Omnitest Inspection Services

National Labor Relations Board - Board Decisions

Feb 14, 1994

313 N.L.R.B. 648 (N.L.R.B. 1994)

648
313 NLRB No. 111
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 The General Counsel excepted to the judge’s dismissal of per-
sonal liability allegations against Daniel McCool. Exclusive of this
matter, we adopt the judge’s supplemental decision in the absence
of exceptions.
2 Member Truesdale joins his colleagues in remanding this pro-
ceeding for a hearing to provide the General Counsel an opportunity
to present evidence on the personal liability issue. However, Member
Truesdale finds it unnecessary to rely on the Gissel summary judg-
ment cases cited above.
Omnitest Inspection Services, Inc. and Daniel
McCool and Patrick Barrett
Omnitest Inspection Services, Inc.; Amspec Tech-
nical Services, a Partnership; Amspec Tech-
nical Services, Inc. and Daniel McCool and
Local 2B, International Union of Operating
Engineers, AFL–CIO and United Association of
Journeymen and Apprentices of the Plumbing
and Pipefitting Industry of the United States
and Canada, AFL–CIO, Party in Interest.
Cases 22–CA–14369 and 22–CA–14673
February 14, 1994
SUPPLEMENTAL DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
DEVANEY AND TRUESDALE
On June 23, 1993, Administrative Law Judge Steven
Davis issued the attached supplemental decision. The
General Counsel filed exceptions and a supporting
brief.
The National Labor Relations Board has considered
the decision and the record in light of the exceptions
and brief1 and has decided to affirm the judge’s rul-
ings, findings, and conclusions as modified below and
to adopt the recommended Order as modified.
As more fully detailed in the judge’s supplemental
decision, the compliance specification in this proceed-
ing alleged the personal liability of Daniel McCool, as
well as the liability of three business entities in which
he was a principal, for the backpay allegedly due to
remedy the unlawful conduct found in the underlying
unfair labor practice proceeding. On the personal li-
ability question, the judge concluded in his decision
that although the relevant allegations of the specifica-
tion were deemed admitted because of the failure of
McCool or any of the Respondents to answer them, the
allegations on their face were insufficient to support a
summary finding of personal liability consistent with
Board precedent. He analogized the procedural cir-
cumstances to Board decisions in which the General
Counsel moved for summary judgment on unanswered
complaint allegations seeking a Gissel bargaining
order. The Board denied the motions in those cases be-
cause, although uncontested, the allegations did not
make out an adequate factual basis to support such a
remedy. See, e.g., Harbor Crossing Skilled Nursing
Care Facility, 308 NLRB No. 27, slip op. at 4–5 (Aug.
11, 1992) (not reported in Board volumes) and FJN
Mfg., 305 NLRB 656, 657 (1991), and cases cited
there. The judge noted, however, that in those deci-
sions the cases were remanded for hearing following
the denial of the summary judgment motions, while
here the General Counsel, in the context of a hearing,
relied on the allegations alone without further litiga-
tion. He dismissed the personal liability allegations on
that basis.
Although we find no fault with the judge’s state-
ment of the appropriate legal standard for a finding of
personal liability, and we agree that, similar to the
Gissel summary judgment cases cited above, the com-
pliance specification’s allegations are inadequate for an
uncontested finding of personal liability, we do not
agree that dismissal of the allegations is an appropriate
disposition here. At the beginning of the hearing, the
judge clearly treated the unanswered personal liability
allegations as a matter for summary judgment, and he
in fact granted summary judgment in the General
Counsel’s favor, thereby obviating any further litiga-
tion of the question of McCool’s personal liability. In
his subsequent decision he effectively withdrew his
grant of summary judgment and on further consider-
ation rejected the theory that judgment was proper on
the face of the pleadings. This is tantamount to a de-
nial of a Motion for Summary Judgment. The General
Counsel was not provided an opportunity to present
evidence on the personal liability issue at any time
after the judge had decided to reconsider his summary
ruling at the hearing. In these circumstances, the Gen-
eral Counsel is entitled to a hearing on the issue of
McCool’s personal liability, as requested in the Gen-
eral Counsel’s exceptions to the Board. Accordingly,
we will remand this proceeding for that purpose.2
ORDER
The National Labor Relations Board adopts the rec-
ommended Order of the administrative law judge as
modified below and orders that the Respondents,
Omnitest Inspection Services, Inc., Amspec Technical
Services, a Partnership, and Amspec Technical Serv-
ices, Inc., Woodbridge, New Jersey, their officers,
agents, successors, and assigns, shall take the action
set forth in the Order as modified.
1. Delete the second paragraph of the judge’s Order.
2. After the end of the judge’s Order, insert the fol-
lowing additional paragraph:
‘‘IT IS FURTHER ORDERED that this proceeding is re-
manded to the Regional Director for Region 22 for fur-
ther appropriate action, including the holding of a
hearing before Administrative Law Judge Steven Davis
on the matter of the personal liability of Daniel
McCool. The judge shall prepare and serve on the par-
ties a Second Supplemental Decision setting forth the
649OMNITEST INSPECTION SERVICES
resolution of such issues, findings of fact, and rec-
ommendations, including a recommended Order, where
appropriate, regarding the issues on remand. Copies of
the Second Supplemental Decision shall be served on
all parties after which the provisions of Section 102.46
of the Board’s Rules and Regulations shall be applica-
ble.’’
Bradley R. Williams, Esq., for the General Counsel.
Fred R. Kimmel, Esq. (Fred R. Kimmel & Associates), of
Chicago, Illinois, for Daniel McCool.
Walter Russell, Business Agent, for Local 2B.
SUPPLEMENTAL DECISION
STATEMENT OF THE CASE
STEVEN DAVIS, Administrative Law Judge. On February
16, 1990, the National Labor Relations Board issued its De-
cision and Order (297 NLRB 752), finding that Respondents
Omnitest Inspection Services, Inc. (Omnitest), Amspec Tech-
nical Services, a Partnership, and Amspec Technical Serv-
ices, Inc., had unlawfully discharged Patrick Barrett, and re-
pudiated its collective-bargaining agreement with Local 2B,
International Union of Operating Engineers, AFL–CIO (the
Union).
Respondents were ordered to reinstate Barrett and make
him whole for any loss of earnings and other benefits. They
were also ordered to transmit to the Union the contributions
to the health and welfare fund and the pension, as required
by the union contract, and to make whole the unit employees
for any losses they suffered from the failure of OTIS/Amspec
to continue to honor the collective-bargaining agreement with
the Union. On June 28, 1991, the United States Court of Ap-
peals for the Third Circuit enforced in full the Board’s
Order. (937 F.2d 112.)
On July 30, 1992, the Regional Director for Region 22
issued and served the instant compliance specification and
notice of hearing. The specification was served on Daniel
McCool, at Omnitest, and on Fred R. Kimmel, the attorney
who represented Respondents in the court of appeals. There-
after, McCool requested an extension of time to file an an-
swer, and on August 18, the Regional Office extended the
time to answer. The order extending time to answer was not
served on Kimmel.
By letter dated 26, 1992, McCool filed a five-page answer
to the specification.
A hearing was held before me on January 19, 1993, in
Newark, New Jersey. At the hearing, an appearance was en-
tered for McCool only, by Attorney Kimmel. No appearance
was made in behalf of Omnitest, Amspec Technical Services,
a Partnership, or AMPEC Technical Services, Inc. Following
the hearing, briefs were received from the General Counsel
and McCool.
Personal Liability
The specification alleges, that, in addition to the corporate
Respondents, Daniel McCool, an individual, is personally lia-
ble for the payment of the backpay due. Specifically, the
specification, in relevant part, alleges as follows:
At all times material herein, Daniel McCool, an indi-
vidual, has been the principal owner of the companies
comprising Respondent, and has formulated, imple-
mented, and administered all labor relations policies af-
fecting its employees.
At all times material herein, Daniel McCool, an indi-
vidual, has been solely responsible for, and made all
decisions concerning, all financial, business and other
affairs of the companies comprising Respondent.
On or about a date or dates unknown to the General
Counsel but particularly within the knowledge of Re-
spondent, Daniel McCool intermingled his assets and
affairs with those of Respondent, including leasing his
personal trucks and equipment to the companies com-
prising Respondent.
By virtue of the acts and conduct described above
. . . the corporate veil of Respondent has been pierced,
and Respondent Daniel McCool is personally liable for
the backpay due.
The answer filed by McCool was silent as to the allega-
tions concerning his alleged personal liability.
The Motion to Amend the Complaint: At the hearing,
McCool’s attorney moved to amend the answer to deny the
above allegations concerning McCool’s personal liability.
The General Counsel objected to the motion, and I denied
it, ruling that not having answered those allegations, Re-
spondents had admitted them.
McCool argues that he was denied due process in not
being permitted to amend the answer as requested. He first
argues that the only issue which may be alleged in a compli-
ance specification is ‘‘the amount of backpay due.’’ How-
ever, Section 102.55 of the Board’s Rules and Regulations
provides that allegations ‘‘other than the amount of backpay
due’’ may be set forth therein. In Riley Aeronautics Corp.,
178 NLRB 495, 500 (1969), the issue of personal liability
was litigated at the compliance hearing even though the per-
son involved was not alleged in the specification in his indi-
vidual capacity. See also Chef Nathan Sez Eat Here, 201
NLRB 343 (1973).
Here, in contrast, McCool was properly alleged as an indi-
vidual, and specific allegations were made in the specifica-
tion concerning his personal responsibility for remedying the
allegations of the specification.
Moreover, the Board in the underlying unfair labor prac-
tice case in, expressly stated that the issue of personal liabil-
ity could be raised in this compliance hearing:
Following the issuance of the judge’s decision, the
General Counsel moved to reopen the record and
amend the complaint in order to name Daniel McCool,
president and part-owner of each of the named Re-
spondents, as an individual party-respondent, based on
alleged newly discovered evidence showing that
Amspec has gone out of business, and that McCool is
removing all of his personally owned assets, i.e., equip-
ment and vehicles, from that Company. Respondent
Amspec’s counsel, on behalf of McCool, opposed
amendment of the complaint, arguing inter alia, that it
is precluded by Sec. 10(b) of the Act and would be
prejudicial to McCool, who was neither named in the
650 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
charge or complaint nor given notice that he could be
held liable as a party-respondent.
The Board has discretion to grant motions to amend
the complaint after the close of the hearing. [Citations
omitted.] Although in the exercise of this discretion we
shall deny this motion, our action does not preclude the
General Counsel from raising the issue of McCool’s
personal liability in the compliance stage of this pro-
ceeding. [Citations omitted. 297 NLRB 752 fn. 3.]
Section 102.56(b) and (c) of the Board’s Rules and Regu-
lations provides that
[t]he answer shall specifically admit, deny, or explain
each and every allegation of the specification. . . .
If the respondent files an answer to the specification but
fails to deny any allegation of the specification required
. . . by paragraph (b) of this section, and the failure so
to deny is not adequately explained, such allegation
shall be deemed to be admitted to be true, and may be
so found by the Board without the taking of evidence
supporting such allegation, and the respondent shall be
precluded from introducing any evidence controverting
the allegation.
McCool was put on notice on February 16, 1990, the date
of the Board’s decision, that the issue of his personal liability
might be raised in the compliance specification. He was then
specifically put on notice when such allegations were set
forth in the specification. McCool’s attorney argued at the
hearing that McCool should be excused from his failure to
deny those allegations of the specification because he was a
layman who was not familiar with these proceedings, and did
not then have an attorney. It should be noted that although
Kimmel did not represent Respondents in the underlying un-
fair labor practice proceeding, he did represent them at the
court of appeals on the Board’s petition for enforcement.
The matters alleged concerning McCool’s personal liability
are within Respondents’ knowledge. Accordingly, on Re-
spondents’ failure to deny those allegations of the complaint
related to McCool’s personal liability, Section 102.56(c) per-
mits a finding that such allegations were admitted. I so ruled,
and I reaffirm that ruling.
The Board’s Rules and Regulations seem to permit an
amended answer to the specification only where the speci-
fication has been amended by the Regional Director. Section
102.56(e). However, ‘‘the Board has held that, even in the
absence of an amended backpay specification, a respondent
may amend its answer prior to the hearing in the matter.’’
Aquatech, Inc., 306 NLRB 975, 976 (1991); Vibra-Screw,
Inc., 308 NLRB 151, 152 (1992). Here, however, the motion
to amend the answer was not made prior to the hearing. It
was made at the hearing, at which time the General Counsel
objected, claiming surprise and prejudice due to his reliance
on Respondents’ failure to answer those allegations, and his
consequent apparent unpreparedness to prove those allega-
tions.
I accordingly reaffirm my denial of McCool’s request to
amend his answer at the hearing.
The Adequacy of the Specification: The specific allega-
tions, set forth above, which I have found to have been ad-
mitted due to Respondents’ failure to deny them, establish
that McCool (a) was the principal owner of Respondents,
who has formulated, implemented, and administered all labor
relations policies for its employees, (b) was solely respon-
sible for, and made all decisions concerning all financial
business and other affairs of Respondent; (c) intermingled his
assets and affairs with those of Respondents, including leas-
ing his personal trucks and equipment to Respondents, and
(d) by virtue of the above, the corporate veil of Respondents
has been pierced, and McCool is personally liable for the
backpay due.
Although the above allegations are deemed to be admitted,
the question becomes whether they are sufficient, on their
face, to warrant a finding that McCool is personally liable
for the backpay due. FJN Mfg., 305 NLRB 656 (1991).
The Board has held that in determining whether to pierce
the corporate veil, and find personal liability in a backpay
context, the most important consideration is the degree to
which the individual made personal use of the assets of the
corporation. IMCO/International Measurement Co., 304
NLRB 738 (1991).
In Riley Aeronautics Corp., 178 NLRB 495, 501 (1969),
in discussing what types of conduct are necessary to make
a finding of personal liability, the Board found that
the courts and Board have looked beyond organiza-
tional form where an individual or corporate employer
. . . so integrated or intermingled his assets and affairs
that ‘‘no distinct corporate lines are maintained.’’
The cases cite detailed and specific instances of personal
use of corporate assets, including using the profit from the
corporation’s sale of a residence, to purchase a new personal
residence; receiving the profit from the sale of a corporate
vehicle; and receipt of the profits from the corporation’s sale
of a yacht. IMCO, supra. Further examples of the inter-
mingling of personal funds with the corporation’s assets are
the individual’s taking money from the corporations; receiv-
ing the assets of the corporations when they ceased oper-
ations; use by the corporation of the individual’s personal
funds and credit cards; personal guarantee of millions of dol-
lars in corporate debts; a million dollar loan to the corpora-
tion with no security for such loan; manipulation of the cor-
porations at the whim of the individual, forming and discard-
ing corporations to meet his needs; and due to the individ-
ual’s integration and intermingling of assets and affairs with
those of the corporation, no distinct corporate lines existed.
Honeycomb Plastics Corp., 304 NLRB 570 (1991). See also
Dahl Fish Co., 299 NLRB 413, 419 (1990).
Here, in contrast, the specification sets forth only that
McCool ‘‘intermingled his assets and affairs with those of
Respondent, including leasing his personal trucks and equip-
ment to the companies comprising Respondent.’’ The only
specific act constituting an unlawful intermingling of assets
set forth in the specification is the leasing of McCool’s per-
sonal trucks and equipment to Respondents. On its face, such
activity is not unlawful, and does not warrant a finding of
intermingling of assets and affairs.
The detail required in making such a finding, where the
General Counsel relies on the fact that no answer has been
filed to these allegations, must be more specific and set forth
specifically the allegedly unlawful conduct, which must be
unlawful on its face. The ‘‘degree to which’’ McCool made
651OMNITEST INSPECTION SERVICES
personal use of the assets of Respondents has not been iden-
tified. I am aware that the allegation notes that the leasing
of the trucks is only one of the instances of intermingling,
and there may be others. Nevertheless, the General Counsel
has not specified them, and no determination may be made
as to the degree to which McCool made personal use of Re-
spondents’ assets or whether the corporate and personal lines
have become blurred.
While it is true that I have also found that Respondents
admitted that allegation which alleges that ‘‘Respondent
Daniel McCool is personally liable for the backpay due’’ be-
cause of his failure to answer that paragraph, that paragraph
is conclusionary only, and its basis exists only by virtue of
its reference to the earlier paragraphs. Thus, the paragraph
states:
By virtue of the acts and conduct described above in
paragraphs 21(a)–(c), the corporate veil of Respondent
has been pierced, and Respondent Daniel McCool is
personally liable for the backpay due.
Accordingly, if the factual basis for a finding of personal li-
ability does not appear, the conclusion may also not stand.
In a similar context, the Board has found complaints in
bargaining order cases insufficient to support a Motion for
Summary Judgment based on their factual allegations, be-
cause they do not allege facts sufficient to enable the Board
to evaluate the pervasiveness of the violations. Thus, they did
not allege the size of the unit or the extent of dissemination
of the violations among the employees. Harbor Crossing
Nursing Facility, 308 NLRB No. 27 (1992) (not reported in
Board volumes); FJN Mfg, supra.
Summary judgment was denied in those cases, and the
matters were remanded for hearing. Here, however, at hear-
ing, the General Counsel has relied on Respondents’ failure
to answer the specification, and therefore the specification
must stand or fall based on whether the allegations there are
factually sufficient to support a finding of personal liability.
I find that they are not, and I will recommend dismissal of
those paragraphs alleging the personal liability of McCool.
The Backpay Computations
Patrick Barrett: Barrett was discharged on February 14,
1986, from his position as a level 1 technician. Although
McCool argues that Barrett never passed a level 1 examina-
tion, the Board and the court of appeals found that he was
employed as a level 1 technician, and I am bound by such
findings.
The Backpay Period: The General Counsel asserts that
Barrett’s backpay period continues until Respondent ceased
operating their facility in August 1988. McCool argues that
Barrett’s backpay should terminate on July 29, 1986.
McCool testified that Respondents employed 2 types of
technicians: level 1 and level 2. He stated that the level 1
employees were in effect, assistants, who could not work
without the presence of a level 2 technician, pursuant to rules
of the American Society for Nondestructive Testing which
purportedly require that a level 2 technician sign any inspec-
tion conducted. Level 1 technicians are not authorized to sign
such inspection reports.
McCool further stated that business declined to such an
extent that by July 29, 1986, Respondents laid off all the
level 1 technicians, and thereafter continued to employ only
level 2 technicians, specifically, David Geisendorfer and
Randy Pridenmore. Respondents continued their business,
employing only level 2 technicians, until August 1988, when
they ceased doing business.
Accordingly, McCool argues that Barrett’s backpay period
should end on July 29, 1986, when Respondents ceased em-
ploying level 1 employees. The level 1 technicians laid off
at that time were Gary Whisenhunt and Brian Hale.
Thus, McCool argues that Barrett would have been laid off
no later than July 29, 1986, when the last level 1 technician
was laid off, and that his backpay period should end then.
The General Counsel argues that there has been no proof
that Geisendorfer or Pridenmore were level 2 employees, and
even if such proof has been shown, that there is no evidence
that they were more qualified than the level 1 technicians to
perform the work that they did subsequent to July 1986.
However, the collective-bargaining agreement does make ref-
erence to a level 2 category, and further sets forth wage rates
for the positions of ‘‘Technician’’ and ‘‘Assistant Techni-
cian.’’
The contractual wage provisions provide for a salary of
$8.70 for the assistant, or level 1 technician, for the calendar
year of 1986. This amount, plus a 2.5-percent increase grant-
ed pursuant to a March 1985 letter of understanding attached
to the contract, results in a wage of $8.91, which is the
amount set forth in the specification payable to Barrett, Hale,
and Whisenhunt. Accordingly, the General Counsel regards
them as level 1 technicians.
Similarly, the $12.10 wage rate provided in the contract
for the technician, or level 2 technician, plus a 2.5-percent
increase, constitutes a wage rate of $13.17, which is the
wage rate set forth in the specification payable to David
Geisendorfer and Kim Geisendorfer for the calendar year
1987. Accordingly, the General Counsel regards them as
being level 2 technicians.
The position of Pridenmore is questionable. There was no
evidence, specifically, as to whether he was a level 1 or level
2 employee. However, McCool testified that he was em-
ployed after July 1986 when no level 1 employees were em-
ployed by Respondents. However, the contractual wage rate
as set forth in the specification for Pridenmore is $10.50.
This is more than the $8.91 contractual wage rate for level
1 technicians, but less than the $13.17 rate for level 2 techni-
cians. No explanation of this wage rate was given at the
hearing. I can only assume that this was the wage rate paid
to Pridenmore, and not the contractual amount. That being
the case, it would not be likely that Respondents would pay
Pridenmore more than the $8.91 rate payable to a level 1
technician if he was in fact a level 1 technician. Rather, it
seems more likely, in view of the fact that McCool’s attor-
ney conceded that Respondents had not paid the contractual
wage rate, that Pridenmore was in fact a level 2 employee,
entitled to a wage rate of $12.40 ($12.10 + 2.5% (30 cents))
in the calendar year 1986.
Accordingly, I find that Pridenmore was a level 2 techni-
cian.
Therefore, I find that no level 1 technicians were em-
ployed by Respondents following Whisenhunt’s dismissal in
July 1986. The question then becomes whether level 1 tech-
nicians, such as Barrett, could have continued to be em-
ployed by Respondents. McCool testified that because of a
652 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
decline in business, and the nature of the work that Respond-
ents had at that time, walk-on inspections of refineries, such
work could be done by one person. Level 2 technicians were
retained to perform this work, and not level 1 technicians,
because only the level 2 technicians were authorized to sign
inspection and certification forms, and that Respondents at
that time performed much work for customers which re-
quired such certifications. Indeed, the collective-bargaining
agreement provides that ‘‘only Level II personnel shall be al-
lowed to read films and at least one Level II Technician shall
be assigned per each unit.’’
McCool conceded that in the past, Respondents sent a
level 1 and a level 2 technician to a job, where the customer
requested it or where the job was extensive. However, that
was not Respondents’ standard practice.
As set forth above, McCool argues that had Barrett contin-
ued in Respondents’ employ, Barrett would have been termi-
nated for economic reasons before the end of the backpay
period, at least by July 29, 1986, at which time all level 1
technicians were terminated.
Such a contention is an affirmative defense and the bur-
den is on Respondents to establish that discriminatees
would not have remained in its employ for such non-
discriminatory reasons. Statistical probability is not
enough and it must be determined what would have oc-
curred regarding the employment of each of the claim-
ants based on the policies of the Respondent. [Midwest
Hanger Co., 221 NLRB 911, 917 (1975).]
I cannot find that Barrett would have been terminated prior
to the other level 1 technicians, Hale, and Whisenhunt, due
to his alleged failure to pass a level 1 examination, or that
he was less experienced than Whisenhunt, as testified by
McCool. As set forth above, Barrett was employed as a level
1 technician, and presumably was competent to perform all
level 1 work.
However, I find that Respondents have met their burden
of showing that Barrett would have been terminated at a time
when the last level 1 technician, Whisenhunt, was dismissed,
on July 29, 1986. Thus, McCool gave uncontradicted testi-
mony concerning Respondents’ requirements and its practice.
There was no longer a need to employ level 1 technicians
because of a decline in business, and because its few cus-
tomers required the services of a level 2 technician who
could sign and certify inspection reports.
This is not a case where a question exists as to which of
several level 1 technicians should have been retained, where
one could argue that discriminatee Barrett should have been
retained, on the basis of seniority or skill. Midwest Hanger,
supra.
Rather, this is a case where a specific category of worker,
level 1 technician, was dropped from Respondents’ payroll,
and Respondents’ business was performed by a different
class of worker, the level 2 technician. No level 1 technician
was employed after July 29, 1986, and there is no reason to
believe that Barrett would have been employed past that
date. McCool has given a reasonable, supportable basis on
which a finding may be made that had Barrett continued in
Respondents’ employ, he would have been dismissed by the
time that the last level 1 technician was dismissed, on July
29, 1986, and that he would not have been employed by
them thereafter.
The Amounts Due Barrett
Respondents do not dispute the method of computations,
or the figures themselves with respect to Barrett, but only the
duration of his backpay, as set forth above.
Gross Backpay: As set forth in the specification, Barrett
is due regular gross backpay of $2,280.96 for the first quarter
of 1986, and $4,633.20 for the second quarter of 1986, which
ends on June 30, 1986.
Inasmuch as I have found that Barrett would have been
dismissed on July 29, 1986, gross backpay for the 4 weeks
in July 1986, must be added to this sum. Thus, 4 weeks at
40 hours per week at a rate of $8.91 equals $1425.60.
In addition, the specification states that a total of 21.90
overtime hours were worked in the third quarter of 1986.
Since no information was given as to what week or weeks
those overtime hours were worked, I have taken the total of
21.90 hours, and divided it by the 13.2 weeks in that quarter,
and obtained an average number of overtime hours worked
per week in the third quarter of 1986. Thus, an average of
1.7 hours of overtime was worked per week in the third
quarter of 1986. The 1.7 hours multiplied by the 4 weeks in
July 1986 equals 6.8 hours overtime worked in July 1986
multiplied by the overtime rate of $13.37 or $90.91.
Thus, the gross backpay due Barrett is $2,280.96 plus
$4,633.20, plus $1,425.60, plus $90.91 or $8,430.67.
Interim Earnings: With respect to interim earnings,
Barrett’s testimony and W-2 forms establish that following
his discharge in February 1986, he diligently searched for
employment, contacted personnel agencies, job placement
centers, and looked in the newspapers for jobs. He also ap-
plied for work at various locations. In March 1986, he was
referred by Pomerantz Personnel Company to work at Serv-
ice Corporation of America. He was employed at that job for
a couple of weeks as a bench technician performing warranty
work on typewriters and computers. He earned $252 in that
employment. In May 1986, he obtained employment as a
bartender at the Bar Harbor Light. He worked until July
1986 earning a total of $739. Accordingly, Barrett’s total in-
terim employment until the end of his backpay period, July
29, 1986, amounted to $991.
The Contractual Guarantee of 40 Hours of Work
The specification sets forth, and McCool admitted at the
hearing, that Respondents failed to pay certain employees the
guaranteed 40-hour minimum between April 2, 1986, and
August 30, 1988.
The collective-bargaining agreement provides in article VI,
section (J) that ‘‘the Company guarantees forty (40) hours of
work per week for each full calendar week employed and the
employee is available for work.’’
McCool admits Respondents’ failure to pay the guaranteed
40 hours’ pay, but presented two defenses to their failure.
The first is that the Union waived the contractual require-
ment in early 1986, and the second is that the contract ex-
pired on October 1, 1987, and was not renewed, thereby ter-
minating, on that date, any obligation to make payments on
the contract’s terms thereafter.
McCool testified that in January or February 1986, he told
union official Walter Russell that the 40-hour guarantee was
653OMNITEST INSPECTION SERVICES
‘‘killing us.’’ McCool sought to lay off employees at night
and rehire them in the morning, presumably to avoid Re-
spondents’ obligation under the 40-hour guarantee provision.
According to McCool, Russell responded that the contract
did not prohibit that practice, although Respondents might
have trouble retaining employees with that practice. McCool
responded that if the Union could not provide workers, then
Respondents would hire from sources other than the Union.
McCool stated that Russell did not object to Respondents’
not complying with the 40-hour guarantee clause. McCool
conceded, however, that no union official specifically told
him that he would not be required to comply with the 40-
hour guarantee clause. According to McCool, he then laid off
employees in the evening and rehired them in the morning.
Union official Russell testified that McCool asked him for
‘‘relief’’ of the 40-hour guarantee clause. Russell refused to
do so, and also told him that the 40-hour guarantee was in
the contract and that he would have to abide by it.
I reject McCool’s argument that Respondents were re-
lieved of the contractual requirement to pay the guaranteed
40 hours’ pay. Russell denied waiving the contractual provi-
sion and no written evidence was offered of such a waiver.
Regarding the alleged expiration of the contract on Octo-
ber 1, 1987, in support of Respondents’ position, McCool
testified that in June or July 1986, he met with union offi-
cials and advised them that Respondents were going out of
business due to financial reasons. He also told them that he
was looking ‘‘very favorably’’ at another union, the Plumb-
ers International Union (UA), and was attempting to nego-
tiate an agreement with that union. McCool testified that he
told union officials at that meeting that he had no intention
of signing a new contract with the Union, was going to can-
cel Respondents’ contract with the Union, and that they did
not comment on his statement. He further testified that union
officials did not ask him to negotiate a successor agreement
to the contract which expired on October 1, 1987.
Article XXIII of the collective-bargaining agreement pro-
vides as follows:
This Agreement shall be in full force and effect from
December 1, 1984, and shall continue until midnight,
October 1, 1987, automatically renewing itself for addi-
tional periods of one (1) year each from year to year
thereafter unless written notice is given by either party
sixty (60) days prior to October 1, 1987 . . . of a de-
sire to open the Agreement to negotiate any changes.
McCool conceded that he did not provide the Union with
written notification that he wished to renegotiate the agree-
ment. Accordingly, inasmuch as the contract automatically
renewed itself, by its terms, it did not expire until October
1, 1988. Therefore, Respondents were obligated to abide by
its terms, in this regard, until it closed its operation in Au-
gust 30, 1988.
McCool does not dispute the computations or the figures
in the specification concerning this issue. It should be noted
that the guarantee is sought only for those weeks within
which the employee involved actually worked or was paid.
Accordingly, I find, as set forth in Appendix 3 of the spec-
ification, that the following amounts are due the following
employees:
Brian Hale $539.05
Gary Whisenhunt 124.74
David Geisendorfer 1739.61
Kim Geisendorfer 678.25
Randy Pridenmore 798.00
The specification sets forth that Jon Coulson is entitled to
$27 pursuant to the 40-hour guarantee provision, which was
earned in the third quarter of 1986. McCool argues that
Coulson is a statutory supervisor or official of Respondents
and therefore not protected by the provisions of the Act. I
agree.
The Board found that on July 1, 1986, Coulson and
McCool operated Amspec as partners, Coulson owning 20
percent of the business, and that Coulson operated as the op-
erations manager of Amspec and the supervisor of its em-
ployees. The Board further found that he solicited business
and handled other managerial tasks. 297 NLRB at 753.
Based on the above, Coulson became a supervisor on July
1, 1986, the beginning of the third quarter of 1986. Accord-
ingly, I cannot find that Coulson was a statutory employee
at the time that Respondents were required to make whole
their employees. I, therefore, find that they had no obligation
to make Coulson whole pursuant to the 40-hour guarantee
provision.
The Failure to Pay the Contractual Wage Rate
The specification alleges that Respondents failed to pay
David Geisendorfer and Kim Geisendorfer the contractual
wage rate between January 1, 1987, and August 30, 1988,
the date Respondents ended their New Jersey operations.
McCool admits the accuracy of the computations, and the
Respondents’ failure to pay those amounts, but contests its
obligation to pay those amounts beyond the termination date
of the collective-bargaining agreement, October 1, 1987.
Inasmuch as this issue is discussed above, and I have re-
jected McCool’s argument that the contract expired on Octo-
ber 1, 1987, I find as set forth in the specification, that Kim
Geisendorfer is entitled to $218.59, and that David
Geisendorfer is entitled to $2,811.41, the difference between
what they were paid, and the amount they should have re-
ceived pursuant to the collective-bargaining agreement.
The Failure to Pay Pension, Health, and Welfare
Contributions
The specification asserts that Respondents were required to
make contributions to certain pension, health, and welfare
funds. McCool admits that it was Respondents’ contractual
obligation to make such contributions, and further admits that
they failed to make such contributions between April 2,
1986, and August 30, 1988, the date that they ended their
New Jersey operations. McCool further admits the specific
contribution rates, and the computations as set forth in the
specification.
However, McCool asserts that Respondents’ obligation to
make such contributions expired on July 29, 1986, with re-
654 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 If no exceptions are filed as provided by Sec. 102.46 of the
Board’s Rules and Regulations, the findings, conclusions, and rec-
ommended Order shall, as provided in Sec. 102.48 of the Rules, be
adopted by the Board and all objections to them shall be deemed
waived for all purposes.
spect to Barrett, as set forth above, since he would not have
been employed thereafter due to the layoff of all level 1
technicians. Respondent also asserts that Coulson is not enti-
tled to any contributions.
McCool further argues that Respondents’ obligation pursu-
ant to their collective-bargaining agreement ended when he
orally repudiated the contract in early 1986, or at the latest,
when the contract expired by its terms on October 1, 1987.
First, I have rejected, above, McCool’s argument that the
collective-bargaining agreement expired at any time prior to
October 1, 1988, since it had been automatically renewed
due to Respondents’ failure to give the contractually required
written notice. I accordingly find that the collective-bargain-
ing agreement, having been automatically renewed for 1
year, expired on October 1, 1988.
The specification provides that pension, health, and wel-
fare contributions in behalf of Coulson, were required to be
paid beginning the third quarter of 1986, for a total of
$4,914.22. Inasmuch as I have found, above, that Coulson
was a statutory supervisor, and an official of Respondents on
July 1, 1986, and there has been no evidence that he was an
employee of Respondents on July 1, 1986, covered by the
collective-bargaining agreement, I cannot find that the speci-
fication should be applied to him in this respect. I accord-
ingly will dismiss the specification as it relates to Coulson.
The specification provides that pension, health, and wel-
fare contributions in behalf of Barrett were required to be
paid from the second quarter of 1986 through the second
quarter of 1988, sometime before Respondents closed their
New Jersey operations in August 1988.
I have found, above, in agreement with McCool’s argu-
ment, that Barrett would have been laid off with the other
level 1 employees, no later than July 29, 1986. Accordingly,
Barrett was entitled to contributions to be made in his behalf,
as set forth in the specification, for the second quarter of
1986, ending June 30, 1986, of $396.34 for pension, and
$707.75 for health and welfare.
Barrett was also entitled to contributions to be made in his
behalf for the month of July 1986. The specification states
that Respondents were required to make contributions of
$384.93 for pension, and $687.37 for health and welfare in
behalf of Barrett for the third quarter of 1986. Since no in-
formation was given as to what week or weeks those con-
tributions were earned, I have taken the two amounts, and di-
vided them by the 13.2 weeks in that quarter, and obtained
an average amount of pension and health and welfare con-
tributions which should have been made in the third quarter
of 1986.
Thus, an average of $29.16 for pension per week, and
$52.07 for health and welfare per week should have been
contributed for Barrett in the third quarter of 1986. Those
amounts multiplied by the 4 weeks in July 1986 equals
$116.64 for pension, and $208.28 for health and welfare,
which should have been contributed for Barrett for July
1986.
Thus, the totals for Barrett are $512.98 for pension, and
$916.03 for health and welfare.
Accordingly, the contributions required to be paid in be-
half of Respondents’ other employees for pension and health
and welfare, as set forth in the specification, are as follows:
Pension Welfare
Barrett $512.98 $916.03
Hale 263.90 471.25
Whisenhunt 330.40 590.00
D. Geisendorfer 4,936.36 9,142.79
Pridenmore 466.55 833.12
K. Geisendorfer 22.80 42.75
On these findings of fact and conclusions of law and on
the entire record, I issue the following recommended1
ORDER
It is ordered that the Respondents, Omnitest Inspection
Services, Inc; Amspec Technical Services, a Partnership; and
Amspec Technical Services, Inc., Woodbridge, New Jersey,
their officers, agents, successors, and assigns, shall make
whole the employees involved by the payment to them of the
amounts set forth below, and shall make contributions in
their behalf, as set forth below, plus interest thereon.
IT IS FURTHER ORDERED that those allegations of the com-
pliance specification be dismissed which allege that Daniel
McCool is personally liable for the backpay due.
IT IS FURTHER ORDERED that those allegations of the com-
pliance specification be dismissed which allege that Jon
Coulson is entitled to any backpay, or that contributions be
made in his behalf.
Backpay Pension Health & Welfare 40 Hr. Qtr. Contractual Wage Total
Barrett $7,439.67 $512.98 $916.03 $8,868.68
Hale 263.90 471.25 $539.05 1,274.20
Whisenhunt 330.40 590.00 124.74 1,045.11
D. Geisendorfer 4,936.36 9,142.79 1,739.61 $2,811.41 $18,630.17
Pridenmore 466.55 833.12 798.00 2,097.67
K. Geisendorfer 22.80 42.75 678.25 218.59 962.39