh of the fees and
costs, regardless of its actual expenses
19 In the Arden Electric representation cases, seven employer -members
of NECA were able to resist NECA's attempt to hold them to the
NECA-NAIU ageement These Employers were successful in obtaining
elections so that their employees could vote for representation by Local
340.
tract with NAIU. Further, they sought to show that the
17 petitions filed by Local 340 were defective . Finally,
they sought to hold the seven dissenting employers who
were sympathetic to Local 340 to the NECA-NAIU
agreement . NECA and its employer-members were suc-
cessful in upholding the NAIU contract . The unfair
labor practice case was withdrawn . However, the 17 pe-
titions were found to be valid . This loss was in the repre-
sentation case and not the adjudication covered by
EAJA. NECA was unable to hold the seven dissenting
employers to the contract . Again this loss was in the rep-
resentation case.
The Applicants contend that if the complaint had been
limited to the allegations I found to be substantially justi-
fied, the case would have been settled . The Applicants
argue that it was the unjustified attempt to set aside the
NECA-NAIU agreement in its entirety that caused the
lengthy and expensive litigation . The General Counsel
does not argue that she sought to set aside the entire
agreement nor does she argue that the Applicants would
not have settled on this basis . Rather, the General Coun-
sel adheres to the position that the complaint was sub-
stantially justified. The General Counsel further argues
that even if portions of the complaint were not justified
those portions of the complaint were inextricably inter-
twined with the meritorious allegations so that the Appli-
cants suffered no loss by their inclusion in the complaint.
The general rule is that the Government should pay
where it was not substantially justified and not pay for
that part of the case where it was substantially justified. I
would adhere to that rule here. It is too easy for a re-
spondent-applicant to say with hindsight "if that's all the
government wanted , I would have settled ." I would only
make such a finding on proof that the Government re-
jected such a settlement offer. In the absence of such
proof, I would apportion the award based on recover-
able time for litigating unsubstantial claims and no recov-
ery where the Government 's position was substantially
justified . 20 An applicant may not be compensated under
EAJA for fees and expenses incurred in litigating matters
in which the Government 's position was substantially
justified , as it would contravene the purposes of EAJA
to require the Government to bear the expense of de-
fending its reasonable positions . Matthews v. United
States, 713 F.2d 677, 684 (11th Cir . 1983); Goldhaber v.
Foley, 698 F.2d 193, 197 (3d Cir. 1983). The actual ap-
portionment of fees and expenses need only be made if
the Board reverse me and finds jurisdiction.
In sum , I adhere to the conclusion in my August 1987
supplemental decision that the net worth of the 48
NECA employer-members who financed this litigation
should be aggregated for eligibility purposes . The failure
of the Applicants to establish eligibility after being given
20 In discussing substantially justified portions of the case , I am refer-
ring only to the unfair labor practice case . The undue delay caused by
the improper consolidation resulted in an increase in legal fees and there-
fore would necessarily result in an increase in compensation The fact
that the representation case can be substantially justified has no bearing in
this proceeding . Nor does it matter that Local 340 rather than NECA
and its employer-members prevailed on the central issues of the represen-
tation cases
GRASON ELECTRIC CO.
a second opportunity to do so warrants dismissal of the
applications.
4. The alleged defects in the application
The General Counsel contends that the documentation
in support of the applications is insufficient . Aside from
the question of the 42 employer -members for whom no
documentation was submitted , I find no basis to support
the General Counsel 's argument . Under Section
102.147(f) each applicant must provide with its applica-
tion a detailed exhibit showing the net worth of the ap-
plicant and any of its affiliates. The exhibit may be in
any form convenient to the applicant that provides full
disclosure of the applicant 's and its affiliates ' assets and
liabilities and is sufficient to determine whether the appli-
cant qualifies under the standards of EAJA eligibility.
The Applicants herein have met that standard with re-
spect to their own net worth but not as to the other enti-
ties who were also real parties in interest . If the Board
reverses me and finds jurisdiction , the minor defects al-
leged by the General Counsel can be corrected , if neces-
sary . I note that the General Counsel could have litigat-
ed these questions at a hearing but chose to proceed
without further hearing.
Based upon the above findings and conclusions , I shall
recommend that the seven applications be dismissed for
lack of jurisdiction under EAJA.
I issue the following recommended21
ORDER
The General Counsel's motion to dismiss is granted
and the seven applications for fees and expenses are
denied.
21 If no exceptions are filed as provided by Sec 102 46 of the Board's
Rules and Regulations , the findings , conclusions, and recommended
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 pur-
poses.
David Sargent and Nancy E. Watson , for the General
Counsel.
Mark R . Thierman and Ronald Novotny, Esqs. (Thierman,
Simpson & Cook), of San Francisco , California, for the
Respondents.
Robert E. Jesinger and Kathryn A. Sure, Esqs. (Wylie,
Blunt, McBride & Jesinger), of San Jose, California, for
Local 340.
0. Brandt Caudell Jr. and John Christopher Larsen, Esqs.
with Philip Harris on brief (Maurer, Higgenbotham &
Harris), of Costa Mesa , California, for the NAIU.
Peter D. Nussbaum and William J. Flynn, Esgs. (Neyhart,
Anderson, Nussbaum, Reilly & Freitas), of San Francis-
co, California , with Lawrence J. Cohen and Richard M.
Resnick on brief (Sherman, Dunn, Cohen, Leifer &
Counts), of Washington , D.C., for the IBEW.
Dennis R. Murphy and Edmond Brehl, Esqs. (Diepenbrock,
Wulff Plant & Hannegan), of Sacramento , California,
for Foss, Gatejen , M & M, Luppen & Hawley, Yamas,
and Stein.
877
George Tichy III and Richard Hill, Esqs. with Jeffrey M.
Tanenbaum on brief (Littler, Mendelson, Fastiff &
Tichy), of San Francisco , California, for Collins.
DECISION
STATEMENT OF THE CASE
JAY R. POLLACK, Administrative Law Judge. I heard
this case in trial at Sacramento , California, on 19 dates
commencing on January 13 and ending on February 11,
1983. On January 28, 1982, International Brotherhood of
Electrical Workers Local Union 340, AFL-CIO (Local
340) filed a charge against Grason Electric Company
(Grason), Amos J. Walker, Inc. (Walker), Rex Moore
Electrical Company (Moore), Harold E. Nutter, Inc.
(Nutter), Myers Electric, Inc. (Myers), Four Star Elec-
tric (Four Star), Branstner Electric (Branstner), Stage I
Electrical Contractor (Stage I), and National Electrical
Contractors Association, Inc., Sacramento Valley Chap-
ter (NECA), herein collectively called Respondents. On
October 1, 1982, the Regional Director for Region 20 of
the National Labor Relations Board (the Board) issued a
complaint and notice of hearing against Respondents.
The National Association of Independent Unions
(NAIU) was named in the complaint as a party in inter-
est and served with a copy of the complaint and notice
of hearing.
On September 28, 1982, the Board 's Executive Secre-
tary issued an order authorizing the Regional Director to
consolidate the instant unfair labor practice case with the
representation hearing ordered by the Board in Arden
Electric, 263 NLRB 318 (1982).' On October 1, the Re-
gional Director issued an order consolidating the 17 rep-
resentation petitions involved in Arden Electric, for pur-
poses of hearing , with the instant unfair labor practice
case . On December 6, upon motion by counsel for Re-
spondents , I severed the representation cases from the
unfair labor practice case and remanded the representa-
tion cases to the Regional Director. On December 16,
the Executive Secretary, by order of the Board , issued
an order directing that the representation cases be con-
solidated for hearing with the unfair labor practice case.
On December 21, 1982, I issued an order consolidating
the cases and rescheduling the representation cases for
hearing with the unfair labor practice case . On January
5, 1983, I granted a motion by the International Brother-
hood of Electrical Workers (IBEW) to intervene.
As mentioned earlier, the consolidated hearing opened
on January 13 and closed on February 11, 1983. On Feb-
ruary 28, 1983, I issued an order which provided, inter
alia, that the record be closed, the representation cases
i The representation cases arose as follows. On September 25, 1981,
Local 340 filed 17 representation petitions in individual employer units
for 17 employers formerly represented by NECA on a multiemployer
basis. On December 29, 1981, the Regional Director administratively dis-
missed the petitions on the basis that the appropriate bargaining unit was
a multtemployer bargaining unit represented by NECA. On May 5, 1982,
the Board 's Executive Secretary issued a ruling reversing the Regional
Director Thereafter NECA' s counsel filed a motion for reconsideration
of that ruling On August 12, 1982, the Board issued its published deci-
sion in Arden Electric, supra , directing a hearing on the issue of the con-
tinued existence or viability of the multiemployer unit.
878 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
be severed from the unfair labor practice case and the
representation cases be transferred to and continued
before the Board. The decision in Arden Electric, is now
pending before the Board.2
The complaint alleges, in substance, that Respondents
violated Section 8(a)(2) and (1) of the National Labor
Relations Act 29 U.S.C. Sec. 151 et seq. (the Act), by
entering into a collective-bargaining agreement with the
NAIU, on October 1, 1981, notwithstanding the filing of
the 17 representation petitions by Local 340 on Septem-
ber 25, 1981. The complaint further alleges that Re-
spondents violated Section 8(a)(2) and (1) of the Act by
certain postrecognition conduct.
All parties were given full opportunity to appear, to
introduce relevant evidence, to examine and cross-exam-
ine witnesses, to argue orally and to file briefs. After the
transfer of the representation cases to the Board, the par-
ties in the representation proceeding were permitted to
file briefs, amicus curiae, in the instant unfair labor prac-
tice case. Based upon the entire record,a and from my
observation of the demeanor of the witnesses, and after
due consideration of the briefs filed on behalf of the par-
ties, I make the following4
2 The 17 employers involved in the representation cases are.
Case Employer
20-RC-15401 Arden Electric
20-RC-15402 Beard Construction
20-RC-15403 Branstner Electric
20-RC-15404 Carlyle Electric
20-RC-15405 Collins Electric Company, Inc
20-RC-15406 George C Foss
20-RC-15407 Gatejen Electric Company
20-RC-15408 May-Han Electric, d/b/a
M & M Electric
20-RC-15409 T. G. Nelson
20-RC-15410 Perri Electric
20-RC- 15411 Peters Electric Company,Inc.
20-RC-15412 Luppen & Hawley
20-RC-15413 Neuffer Electric Company
20-RC-15414 Slater Electric Company
20-RC- 15415 Stage I Electric Company
20-RC-15416 G J. Yamas, Inc.
20-RC-15417 Stein Electric Company
All of the above-named employers were given notice of the consolidated
hearing and all, except for T. G. Nelson and Slater Electric , were repre-
sented by counsel . As mentioned earlier , the IBEW was granted interven-
tion in the representation hearing and it also was represented by counsel
5 On May 17, 1983, counsel for the IBEW filed a motion to correct
transcript and on May 27, 1983, counsel for Respondents filed a motion
to correct transcript On July 11, 1983, the Board granted the IBEW's
motion to correct transcript There being no opposition to either motion
before me and no inconsistencies therein, I grant both motions The cor-
rections contained therein are incorporated , sua sponte , into the record as
Judge's Exhs I and 2, respectively.
4 On May 27, 1983, Respondents filed a motion to defer the judge's de-
cision in this case pending the Board 's decision in the representation
cases On June 3, 1983, the Board denied Respondents ' motion
FINDINGS OF FACT AND CONCLUSIONS
I. JURISDICTION
NECA is an organization composed of employers en-
gaged in the electrical contracting business which exists
for the purpose, inter alia, of representing its employer-
members, and other employers who have designated it as
their bargaining representative in negotiating and admin-
istering collective -bargaining agreements . At all times
material herein , Respondents Grason , Walker, Moore,
Nutter , Myers, Branstner , and Stage I were each an em-
ployer-member of NECA. At all times material herein,
Respondent Four Star , although not a member of
NECA, was represented for purposes of collective bar-
gaining by NECA.
During calendar year 1981 , the employer-members of
NECA purchased and received at their facilities in Cali-
fornia, goods and materials valued in excess of $50,000
directly from points outside the State of California. Ac-
cordingly, Respondents admit and I find that they are
employers engaged in commerce within the meaning of
Section 2(2), (6), and (7) of the Act.
II. THE LABOR ORGANIZATIONS INVOLVED
There is no issue that the NAIU and Local 340 each is
now, and each has been at all times material herein, a
labor organization within the meaning of Section 2(5) of
the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. Background
As mentioned earlier, NECA is an association of em-
ployers engaged in electrical contracting which has as
one of its purposes the representation of its employer-
members and other nonmember employers who have
designated it as bargaining representative, in negotiating
and administering collective-bargaining agreements with
various labor organizations. NECA and Local 340 had a
collective-bargaining relationship for approximately 40
years. The last collective-bargaining agreement between
Local 340 and NECA expired May 31, 1981. On June
11, 1981, Local 340 commenced a strike against the Em-
ployers in the NECA multiemployer bargaining group,
including all of the Respondents herein.5 After striking
for 3 months, on September 15, 1981, Local 340 sent
NECA a disclaimer of interest which provided:
On behalf of Local Union 340, IBEW, this letter
shall serve as, and constitute a disclaimer of interest
by IBEW Local 340 as representing, for purposes of
collective bargaining or any other purpose, the em-
ployees of the multibargaining unit previously estab-
lished and consisting of the employees of the em-
ployer-members of the Sacramento Valley Chapter,
of the National Electrical Contractors Association,
Inc., and other employees who have, from time to
5 At the time the strike commenced , there were approximately 55 em-
ployers in the NECA bargaining unit, including the 17 employers in-
volved in the representation cases
GRASON ELECTRIC CO.
time , agreed to become part of the multiemployer
bargaining unit . This disclaimer covers the employ-
ees covered by the Inside Wireman 's Agreement,
the Line Agreement , and the Material Handler's
Agreement , and is intended to disclaim interest as to
the multiemployer bargaining units or unit previous-
ly created by these three separate labor contracts.
As mentioned earlier , on September 25, Local 340
filed 17 representation petitions in individual employer
units for 17 employers , formerly in the NECA bargain-
ing unit, including Respondents Stage I and Branstner.
Prior to the Regional Director 's dismissal of the peti-
tions, NECA signed a collective -bargaining agreement
with the NAIU on October 1. The NAIU-NECA bar-
gaining agreement purported to cover the electrician em-
ployees of the approximately 55 employers previously in-
volved in the negotiations between Local 340 and
NECA, including the 17 employers involved in the con-
solidated representation cases . As previously stated, on
December 29, 1981 , the Regional Director administra-
tively dismissed the petitions but was reversed by the
Board Orders of May 5 and August 12, 1982.6
Within this factual context, the General Counsel con-
tends that Respondents violated Section 8(a)(2) and (1)
of the Act by recognizing and entering into a collective-
bargaining agreement with the NAIU while the 17 repre-
sentation petitions were pending before the Board.' The
General Counsel contends that Section 8(a)(2) was vio-
lated regardless of whether the petitions were filed in an
appropriate unit . The complaint further alleges that Re-
spondents violated Section 8(a)(2) and (1) of the Act by
the following acts of assistance to the NAIU: (a) urging
employees to sign membership cards; (b) urging employ-
ees to sign dues-checkoff authorizations; (c) deducting
money from employees ' wages in the absence of employ-
ee authorization ; (d) operating and financially supporting
the NECA-NAIU hiring hall; and (e) giving other finan-
cial assistance to the NAIU.
In addition to supporting the General Counsel's con-
tentions, Local 340 contends that NECA violated Sec-
6 The Board ordered a hearing on the issue of the "continued viability
of the multiemployer unit which the Regional Director has administra-
tively found to constitute a bar to the petitions" including but not limited
to the following issues-
I The extent of the authority of Sacramento Valley Chapter, Na-
tional Electrical Contractors Association , as demonstrated by letters
of assent , by-laws , or any other evidence , to bargain with unions
other than Local 340 , International Brotherhood of Electrical Work-
ers, for electrical contracting work,
2 The degree to which specific named Employer-members of the
Association did or did not attempt to withdraw from the Sacramento
Valley Chapter , National Electrical Contractors Association and the
number of Employers and employees involved; and
3. The manner (e.g., how , when , etc) in which these employers
sought to and did withdraw . [Slip op at 2 ]
I The General Counsel affirmatively disavowed any allegation that Re-
spondents recognized and executed a contract with the NAIU at a time
when NAIU was not the majority representative of the employees in the
NECA multiemployer unit covered by the contract The General Coun-
sel conceded that absent the filing of the petitions, Respondents ' contract
with NAIU would be privileged by Sec 8 (f) of the Act . Accordingly,
during the hearing, I refused to permit Local 340 to litigate whether Re-
spondents' recognition of NAIU was recognition of a minority union not
privileged by Sec 8(f) of the Act . During the hearing , the Board issued
an order affirming my ruling described above
879
tion 8 (a)(2) and (1) of the Act by recognizing the NAIU,
a minority union , when Local 340 itself was the majority
representative of the employees in the recognized bar-
gaining unit . Further, as noted above, Local 340 con-
tends that Section 8(f) of the Act does not privilege Re-
spondents' recognition of the NAIU. The IBEW sup-
ports the General Counsel's theory of the complaint and
in addition argues that Local 340 enjoyed a presumption
of majority status within the multiemployer bargaining
unit and , therefore, NECA could not sign a bargaining
agreement with the NAIU. In support of this contention
the IBEW argues that Local 340's disclaimer was void
and that NECA had knowledge that the disclaimer was
void.
Collins Electric (Collins), one of the Employers in-
volved in the representation cases , and currently signato-
ry to a collective-bargaining agreement with Local 340,
submitted a brief in which it argued, in addition to sup-
porting the General Counsel 's case, that the NECA-
Local 340 multiemployer bargaining unit dissolved and,
therefore, Local 340's representation petitions created a
question concerning representation in separate appropri-
ate units . Accordingly, Collins argues that NECA could
not enter into any agreement with NAIU covering em-
ployees involved in the petitions and, in any event,
NECA could not enter into a contract on behalf of Col-
lins. Luppen & Hawley, George C. Foss Co. (Foss), M &
M Electric Co. (M & M), Gatejen Electric Co. (Gate-
jen), Stein Electric Co. (Stein) and G. J. Yamas Co.
(Yamas), employers involved in the representation pro-
ceeding and currently signatories to separate agreements
with Local 340, argued in support of the General Coun-
sel's complaint . These six employers argue that Respond-
ents violated the Act regardless of the unit determination
but, in any event, that the appropriate units were single
employer units, at least with respect to these six employ-
ers.8
Respondents deny the commission of any unfair labor
practices and further affirmatively allege that the 17 rep-
resentation petitions filed by Local 340 were filed in in-
appropriate units and, therefore, do not raise a real ques-
tion concerning representation .9 Accordingly , Respond-
ents argue that NECA and its employer constituents
were free to recognize and bargain with the NAIU on a
multiemployer basis . Respondents further argue that
even if the petitions were valid , no violation could be
found against Respondents Grason, Walker , Moore,
Nutter, Myers, and Four Star since no petitions were
filed regarding those employers . Accordingly , Respond-
ents argue that even if the petitions were valid , a viola-
tion could be found only against Respondents Branstner
and Stage I. Respondents further argue that any assist-
8 Although the representation cases are pending before the Board, the
parties to the representation cases were permitted to file briefs in this
matter This decision makes no findings, conclusions, or recommendations
regarding the representation cases . Sec. 9(c) of the Act prohibits a hear-
ing officer from making any recommendations with respect to a preelec-
tion representation case.
8 Counsel for Respondents also represented Arden Electric, Beard
Construction, Carlyle Electric, Perri Electric, Peters Electric Company,
Inc and Neuffer Electric Company, six employers in the representation
cases
880 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
ance granted the NAIU was minimal in view of its con-
tention that the underlying contract between Respond-
ents and the NAIU was lawful. Finally, Respondents
argue that even if a violation is found , only a narrow
cease-and -desist order is appropriate to remedy such vio-
lations.
The NAIU supports Respondents' argument that the
17 representation petitions were filed in inappropriate
units and , therefore, did not raise a question concerning
representation . The NAIU further argues that it did not
receive unlawful assistance . Finally, the NAIU argues
that the General Counsel's use of certain affidavits of
NAIU officials denied the NAIU due process and man-
dates dismissal of the General Counsel 's complaint.
B. The Evidence
As mentioned earlier, Local 340 and NECA had a col-
lective-bargaining relationship for approximately 40
years . This relationship was embodied most recently in
three agreements called the Inside Wireman 's Agree-
ment, the Line Agreement , and the Material Handlers'
Agreement, which were effective from June 1, 1978, to
May 31, 1981. On June 10, 1981, Local 340 commenced
a strike against the bargaining unit employers. A majori-
ty of the bargaining unit employers hired replacement
employees.' 0 Negotiations continued during the strike
until August 31. Agreement still not having been
reached, on September 15, 1981, Local 340 sent NECA
its disclaimer letter set forth above at page 5.
NECA received the disclaimer during the late after-
noon of September 15. However, prior to September 15,
the employer-members of NECA had heard rumors that
Local 340 intended to "disclaim," "decertify" or "di-
vorce" NECA. Kenneth Carlson , NECA's chapter man-
ager, testified that on or about August 11 he learned
from Tom Roberts , an International representative of the
IBEW , that "if negotiations did not start getting some-
where, the Local Union was going to decertify NECA."
Steven Rex Moore, president of Moore and a member of
the NECA negotiating team, corroborated Carlson's tes-
timony. Carlson further testified that he learned from
Roberts on September 11 that Local 340 was going to
take some drastic action on September 14 to eliminate
the multiemployer unit . Richard Carlson , president and
general manager of Respondent Grason and a member of
the NECA board of directors and negotiating committee,
testified that he heard prior to September 15 that "we
were going to be completely blown apart in a couple of
days, and that the Local Union was planning to take
some type of drastic action to remove themselves from
the bargaining group ." On September 11, Ken Carlson
wrote the employer-members of NECA a letter in which
he suggested that Local 340 "surely would never" take
such radical action.
However, the issue of disclaiming interest was voted
on and approved by the membership of Local 340 at a
meeting on September 14. Upon receiving the disclaimer
letter, Ken Carlson called a meeting of the NECA board
of directors for the morning of September 16. The board
10 Collins . Luppen & Hawley , M & M, Yamas , Stein , and Gatejen did
not hire replacement employees
of directors , according to Ken Carlson , were "shocked
and dismayed" at Local 340's action and voted unani-
mously to accept the disclaimer. The board of directors
considered challenging the disclaimer before the NLRB
but decided not to do so. That same afternoon, NECA
sent Local 340 a telegram which read in pertinent part:
Re disclaimer of interest: Thank you for your letter
of September 15, 1981, disclaiming interest in repre-
senting the employees of the NECA multi-employer
bargaining group . The NECA multi-employer
group has now commenced negotiations with an-
other labor organization." Please do not contact
any of the employers in the NECA multi-employer
group for negotiations on an individual or a single
employer basis ... .
On the afternoon of September 16, S. R. "Jack"
McCann , an International vice president of the IBEW,12
instructed Roberts, the IBEW representative, to obtain
from Frith a complete report concerning the disclaimer.
In addition , McCann sent a letter to Frith stating, inter
alia:
This letter will serve to inform you that the imple-
mentation of [the membership 's vote to disclaim] is
improper without the approval of International
President Charles H. Pillard.
On the morning of September 17, McCann received
Frith 's report and took the report to Washington, D.C.,
where he met with Charles Pillard, president of the
IBEW . Pillard instructed McCann to go to Sacramento
and attempt to negotiate a contract with NECA on
behalf of Local 340. Further, Pillard gave McCann a
letter dated September 21 to be delivered to Frith and
NECA which proclaimed that Local 340 had no author-
ity to disclaim the bargaining unit and that Frith's dis-
claimer of September 15 was null and void.
On September 17, NECA had a general membership
meeting to discuss the disclaimer and its acceptance. The
employers were introduced to a representative of the
Steelworkers Union who told the employers that his
union would be willing to negotiate a contract with
NECA. A rough draft proposal of a collective-bargain-
ing agreement was presented to the Steelworkers ' repre-
sentative by the NECA board of directors. 13 However,
several days later, the Steelworkers notified NECA that
the Union was no longer interested in negotiating with
NECA. According to NECA's attorney , a Steelworkers'
representative told him that the Steelworkers had been
requested by the IBEW 's president to refrain from bar-
gaining with NECA.
After the Steelworkers Union indicated that it would
not sign an agreement with NECA, Mark Thierman,
NECA's attorney, called Nathan Norman, president of
11 In fact , no such negotiations had begun
12 Jack McCann is the IBEW 's vice president for the geographic area
that includes Sacramento and Local 340 McCann is the supervisor of
Tom Roberts, International representative, mentioned above
13 The proposal had been drafted prior to the meeting of September
17
GRASON ELECTRIC CO.
the NAIU, on September 21, to set up a meeting for the
morning of September 22. Thierman had previously
spoken with Norman, on September 14, about the possi-
bility of the NAIU bargaining with NECA if Local 340
disclaimed interest. On September 14, Norman told
Thierman that when NECA had a disclaimer, he would
be willing to talk but until there was a disclaimer
Norman was not interested in being used to break Local
340's strike.14 Thierman met with Norman on the morn-
ing of September 22 and showed Norman a copy of the
disclaimer letter of September 15. After reading the
letter, Norman said that he was then interested in negoti-
ating with Thierman and NECA. Thierman presented
Norman with a rough draft proposal of a collective-bar-
gaining agreement. Norman later gave a copy of the pro-
posal to his son Bruce, currently an NAIU business
agent, for review. Apparently, the proposal was identical
to that offered by NECA to the Steelworkers Union.
Also on September 22, McCann and Roberts went to
Sacramento to meet with Lee Frith, Local 340's business
manager, and then with Ken Carlson of NECA. Frith
told McCann that the disclaimer letter had been sent in
order to allow Local 340 to "bargain independently"
with employers that had previously been in the multiem-
ployer bargaining unit. McCann informed Frith that
Local 340 could not do that and gave Frith a copy of
the letter dated September 21 from Pillard which stated
that Local 340 "had no authority under the IBEW con-
stitution to disclaim interest . . . without [his] approval."
Pillard's letter further stated that Pillard did not approve
the disclaimer and that the disclaimer was "null and
void." Frith was advised that the matter had been re-
ferred to McCann pursuant to the IBEW constitution.
After meeting with Frith, McCann and Roberts met
with Ken Carlson, members of his negotiating commit-
tee, and two representatives of NECA's national organi-
zation (Dan McPeak and Peter Marana). McCann ex-
pressed the desire to resume "meaningful bargaining"
with NECA and asked NECA to acknowledge IBEW's
status as the bargaining agent for the employees in the
unit. Ken Carlson acknowledged "receipt" of Pillard's
letter but did not accept the content of the letter. Sam
Myers asked whether the IBEW was going to take over
Local 340. Further, Myers, Steven Rex Moore, and
Amos Walker, members of the committee, indicated that
NECA wanted nothing further to do with Lee Frith.
Notwithstanding that NECA hedged regarding negotiat-
ing with IBEW, the parties then discussed substantive
terms, e.g., residential building terms, the status of the re-
placements and the operation of the hiring hall. At the
conclusion of the meeting, McCann again asked if
NECA would acknowledge the IBEW as the bargaining
representative for the multiemployer unit. Ken Carlson
said that NECA would have to consider the question
further. McCann then met again with Frith and reported
on his discussions with NECA.
14 There is no allegation that Respondents unlawfully aided or assisted
the formation of the NAIU. In fact , the NAIU was in existence for years
prior to the events in this case . Further , the General Counsel conceded
that the NAIU represents employees , including construction workers,
other than those involved in this proceeding There is also no allegation
that Respondents unlawfully dominated the NAIU
881
On September 24, Nathan Norman met with NECA's
negotiating committee and later with the Employers at a
general membership meeting of NECA. Norman told the
contractors that the NAIU had contracts with approxi-
mately 40 other employers and that the NAIU would
hire a business agent to service any contract with NECA
in Sacramento. After Norman left, Ken Carlson informed
the NECA employers of his meeting with McCann.
Carlson told the NECA employers that NECA would
bargain directly with the IBEW, but would no longer
deal with Local 340, even if Local 340 rescinded its dis-
claimer letter.
On September 24, Local 340's attorney wrote to
IBEW's vice president, McCann, attempting to explain
Local 340's disclaimer . The attorney's letter provides,
inter alia, the following passage which sheds light on the
Union's disclaimer:
In late August and early September , Business Man-
ager Frith asked me for advice concerning the le-
gality of and procedures for disclaiming interest in
the multi-employer bargaining unit represented by
NECA . He asked me what impact a disclaimer
would have on the NECA members and whether a
disclaimer would free those NECA members who
Frith felt wanted to bargain in good faith with
Local 340. I understood then and now understand
that the NECA negotiation committee and Board of
Directors was and is dominated by employers who
want to go non-union . Those NECA members who
really wanted a fair contract and wanted to bargain
in good faith had been kept out of the Negotiations
and ignorant of the progress of negotiations. How-
ever, these same employers had signed a Power of
Attorney with NECA to represent them and up to
this point had not chosen to attempt to break away
from the multi-employer unit and request individual
bargaining.
Brother Frith also inquired whether NECA
could foster an RD election petition or file an RM
election petition in an attempt to oust Local 340
from its position as bargaining representative. As
you know, those NECA contractors who had
shown their true colors at the bargaining table had
hired scab replacements during the strike. In fact,
NECA had already placed the newspaper ad for
strike replacements before the strike was called and
before impasse had been reached in negotiations.
I advised Brother Frith that a disclaimer of inter-
est was legally possible, but would have to extend
to the whole multi-employer bargaining unit. I ad-
vised him that a disclaimer would cause a halt to his
strike and prohibit him from demanding further bar-
gaining with NECA on a multi-employer basis.
Therefore, with this history of bad faith bargain-
ing, lawsuits and NLRB charges, Brother Frith pre-
sented the matter of a disclaimer to the membership
for its consideration. Although I was not asked to
express an opinion as to the wisdom of disclaiming
interest, it is my opinion that it was a realistic move
to make considering the tactics employed by NECA
882 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
and the possibility that the disclaimer would prompt
the good contractors into action.
I further advised Brother Frith that the disclaim-
er would permit the individual employers to grant
recognition to Local 340 on an individual basis and
to bargain on a single employer basis . However, I
explained that the disclaimer would not have the
effect of voiding the Power of Attorney. Should
any employer wish to bargain individually with
Local 340, it would still have to use NECA as its
bargaining agent . Whether NECA would refuse to
act on behalf of any employer on this basis (and
whether the employer itself would seize this refusal
as an opportunity to break the Power of Attorney)
were matters of speculation.' 5
On September 25, McCann again met with Ken Carl-
son. In answer to McCann 's question as to whether
NECA acknowledged the IBEW as the representative of
the employees in the NECA unit, Ken Carlson answered
that "the discussions should continue " but that NECA
would not agree to "formal negotiations ." Carlson said
he would draft an agreement and recognize the IBEW if
it accepted that agreement . Carlson said he was not
ready to recognize the IBEW because such action might
"destroy" or "null and void " the disclaimer . McPeak of
National NECA mentioned that Local 340 had never
sent a letter to NECA rescinding the disclaimer.
McCann then instructed Roberts to get such a letter. Ac-
cording to McCann and Roberts, Carlson said that it was
not necessary for Roberts to do so. According to Carl-
son, Roberts simply did not respond to McCann's in-
structions even though McCann repeated the instruc-
tions . I am convinced that all three testified truthfully as
to what they perceived occurred at the meeting . Appar-
ently, Carlson said something to the effect that a rescis-
sion was not necessary at that moment because NECA's
board of directors was not going to meet until October
1. McCann and Roberts took Carlson's statement to
mean that a rescission was not necessary , period . There-
after, Roberts stayed for further discussions between
McCann and Ken Carlson over substantive terms, e.g.,
the hiring hall, strike replacements , apprentice programs,
15 Local 340 objected to the acceptance in evidence of the letter writ-
ten by its attorney to the IBEW's International representative . Said letter
was received as an admission by a party opponent under Federal Rules of
Evidence 801 (d)(2)(C) and (D).
Rule 801 (d)(2) provides "Statements which are not hearsay A
statement is not hearsay if . .
(2) Admission by party opponent The statement is offered against
a party and is . (C) a statement by a person authorized by him to
make a statement concerning the subject , and (D) a statement by his
agent or servant concerning a matter within the scope of his agency
or employment, made during the existence of the relationship "
Local 340's principal officer , Lee Frith, testified that the attorney rep-
resented Local 340 at the time the letter was written and was authorized
to correspond with the IBEW 's attorneys regarding the disclaimer and
related matters. However, Frith did not expect that the attorney would
communicate with officials of the IBEW Both secs (C) and (D) cover
this type of admission Local 340's unexpressed limitation on the attor-
ney's authorization does not bar consideration of the admission The
statements were admittedly uttered within the scope of the attorney's
agency and during the existence of the relationship Moreover, since
knowledge of any statement to the IBEW attorneys would be imputed to
the IBEW, Frith's unexpressed limitation, to correspond with the agent
but not the principal , would appear to be a legal nullity
wages, etc . At the close of the meeting, McCann stated
that he was willing to meet with NECA at any time to
resolve the outstanding issues.
After meeting with NECA, McCann again met with
Frith . Frith asked permission to file representation peti-
tions with the Board. Frith had previously asked for
such permission but McCann instructed Frith to wait
until after McCann 's meeting with NECA. McCann told
Frith that the IBEW was going to make every effort to
reestablish the relationship between Local 340 and
NECA. However, McCann said that in the meantime,
Local 340 could file the petitions "to protect its jurisdic-
tion in light of Carlson's refusal to recognize the IBEW."
Immediately thereafter , Frith filed the instant 17 repre-
sentation petitions.' a The record does not show when
the 17 employers received the petitions . Thierman admit-
ted that he was told of the filing of the petitions by the
IBEW 's attorney on September 26.
On September 25, Frith began telephoning the 17 Em-
ployers to ask if they wanted their employees back to
work under the terms of the recently expired agreement.
Only seven of the Employers accepted Frith's offer: Col-
lins, Foss, Luppen & Hawley, M & M, Yamas, Gatejen,
and Stein . When Frith telephoned Respondents
Branstner and Stage I, he was told that NECA handled
negotiations for each of those Employers.
On September 28, NECA 's board of directors met and
instructed McPeak to inform Pillard of NECA's desire to
work things out with the IBEW.' 7 The board of direc-
tors told McPeak that NECA wanted an answer from
the IBEW by October 1 but would not act before that
date pending McPeak 's meeting with Pillard.
On September 30, NECA's board of directors held an-
other meeting. The minutes of the September 30 meeting
show that the Board voted , "if the answer expected from
Dan McPeak is not to the satisfaction of the Board to-
morrow ... NECA [shall] negotiate an Agreement with
N. Norman of the National Association of Independent
Unions . Said Agreement to be signed immediately."' 8
Norman was then contacted and asked to come to Sacra-
mento the next day.' e
On October 1, NECA's board of directors had a meet-
ing with McPeak prior to meeting with Norman.
McPeak reported to NECA on his meeting with Pillard.
The board of directors was not satisfied with Pillard's re-
sponse and voted "to sign the agreement with the
NAIU."20 Norman met with the board of directors and
quickly negotiated the final details of the collective-bar-
gaining agreement . The agreement was signed that
evening.
16 Letters demanding bargaining were sent the same day to all 17 Em-
ployers However , Local 340 made no further attempt to bargain with
NECA
i? McPeak, McCann, and Pillard were all scheduled to be present at a
function in San Diego
19 NECA was concerned about possible liability under ERISA if it did
not take certain steps within 30 days of the disclaimer
19 Between September 15 and 30 , NECA had contacted several unions
but, by the end of September , only the NAIU was interested
20 Carlson testified that, until McPeak 's report, NECA still held out
hope that an agreement could be reached with the IBEW
GRASON ELECTRIC CO.
The next day, October 2, NECA held a general mem-
bership meeting to announce the new collective-bargain-
ing agreement to its employer-members . There was ap-
parently no discussion of the 17 representation petitions.
The new collective-bargaining agreement contained a
union-security clause with a 30-day grace period. On or
about October 15, NECA sent NAIU membership appli-
cation cards and savings plan authorization forms21 to all
employers in the multiemployer unit . In certain instances,
employer-members of NECA withheld dues from the
paychecks of employees for periods of time prior to the
date the employees signed an authorization and in some
instances where no authorization was signed . Nutter
withheld dues from 7 employees prior to their authoriza-
tions and from 12 employees for whom no authorizations
could be found. Four Star withheld dues from five em-
ployees prior to the date of their authorization and with-
held dues from one employee for whom no authorization
could be found. Grason withheld dues from nine employ-
ees prior to their execution of an authorization . Walker
withheld dues from 17 employees prior to their authori-
zation and withheld dues from 11 employees for whom
no authorization was found. Moore withheld dues from
19 employees prior to their authorization . Stage I with-
held dues from five employees prior to their execution of
a written authorization.
Richard Chafe, a former employee of Nutter Electric,
testified that he received a copy of an NAIU dues-check-
off authorization form and membership application at-
tached to his October 13, 198122 paycheck from Nutter
Foreman Craig Bosely . According to Chafe, he tele-
phoned Ted Choate, Nutter's superintendent , to com-
plain about the deductions from his paycheck. The de-
ductions were for the savings plan originally set forth in
the NECA-NAIU contract but which were amended
out, in November, because of employees ' complaints.23
Choate allegedly told Chafe to sign the NAIU member-
ship card and checkoff authorization , if Chafe wanted to
work for Nutter. Choate testified that he never received
such a call from Chafe and did not have any conversa-
tion with Chafe concerning the NAIU application cards.
Chafe's testimony is credited over that of Choate. The
money deducted from Chafe's check for the savings plan
was returned by the end of October.
Tom McGuinness, a former employee of Nutter, testi-
fied that Foreman Craig Bosely gave him a "field
memo" with his October 16 paycheck. The field memo
requested that employees return NAIU membership ap-
plication cards as soon as possible and advised the em-
ployees that they had the option to become a member of
the NAIU or a financial core member (a nonmember
paying the same dues and fees). McGuinness also re-
ceived an NAIU dues-checkoff authorization , member-
ship application and a notice for a November 4 NAIU
meeting . These notices of the NAIU meeting were
mailed out by the NECA office and copying of the
21 The savings plan followed the procedure under the NECA-Local
340 agreement and should be distinguished from a dues -checkoff authori-
zation The dues-checkoff authorization provided that monies could be
taken from an employee 's savings plan to satisfy his dues obligation
22 The correct date is October 15, 1981.
23 These deductions were not for union dues
883
notice was done by NECA. Apparently Nutter copied
the authorization cards and forms on its office copier.
McGuinness attended a meeting of employees at
NECA's offices in October or November. According to
McGuinness , an NAIU representative was present at the
meeting and the NECA-NAIU agreement was explained
to the employees . Walter K. Hurst , now an attorney, at-
tended the meeting as a law clerk on behalf of several
Nutter employees . According to Hurst, Ken Carlson and
Norman Nutter , vice president of Nutter , explained the
advantages of the agreement to the employees . Hurst tes-
tified that he observed Carlson, Norman Nutter, or
Thierman (he could not remember which) distribute
NAIU membership application cards at the meeting.
However, employees were told that they did not have to
join the NAIU and that they would not lose their jobs if
they did not join . Hurst advised his clients not to fill out
any cards and those employees did not sign anything at
this meeting . Ken Carlson testified that he did not pass
out cards at this meeting and neither did Thierman.
Norman Nutter testified that he did not pass out cards
and neither did Carlson nor Thierman . While it is not ap-
parent who passed out the NAIU membership applica-
tions, I find that NECA and Nutter solicited employees
to satisfy the union-security provision of the NECA-
NAIU contract by becoming a member or by paying the
financial core obligation.
Craig Bosely testified that he distributed NAIU mem-
bership application cards to Nutter's employees in late
October 1981 but that he told the employees that if they
had reservations about signing the cards , not to do so .
Ronald Cole, a former employee of Walker, received
an NAIU application card , at the time of his hire, from
Amos Walker, president of Respondent Walker. Rick
Ballou , a former employee of Walker , also testified that
Amos Walker gave him an NAIU application card.
Amos Walker told Ballou that it was not important that
the employee join the NAIU. Ballou further testified that
Walker was present at a company safety meeting when
Nick Nickerbocker, a foreman , distributed NAIU mem-
bership cards and dues-checkoff authorizations . Nicker-
bocker, in Walker's presence , told the employees to fill
out the cards and return them that same date . If the em-
ployees did not fill out the forms, it would mean termi-
nation of employment. Three employees who had not
previously signed such forms signed that same date.
Amos Walker testified that the only membership applica-
tion he passed out was to Cole, whom he presumed was
an independent contractor . Walker further testified that
he talked to his employees "about the fact that it was a
union shop," but did not pass out any NAIU cards at the
time . Ballou 's testimony regarding Nickerbocker's solici-
tation of NAIU membership and dues -checkoff forms is
credited.
Donald Strain , a former foreman for Moore , 24 testified
that when a new employee reported to work , Strain
would give the employee a packet including an NAIU
membership application card and a dues-checkoff author-
24 The parties stipulated that Strain was a supervisor within the mean-
ing of the Act while employed by Moore.
884 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
ization form . Patrick Horan , a former employee of
Moore, testified that upon his hire by Moore he was
given an NAIU membership application card to sign.
Shortly thereafter, Horan attended a meeting conducted
by Steven Rex Moore in which the NAIU agreement
was discussed. Although no representative for the NAIU
was present, NAIU application cards and dues -checkoff
authorizations were passed out to employees . Moore ex-
plained the difference between the membership and fi-
nancial core options of satisfying the union -security obli-
gation of the agreement.
Richard Carlson , president and general manager of Re-
spondent Grason, testified that neither he nor any other
official of Grason distributed NAIU membership cards to
Grason employees. Bruce Norman, NAIU business
agent, testified that he gave some NAIU cards to Ron
Stewart, an employee of Grason on October 12. No
other evidence of support by Grason to the NAIU was
presented.
Paul Woychesin , owner of Stage I, testified that nei-
ther he nor any other official of Stage I distributed
NAIU cards to his employees . Frank Azvedo, president
of Four Star, similarly testified that neither he nor his su-
pervisors distributed NAIU cards to his employees. Sam
Myers, president of Myers, testified that his company
never distributed NAIU cards to employees. Further,
there was no evidence that Myers had withheld dues
from its employees without prior written authorization.
Lloyd Branstner , owner of Branstner, testified that he re-
ceived NAIU membership applications from NECA but
that he did not distribute them to employees. According
to Branstner , he filed the applications in "File 13." There
is no evidence that Branstner withheld dues from any
employee without prior written authorization.
The NECA-NAIU agreement provided for an exclu-
sive hiring hall which has been established at NECA
headquarters . Prior to the NECA-NAIU agreement,
NECA operated a referral hall or clearinghouse for job
applicants during the Local 340 strike. Prior to the
strike, Local 340 operated an exclusive hiring hall from
which the NECA Employers obtained their workers.
Under the NECA-NAIU agreement , NECA operates the
exclusive hiring hall. The NAIU retains the right to in-
spect the hiring hall records for purposes of ascertaining
compliance with the agreement . While the General
Counsel 's complaint alleged that NECA's operation of
the hiring hall was unlawful assistance to the NAIU, the
General Counsel conceded that the operation of the hall
was unlawful only if recognition was unlawful . The Gen-
eral Counsel offered no explanation as to why NECA's
operation of the hiring hall was specifically alleged as a
violation of the Act.
Collins, Luppen & Hawley, M & M, Gatejen, Stein,
and Yamas agreed with Frith to allow their Local 340
members to return to work at the end of September
1981, under the terms and conditions of the recently ex-
pired NECA-Local 340 collective -bargaining agreement.
These six employers never put the NECA-NAIU agree-
ment into effect and all six signed separate but identical
agreements with Local 340 in February 1982. Prior to
signing its February agreement with Local 340, Collins
obtained an uncontested "cross-check" election by the
California State Conciliation Service on January 18,
1982. The NAIU was not given notice of this election
and Local 340 was certified by the state agency as repre-
senting a majority of Collins' employees.
Foss also agreed with Frith to allow its Local 340 em-
ployees to return to work at the end of September 1981.
However, at the same time , Foss continued to employ
the replacements that the Company had hired during the
strike . The strike replacements were paid pursuant to the
NECA-NAIU contract and the returning Local 340 em-
ployees were paid pursuant to Foss' oral agreement with
Frith , i.e., under the terms of the recently expired
NECA-Local 340 agreement . During January 1982, Foss
made fringe benefit payments on behalf of the Local 340
employees pursuant to the NECA-NAIU contract.25
However, in February 1982, Foss signed an agreement
with Local 340 and , thereafter , no longer complied with
any of the terms or conditions of the NECA-NAIU con-
tract . On April 18, 1983 , 1 issued a decision in George C.
Foss Co., JD-(SF)-76-83, dealing with the discharge of
the strike replacements . That case is now pending before
the Board on exceptions to my decision.
Analysis and Conclusions
1. Recognition of the NAIU
The theory of the complaint is based upon the Board's
doctrine established in Midwest Piping26 and recently
modified in Bruckner27 and RCA del Caribe.28 The Mid-
west Piping doctrine was an attempt by the Board to
ensure that , in a rival union situation , an employer would
not render "aid" to one of two or more unions compet-
ing for exclusive bargaining representative status through
a grant of recognition in advance of a Board -conducted
election . Thus, the Board ruled that an employer faced
with conflicting claims of two or more rival unions
which give rise to a real question concerning representa-
tion may not recognize or enter into a contract with one
of these unions until the right to be recognized has final-
ly been determined under the special procedures provid-
ed by the Act. In the past, the Board interpreted the
Midwest Piping doctrine so that all a minority union
needed to trigger the operation of the Midwest Piping
doctrine was a "credible claim ," a claim that was not
"clearly unsupportable," or a claim that was not
"naked." The circuit courts refused to enforce many of
the Board's decisions where the Midwest Piping doctrine
was utilized to prevent an employer from recognizing a
bona fide majority union. See Bruckner Nursing Home,
supra at 956 fn. 9. Accordingly, in Bruckner, the Board
stated that it would no longer find 8(a)(2) violations in
rival unions, initial organizing situations when an em-
ployer recognizes a labor organization which represents
an uncoerced , unassisted majority, before a valid petition
for an election has been filed with the Board . However,
as Apparently for this I month , Foss' Local 340 employees received
fringe benefits under both the NAIU and Local 340 plans.
26 Midwest Piping & Supply Co, 63 NLRB 1060 (1945)
27 Bruckner Nursing Home , 262 NLRB 955 (1982)
28 RCA Del Caribe, Inc., 262 NLRB 963 (1982)
GRASON ELECTRIC CO.
once notified of a valid petition , an employer must re-
frain from recognizing any of the rival unions.29
In RCA Del Caribe, issued the same day as Bruckner,
the Board reversed its Shea ChemicalS° modification of
Midwest Piping and held that, unlike initial organizing sit-
uations, an employer in an existing collective -bargaining
relationship cannot observe strict neutrality . According-
ly, the Board stated that the mere filing of a representa-
tion petition by an outside, challenging union will no
longer require or permit an employer to withdraw from
bargaining or executing a contract with an incumbent
union . Under this rule, an employer does not violate Sec-
tion 8(a)(2) by postpetition negotiations or execution of a
contract with an incumbent . Further, an employer would
violate Section 8(a)(5) by withdrawing bargaining based
solely on the fact that a petition has been filed by an out-
side union.31
In both Bruckner and RCA Del Caribe the Board
stated that it would continue to process timely filed peti-
tions and to conduct elections in the most expeditious
manner possible, following its normal procedures with
respect to intervention and placement of parties on the
ballot.
In its Bruckner decision , the Board consistently spoke
of a valid petition as the operative event for the imposi-
tion of strict employer neutrality in rival union , initial or-
ganizing situations . However, the Board did not define
what it meant by a valid petition . The Board indicated in
several places in the decision , that a valid petition indi-
cates that the union has "substantial support" in the peti-
tioned for unit . See, e .g., supra 957-958 . Substantial sup-
port means that the union has at least a 30 percent show-
ing of interest in the unit sought.
Respondents rely on the following passage from the
Shea Chemical case for their contention that the instant
petitions were not valid:
However, we wish to make it clear that the Midwest
Piping doctrine does not apply in situations where,
because of contract bar, a certification year or inap-
propriate unit or any other established reason, the
rival claim and petition does not raise a real repre-
sentation question.5
S Cf. William Penn Broadcasting Co.. 93 NLRB 1104 (1951).
[121 NLRB at 1029.]
The William Penn case cited by the Board in Shea
Chemical held that the pendency of a petition for certifi-
cation imposes no duty upon an employer to refrain from
continuing exclusively to recognize and bargain with an
incumbent bargaining representative , unless the petition
"has a character and timeliness" which creates a real
question concerning representation . Thus, the continuing
validity of the Shea Chemical and William Penn cases are
in doubt in view of the reversal of Shea Chemical in
RCA Del Caribe . Although this specific point was not
addressed in RCA Del Caribe, the Board in lifting the re-
29 See also Great Southern Construction. Inc, 266 NLRB 364 (1983).
3 0 Shea Chemical Corp., 121 NLRB 1027 ( 1958).
31 However, the employer could withdraw recognition based on other
objective considerations
885
strictions on an employer's continued dealing with an in-
cumbent labor organization seemingly made unnecessary
the above-quoted limitations of the Shea Chemical doc-
trine.
In Swift & Co., 128 NLRB 732 (1960), cited by the
IBEW, the Board in applying Shea Chemical found a
violation where the employer entered into a multiloca-
tion contract with an incumbent union during the pend-
ency of a petition for a single location . The Board reject-
ed the employer's contention that the petition did not
raise a real question concerning representation . The em-
ployer had argued that employees had continued dues-
checkoff authorizations in spite of the ability to revoke
such authorizations . However, the Swift case is not help-
ful because the employer apparently did not argue that
the single location was inappropriate and the Board did
not discuss the appropriateness of the unit . In Swift, the
Board cited Shea Chemical for the proposition that "the
timely filing of the petition supported by an administra-
tively determined showing of interest in fact raises a real
question concerning representation." The Board's reme-
dial order was limited to the single location covered by
the pending petition and did not extend to the other lo-
cations covered by the collective-bargaining agreement.
In the instant case, the filing of the disclaimer letter by
Local 340 ended its incumbent status in the NECA mul-
tiemployer unit . Thus, the Bruckner rules regarding ini-
tial organizing situations would seem to apply. Neither
Local 340 nor the NAIU held the position of an incum-
bent union with respect to the NECA multiemployer
unit.
Respondents' attorney was notified of the petitions on
September 26. The record does not indicate when the 17
Employers were sent or received the petitions . However,
the knowledge of their attorney is imputed to Respond-
ents.32 On October 1, Respondents executed a collective-
bargaining agreement with NAIU notwithstanding notice
of the filing of the petitions. Respondents contend that
the petitioned-for units were inappropriate and, there-
fore, they could act as if no petitions were filed. For the
following reasons, I disagree.
The Board's recent modification of its Midwest Piping
doctrine indicates a concern for establishing clear stand-
ards that would enable employees , unions, and employers
alike to discern the triggering event for the imposition of
strict employer neutrality. In Bruckner, the Board found
that notice of a valid petition in an initial organizing situ-
ation triggered the Midwest Piping doctrine. Once the
employer has received notice of a properly filed petition,
it must refrain from recognizing any of the competing
unions . This policy would be severely undercut if the
employer could ignore a petition because the petitioned-
for unit was in some way inappropriate . The best policy
is to require the employer to refrain from arrogating the
unit question to itself and to await the Board 's determi-
nation of the appropriate unit . If the Board dismisses the
petition as inappropriate , the employer is then free to
32 It is a well-established principle of agency law that attributes to a
client the knowledge obtained by the client's attorney . Link Y Wabash
Railroad Co, 370 U.S 626, 634 (1962)
886 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
recognize a majority union . 33 In the instant case, after
almost 2 years the parties still do not know whether the
17 petitions filed by Local 340 were filed in appropriate
units . However, the Board , having ordered a hearing in
this matter, has determined that Local 340 has substantial
support in the petitioned -for units.34
To qualify the new Midwest Piping doctrine with the
limitation that the valid petition must be filed in an ap-
propriate unit would inject into this area of the law the
uncertainty the Board was attempting to eliminate in its
Bruckner and RCA Del Caribe decisions . Further, in this
case, operation of the Midwest Piping doctrine does not
interfere or frustrate bargaining with a majority repre-
sentative . As applied here, the Midwest Piping doctrine
merely serves to prevent Respondents from determining
the exclusive representative of their employees , by rec-
ognizing a minority union , while representation petitions
are pending before the Board. Here the principle that a
Board-conducted election is the preferred method for
choosing a bargaining representative is not in conflict
with the need for stability of collective-bargaining rela-
tionships , as was the case in RCA Del Caribe. The result
herein should be unaffected by the Board 's determination
of the unit issues in the representation cases.
The Board's handling of this case buttresses the above
conclusions . First, the Board ordered consolidation of
these cases , notwithstanding the prohibitions of Section
9(c) of the Act. Then after litigation of the representa-
tion and unfair labor practice cases, the Board denied
Respondents' motion to defer this decision pending the
outcome of the representation cases . The Board rejected
Respondents' contention that resolution of the unit issues
are necessary for disposition of the unfair labor practice
case . Knowing that Section 9(c) of the Act prohibited
me from deciding the representation case issues, the
Board still determined that my decision need not await
determination of the appropriate unit . Therefore, the
Board implied that operation of the Midwest Piping doc-
trine is not dependent upon the appropriateness of the
unit sought by the petition . Rather, the Midwest Piping
doctrine is dependent upon the timely filing of a petition,
validly supported in the petitioned-for unit.
As can be readily seen , the Board might determine
that the Regional Director was correct in dismissing the
petitions on the ground that the appropriate unit was the
multiemployer unit represented by NECA. However, for
the reasons expressed above, the Respondents should not
be privileged to decide for their employees what union
3' As the Board pointed out in Bruckner, 262 NLRB at 958 fn. 13, an
employer will still be found liable under Sec. 8 (a)(2) of the Act for recog-
nizing a labor organization ' which does not actually have majority em-
ployee support . See Ladies ' Garment Workers' Union, AFL-CIO (Bern-
hard-Altmann Texas Corp.) v NLRB, 366 U S 731 ( 1961). In the con-
struction industry . Sec 8(1) permits recognition of a union which does
not have majority employee support.
44 At the hearing, I refused to permit Respondents to litigate the ques-
tion of Local 340's showing of interest . The Board has held that the
showing of interest is a matter of the Board 's administrative convenience
and is not subject to collateral attack See , e g., Associated General Con-
tractors of California, 220 NLRB 540 , 546 (1975), enf. denied on other
grounds 564 F 2d 271 (9th Cir . 1977) Under the circumstances of this
case, I view the Board 's order directing a hearing as an administrative
determination that Local 340 had a sufficient showing of interest in the
petitioned-for units to justify further Board proceedings
will represent the employees in the face of validly sup-
ported representation petitions . As pointed out in the
RCA Del Caribe case , the result would be different
where an employer sought to continue recognition of an
incumbent union , presumed to be the majority represent-
ative.
Although Section 8(f) privileges Respondents , as con-
struction industry employers , to enter into agreements
with unions without the unions having first been estab-
lished as majority representatives , it is well established
that 8(f) agreements do not have the same standing as
other collective-bargaining agreements : (1) pursuant to
Section 8(f), . such agreements do not constitute a con-
tract bar to a representation petition; and (2) prior to the
union 's obtaining majority status, an employer's 8(f)
agreement is voidable. See NLRB v. Iron Workers Local
103 (Higdon Contracting), 434 U.S. 335 (1978). Moreover,
it is well established that Section 8(f) does not exempt
employers and unions in the construction industry from
the requirements of the Midwest Piping doctrine. See
Couch Electric Co., 143 NLRB 662, 669 (1963); Komatz
Construction, 191 NLRB 846, 851 (1971); see also Associ-
ated General Contractors of California, 220 NLRB 540,
548 fn. 9 (1975), enf. denied on other grounds 564 F.2d
271 (9th Cir. 1977). Thus, an employer's right to enter
into an 8(f) agreement is subordinate to the rights of em-
ployees and their labor organizations to have a question
concerning representation resolved by the representation
procedures of the Act. Accordingly, I conclude that an
employer may not enter into an 8(f) agreement while a
valid representation petition is pending regardless of
whether the petition is ultimately dismissed by the
Board.
Respondents' argument that the disclaimer, as an un-
lawful attempt to withdraw from multiemployer bargain-
ing,35 was invalid, does not, in my view , aid their case.
If the disclaimer were found by the Board to be invalid,
the parties would be in the same position that they were
in prior to the disclaimer, i.e., Local 340 would be the
incumbent union representing all the employees of the
Employers in the NECA multiemployer unit. Under
such circumstances, Respondents could bargain only
with Local 340 and could not bargain with the NAIU or
any other labor organization . For purposes of this case, I
view the disclaimer , accepted and relied upon by NECA,
as terminating Local 340's incumbency. As the complaint
alleged only a Midwest Piping violation , no other theory
of a violation was considered.
Accordingly, under the circumstances of this case, I
find that on October 1, when Respondents recognized
the NAIU, there were 17 valid petitions pending for the
17-named Employers in the NECA bargaining group. I
find that Respondents Branstner and Stage I each violat-
ed Section 8(a)(2) and (1) by recognizing and executing a
collective-bargaining agreement with the NAIU while a
valid petition was pending . Further, I find that Respond-
ent NECA violated Section 8(a)(2) and (1) by recogniz-
ing and executing a collective -bargaining agreement with
as See generally Bonanno Linen Service Y. NLRB, 454 U.S. 404 ( 1982),
Teamsters Local 378 (Olympia Automobile Dealers Assn.), 243 NLRB 1086
(1979).
GRASON ELECTRIC CO.
the NAIU while 17 valid petitions were pending. How-
ever, under the same principles , no violation can be
found against Respondents ' Grason , Walker, Moore,
Nutter, Myers, and Four Star . There were no petitions
pending regarding the employees of those six Employers.
Local 340 had filed its disclaimer in the multiemployer
unit and made no demand for bargaining with those six
Employers. Further, Local 340 has filed no refusal to
bargain charge against any of those six Employers. Thus,
with respect to those six Employers , there was no union
competing with the NAIU, and no situation to which
Midwest Piping could apply . As mentioned earlier, the
General Counsel made no allegation that the recognition
of the NAIU violated Section 8(a)(2) on any ground
other than the Midwest Piping doctrine.
Under these same principles , NECA's agreement with
the NAIU would be unlawful with regard to all 17 Em-
ployers for whom representation petitions were filed.
However, no charge was filed against any of these 17
Employers except Branstner and Stage I. The complaint
did not allege any violations by the other 15 Employers.
Accordingly , no violations can be found and no order
can issue against Arden Electric , Beard Construction,
Carlyle Electric, Collins, Foss, Gatejen, M & M, T. G.
Nelson , Perri Electric, Peters Electric Company, Luppen
& Hawley, Neuffer Electric Company, Slater Electric
Company, Stein , or Yamas . Cf. Sewanee Coal Operators
Assn., 167 NLRB 172 (1967).36
2. Postcontract assistance
As found above, Respondents Nutter, Four Star,
Grason, Walker, and Moore withheld dues from employ-
ees either in advance of written authorization or without
written authorization. The Board has long held that an
employer violates Section 8(a)(1)(A) and (2) of the Act if
it deducts union dues from an employee's wages absent
written authorization by the employee of such deduction.
See, e.g., Dan T. Edwards & Son, 143 NLRB 703 (1963);
Mashkin Freight Lines, 261 NLRB 1473, 1481 (1982). It is
equally well settled that a labor organization violates
Section 8(b)(1) and (2) of the Act by accepting such
moneys. American Geriatric Enterprises, 235 NLRB 1532
(1978). In this case, Respondents Nutter, Four Star,
Grason, Walker, and Moore violated Section 8(a)(1) and
(2) when, without proper written authorization or prior
to proper written authorization, they deducted moneys
from the wages of employees and remitted such monies
to the NAIU. There being no charge against the NAIU,
it cannot be found to have violated the Act.
It is well settled that employees have a right under the
Act to refrain from executing dues-checkoff authoriza-
tions. American Screw Co., 122 NLRB 485, 489 (1958);
Luke Construction Co., 211 NLRB 602, 603 (1974). How-
ever, tendering new employee applications for member-
ship along with checkoff authorization cards without a
further showing of intimidation or coercion, particularly
where the collective-bargaining agreement contains a
union-security clause, is not violative of Section 8(a)(2)
36 The conclusion that no violation could be found and no order issued
against these 15 Employers should in no way be considered as a finding
regarding the unit in the representation cases
887
or (1) of the Act. Colin Service Systems, Inc., 226 NLRB
70, 72 (1971); 'Keller Plastics Eastern, Inc., 157 NLRB
583, 587 (1966).
As set forth above, Respondent Nutter distributed
NAIU membership application cards and dues-checkoff
forms to employees . Employees were told of the union-
security provision of the contract and of the difference
between the financial core and membership options of
satisfying the union-security obligation. The only evi-
dence of restraint or coercion was the telephone conver-
sation in which Ted Choate, Respondent Nutter's super-
intendent, told Richard Chafe, an employee , to sign the
NAIU membership card and dues-checkoff forms, if
Chafe wanted to work for Nutter. While Chafe could be
required to comply with the union-security provision as
a condition of employment, Chafe was free to refuse to
pay his dues obligation by way of checkoff. According-
ly, I find Choate's statement to be violative of Section
8(a)(2) and (1) of the Act. The other instances of Nut-
ter's solicitation of membership cards and authorization
forms, in view of the lawful union security and voluntary
checkoff provisions of the contract, are not violative of
the Act.
As stated earlier, Respondent Walker's foreman dis-
tributed NAIU membership cards and checkoff forms to
employees . However, employees were told to fill out the
cards and turn them in that same date as a condition of
employment . Three employees filled out cards in re-
sponse to those directives. As with Respondent Nutter,
such solicitation went beyond merely advising employees
of the union-security obligations of the contract and
tended to restrain and coerce employees into executing
NAIU checkoff authorizations.
With regard to Respondent Moore, the evidence
shows only distribution of NAIU membership cards and
checkoff authorization forms . Employees were told of
the union-security obligation and of the difference be-
tween membership and financial core obligations. There
was no evidence of any restraint or coercion in obtaining
employee execution of checkoff authorization forms.
There was also no evidence of unlawful solicitation of
checkoff authorizations by Respondents Grason, Stage I,
Four Star, or Myers.
Respondents Stage I and Branstner , by applying the
NECA-NAIU contract to their employees , have unlaw-
fully assisted the NAIU . Respondents Stage I and
Branstner further assisted the NAIU unlawfully by en-
forcing the union-security and dues-checkoff provisions
of the agreement . Although not specifically alleged as a
violation , 37 these consequences of the unlawful agree-
ment will be the subject of the remedial order herein.
With respect to Respondent NECA 's operation of the
hiring hall pursuant to its agreement with the NAIU, the
General Counsel concedes that such a violation rests
upon the determination of the recognition issue . Usually
in the construction industry, employers delegate the
hiring process to the union through the operation of an
exclusive nondiscriminatory hiring hall . Here, the NAIU
37 The complaint alleged unlawful solicitation of membership and dues
authorizations
888 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
and NECA agreed that NECA would operate the hiring
hall. The NAIU has the right to inspect the hiring hall
records to ascertain whether the hall is being operated
properly. Having found that Respondents Grason,
Walker, Moore, Nutter, Myers, and Four Star were free
to sign an agreement with the NAIU, I must find no vio-
lation in their operation of the hiring hall.
I view the copying of forms for the NAIU by Re-
spondent NECA and Nutter to be de minimis. This type
of assistance were it given prior to recognition38 or in a
minority union situation would be found unlawful. How-
ever where , as here, the assistance was given after lawful
recognition , no violation is found . See Coamo Knitting
Mills, 150 NLRB 579 (1964); see also Coppus Engineering
Corp. v. NLRB, 240 F.2d 564 (1st Cir. 1957).
3. The General Counsel's use of the NAIU's
affidavits
Finally, counsel for the NAIU argues that the com-
plaint should be dismissed on the ground that the attor-
ney for the General Counsel utilized affidavits of the
NAIU's officers obtained in another case, where the
NAIU was the charging party, in order to impeach or
otherwise cross-examine those same officers in this case
where the NAIU was aligned with the Respondents. The
NAIU cites Paul E. Iacono Structural Engineer, Inc. v.
Humphrey, 722 F.2d 435 (9th Cir. 1983) for the proposi-
tion that the General Counsel 's conduct violates Canon 9
of the ABA Model Code of Professional Responsibility.
In the Iacono case, the United States Court of Appeals
for the Ninth Circuit upheld a district court order dis-
qualifying a law firm representing union defendants in an
action brought by a company under Section 303 of the
Act. A lawyer from the firm had investigated the related
unfair labor practice charge while employed by the
Board . The court held that the former Board attorney's
conduct violated Canon 9 's admonition that "a lawyer
should avoid even the appearance of professional impro-
priety" and Disciplinary Rule DR -9-101(B)'s admonition
that "a lawyer shall not accept private employment in a
matter in which he had substantial responsibility while
he was a public employee." The court construed Canon
9 to require disqualification based on prior employment
where the former representation is "substantially related"
to the current representation and the current representa-
tion is adverse to the former representation . A substantial
relationship is present "if the factual contents of the two
representations are similar or related," regardless of
"whether confidences were in fact imputed to the lawyer
by the client" in the prior representation . 722 F.2d at 439
113 LRRM at 3520.
At first blush , the Iacono case appears clearly inappo-
site to the instant case . The attorney for the General
Counsel 's employment or representative status never
changed . The General Counsel is charged with investi-
gating cases filed against employers or labor organiza-
tions by any person . It should be obvious in a dispute
such as this, with its charges and countercharges, that
the General Counsel would be investigating charges by
se NECA's recognition of the NAIU was lawful regarding those em-
ployers for whose employees no representation petition was filed
and against the NAIU, NECA, and Local 340. However,
the following passage of the Iacono decision is trouble-
some:
Although [the former Board attorney's] former
client was, strictly speaking the NLRB, in that em-
ployment he was called upon to investigate the
complaints of Iacono to determine whether the
Board should press unfair labor charges against the
defendants. In this special circumstance , we find
that the actual former 'client' for purposes of a dis-
qualification analysis was Iacono . [722 F.2d at 439.]
In Iacono, the court was examining the question of the
propriety of an attorney formerly employed by the Gov-
ernment representing a third party opponent of a charg-
ing party . The court did not examine the question of the
propriety of the government's use of evidence against a
former charging party. Clearly, the court was not creat-
ing a privilege for charging parties, i .e., that evidence
given to aid one case could not be utilized against them
in another case . Having called Nathan and Bruce
Norman to testify, the General Counsel was obligated
under the Board 's Jencks rule, Section 102.118 of the
Board 's Rules and Regulations, to make the Normans' af-
fidavits available to Respondents . See Harvey Aluminum,
Inc. v. NLRB, 335 F.2d 749 (9th Cir. 1964); United States
v. Jencks, 353 U.S. 657 (1957). Moreover, the Board's use
of the affidavits furthered the public policy of requiring a
charging party to make truthful statements in his charges
or affidavits filed with the Board. The General Counsel
merely attempted to hold the NAIU officers to their
prior testimony or inquire into discrepancies between
prior testimony and testimony at trial . Thus, I find that
neither the Iacono case nor Canon 9 intended to bar the
General Counsel's use of affidavits by former charging
parties in cases where the former charging parties' inter-
ests are adverse to the General Counsel.
Secondly, the Iacono decision is expressly limited to
the facts of that case . In the instant case, the General
Counsel determined to utilize the same lawyer in investi-
gating cases arising out of the Local 340 NECA-NAIU
dispute . That the General Counsel's regional office and
this particular lawyer were investigating cross-charges to
determine whether the General Counsel should issue
complaint in any of such matters should have been ap-
parent to the NAIU. The affidavits in question on their
face appear to apply to several charges filed by the
NAIU and are not limited on their face to any one
case. S9
The possibility that the General Counsel would take a
position adverse to the NAIU should have been apparent
at the time of the investigation as the affidavits were
99 To the extent that Nathan Norman testified that his affidavit was
limited to the NAIU's charges against George C. Foss Company, I do
not credit Norman Norman had no memory as to what case the affidavit
applied , but rather testified to what he heard his attorney argue regarding
the affidavit and alleged assurances Further , the very terms of the affida-
vit impeach Norman regarding such a limitation on the affidavit It ap-
pears most likely that the affidavit was intended to be utilized in further-
ance of the NAIU's charges against Foss , Gatejen, Collins, Luppen &
Hawley , M & M. Stein , and Yamas
GRASON ELECTRIC CO.
given after the filing of the instant 8(a)(2) charges.40
Thus the subsequent use of the NAIU's statements would
not give the appearance of professional impropriety.
Under these circumstances , it would serve no purpose
to disqualify the General Counsel's lawyer due to her
former role as investigator. The affidavits would be
available to any other representative of the General
Counsel . The General Counsel has the exclusive author-
ity under Section 3 of the Act to prosecute unfair labor
practice cases . If I accepted the NAIU's view of this
matter, the General Counsel would have to hire outside
counsel to present this case or, carried to the absurd, to
prosecute any case against the NAIU. It appears to me
that the NAIU was not entitled to such treatment merely
by filing a charge with the Board and then supplying an
affidavit in support of the charge.
Finally, I note that the Board has been reluctant to en-
force the Canons of Ethics and Disciplinary Rules. Thus,
in situations involving the testimony of an attorney
acting as both witness and attorney for a party, the
Board has ruled on the evidence but has left the enforce-
ment of the Canons of Ethics to the Bar Association.
See, e .g., Operating Engineers Local 9 (Frontier Sand), 210
NLRB 129 fn. 1 (1974). Thus, for all of the above rea-
sons , I find no basis for barring the General Counsel's
use of the affidavits submitted by the NAIU officers.
Further, I decline to disqualify the General Counsel's
former investigator from representing the General Coun-
sel as an attorney in this matter . Finally, the NAIU has
shown no overreaching by the General Counsel or any
prejudice requiring dismissal of the complaint.
CONCLUSIONS OF LAW
1. Respondents , NECA, Grason , Walker, Moore,
Nutter, Myers, Four Star , Branstner, and Stage I, are
employers engaged in commerce and in businesses affect-
ing commerce within the meaning of Section 2(6) and (7)
of the Act.
2. Local 340 and the NAIU are labor organizations
within the meaning of Section 2(5) of the Act.
3. By recognizing the NAIU and by executing a col-
lective-bargaining agreement , which contains union-secu-
rity and dues-checkoff provisions, with the NAIU cover-
ing the employees of Respondents Branstner , and Stage
I, at a time when a question concerning representation of
Respondents Branstner 's and Stage I's employees existed,
Respondents NECA, Branstner, and Stage I engaged in
unfair labor practices within the meaning of Section
8(a)(2) and (1) of the Act.
4. By unlawfully deducting dues from the wages of
employees without or prior to the execution of a proper
written authorization, Respondents Grason, Walker,
Moore, Nutter, and Four Star engaged in unfair labor
practices within the meaning of Section 8(a)(2) and (1) of
the Act.
5. By unlawfully aiding and assisting the NAIU in the
solicitation of dues-checkoff authorization forms, Re-
spondents Walker and Nutter engaged in unfair labor
40 The NAIU was not represented by counsel at the time the affidavits
were given.
889
practices within the meaning of Section 8(a)(2) and (1) of
the Act.
6. The aforementioned unfair labor practices affect
commerce within the meaning of Section 2(6) and (7) of
the Act.
7. Except as set forth above, the General Counsel has
not established that Respondents have violated the Act.
8. Respondent Myers has not engaged in any unfair
labor practices.
THE REMEDY
Having found that Respondents, Grason, Walker,
Moore, Nutter, Four Star, Branstner , Stage I, and
NECA, have engaged in unfair labor practices , I shall
recommend that they be ordered to cease and desist
therefrom and take certain affirmative action designed to
effectuate the policies of the Act.
In order to dissipate the effect of Respondents
NECA's, Branstner's, and Stage I's unlawful recognition
of the NAIU and unlawful agreement with the NAIU, I
shall order the three Respondents to withdraw and with-
hold all recognition of the NAIU with respect to the em-
ployees of Respondents Branstner and Stage I and to
cease giving effect to the aforementioned agreement, or
to any renewal , modification, or extension thereof, until
such time as the NAIU shall have been certified by the
Board as the exclusive representative of the employees in
question.
Having found that Respondents Stage I and Branstner
deducted dues from the employees pursuant to the
union-security and dues-checkoff provisions of the un-
lawful agreement , I shall order Respondents Stage I and
Branstner to reimburse all present and former employees,
for monies paid by or withheld from them on or after
October 1, 1981, for initiation fees, dues, or other obliga-
tions of membership in the NAIU,41 with interest there-
on computed in the manner provided in Florida Steel
Corp., 231 NLRB 651 (1977), and Olympic Medical Corp.,
250 NLRB 146 (1980).
Respondents Grason, Walker, Moore, Nutter, and
Four Star will be ordered to reimburse employees whose
dues were checked off prior to or without their written
authorization. However, since the union-security and
checkoff provisions were not unlawful, Respondents
Grason, Walker, Moore, Nutter, and Four Star will be
required to reimburse those employees only for the
amounts deducted during their first 30 days of employ-
ment (the grace period provided for in the NECA-NAIU
bargaining agreement). See Luke Construction Co., 211
NLRB 602, 605 (1974); General Instrument Corp., 262
NLRB 1178 (1982). Interest on such moneys is to be paid
in accordance with Florida Steel, supra, and Olympic
Medical Corp., supra.
To facilitate the computation of the moneys which
may be due to employees by the terms of this Order, I
will also recommend that Respondents NECA, Stage I,
Branstner, Nutter, Four Star, Grason, Walker, and
Moore provide and, upon request, make available to the
41 See R.J E Leasing, 262 NLRB 373 ( 1982). see also Monfort of Colo-
rado. Inc, 256 NLRB 612 (1981 ), enfd . 683 F 2d 305 (9th Cir 1982)
890 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Board or its agents, for examination and copying, all
payroll records, timecards , personnel records and re-
ports, and all other records necessary to analyze and de-
termine the said amounts.
On these findings of fact and conclusions of law and
on the entire record , I issue the following recommend-
ed42
ORDER
tices, on forms provided by the Regional Director for
Region 20, after being signed by an authorized represent-
ative of the appropriate Respondent , shall be posted by
Respondents Stage I and Branstner immediately upon re-
ceipt and maintained by them for 60 consecutive days in
conspicuous places including all places where notices to
employees are customarily posted . Reasonable steps shall
be taken by each Respondent to ensure that its notices
are not altered , defaced , or covered by any other materi-
al.1. Respondents, Stage I Electrical Contractor and
Branstner Electric, Sacramento , California, their officers,
agents, successors , and assigns, shall
1. Cease and desist from
(a) Assisting or contributing support to the National
Association of Independent Unions, by recognizing this
labor organization as the exclusive representative of any
of their employees for the purpose of collective bargain-
ing at a time when a question concerning representation
exists.
(b) Giving effect to or enforcing the collective-bar-
gaining agreement executed by the National Electrical
Contractors Association , Inc., Sacramento Valley Chap-
ter and the NAIU on October 1, 1981, or to any modifi-
cation , extension , renewal , or supplement thereto, unless
and until the NAIU has been certified by the National
Labor Relations Board as the exclusive bargaining repre-
sentative of such employees ; provided , however, that
nothing herein shall require Respondents Stage I and
Branstner to vary or abandon any existing terms or con-
ditions of employment.
(c) In any like or related manner interfering with, re-
straining, or coercing employees in the exercise of rights
guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) Withdraw and withhold all recognition from the
NAIU as a representative of their employees for the pur-
pose of collective bargaining unless and until said labor
organization has been duly certified by the Board as the
exclusive representative of such employees.
(b) Reimburse all past and present employees for all
initiation fees, dues, and other moneys unlawfully exact-
ed from them under their contract with the NAIU in the
manner provided in the remedy section of this decision.
(c) Preserve and, on request , make available to the
Board or its agents, for examination and copying, all
payroll records, timecards, personnel records and re-
ports, and all other records necessary to analyze the
amount of moneys due under the terms of this Order.
(d) Post at their places of business in the Sacramento,
California area copies of the appropriate attached notices
marked "Appendix A" (Respondent Stage I) and "Ap-
pendix B" (Respondent Branstner).43 Copies of said no-
42 If no exceptions are filed as provided by Sec. 102.46 of the Board's
Rules and Regulations, the findings, conclusions, and recommended
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 pur-
poses.
49 If this Order is enforced by a judgment of a United States court of
appeals, the words in the notice reading "Posted by Order of the Nation-
al Labor Relations Board" shall read "Posted Pursuant to a Judgment of
(e) Notify the Regional Director in writing within 20
days from the date of this Order what steps each Re-
spondent has taken to comply.
II. Respondents Amos J. Walker, Inc. and Harold E.
Nutter, Inc., Sacramento , California, their officers,
agents, successors, and assigns, shall
1. Cease and desist from
(a) Assisting or contributing support to the National
Association of Independent Unions by unlawfully solicit-
ing dues authorization forms on behalf of the NAIU.
(b) Deducting dues from the wages of employees prior
to or without written authorization to do so.
(c) In any like or related manner interfering with, re-
straining , or coercing employees in the exercise of rights
guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) Reimburse those present and former employees for
moneys unlawfully exacted from them in the manner and
to the extent set forth in the remedy section of this deci-
sion.
(b) Preserve and , on request , make available to the
Board or its agents, .for examination and copying, all
payroll records, timecards , personnel records and re-
ports, and all other records necessary to analyze the
amount of moneys due under the terms of this Order.
(c) Post at their places of business in the Sacramento,
California area copies of the appropriate notice marked
"Appendix C" (Respondent Walker), and "Appendix D"
(Respondent Nutter).44 Copies of said notices , on forms
provided by the Regional Director for Region 20, after
being signed by an authorized representative of the ap-
propriate Respondent , shall be posted by each Respond-
ent immediately upon receipt and maintained by it for 60
consecutive days thereafter in conspicuous places includ-
ing all places where notices to employees are customari-
ly posted. Reasonable steps shall be taken by each Re-
spondent to ensure that its notices are not altered, de-
faced, or covered by any other material.
(d) Notify the Regional Director in writing within 20
days of the date of this Order what steps each Respond-
ent has taken to comply.
II.
Respondents , Rex Moore Electrical Company, Grason
Electric Company and Four Star Electric, Sacramento,
the United States Court of Appeals Enforcing an Order of the National
Labor Relations Board."
44 See In . 43, supra.
GRASON ELECTRIC CO.
California, their officers, agents, successors , and assigns,
shall
1. Cease and desist from
(a) Assisting or contributing support to the National
Association of Independent Unions by deducting dues
from the wages of employees prior to or without written
authorization to do so.
(b) In any like or related manner interfering with, re-
straining , or coercing employees in the exercise of rights
guaranteed in Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) Reimburse those present and former employees for
moneys unlawfully exacted from them in the manner and
to the extent set forth in the remedy section of this deci-
sion.
(b) Preserve and, on request, make available to the
Board or its agents , for examination and copying, all
payroll records, timecards, personnel records and re-
ports, and all other records necessary to analyze the
amount of moneys due under the terms of this Order.
(c) Post at their places of business in the Sacramento,
California area copies of the appropriate attached notices
marked "Appendix E" (Respondent Moore ), "Appendix
F" (Respondent Grason) and "Appendix G" (Respond-
ent Four Star).45 Copies of said notices , on forms pro-
vided by the Regional Director for Region 20, after
being signed by an authorized representative of the ap-
propriate Respondent , shall be posted by each Respond-
ent immediately upon receipt and maintained by it for 60
consecutive days in conspicuous places including all
places where notices to employees are customarily
posted. Reasonable steps shall be taken by each Respond-
ent to ensure that its notices are not altered , defaced, or
covered by any other material.
(d) Notify the Regional Director in writing within 20
days from the date of this Order what steps each Re-
spondent has taken to comply.
IV.
Respondent National Electrical Contractors Associa-
tion , Inc., Sacramento Chapter, Sacramento , California,
its officers , agents, successors , and assigns, shall
1. Cease and desist from
(a) Assisting or contributing support to the National
Association of Independent Unions by recognizing this
labor organization as the exclusive representative of any
of the employees of Branstner Electric or Stage I for the
purpose of collective bargaining at a time when a ques-
tion concerning representation exists.
(b) Giving effect to or enforcing with respect to Re-
spondents Branstner or Stage I, the collective-bargaining
agreement executed with the NAIU on October 1, 1981,
or to any modification , extension, renewal , or supple-
ment thereto, unless and until the NAIU has been certi-
fied by the National Labor Relations Board as the exclu-
sive bargaining representative of such employees.
(c) In any like or related manner interfering with, re-
straining , or coercing employees in the exercise of rights
guaranteed in Section 7 of the Act.
45 See fn . 43, supra.
891
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) Withdraw and withhold all recognition from the
NAIU as a representative of the employees of Respond-
ents Stage I and Branstner for the purpose of collective
bargaining unless and until said labor organization has
been duly certified by the Board as the exclusive repre-
sentative of such employees.
(b) Preserve and, on request , make available to the
Board or its agents , for examination and copying, all
payroll records, timecards, personnel records and re-
ports, and all other records necessary to analyze the
amounts of moneys due from any of the Respondents
under the terms of the instant Orders.
(c) Post at its place of business in Sacramento , Califor-
nia, copies of the attached notice marked "Appendix
H."48 Copies of said notice , on forms provided by the
Regional Director for Region 20, after being signed by
Respondent NECA's representative , shall be posted by
Respondent NECA immediately upon receipt and main-
tained by it for 60 consecutive days thereafter , in con-
spicuous places, including all places where notices to em-
ployees are customarily posted . Reasonable steps shall be
taken by Respondent NECA to ensure that said notices
are not altered , defaced, or covered by any other materi-
al.
(d) Notify the Regional Director in writing within 20
days from the date of this Order what steps Respondent
NECA has taken to comply.
V.
IT IS ORDERED that the complaint be dismissed as to
Myers Electric, Inc.
IT IS FURTHER ORDERED that those allegations as to
which no violations have been found are hereby dis-
missed.
46 See fn 43, supra
[Appendixes A-H omitted from publication.]
SUPPLEMENTAL DECISION
Equal Access to Justice Act
JAY R. POLLACK, Administrative Law Judge . The un-
derlying unfair labor practice case was based on a charge
filed on January 28, 1982, by International Brotherhood
of Electrical Workers Local Union 340, AFL-CIO
(Local 340) against nine Respondents , Grason Electric
Company (Grason), Amos J. Walker, Inc. (Walker), Rex
Moore Electrical Company (Moore), Harold E . Nutter,
Inc. (Nutter), Myers Electric, Inc. (Myers), Four Star
Electric (Four Star), Branstner Electric (Branstner),
Stage I Electrical Contractor (Stage I), and National
Electrical Contractors Association , Inc., Sacramento
Valley Chapter (NECA). Grason, Walker, Moore,
Nutter, Myers, Four Star, and NECA have each filed an
application for attorneys ' fees and expenses under the
Equal Access to Justice Act, Pub . L. 96-481, 94 Stat.
892 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
2325 (EAJA) and Section 102.143 of the Board 's Rules
and Regulations.
Background
On October 1, 1982, the Regional Director for Region
20 of the Board issued a complaint and notice of hearing
alleging that Respondent NECA and its employer-mem-
bers had violated Section 8(a)(2) and (1) of the National
Labor Relations Act by entering into a contract with the
National Association of Independent Unions (NAIU), on
or about October 1, 1981, at a time when Local 340 had
filed valid representation petitions with the Board seek-
ing to represent employees of 17 employers formerly in
the NECA-Local 340 multiemployer bargaining unit.
Valid representation petitions had been filed by Local
340 for representation of the employees of Branstner and
Stage I but no petition had been filed for the employees
of the Applicants herein . Respondent-Applicant NECA
is a multiemployer association and has no bargaining unit
employees of its own.
The 17 representation petitions , whose validity was at
issue in the unfair labor practice case, were the subject of
proceedings in Arden Electric, Cases 20-RC-15401, 20-
RC-15417 . By an unpublished Order dated December
16, 1982, the Board in Washington , D.C., ordered that
the preelection representation case in Arden Electric be
consolidated for hearing before me with the unfair labor
practice case in Grason Electric. The consolidated hear-
ing was held in January and February 1983 and , on Feb-
ruary 28 , 1983, I issued an order closing the record and
transferring the Arden representation cases to the Board
for determination.
On August 31, 1983, I issued my decision ((SF)-190-
83) in the underlying unfair labor practice case.' I found
that Respondent Branstner and Stage I had violated Sec-
tion 8(a)(2) and (1) of the Act by entering into a NECA
multiemployer contract with the NAIU at a time when
Local 340 had filed valid petitions seeking to represent
their employees . I further found that Respondent -Appli-
cant NECA had violated the Act insofar as its actions
purported to bind Branstner and Stage I to the NECA-
NAIU bargaining agreement . I found no violation by the
six other named Respondents in signing with the NAIU
because no petitions had been filed for the employees of
these six companies . Further, no violation was found to
have been committed by Respondent NECA for signing
the contract on behalf of its employer-members who
were not named as Respondents in the underlying charge
or in the complaint . However, all of the named Respond-
ents except Myers were found to have violated Section
8(a)(2) and (1) by various acts of unlawful assistance to
NAIU. All parties involved in the case took exceptions
and cross-exceptions to that decision . As will be seen
below , the Board will not pass on the decision based on
the withdrawal of the charge and complaint in 1986.
While my decision in the unfair labor practice case
was pending before the Board on exceptions , the Board
on June 4, 1985 , issued its decision in the Arden represen-
tation cases , 275 NLRB 654 ( 1985). In that decision, the
Board found that the multiemployer bargaining assents
upon which NECA relied to bind its constituent employ-
ers to the multiemployer unit were not applicable to any
union other than an IBEW local and that, therefore, the
multiemployer unit had dissolved as of the time of Local
340's disclaimer and NECA 's acceptance of that dis-
claimer . Consequently , the Board found that the single-
employer petitions were filed in appropriate units and re-
manded the cases to the Regional Director of Region 20
for further processing.
In March and April 1986 , the Regional Director held
several days of hearing on the representation petitions. In
certain of the cases , stipulations for elections were en-
tered into, while the other petitions , including that for
the employees of Stage I, were withdrawn.
In the unfair labor practice case, on August 26, 1985,
Respondent filed a motion to dismiss for lack of jurisdic-
tion . On August 31, 1986, by an unpublished Order, the
Board denied the motion to dismiss and remanded the
case to me for further proceedings on the issue of juris-
diction in light of the Board 's decision in Arden Electric.
The hearing was opened on May 19, 1986 , and contin-
ued pending proceedings for enforcement of subpoenas
in the United States District Court for the Eastern Dis-
trict of California. After the district court issued an order
enforcing the subpoenas , the parties entered into a stipu-
lation concerning jurisdiction . On September 15, 1986, I
received the jurisdictional stipulation and closed the
record. Prior to the issuance of a decision pursuant to
the Board 's remand , on November 17, 1986, the General
Counsel moved for approval of the withdrawal of the
complaint based upon Local 340's request to withdraw
the underlying unfair labor practice charge . On Novem-
ber 18, 1986, I granted the General Counsel's motion, ap-
proved the withdrawal of the complaint and ordered that
the case be closed.
On December 18, 1986, the Applicants filed seven sep-
arate applications for an award of fees and expenses
under EAJA. Thereafter on December 20 the Board re-
ferred the matter to me for appropriate action . On Feb-
ruary 17, 1987, the General Counsel filed a timely
motion to dismiss the application . Thereafter on April 2,
1987, the Applicants filed an opposition to the motion to
dismiss . The principal issues herein are whether the Ap-
plicants meet the eligibility standards under EAJA and
the Board 's Rules and Regulations, and whether the fi-
nancial relationship of the Applicants constitutes special
circumstances that would make an award unjust.2
Findings and Conclusions
Section 203(a)(1) of EAJA (5 U.S.C. 504(a)( 1)) pro-
vides for an award of attorneys ' fees to a "party" pre-
vailing in an adversary adjudication before a Federal
agency unless it is shown that the Government 's position
was "substantially justified" or that "special circum-
stances" make an award of attorneys ' fees unjust. In de-
fining a "party" entitled to recover expenses incurred in
2 The General Counsel argues three other grounds for dismissal of the
A copy of that unpublished decision is attached hereto as Appendix application In view of the conclusion reached herein . I rind it unneces-
sary to rule on the General Counsels other argumentsA
GRASON ELECTRIC CO. 893
an administrative proceeding , 5 U.S.C. 605(b)( 1)(B),
which is the applicable subsection of EAJA, reads in rel-
evant part:
"party" means a party as defined in 5 U.S.C. 551(3),
who is . . . (ii) any owner of an unincorporated
business, or any partnership , corporation, associa-
tion, unit of local government, or organization, the
net worth of which did not exceed $7,000,000 at the
time the adversary adjudication was initiated, and
which had not more than 500 employees at the time
the adversary adjudication was initiated ; . . . except
that an organization described in section 501(c)(3)
of the Internal Revenue Code of 1954 (26 U.S.C.
501(c)(3)exempt from taxation under section 501(a)
of such Code, or a cooperative association as de-
fined in section 15(a) of the Agricultural Marketing
Act (12 U.S.C. 1141(j)(a)), may be a party regard-
less of the net worth of such organization or coop-
erative association.
It is, of course , an applicant's burden to comply with
the EAJA filing requirements . See, e .g., Kut-Kwick Corp.,
273 NLRB 838 (1984). Section 102.143(g) of the Board's
Rules and Regulations further defines the eligibility re-
quirement by providing:
The net worth and number of employees of the
applicant and all of its affiliates shall be aggregated
to determine eligibility. Any individual, corporation,
or other entity that directly or indirectly controls or
runs a majority of the voting shares or other inter-
est of the applicant, or any corporation or the entity
of which the applicant directly or indirectly owns
or controls a majority of the voting shares or other
interest , will be considered an affiliate for purposes
of this part, unless said treatment would be unjust
and contrary to the purposes of the Equal Access to
Justice Act (94 Stat. 2325) in light of the actual re-
lationship between the affiliated entities . In addition,
financial relationship of the applicant other than
those described in this paragraph may constitute
special circumstances that would make an award
unjust.
Each of the seven Applicants herein alleges that it
qualifies under the net worth standards set forth in Sec-
tion 102 .147(f) of the Board's Rules and Regulations, i.e.,
that each does not have a net worth exceeding $7 million
and does not employ 500 employees or more. Each Ap-
plicant also alleges that it has no "affiliates" within the
meaning of Section 102.143 of the Board's Rules and
Regulations.
The first question to be addressed is who is the real
party in interest in this proceeding . The General Counsel
contends that the real party in interest is Respondent-Ap-
plicant NECA; not NECA acting on its own behalf but
rather NECA as the representatives of its employer-
members as a group . The Applicants , on the other hand,
argue that each Applicant as a named Respondent with
the possibility of a remedial order issuing against it, was
an interested party in the action. Further, the Applicants
argue that , even if Respondent -Applicant NECA was
found to be the real party in interest, it would qualify
under the EAJA requirements . According to the Appli-
cants, the employer-members of NECA are not affiliates.
The purpose of Congress in enacting EAJA was to
provide a means by which small businesses , which other-
wise might not have the necessary financial resources,
could contest unreasonable government actions . As Con-
gress noted, EAJA was designed to assist "the little
guys, not the giants" in business . S. Rep . No. 253, 96th
Cong. 1st Sess ., 5 No. 1 (1979). The original EAJA ex-
pired on October 1, 1984. Thereafter on July 25, 1985,
Congress reenacted EAJA with the purpose of reimburs-
ing individual Americans who successfully ligitate
against the Federal bureaucracy. "This will force gov-
ernment agencies to be responsible for their conduct and
will provide those with modest means with access to the
courthouse door." 131 Cong. Rec. 9997 (daily ed. July
24, 1985) (Statement of Sen. Domenici).
Section 102.147(h) of the Board 's Rules and Regula-
tions also supports this view:
An applicant that participates in a proceeding pri-
marily on behalf of one or more other persons or
entities that would be ineligible is not itself eligible
for an award.
In Unification Church v. Immigration & Naturalization
Services, 762 F.2d 1077 (D.C. Cir. 1985), the court held
that eligibility for an EAJA award should be based on
the qualifications of the real party in interest. The attor-
neys' fees and expenses at issue in Unification Church had
not been paid by the individual fee applicants but by the
Church, and the Church, not the individual, would be
the beneficiary of any award. The court reasoned that
"to award fees in this case on the basis that the individ-
ual [litigant] qualified . . . would open the door for the
wholesale subversion of Congress' intent to prevent large
entities from receiving fees. . . ." Id. at 1082. The court
therefore found that eligibility depended on the qualifica-
tions of the Church. See also National Treasury Employ-
ees Union v. Department of the Treasury, 656 F.2d 848,
850-851 (D.C. Cir. 1981).
In United States v. Lakeshore Terminal & Pipeline Co.,
639 F.Supp . 958 (E .D. Mich . 1986), the applicant was a
wholly owned subsidiary of a larger corporation. The
district court held that the relationship does not auto-
matically make the parent corporation the real party in
interest . However, based on the parent company's
"active involvement" in the underlying civil case, the
court held that the parent company and not its subsidiary
was the real party in interest and not entitled to recover
attorney fees.
Reference to the unfair practice case and the conduct
which caused the Respondent-Applicants to be the sub-
ject of an unfair labor practice complaint reveals group
conduct . 3 Respondent-Applicant NECA and its employ-
3 My decision in the unfair labor practice case is attached as Appendix
A in order to show in more specific detail the facts which reveal
common conduct on the part of NECA and its employer-members
894 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
er-members had been party to a series of bargaining
agreements with Local 340. During negotiations for a
multiemployer agreement in 1981 , during a strike, Local
340 disclaimed interest in representing the employees in
the NECA multiemployer bargaining unit, which at that
time consisted of approximately 55 employees . Shortly
thereafter, Local 340 filed the 17 representation petitions
represented by the Arden case . NECA and its employer-
members, with only six or seven dissenters , acted upon
Local 340's disclaimer and recognized and signed a bar-
gaining agreement with the NAIU. NECA and its ap-
proximately 48 employer-members sought to hold the
dissenting employers to the NECA-NAIU agreement.
NECA and its employer-members sought to have the 17
representation petitions dismissed . The legal fees for
these proceedings and collateral proceedings in the
courts were paid for by NECA. Its employer-members
paid dues and assessments so that NECA could pay these
legal expenses.
NECA itself is a nonprofit corporation with a net
worth of less than $ 1 million and only four employees.'
NECA as a nonprofit corporation has no voting shares.
It is governed by its board of directors. The board is
elected by the employer-members, each of whom has
only one vote. Thus, NECA has no affiliates as that term
is defined by the Board 's Rules and Regulations. The
question remains whether, because NECA pursued this
action on behalf of its employer-members as a group, the
net worth of all the employer-members of NECA should
be aggregated for purposes of determining eligibility
under EAJA.
The intent of Congress to limit EAJA awards to small
businesses and the interest of the Board to bar an award
where a party participates primarily on behalf of other
entities that would be ineligible would bar an award to
NECA if any of its employer-members were ineligible.
The instant Applicants reveal that none of the six Em-
ployer-Applicants are separately ineligible , however,
there is no information with respect to the other 42 em-
ployer-members of NECA. With the burden on the Ap-
plicants to establish eligibility , the applications can be
dismissed for this reason alone.
Further, it appears that the Board would aggregate the
net worth of all the employer-members of NECA under
the circumstances of this case. In Pacific Coast Metal
Trades District Council (Foss Launch), 271 NLRB 1165
(1981), the Board held that aggregation of the net worth
of an applicant and another entity is mandated by the
Board 's Rules whenever an entity is either directly or in-
directly controlled by, or in control of, the applicant.
The Board reasoned that the intent of Congress was to
limit eligibility to truly small entities rather than those
that are part of larger groups of affiliated firms. "The
only express statutory exclusion to aggregation for the
purposes of computing net worth and determining EAJA
eligibility where related entities have joined in a larger
group for a common objective is that pertaining to agri-
cultural cooperatives ." Id. at 1167. See also Carpenters
Local 1361 (Atchinson Foundation), 272 NLRB 1118
(1984), remanding to the administrative law judge for de-
termination of whether the net worth of a local union
should be aggregated with the net worth of its Interna-
tional union . The Pacific Coast Metal Trades and Carpen-
ters Local 1361 cases have been overruled by the 1985
EAJA Amendments. See H . R. Report No . 120, 99th
Cong., 1st Sess. 17 (1985). Labor organizations are treat-
ed as separate entities if they file separately under the
Labor Management Reporting and Disclosure Act of
1959. However, the rationale of these two cases, i .e., that
Congress intended to limit EAJA to truly small entities
rather than those that form a large group for group
action and group litigation , remains the reasoning of the
Board.
It is not membership in NECA which causes me to
conclude that the net worth of the employer-members
should be aggregated . Rather, it is the joint participation
in the conduct which gave rise to the adversary adjudi-
cation and the joint participation in the litigation (and
payment thereof) which mandates an aggregation of the
net worth of all those business firms . This case is an ex-
ample of why Section 102 .143(g) provides that financial
relationships other than those meeting the definition of
affiliation may constitute "special circumstances" which
would make an award unjust . Thus, the employer-mem-
bers of NECA may be separate firms and not affiliates,
but for purposes of these proceedings they have conduct-
ed themselves in a common effort for their common ben-
efit and have pooled their resources . Congress did not
intend in EAJA to give fees and expenses to all prevail-
ing parties but rather only to small businesses and other
small entities . "The converse of this concern is a decision
not to subsidize . . . the purchase of legal services by
large entities easily able to afford legal services." Ac-
cordingly, I find , under the circumstances of this case, it
would be unjust and contrary to the purposes of EAJA
to treat NECA as a separate entity . Rather, the net
worth of the employer-members of NECA should be ag-
gregated for purposes of determining eligibility under
EAJA. See Pacific Metal Trades Council, supra, 271
NLRB at 1167.
The net worth of the remaining 42 employer-members
is not known . The Respondent-Applicants had the
burden of establishing eligibility and have not done so in
either their initial applications or in their oppositon to
the General Counsel' s motion to dismiss . Accordingly, I
find that the Applicants have failed to establish their eli-
gibility under EAJA. Kut-Kwick Corp., supra, 273 NLRB
838 (1984).
I issue the following recommended5
ORDER
The General Counsel's motion to dismiss application is
granted and the Respondent 's application for fees and ex-
penses is denied.
5 If no exceptions are riled as provided by Sec 102 46 of the Board's
Rules and Regulations, the findings, conclusions , and recommended
Order shall , as provided in Sec 102 .48 of the Rules , be adopted by the
4 There is no claim that NECA is exempt from taxation under Sec. Board and all objections to them shall be deemed waived for all pur-
501(a) of the Internal Revenue Code. poses