Pallazola Electric

National Labor Relations Board - Board Decisions

Sep 30, 1993

312 N.L.R.B. 569 (N.L.R.B. 1993)

569
312 NLRB No. 95
PALLAZOLA ELECTRIC
1 High Tech was not a party in Case 1–CA–25048, and it has not
been found to have violated the Act. The charge filed in Case 1–
CA–28622 alleges that High Tech is Pallazola’s alter ego and, as
such, is liable for ‘‘amounts outstanding.’’ See, e.g., Scotch & Sir-
loin Restaurant, 287 NLRB 1318, 1320–1321 (1988).
2 The General Counsel asserts that the Respondents failed to an-
swer the amendments to the specification. We disagree. The answer
is dated November 19, 1992, several days after the specification was
amended. Under the circumstances, we infer that the allegations re-
sponded to in the answer are those of the specification as amended.
3 Pallazola’s discharge from bankruptcy is not contested.
4 The General Counsel asserts that the Respondents’ answer con-
tains only general denials of the allegations in pars. 10 through 18
of the amended specification, contrary to Sec. 102.56 of the Board’s
Rules and Regulations. (See discussion in text, below.) The General
Counsel states that the Respondent was provided a copy of the appli-
cable rules in the Regional Office’s January 15 letter. (The motion
actually characterizes the letter as having been sent on December 4,
1992; that apparently is an inadvertent error.)
Michael J. Pallazola d/b/a Pallazola Electric and
High Tech Electrical Contractors, Inc. and
Local 103, International Brotherhood of Elec-
trical Workers, AFL–CIO. Cases 1–CA–25048
and 1–CA–28622
September 30, 1993
SUPPLEMENTAL DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
DEVANEY AND RAUDABAUGH
On February 22, 1991, an administrative law judge
of the National Labor Relations Board issued his deci-
sion in Case 1–CA–25048, ordering Respondent Mi-
chael J. Pallazola d/b/a Pallazola Electric (Pallazola),
his heirs, devises, successors, and assigns to make its
employees whole, with interest, for any losses they
may have suffered as the result of Pallazola’s failure
to observe the terms of the collective-bargaining agree-
ments to which it was bound, to make all required
contributions to the union fringe benefit funds, to
transmit union dues (if any) withheld from employees’
salaries pursuant to the agreements, and to reimburse
employees for any expenses resulting from Pallazola’s
failure to make the required contributions. In the ab-
sence of exceptions, the Board on April 3, 1991,
issued an unpublished Order adopting the judge’s deci-
sion.
A controversy having arisen over the amounts of
money owed under the terms of the Board’s Order, the
Regional Director for Region 1 on October 30, 1992,
issued an order consolidating cases and consolidated
compliance specification and notice of hearing. On No-
vember 9, 1992, the Regional Director issued an
amendment to the specification. In addition to stating
the sums claimed and the basis for those claims, the
specification asserts that Respondent High Tech Elec-
trical Contractors, Inc. (High Tech) is a single em-
ployer with, and alter ego and successor of, Pallazola
and is liable for the amounts claimed.1 The Respond-
ents filed an answer to the amended specification.2 In
the answer, the Respondents denied that High Tech is
the alter ego or successor of, or a single employer
with, Pallazola; that High Tech is liable for the
amounts claimed in the specification; and that either
Pallazola or High Tech is engaged in the construction
industry. The answer also denies all of the allegations
in the specification regarding the amounts claimed on
behalf of the employees of Pallazola. Finally, the an-
swer asserts as an affirmative defense Michael
Pallazola’s discharge in bankruptcy about August 13,
1991.3
On May 25, 1993, the General Counsel filed with
the Board a motion to transfer proceeding to the
Board, to strike portions of Respondents’ answer and
Motion for Partial Summary Judgment, with exhibits
attached. In the motion, the General Counsel alleges
that by letter dated January 15, 1993, the Regional Of-
fice informed the Respondents’ counsel that the answer
to the specification was insufficient under the Board’s
Rules and Regulations.4 The General Counsel further
alleges that the Respondents were notified that they
had until February 5, 1993, to file an amended answer
in conformity with the Board’s Rules and Regulations
and that unless the Region received a sufficient answer
by that date, a Motion for Partial Summary Judgment
would be filed regarding paragraphs 10 through 18 of
the specification. By letter dated February 4, 1993, the
General Counsel continues, Michael Pallazola informed
Region 1 that the Respondents were no longer rep-
resented by their former counsel but by Michael
Pallazola himself, and requested an additional week in
which to file an amended answer. The General Coun-
sel also alleges that the Regional Attorney granted the
Respondents an extension of time until February 16 to
file an amended answer and, upon Michael Pallazola’s
request for an additional extension of time, granted a
second extension of time until March 9 to file an an-
swer. The General Counsel alleges that the Respond-
ents have never filed an amended answer. The General
Counsel therefore asserts that the Respondents have
failed to file a sufficient answer, and that the allega-
tions in paragraphs 10 through 18 of the amended
specification should be deemed to be admitted and
found to be true. The General Counsel also moves to
strike the portions of the Respondents’ answer that al-
legedly fail to conform to the Board’s Rules and Regu-
lations.
On May 28, 1993, the Board issued an order trans-
ferring this proceeding to the Board and Notice to
Show Cause why the General Counsel’s motion should
not be granted. Michael Pallazola filed a response, pre-
sumably on behalf of both Respondents, asserting that
High Tech is not the alter ego of Pallazola. The re-
sponse also asserts that no money is owed because (1)
570 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
5 The specification states that the amount of dues owed to the
Union is unknown.
payments had been made to the Union on behalf of
one employee, (2) the Union was listed as a creditor
in the bankruptcy petition of Michael Pallazola but
failed to timely file an objection to his discharge in
bankruptcy, (3) all but one of the employees did not
want to be in the Union, and (4) the Respondents have
insufficient assets to satisfy the claims in the specifica-
tion.
On the entire record in this case, the Board makes
the following
Ruling on Motion to Strike and for Partial
Summary Judgment
Section 102.56 of the Board’s Rules and Regulations
states:
(b) Contents of answer to specification.—The
answer shall specifically admit, deny, or explain
each and every allegation of the specification, un-
less the respondent is without knowledge, in
which case the respondent shall so state, such
statement operating as a denial. Denials shall fair-
ly meet the substance of the allegations of the
specification at issue. When a respondent intends
to deny only a part of an allegation, the respond-
ent shall specify so much of it as is true and shall
deny only the remainder. As to all matters within
the knowledge of the respondent, including but
not limited to the various factors entering into the
computation of gross backpay, a general denial
shall not suffice. As to such matters, if the re-
spondent disputes either the accuracy of the fig-
ures in the specification or the premises on which
they are based, the answer shall specifically state
the basis for such disagreement, setting forth in
detail the respondent’s position as to the applica-
ble premises and furnishing the appropriate sup-
porting figures.
(c) Effect of failure to answer or to plead spe-
cifically and in detail to backpay allegations of
specification. . . . If the respondent files an an-
swer to the specification but fails to deny any al-
legation of the specification in the manner re-
quired 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 with-
out the taking of evidence supporting such allega-
tion, and the respondent shall be precluded from
introducing any evidence controverting the allega-
tion.
We agree with the General Counsel that portions of
the Respondents’ answer to the amended specification
do not meet the requirements of Section 102.56 of the
Board’s Rules and Regulations. Paragraphs 10 through
17 of the specification explain the basis for the claims
for backpay owed to Pallazola’s employees and for the
contributions owed to the fringe benefit funds on their
behalf.5 Paragraph 18, as amended, contains, inter alia,
the specific amounts claimed on behalf of each of the
named employees. Section 102.56(b) makes clear that
general denials of those matters are insufficient. Rath-
er, if the Respondents dispute the accuracy of the fig-
ures contained in the specification or the premises on
which they are based, the Respondents must state why
they disagree, what they consider to be the applicable
premises, and furnish the relevant supporting figures.
As the General Counsel notes, the Respondents’ an-
swer contains only a general denial of those allega-
tions, and no explanation has been given for the failure
to answer them in the manner required by Section
102.56.
The assertions in Michael Pallazola’s response to the
Notice to Show Cause are also insufficient expla-
nations of the Respondents’ failure to answer the spec-
ification as required. The claim that most of the em-
ployees did not want to be ‘‘in the Union’’ is without
merit, for two reasons. First, it is an attempt to reliti-
gate an issue that was decided in the affirmative in the
unfair labor practice case—whether to afford make-
whole relief to Pallazola’s employees. The specifica-
tion is concerned not with whether make-whole relief
is due, but with how much is due. Second, the Re-
spondent’s contention is irrelevant. Pallazola’s con-
tracts with the Union were governed by Section 8(f) of
the Act, under which collective-bargaining agreements
in the construction industry are enforceable even with-
out a showing of employee support for the Union. See
John Deklewa & Sons, 282 NLRB 1375 (1987). The
contention that payments were made to the Union on
behalf of John Santinello is insufficient under Section
102.56 because it identifies neither the amounts of the
payments assertedly made, nor even whether those
payments were for union dues (as Michael Pallazola
indicated at the hearing in the unfair labor practice
proceeding) or for one or more of the industry’s fringe
benefit funds. The allegation that the Respondents have
insufficient assets to satisfy the claims made in the
specification is also irrelevant to this proceeding. The
issue in a compliance proceeding is the amounts due,
not whether the Respondents are able to pay. See, e.g.,
Scotch & Sirloin Restaurant, supra, 287 NLRB at
1320. Pallazola’s release from bankruptcy, and the
Union’s failure to object to it, are likewise irrelevant
to the quantum of relief required to make the employ-
ees whole as provided in the Board’s previous Order.
Thus, we agree with the General Counsel that para-
graphs 10 through 17 of the Respondents’ answer, and
paragraph 18 insofar as it denies the amounts claimed
on behalf of the named employees, fail to comply with
the requirements of Section 102.56(b) and (c). We
571PALLAZOLA ELECTRIC
6 In any event, see Best Roofing Co., 304 NLRB 727, 728 (1991)
(general denial of single employer, alter ego, or successor status suf-
ficient to warrant a hearing).
7 Similarly, the General Counsel has not moved for summary judg-
ment on the issue of the Respondents’ status as employers in the
construction industry. That issue also must be decided at a hearing,
albeit we note that in the unfair labor practice stage of Case 1–CA–
25048, no exceptions were taken to the judge’s finding that Re-
spondent Pallazola was engaged in the construction industry.
therefore grant the General Counsel’s motion to strike
those portions of the answer, and we deem the allega-
tions of paragraphs 10 through 17 of the specification,
and of the claims advanced on behalf of the employees
in paragraph 18, to be admitted as true.
We disagree, however, with the General Counsel’s
contention that the Respondents’ general denial of all
the allegations contained in paragraph 18 of the
amended specification is deficient. Amended paragraph
18 alleges, in addition to the amounts claimed, that
High Tech is liable for the amounts due. The issue of
High Tech’s liability depends on the resolution of
other matters, principally whether High Tech is, as al-
leged, the alter ego or successor of, or a single em-
ployer with, Pallazola and the question of the effect of
Michael Pallazola’s release from bankruptcy on these
proceedings. The General Counsel has not moved for
summary judgment on those issues, which must be de-
cided at a hearing.6 Accordingly, to the extent para-
graph 18 of the amended specification alleges that
High Tech is liable for the amounts claimed, we find
that the Respondents’ general denial meets the require-
ments of the Board’s Rules and Regulations, and we
deny the motion to strike and for Partial Summary
Judgment concerning the alleged liability of High
Tech.7
In summary, we shall grant the General Counsel’s
motion to strike and for Partial Summary Judgment
with regard to the issues raised in paragraphs 10
through 17, and the specific amounts claimed in para-
graph 18, of the amended compliance specification.
We shall direct a hearing limited to the remaining
issues raised in the amended specification and answer.
ORDER
It is ordered that the General Counsel’s motion to
strike portions of the Respondents’ answer to the
amended compliance specification is granted with re-
gard to paragraphs 10 through 17 of the answer, and
to paragraph 18 insofar as it denies the amounts
claimed on behalf of the named employees.
IT IS FURTHER ORDERED that the General Counsel’s
Motion for Partial Summary Judgment is granted with
regard to the allegations contained in paragraphs 10
through 17, and to the amounts claimed on behalf of
the named employees in paragraph 18, of the amended
specification.
IT IS FURTHER ORDERED that this proceeding is re-
manded to the Regional Director for Region 1 for the
purpose of issuing a notice of hearing and scheduling
a hearing before an administrative law judge for the
purpose of taking evidence concerning the allegations
that High Tech is a single employer with or the alter
ego or successor of Pallazola and that Pallazola and
High Tech are engaged in the construction industry;
concerning the effect of Michael Pallazola’s discharge
from bankruptcy on these proceedings; and concerning
the alleged liability of High Tech for the amounts
claimed. The judge shall prepare and serve on the par-
ties a decision containing findings of fact, conclusions
of law, and recommendations based on all the record
evidence. Following service of the judge’s decision on
the parties, the provisions of Section 102.46 of the
Board’s Rules and Regulations shall apply.