Peter Kiewit Sons' Co.

National Labor Relations Board - Board Decisions

Oct 24, 1973

206 N.L.R.B. 562 (N.L.R.B. 1973)

562 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Peter Kiewit Sons' Co. and South Prairie Construction
Co. and International Union of Operating Engi-
neers, Local No. 627 , AFL-CIO. Case 16-CA-4826
October 24, 1973
DECISION AND ORDER
BY CHAIRMAN MILLER AND MEMBERS JENKINS
AND KENNEDY
On January 31, 1973, Administrative Law Judge
Nancy M. Sherman issued the attached Decision in
this proceeding. Thereafter, Respondent Peter Kiewit
Sons' Co. filed exceptions, Respondent South Prairie
Construction Co. filed exceptions and a supporting
brief, and the Charging Party filed an answering brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the record and the at-
tached Decision in light of the exceptions and briefs
and has decided to affirm the rulings, findings, and
conclusions of the Administrative Law Judge only to
the extent consistent herewith.
Respondent South Prairie Construction Co., herein
called South -Prairie, and Respondent Peter Kiewit
Sons' Co., herein called Kiewit, are separate corporate
subsidiaries of Peter Kiewit Sons', Inc., herein called
Inc. For a substantial number of years, Kiewit has
been engaged in construction activity, including high-
way construction, in Oklahoma. It was the only high-
way contractor in Oklahoma to have signed a union
contract and its wage costs were higher than those of
its competitors. Because of this disparity in costs,
which made Kiewit not sufficiently competitive with
nonunion contractors, Inc. determined that South
Prairie, which was a nonunion contractor engaged in
construction work outside Oklahoma, should be acti-
vated in Oklahoma to compete on equal terms with
nonunion contractors. About March 1, 1972, South
Prairie began doing business in Oklahoma as a high-
way contractor. South Prairie has never signed any
collective-bargaining contract with the Union, nor
have its employees ever selected the Union as their
'bargaining representative. Nevertheless, the Adminis-
trative Law Judge found that by refusing to apply
Kiewit's contract with the Union to South Prairie's
employees, Respondents violated Section 8(a)(5) and
(1) of the Act.
It is not uncommon in the construction industry for
the same interests to have two separate organizations,
one to handle contracts performed under union con-
ditions and the other under nonunion conditions. The
Board has recognized this fact by refusing to include
the employees of a nonunion company in the same
bargaining unit with those of a union company con-
trolled by the same interests,' and by refusing to re-
quire the nonunion company to recognize the
bargaining representative of the union company's em-
ployees or to apply the collective-bargaining contract
with the latter to its own employees .2
A company which has not agreed to be bound by
the collective-bargaining contract of another compa-
ny may nevertheless be held to that contract if it is an
alter ego of the signing company or if it may be said
to constitute a single employer with that company.
There is no contention that South Prairie is an alter
ego for Kiewit. South Prairie's potential liability under
the Kiewit contract therefore must turn on the issue
of whether the two companies constitute a single em-
ployer ,for collective-bargaining purposes. In making
this determination, consideration is given to the fact
that the two companies are wholly owned subsidiaries
of Inc. and are engaged in related businesses. Howev-
er, these factors are not controlling. As recently stated
in the Gerace Construction case:3
A critical4actor in determining whether sepa-
rate legal entities operate as a single employing
enterprise is the degree of common control of
labor relations policies. Thus, the Board has
found common ownership not determinative
where requisite common control was not shown,
and the Board has held with court approval that
such common control must be actual or active, as
distinguished from potential control. [Citations
omitted.]
In the present case, South Prairie and Kiewit are
separate legal entities which have operated as separate
enterprises for a great many years preceding the pre-
sent dispute. They have separate accounting records,
separate bank accounts, and different officers. They
have separate offices in Oklahoma with separate tele-
phone numbers, and separate Oklahoma area supervi-
sors with separate supporting office staffs. Neither has
ever subcontracted work to the other. Each company
submits, separate job bids, although they do not bid
against each other. Each company has a different dol-
lar maximum fixed by the Oklahoma State Highway
Department for work which it may undertake. Em-
ployees on Kiewit's payroll receive the wages and
benefits called for by the union contract; employees
of South Prairie receive lower wages and no benefits.
Although Inc. determined that South Prairie would
i Central New Mexico Chapter, National Electrical Contractors Association,
'Inc, 152 NLRB 1604
2 Gerace Construction, Inc., 193 NLRB 645, Frank N. Snuth Associates,
Inc., 194 NLRB 212.
3 Gerace Construction Inc, supra, 645
206 NLRB No. 66
PETER KIEWIT SONS' CO.
operate on a nonunion basis, South Prairie's labor
policy determinations within that framework are set
by South Prairie's president, whereas Kiewit's labor
policies are determined by an official of Inc.,;
In view of the foregoing, we find that South Prairie
and Kiewit are separate employers under the Act and
that the employees of each constitute a separate bar-
gaining Unit .4 Accordingly,, we further find that Re-
spondents had no obligation to recognize the Union
as the bargaining representative of South Prairie's em-
ployees or extend the terms of the Union's agreement
with Kiewit to South Prairie's employees. For this
reason, we shall dismiss the complaint.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Rela-
tions Board hereby orders that the complaint herein
be, and it hereby is, dismissed in its entirety.
4 Gerace Construction, Inc., 193 NLRB 645; Frank N Smith Associates,
Inc., 194 NLRB 212. The Administrative Law Judge's attempt to distinguish
these cases is not persuasive. The decision in Gerace did not turn on the date
when the bargaining agreement was executed with respect to the date on
which the nonunion corporation was formed , but on the critical fact that
despite the formation of the nonunion corporation by the controlling stock-
holder of the union corporation, actual control of the labor relations of the
former, as distinguished from potential control, was vested in the nonunion
corporation's own officers. On this basis, the Board found that the two
corporations constitute separate employers similarly, in Smith Associates the
nonunion corporation was formed by the persons in control of the union
corporation "in order to negotiate for or bid on jobs as an open shop."
Despite this frank admission of the purpose in the formation of the nonunion
corporation, the Board adopted the Trial Examiner's finding that the nonun-
ion corporation was a separate employer which was not required to adhere
to the terms of the collective-bargaining contracts of its sister corporation.
DECISION
STATEMENT OF THE CASE
NANCY M. SHERMAN, Administrative Law Judge: This pro-
ceeding heard at Oklahoma City, Oklahoma, on October 11
and 12, 1972, pursuant to a charge filed on June 20, 1972,
and a complaint issued on September 6, 1972, presents the
question of whether Respondents violated Section 8(a)(5)
and (1) of the National Labor Relations Act, as amended,
by their refusal to apply to employees on the payroll of
Respondent South Pacific Construction Co. (herein "South
Prairie") the terms and conditions of a contract executed by
Respondent Peter Kiewit Sons' Co. (herein "Peter Kiewit")
and the Charging Party (herein "Local 627").
Upon the entire record, including my observation of the
witnesses, and after due consideration of the briefs filed by
the General Counsel, Peter Kiewit, and South Prairie, I,
make the following:
FINDINGS OF FACT
1. JURISDICTION
563
Respondents are Nebraska corporations which are en-
gaged in the general construction business throughout the
United States and, more specifically , in the construction of
highways in the State of Oklahoma . During the 12-month
period preceding the issuance of the complaint , a represen-
tative period , each Respondent made purchases valued in
excess of $50,000 from outside Oklahoma which it caused
to be shipped directly to its operations in Oklahoma. I find
that, as Respondents concede , Respondents are each en-
gaged in commerce within the meaning of the Act, and that
exercising jurisdiction over the operations of each will effec-
tuate the policies of the Act.
International Unionn of Operating Engineers , Local No.
627, AFL-CIO, is a labor organization within the meaning
of Section 2(5) of the Act.
II THE ALLEGED UNFAIR LABOR PRACTICES
A. Background
At all times material hereto, Peter Kiewit has been an
employer engaged primarily in the building and' construc-
tion industry within the meaning of Section 8(f) of the Act,'
and Local 627 has been a labor organization of which build-
ing and construction employees are members within the
meaning of Section 8(f). Local 627 has represented Peter
Kiewit's employees continuously since 1960, 12 years before
the alleged unfair labor practices herein.' Robert H. Doyle
(Peter Kiewit's counsel at the hearing) and Gerald Ellis
(Local 627's business representative, who represented it at
the hearing) stated on the record that the initial agreement
had been negotiated under Section 8(f). However, at all
times since 1960, including the, time during which the parties
negotiated and executed the most recent agreement (effec-
tive by its terms between July 1970 and June 1973), Peter
Kiewit has continuously had on its payroll employees repre-
sented by Local 627. The testimony fails to show the num-
ber of bargaining agreements to which Peter Kiewit and
Local 627 have been parties since 1960;3 but it establishes
that as to highway work, the kind of work involved here,
there were at least two prior to the execution of the 1970-
1973 agreement .4 Peter Kiewit attempted to comply with at
least the agreement preceding the 1970-1973 agreement,
i This provision is quoted and discussed at length infra, see. II,E,la.
2 This finding is based on the uncontradicted and credited testimony of
Gerald Ellis, Local 627's business manager, on redirect examination. His
testimony in this respect is to some extent corroborated by the testimony of
J. M Darveau (Peter Kiewit's area manager between 1960 and March 1972),
and is consistent with record statements by Peter Kiewit's attorney, Robert
H. Doyle.
3 Doyle and Ellis stated on the record that since the execution of the
original agreement, the parties have periodically renegotiated their agree-
ments.
4 Richard L. Coyne, Peter Kiewit's vice president, testified that "originally,
as I remember years ago, the agreement we had initially covered only high-
way work." Ellis testified that the 1970-1973 agreement, which covers both
highway construction work and heavy construction work, replaced two expir-
ing agreements covering such work separately.
564 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
and also the latter agreement with respect to employees on
its payroll.-Both the 1970 agreement and its immediate pre-
decessors included a provision requiring employees to join
or remain members of Local 627 as a condition of keeping
their jobs. Local 627 never advised Peter Kiewit that any
employees had failed to comply with such provisions and
should be discharged for that reason.
In May or June of 1970, J. M. Darveau, who was then
Peter Kiewit's area manager and was representing it during
the negotiations which culminated in the 1970-1973 con-
tract, told Local 627 that if it did not get more contractors
signed to the collective-bargaining agreement Peter Kiewit
was going to quit bidding work in Oklahoma and leave the
State.' Darveau had made similar remarks to Ellis on previ-
ous occasions. Darveau testified that if Ellis did not organ-
ize other contractors, Peter Kiewit would feel forced to get
out of Oklahoma because it would be paying higher wages
than its competitors, and that he wanted Ellis to bring Peter
Kiewit's competitors up to Peter Kiewit's wage scale.
B. South Prairie Starts to Bid for -
Highway Construction Work in Oklahoma
Darveau (who was Peter Kiewit's area manager between
1960 and March 1, 1972) testified that so far as he knew,
Peter Kiewit operates strictly union jobs. He further testi-
fied that so far as he knew, Peter Kiewit was the only union
highway contractor in Oklahoma, and ,that it was difficult
for Peter Kiewitto bid against nonunion companies. On a
date not-fixed -by the record, Darveau complained to Peter
Kiewit's board of directors that because the wages and ben-
efits required by Peter Kiewit's collective-bargaining agree-
ment were higher than those .paid by competitors, Peter
Kiewit could not competitively bid on highway contracts in
Oklahoma. Darveau suggested to Peter Kiewit Sons', Inc.
(sometimes referred to herein and in the record as "Inc."),
which owns all the stock of Respondent Peter Kiewit Sons'
Co., that a nonunion company should be brought in.
Thereafter the matter was discussed by Inc.'s board of
directors, who decided to accept Darveau's suggestion to
send in a nonunion company. Richard L. Coyne, who is a
vice president of Peter Kiewit and a director of Inc., credi-
bly testified that Inc.'s board of directors made this decision
because:
... we felt that Peter Kiewit Sons', Inc., Co. with the
union agreement and the wages and conditions, was
unable to continue to compete successfully in the,State
and that if we were going to stay in business in the State
it probably would have to be with a company that
wasn't burdened by the union agreement . . . We had
to find a company that could come into the State and
not have the burdens of the contract and get the work.
The company so selected was Respondent South Prairie,
a Nebraska corporation which, like Respondent Peter
Kiewit, is a wholly owned subsidiary of Inc. At that time
5 This finding is based on Ellis' credited testimony. On the basis of the
witnesses' demeanor, I do not credit Darveau's testimony that he referred
only to highway contractors.
South Prairie, which had been incorporated in 1944 under
.a different name, was performing essentially the same kind
of work (heavy and highway construction) as Peter Kiewit
in several other States, but was not performing any work in,
Oklahoma. Darveau testified that so far as he knew, South
Prairie operated and operates strictly nonunion jobs. When
asked why South Prairie was activated in Oklahoma, Dar-
veau testified, "We activated it to be competitive with our
competitors." He further testified that when Inc. activated
South Prairie it was designed to compete against the nonun-
ion highway contractors and that the motivating factor that
brought South Prairie into Oklahoma was that Peter Kiewit
allegedly could not competitively bid on contracts in Okla-
homa; "our competitors were several cents or quite a little
bit below us on the salaries they were paying, 50 cents or a
dollar an hour than what we were paying."
Between January 1, 1971, and November 23, 1971,6 Peter
Kiewit bid on 35 jobs for the Oklahoma State Highway
Department 7 and was the low bidder on 4, the last of which
it obtained on November 23, 1971 s Pursuant to an applica-
tion dated November 29, 1971, for a "Certification of
Domestication," on December 10, 1971, South Prairie re-
ceived a certificate of authority from the State of Oklahoma
to transact business in that State. In January or February
1972, South Prairie submitted to the Oklahoma State High-
way Department the financial statement required of con-
tractors who wish to qualify for highway department work.9
Thereafter, South Prairie bid on 5 to 10 percent of the work
offered by that department. Thus, between February 25,
1972, and June 23, 1972, South Prairie bid on 4 jobs with
the Oklahoma State Highway Department, but obtained
none of them. On June 20, 1972, South Prairie submitted
bids on 4 of the 5 jobs let that day by the Oklahoma Turn-
pike Authorit , amounting to $4 or $5 million, but obtained
none of them Because all the stock in both Peter Kiewit and
South Prairie is owned by a single entity, under Oklahoma
law South Prairie's action in bidding on these 8 jobs fore-
closed Peter Kiewit from doing so]Moreover, Peter Kiewit
6 The various highway department jobs bid for and obtained by Respon-
dents during 1971 and 1972 are set forth in Peter Kiewit's Exh. I and in South
Prairie's Exh. 1. It is not clear from these exhibits whether the listed dates
are the dates on which bids were submitted or the somewhat later dates on
which the contracts were let. As the difference does not appear significant,
I have assumed in my findings that these dates coincide.
Peter Kiewit's Exh. 1 contains an obvious error in connection with the
Washita Countyjob on which Cornell was assertedly the low bidder. Accord-
ing to the exhibit, Peter Kiewit's bid was less than half of Cornea's. My
findings assume that Cornell was the low bidder and that the two bids were
interchanged.
7 During 1971, Peter Kiewit bid on about 10 percent of the jobs that the
highway department had.
Three of these four were among the five biggest lobs for which it bid. Of
the remaining 34 jobs, Empire was the low bidder on 11, H. D. Youngman
on 4; Evans S Throop and McConnell on 3 each, JOB, Cornell, Chas.
Cohen, and Broce on 2 each; and five other-firms on I each. Of these 13 rival
bidders, only 1 (Empire) obtained contracts totalling more (by about 20
percent) than those obtained by Peter Kiewit. Peter Kiewtt obtained con-
tracts totalling about 40 percent more than the third ranking bidder (Young-
man).
9 As a practical matter, a contractor who has been accepted by the Oklaho-
ma State Highway Department as eligible to bid on its contracts will also be
accepted by the Oklahoma Turnpike Authority as eligible to bid on contracts
let by it. However, a contractor's eligibility to bid on Federal or private
highway contracts in Oklahoma is not affected by his status as a bidder with
the Oklahoma State Highway Department
PETER KIEWIT SONS' CO. 565
in effect disqualified itself from bidding on any highway
department or turnpike authority contracts between May
1972 and July 5, 1972.10
Peter Kiewit submitted no bids for state highway depart-
ment work between South Prairie's application for authority
to do business in Oklahoma (filed on November 29, 1971)
and July 23, 1972. Between that date and October 1, 1972,
it bid on three Highway Department jobs, but received none
of them (infra, In. 46). Between these same dates, South
Prairie also bid on three Highway Department jobs. South
Prairie was the successful bidder on one of these jobs, which
is one of the largest in highway department history. Peter
Kiewit could perform this job and was qualified to do it. At
the time of the hearing, South Prairie had not yet begun
work on this job. However, prior to the hearing it had per-
formed work on several Oklahoma highway jobs as a sub-
contractor (see infra, sec. II,D,3).
C. Respondents' Refusal to Apply to the Employees on
South Prairie's Payroll the Bargaining Agreement Executed
by Local 627 and Peter Kiewit
In March 1972, Gerald Ellis (Local 627's business agent)
complained to Richard L. Coyne (a vice president of Peter
Kiewit and a director of Inc.) that Peter Kiewit had brought
South Prairie into Oklahoma to start bidding on highway
work, and that he "believed" that South Prairie was "con-
trolled by Peter Kiewit Sons' Company." Ellis expressed the
view that such action was "circumventing of our collective
bargaining agreement." Coyne replied that he "wasn't
aware of any part of it. He wasn't aware of South Prairie." 11
Coyne stated that he would "check into it" and call Ellis
back. However Coyne never did call Ellis back. Ellis also
made a number of attempts to telephone Attorney Robert
Doyle, who had participated in negotiating and had signed
the contract executed by Peter Kiewit and Local 627, and
finally reached him in Omaha on March 29. Doyle stated
that he was no longer labor relations man for Peter Kiewit
in Oklahoma. 12 Doyle stated that Local 627 would have to
talk to the superintendents with any problems. Doyle told
10 Because Peter Kiewit was late in filing its 1971 financial report by a due
date extended to April 30, 1972, and failed to request a further extension,
between May 1972 and July 5, 1972, it was not qualified to bid for state
highway department or turnpike authority work. The General Counsel sug-
gests that Peter Kiewit's action in filing this report on July 5, 1972, was
prompted by the June 20, 1972, filing of the charge herein. However, Peter
Kiewit had filed its report late on other occasions, although the record fails
to show whether it had ever previously been dropped from the prequalified
bidders list upon failure to obtain additional extensions. Moreover, a con-
tractor which has been dropped from the prequalified bidders list for failure
to file a current financial statement can at any time requalify itself to bid for
state highway department and turnpike authority jobs simply by filing a
statement, is not precluded from performing such contracts already let to it,
and has not been affected in its ability to obtain certain other work in
Oklahoma (supra, In 9). Further, Peter Kiewit actually submitted a bid to
the highway department later in the same month in which it filed the report-
its first bid since it had been dropped from the prequalified bidders list-and
I see no reason to infer that this bid was a sham (infra, fn. 46). In view of
this evidence, I decline to draw the inference suggested by the General
Counsel.
11 As previously noted, Coyne had admittedly participated in the decision
of Inc.'s board of directors to bring South Prairie into Oklahoma.
12 Doyle represented Peter Kiewit at the hearing herein, and filed a brief
with me on its behalf.
Ellis that he was aware of South Prairie. Ellis told Doyle that
he thought Peter Kiewit controlled South Prairie. Doyle did
not deny this, but stated that he was not doing any labor
relations for Peter Kiewit in Oklahoma at that time.
That same evening, Ellis telephoned Darveau, who had
been Peter Kiewit's Oklahoma area manager until March 1
but then became South Prairie's president. Ellis complained
to Darveau that Peter Kiewit was attempting to circumvent
the collective-bargaining agreement. Ellis asked Darveau
what his capacity was with South Prairie; he replied that he
was the "head man" and that "Kiewit would continue to
work union on their union jobs. But South Prairie had elect-
ed to be non-union and do their work nonunion." Ellis
asked whether Darveau was "the area manager like he had
been for Kiewit for the past eleven or twelve years"; Dar-
veau stated in the affirmative that he was the area manager.
Ellis asked Darveau to recognize Local 627, and to cover the
South Prairie work with the Peter Kiewit bargaining agree-
ment. Ellis also asked "what our problem was." Darveau
replied that "we didn't have any problem." Ellis asked
whether it was the wages. Darveau replied no, it was not the
wages. Ellis asked "had we been guilty of some action that
we weren't aware of that should be brought to our people's
attention?" Darveau said no, and repeated several times
that "South Prairie had elected to be non-union." Ellis made
no claim that a majority of operating engineers on South
Prairie's payroll wanted Local 627 to represent them.
On April 18, 1972, Ellis chanced to encounter Doyle in
a Washington, D.C., hotel lobby. At Ellis' request for a
discussion of the Oklahoma situation involving Peter Kiewit
and South Prairie, the two men met later that afternoon. At
this meeting, Doyle admitted that Peter Kiewit was a "con-
trolling company of South Prairie," but stated that South
Prairie was "going to work non-union." When Ellis asked
why, Doyle replied that "he didn't make those decisions and
... he wasn't in the labor relations in Oklahoma."13
On June 16, 1972, Ellis directed the following letter to
Doyle (at Peter Kiewit's Omaha office) and Darveau (as
"Oklahoma Area Manager, South Prairie Construction
Company," in Oklahoma City):
As you know, Local 627 of the International Union
of Operating Engineers has had a Collective Bargain-
ing Agreement with Peter Kiewit Sons' Co., for their
highway and related construction work in Oklahoma
and has a current agreement providing for wages, hours
and conditions of employment for the Company's op-
erating engineer employees.
As you know also, South Prairie Construction Co. of
Nebraska (formerly Cunningham-Kiewit Co.) recently
domesticated in Oklahoma and started bidding and
construction highway and related construction [sic].
We have talked to Dick Coyne, General Counsel of
Peter Kiewit Sons' Co., about this matter who told me
he would call me back on the situation.
My telephone conversation with Mr. Coyne was sev-
eral weeks ago. He has not called me back to date.
I have talked to Mr. Robert Doyle, Labor Relations
Attorney for Kiewit, who informed me that he does not
13 My findings as to the conversations between Ellis and Doyle are based
on Ellis' uncontradicted and credited testimony. Doyle appeared at the hear-
ing on Peter Kiewit's behalf, but did not testify
566 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
handle Oklahoma Labor Relations for Kiewit.
I have talked to Joe Darveau who was Area Manager
for Kiewit in Oklahoma for the past several years. He
informed me that he is now area Manager for South
Prairie Construction Co. on their highway work in Ok-
lahoma. I ask [sic] him to recognize the Peter Kiewit
Sons' Company and Operating Engineers, Local 627,
Highway Agreement which he refused.
We respectfully submit that there is considerable in-
dicia to indicate to our Local Union that the above two
firms are one employer within the meaning of Labor
Management Relations Act so far as the highway and
related construction work in Oklahoma are concerned.
Since we have had no response to our request to
make the South Prairie work come under the collective
agreement or to bargain about the matter, we have no
alternative except to institute action(s) under the appli-
cable Labor Statutes.
We stand ready to meet with you as requested earli-
er. We have no alternative with the facts known to us
except to take the position that the South Prairie High-
way Construction work in Oklahoma is covered by the
Peter Kiewit Sons' Co. and Operating Engineers Col-
lective bargaining agreement.
Ellis received no response to this letter. Four days after
he sent it, on June 20, Local 627 filed the charge which gave
rise to the instant proceeding. On the same date, O. W.
Clark, who is the International representative of Local 627's
parent International , asked Darveau to sign an agreement
for South Prairie on Oklahoma highway work. Darveau
replied that he would not sign a contract, and that he in-
tended to run South Prairie nonunion in the State of Okla-
homa.
South Prairie has its own set of books and its own bank
account. Inc. performs accounting services for both Peter
Kiewit and South Prairie, and charges each company, a fee
therefor which (inferentially) is collected by means of a
bookkeeping transaction.14
2. The nature of Respondents ' business
As stated supra, both Respondents are engaged in the
construction of highways in Oklahoma. As previously
found, under state law they 'cannot bid against each other
for work to be performed by the state highway department
or the state turnpike authority;15 and there is no evidence
that they have ever bid against each other for any job.
Neither firm has ever subcontracted work to the other; nor
has Peter Kiewit ever assigned any jobs or contracts to
South Prairie. The Oklahoma State Highway Department
determines for each firm on its prequalified bidders list the
total amount of unperformed department contracts to
which it may be a party at any one time. This amount is
unaffected by the resources of a particular firm's parent
corporation, but is affected by whether the firm has had
prior experience with the department. The amount is over
$5 million for Peter Kiewit (an amount which permits it to
bid on any highway department contracts) and $15 million
for South Prairie. An individual department contract of $6
million is unusually large; but sometimes a contractor may
be required to bid on several projects as a unit, and these
may run as high as $10 million (never as high as $15 mil-'
lion). -
3. Respondents' offices, staff,,and equipment
D. The Relationship Between Peter
Kiewit and South Prairie
As previously noted, all the stock in both Peter Kiewit
and South Prairie is owned by Inc. Respondents had no
common officers or directors at the time of the hearing in
October 1972, but William H. Taylor-whom Darveau re-
placed on March 1, 1972, as South Prairie's president, and
who was a director of South Prairie as late as November 29,
1971-is Peter Kiewit's controller. Moreover, as late as Jan-
uary 25, 1971, South Prairie's vice president was Walter
Scott, Jr. (who is Peter Kiewit's executive vice president and
a member of its board of directors), and South Prairie's
secretary was James L. Koley, who is Peter Kiewit 's secre-
tary. South Prairie's board of directors live in Omaha, Ne-
braska, have the same set of offices in Omaha as Peter
Kiewit, and share with Peter Kiewit the use of Inc.'s tele-
phone switchboard. Included among South Prairie's board
of directors is Omaha attorney Richard L. Waldron, who as
late as November 29, 1971, was South Prairie's secretary,
and who prepared its articles of domestication (which Dar-
veau took to the qualification office in the Oklahoma State
Highway Department while he was still Peter Kiewit's area
manager). Prior to March 1, 1972, Darveau had been Peter
Kiewit's area manager for 12 years and had been in its
employ for 35 years; but he testified that since that date he
has done no work for Peter Kiewit.
Since about March 1, 1972, South Prairie has been occu-
pying the Oklahoma City office, and an adjacent storage
yard, occupied by Peter Kiewit when Darveau was its area
manager.16 None of the four office personnel changed when
the office changed hands. Thus, Darveau, who had been the
"number one man in the office" for Peter Kiewit, became
South Prairie's president. He continued to prepare bids with
the assistance of the same engineer estimator, Myron
Blume .17 The individuals who had worked for Peter Kiewit
in the capacities of material engineer and secretary to Dar-
veau now work in the same capacities on South Prairie's
14 There is no evidence about how this fee compares with the amount
which would be charged therefor by an independent firm
15 If a contractor's interest in a particular job is aroused by the highway
department's hsting of jobs to be let, the contractor requests the agency to
issue him a "proposal" document on which his bid must be submitted. When
the contractor receives the "proposal " document, his name has already been
stamped thereon by the state agency , and no other contractor can submit a
bid on that "proposal" document. Peter Kiewit and South Prairie have never
requested a "proposal" document for the same job From Darveau 's rather
confused testimony on the subject , I conclude that he was aware in advance
about Peter Kiewit's intention to submit bids (although not the amounts) on
some state highway department work in July and August 1972.
16 At the time of the hearing in October 1972, Peter Kiewit had just ac-
quired a new office in Oklahoma City. Between March 1 and that acquisition,
Peter Kiewit had been using as an office a construction trailer which it had
initially installed as a temporary office for an airport job, whose job superin-
tendent under Darveau also became Peter Kiewit's acting area manager
when Darveau became South Prairie 's president.
17 Blume is also South Prairie's assistant secretary.
PETER KIEWIT SONS' CO. 567
payroll. The superintendent in charge of the storage yard
(Harry Marshall) is the same individual who served in that
capacity with Peter Kiewit. However, South Prairie has a
different telephone number from that previously assigned to
Peter Kiewit. South Prairie's Oklahoma City office is now
its main office, although South Prairie has field offices in
other States.
South Prairie hires its supervisory staff on a continuous
basis, rather than (as with rank-and-file employees) for a
particular job only. At the time of the hearing, a majority
of South Prairie's supervisors had been supervisors for Peter
Kiewit when Darveau was Peter Kiewit' s area manager.
Most of this group transferred between the two firms with-
out any break in their employment. Supervisors who have
moved from Peter Kiewit to South Prairie continue, normal-
ly, to serve in the same capacity, and continue to receive the
same salaries and to be covered by the same insurance plan.
A supervisor working for Peter Kiewit receives paychecks
signed by Peter Kiewit, and a supervisor who works for
South Prairie receives paychecks signed by South Prairie;
but paychecks for both firms are made out in Omaha on the
same pay machine. When Peter Kiewit lays off a supervisor,
whoever is in charge of the Kiewit job lets South Prairie
know about his availability. If South Prairie wants to hire
him (as it usually does), 18 it calls him at home. Frequently,
if not usually, the arrangements are made in advance. On
occasion, a supervisor on a Peter Kiewit job which had just
been completed, or who quit a Peter Kiewit job, applied for
work directly to Darveau, who testified, "The job was fin-
ished that they were on. They didn't have any other job to
go to. If I wanted to hire them I would hire them." 19 If
South Prairie has thus made arrangements to hire a Peter
Kiewit supervisor for a South Prairie job upon completion
of his Peter Kiewit job, he is paid (by whom, does not
appear) for travel time between jobs. However, if there is an
interval between such jobs, he receives neither a salary nor
insurance benefits.
No supervisors who had worked for South Prairie have
ever been hired by Peter Kiewit. According to Darveau,
"they have hever had the occasion to do it. If we were
without work it could happen. It has just never come up."
Employees on South Prairie's payroll are paid 50 cents to
$1 an hour less than those on Peter Kiewit's payroll, and do
not receive the health and welfare benefits enjoyed by the
latter. As is customary in the construction industry, South
Prairie hires rank-and-file employees for a particular job
only. There is little evidence of transfers of such employees
between Peter Kiewit's and South Prairie's payroll.
At the time of the hearing, South Prairie had performed
or was performing two major jobs in Oklahoma-a surfac-
ing contract with Nineteenth Seed Company near Edmond
18 I so infer from Darveau's testimony, as an adverse witness called by the
General Counsel, that "Some of [Peter Kiewit's laid off supervisors] are not
rehired." Darveau was a close-mouthed witness who carefully gave minimal
answers to the General Counsel's questions.
19 Darveau testified that if he had not hired these supervisors, Peter Kiewit
would have either transferred them to a new job if one was available, or laid
them off. Because the thrust of Darveau's testimony was directed to applica-
tions by Peter Kiewit supervisors on completed jobs, I infer that he hired few
or none who had quit a Peter Kiewit job before completing their function
thereon.
(which was still in progress), and a subcontract with Tulsa
Paving in Tulsa (which had been completed)? With the
exception noted below,21 all six of South Prairie's superviso-
ry force on the Edmond job had previously worked for Peter
Kiewit 22
Most of the equipment and supervisors, and a few of the
employees, used by South Prairie on the Tulsa Paving job
came from a job performed by Peter Kiewit in Nowata.
South Prairie's job superintendent on the Tulsa Paving job,
Don Hurst, had served in this capacity for Peter Kiewit on
the Nowata job, and South Prairie paid him the same salary
he had been receiving from Peter Kiewit. In November
1971, Hurst described this Tulsa Paving job to Local 627's
business representative, William Grant, as a job to be per-
formed-by Peter Kiewit, and advised Grant that when Peter
Kiewit finished the Nowata job it would in turn be moving
its crew and equipment to the Tulsa Paving job. When Peter
Kiewit had no more need for a "batch plant" crew at Nowa-
ta, the concrete foreman, Brewer, told the crew to go down
to South Prairie's Tulsa Paving job.23 Three members of the
crew (the fourth was not "interested") drove directly to the
Tulsa Paving job and began work there at about the same
rate of pay, without applying therefor and without any
break in employment.
The Peter Kiewit equipment (including the "batch
plant") used on the Tulsa Paving job was leased by South
Prairie under a written lease agreement, and an amount
representing equipment rental at the "full going rate" was
"charged to the job" and transferred from South Prairie to
Peter Kiewit by means of a bookkeeping transaction. When
20 Darveau's testimony leads me to infer that at the time of the hearing in
October 1972, C. W. "Bill" Foster, who had been hired by Peter Kiewit in
August 1970 and was its general superintendent as of September 30, 1972,
was being seriously considered as general superintendent on the large Okla-
homa highway department contract which South Prairie received in Septem-
ber 1972.
2i The first job superintendent on the Edmond job (Tiemeyer), who served
as such for about the first 2 months, had been in business for himself when
South Prairie hired him. At the time of the hearing in October 1972, Tiemeyer
was South Prairie's vice president and field superintendent; and the Edmond
job superintendent was Don Hurst, who had worked, in the same-capacity,
for Peter Kiewit on the Nowata job and then for South Prairie on the Tulsa
pavingjob The record indicates that Hurst became the Edmondjob superin-
tendent immediately on completion of the Tulsa paving job.
22 Namely, Dan Kudron (South Prairie's paving foreman, who had been
an hourly paid employee for Peter Kiewit at an airport job), A. L. Campbell
(South Prairie's asphalt laydown foreman, who had worked for Peter Kiewit
on the Nowata job and then worked for South Prairie on the Tulsa Paving
job), Troy Evans (South Prairie's master mechanic, who had worked for Peter
Kiewit as a master mechanic on the Nowata job and then for South Prairie
on the Tulsa Paving job), Ole Nelson (South Prairie's truck foreman, who had
worked for Peter Kiewit in that capacity at the Oklahoma City airport job
and then for South Prairie on the Tulsa Pavingjob), Van Rouak (who worked
for Peter Kiewit on the Nowata job, and then for South Prairie for about 3
months on the Edmond job), and Gerald Brewer. Brewer worked for Peter
Kiewit on the Nowata job as supervisor of the batch plant, then worked for
South Prairie on the Tulsa Paving job as a "concrete superintendent" or form
foreman, and then worked for South Prairie on the Edmond job. While the
record fads to disclose Brewer's capacity on the Edmond job, Darveau's
testimony that South Prairie hires supervisors on a continuous basis and that
supervisors retain that capacity when moved between Peter Kiewit and South
Prairie leads me to infer that Brewer was a supervisor on the Edmond job.
Darveau testified that he thought Eugene Peterman (who had worked for
South Prairie for a time on the Edmond job) had worked for about a week
on Peter Kiewit's Nowata job, but his name does not appear on Peter
Kiewit's payroll records
23 Brewer explained "that they to go [sic] South Prairie to get out from
under the Operators so they could compete with the other contractors."
568 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the equipment was leased by South Prairie, decals bearing
its name replaced decals thereon bearing Peter Kiewit's
name 24 The two corporations have leased equipment from
each other on other occasions. The "full going" rental rate
was in each case transferred from the lessee corporation's
account to the lessor corporation 's account ; and custom-
arily, the parties executed a written lease and the lessee's
decal replaced that of the lessor . South Prairie has also
executed written leases of its equipment to other construc-
tion companies; Darveau testified that this is not an unusual
practice and that "We do it all the time." Darveau further
testified that South Prairie customarily attaches its decal to
any equipment it happens to be using, regardless of who
owns it. In addition, Darveau testified that there was noth-
ing unusual about South Prairie's renting the batch plant
from another company. Darveau also testified that he usual-
ly has a record showing what Peter Kiewit equipment is
available because not in use , and that if he wants a particu-
lar piece of this equipment he talks to Peter Kiewit's acting
area manager, Niebrugge, who had been a job superinten-
dent on an airport job (inferentially, the Will Rogers Airport
job) under Darveau when Darveau was Peter Kiewit's area
manager.
In March 1972, Peter Kiewit's employees at the Will Rog-
ers Airport job removed-certain equipment from the back
of old Peter Kiewit trucks at that job and installed them on
certain new trucks owned by South Prairie.25 They also
attached Peter Kiewit decals to these new trucks. The equip-
ment so removed was worth more than the old Peter Kiewit
trucks. At least two or three of these new trucks were still
being used by Peter Kiewit on another job (the Warner job)
at the time of the hearing. Darveau testified that South
Prairie had bought the new trucks to use on a South Prairie
job in Oklahoma City, that it then found it could rent trucks
cheaper by the hour 'than it could operate its own trucks,
and that its lease of such trucks to Peter Kiewit was a
routine lease of equipment. Darveau further testified that
the transfer of equipment between truck beds involved no
difficulty; that it is commonly done; and that when ceasing
to rent these trucks from South Prairie, Peter Kiewit will
simply remove its equipment.
In, June 1972, Gerald Kitchin, the truck mechanic fore-
man for Peter Kiewit on the Will Rogers Airport job, asked
mechanic Kenneth Bolding, also employed by Peter Kiewit
on that job, about working in South Prairie's Oklahoma
City yard. Bolding replied that he did not want to go be-
cause he would lose his health and welfare benefits, "that
being a non-union company." A few days later, Gerald
Kitchin told Bolding, "we have it worked out to where you
will, go ahead and be paid through this office at the airport."
Bolding then reported to South Prairie's Oklahoma, City
yard. During the next month, he worked in that yard con-
structing a "steel inserter," with the assistance of South
Prairie equipment supervisor Harry Marshall and the part-
i
24 The decals, which are circular and have similarly designed letters, both
have a yellow center with black letters and a black border with yellow letters,
but South Prairie's is about 5-3/4 inches in diameter and Peter Kiewit 's about
8-3/4 inches.
25 The equipment included equipment used on a lube truck , a winch truck,
a form truck , a shop truck , and a water truck
time assistance of South Prairie mechanic Gale Kitchen,
who had been employed by Peter Kiewit Foreman Gerald
Kitchin. Gale Kitchen was paid less than Bolding for work-
ing on this equipment. This "steel inserter" was later used
by Peter Kiewit on the Warner job. While working on the
"steel inserter," Bolding was paid at his old union rate by
Peter Kiewit checks, and after he left the South Prairie yard
he went to work on Peter Kiewit's Warner job. The specifi-
cations on the Warner job called for the use of the "steel
inserter," which involved an entirely different and novel
technique and had been developed by Marshall and Dar-
veau while they were on Peter Kiewit's payroll. However,
there is no evidence that either Gale Kitchen or Bolding had
any prior familiarity with the "steel inserter-" As a result of
this activity, about $5,000 (representing labor and materials)
was transferred from Peter Kiewit's to South Prairie's ac-
count.
Respondents do not share hand tools or raw materials.
4. Respondents' labor policies
Darveau and Richard D. Coyne, who is a director of Inc.,
credibly testified that Inc. (through Coyne) sets Peter
Kiewit's labor policy. Coyne credibly testified that South
Prairie's board of directors sets South Prairie's labor policies
and "they of course would get their instructions from Peter
Kiewit Sons', Inc." 26 As previously noted, when discussing
South Prairie's failure to abide by the collective-bargaining
agreement, Peter Kiewit Attorney Doyle admitted that Pe-
ter Kiewit "was a controlling company of South Prairie."
Coyne (who is also Peter Kiewit's vice president) and Dar-
veau both testified that Peter Kiewit has nothing to do with
South Prairie's labor policy. To the extent indicated infra,
sec. II ,E,2b, I do not accept Coyne's and Darveau's testimo-
ny in this respect.
E. Analysis and Conclusions
1. Whether the contract imposed any duty to bargain on
Peter Kiewit
a. Whether the majority status of the contractual bargain-
ing representative in the contract unit is to be presumed
The General Counsel's contention that Respondents vio-
lated Section 8(a)(5) and (1) of the Act by refusing to apply
to the operating engineers on South Prairie's payroll the
terms and conditions of the collective-bargaining agreement
executed by Peter Kiewit assumes that Peter Kiewit would
have violated the Act by refusing to apply such contract
terms to the operating engineers on Peter Kiewit's payroll,
who were admittedly covered thereby. In a case not involv-
ing the building and construction industry, the mere exis-
tence of the contract would warrant such an assumption:
the existence of the contract would establish a virtually
irrebuttable presumption of the majority status of the con-
26 Darveau testified that Inc. directed him to do "none whatsoever" in
connection with labor relations policies. On the basis of the witnesses' demea-
nor, I credit Coyne to the extent that their testimony conflicts. I note, more-
over, that Darveau's testimony in this respect is inconsistent with certain
other particulars of his own testimony (see infra, sec. II,E,2b)
PETER KIEWIT SONS' CO. 569
tracting union or unions in the contract unit during its
term,27 and the duty of the contracting employer or employ-
ers to bargain flowing from such a status would encompass
the duty to honor the agreement 28
However, a more extensive inquiry is called for by the
fact, to which all parties stipulated at the hearing, that both
Respondents are employers "engaged primarily in the
building and construction industry" and Local 627 is "a
labor organization of which building and construction em-
ployees are members." Section 8(f) provides, in part:
It shall not be an unfair labor practice under subsec-
tions (a) and (b) of this section for an employer en-
gaged primarily in the building and construction
industry to make an agreement covering employees
engaged (or who, upon their employment, will be en-
gaged) in the building and construction industry with
a labor organization of which building and construc-
tion employees are members . . . because (1) the ma-
jority status of such labor organization has not been
established under the provisions of Section 9 of this Act
prior to the making of such agreement . . . Provided
further, that any agreement which would be invalid, but
for clause (1) of this subsection, shall not be a bar to
a petition filed pursuant to section 9(c) or 9(e).
The 1970-1973 agreement on its face covers "employees
engaged (or who upon their employment, will be engaged)
in the building and construction industry." In seeking dis-
missal of the complaint, Peter Kiewit contends that because
of Section 8(f), the 1970-1973 agreement fails to create any
presumption of majority status (citing R. J. Smith Construc-
tion, supra; and, further, that the General Counsel intro-
duced no evidence that Local 627 represented any
employees on Peter Kiewit's payroll.
Peter Kiewit's argument might perhaps be meritorious if
the 1970-1973 agreement had been the initial bargaining
agreement executed between Local 627 and Peter Kiewit;2
or if Peter Kiewit had never attempted to live up to any
contract with Local 627.30 However, the 1970-1973 agree-
ment was at least the third of a series of agreements which
had been in effect since 1960. While the representatives of
Peter Kiewit and Local 627 stated at the hearing that the
1960 agreement had been negotiated under Section 8(f), I
conclude from the record evidence that the subsequent con-
tracts (including the 1970-1973 agreement specifically in-
volved here) were valid without regard to Section 8(f)(1).
Thus, operating engineers represented by Local 627 have
been on Peter Kiewit's payroll at all relevant times since
27 R. J. Smith Construction Co., 191 NLRB 693; Hexton Furniture Co., I I I
NLRB 342, 343-344; N.L.R.B. v. Marcus Trucking Company, Inc., 286 F.2d
583, 593 (C.A. 2, 1961); Shamrock Dairy, Inc., 119 NLRB 998, 1001-1002,
124 NLRB 494, 495-496, enfd. 280 F.2d 665 (C.A.D.C., 1960), cert. denied
364 U.S. 892 (1960); Sanson Hosiery Mills, Inc., 92 NLRB 1102, 1003, enfd.
195 F.2d 350 (C.A. 5), cert. denied 344 U.S. 836.
28 The leading case in this area is Strong Roofing & Insulating Co., 152
NLRB 9, 13, enfd. as modified 386 F.2d 929 (C.A. 9, 1967), cert. denied 390
U.S. 920 ( 1968), modification reversed 393 U.S. 357 ( 1969). Interestingly, this
case involved a construction industry employer and Union . See also, Johnson
Sheet Metal, Inc., 179 NLRB 644, enfd. 442 F.2d 1056 (C.A. 10, 1971).
29 Komatz Construction, Inc., 191 NLRB 846 (TXD) enfd . as modified 458
F.2d 317 (C.A. 8, 1972); Davenport Insulation, Inc., 184 NLRB 908; S. S.
Burford, Inc., 130 NLRB 1641.
3 Cf. R. J. Smith Construction, supra.
1960, including the time during which the parties negotiated
and executed the 1970-1973 agreement. The immediate pre-
decessor of the 1970-1973 agreement,31 as well as the latter,
contained a lawful union shop clause, and I infer that em-
ployees on Peter Kiewit's payroll in the contract unit were
in compliance with that clause 32 Further, I infer that the
immediate predecessor of the 1970-1973 agreement, as well
as the latter agreement, contained a lawful hiring-hall provi-
sion.33 Moreover, Peter Kiewit attempted to comply with at
least the agreement preceding the 1970-1973 agreement,
and also the latter agreement with respect to employees on
its payroll. Accordingly, I conclude that at the time that
Local 627 and Peter Kiewit executed the 1970-1973 agree-
ment, Local 627 was the exclusive representative of Peter
Kiewit's operating engineers under Section 9(a) of the Act,
and that Peter Kiewit's bargaining obligations toward it at
that time and all material times thereafter (including its
obligations to honor the contract) were governed by Section
8(a)(5). Bricklayers & Masons International Union, Local No.
3 (Eastern Washington Builders), 162 NLRB 476, enfd. 405
F.2d 469 (C.A. 9, 1968); Dallas Building and Construction
Trades Council (Dallas County Construction Employers'Asso-
ciation, Inc.), 164 NLRB 938, 942-943, enfd. 396 F.2d 677,
679-680, fn. 4 (C.A.D.C., 1968); The Irvin-McKelvy Compa-
ny, 194 NLRB 52; S. Rept. 187 on S. 1555 (86th Cong., 1st
Sess .) p. 28, 1 Leg. Hist. of the Labor-Management Report-
ing and Disclosure Act of 1959 at 424; Komatz Construction,
supra; Barwise Sheet Metal Co., Inc., 199 NLRB No. 64
(TXD)34 Cf. Ruttman Construction Company, 191 NLRB
701; Smith Construction, supra; Roberts & Schaefer Compa-
ny, 193 NLRB 860 (fn. 2). Thus, the contract carries with it
a conclusive presumption of Local 627's majority status in
the contract unit for the term of the contract 35
31 As previously noted, the 1970-1973 agreement , which covers both heavy
and highway construction, succeeded two apparently concurrent or cotermi-
nous agreements covering the two kinds of work separately. However, evi-
dence of majority in each of the prior contract units would have the same
relevance to majority status in the combined contract unit as such evidence
would have if the contract units had remained the same. Emerald Mainte-
nance, Inc., 188 NLRB 876, enfd. in material part 464 F.2d 698 (C.A. 5, 1972).
Accordingly, for purposes of convenience my discussion describes as a single
contract the two agreements immediately preceding the 1970-1973 contract.
32 I so infer from Local 627's efforts to assure that Peter Kiewit complied
with other provisions of the contract, from Local 627's failure to seek the
discharge of any employees pursuant to the union -security clause , and from
Local 627's obvious interest in obtaining employee compliance with that
clause.
33 I so infer from Ellis' testimony that the 1970-1973 agreement was a
renegotiation of the prior agreement except as to wages, benefits , and the
variation referred to supra, fn. 31.
34 The Eighth Circuit held in Komatz that "a prima facie showing of major-
ity support is made by the mere fact of a union's incumbency ." (458 F.2d
at 326). In rejecting the Board's bargaining order, the court found the exis-
tence of rebuttal evidence (absent from the instant record ) to case serious
doubt on this presumed majority. Moreover, the court found that the employ-
er there (unlike Peter Kiewit) was not bound by any bargaining agreement
at the time of the refusal to bargain. I note that in sustaining the Board's
unfair labor practice finding based on a construction industry employer's
action in substituting for the incumbent representative a union which did not
enjoy majority support, the court quoted with approval the Board 's statement
in Bricklayers, Local No. 3, supra, 162 NLRB at 478, that the prehire provi-
sions of Sec . 8(f) were intended to apply "where the parties were attempting
to establish a bargaining relationship for the first time," and "the entire
legislative history of 8(f)(1) is couched in terms of 'prehire agreements,' a
reference which can have no meaning in the situation where, as here, .
employees have previously been hired." 458 F.2d at 323, fn. 4.
Mishara Construction Co., 171 NLRB 471; Island Construction Co., Inc.,
135 NLRB 13; and cases cited supra, fn. 27.
570 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
b. Whether the contract creates a unit which excludes the
employees of the signatory employers other than Peter
Kiewit
The foregoing discussion assumes that the contract in-
volves a unit (among others) which excludes the employees
of the signatory employers other than Peter Kiewit. Peter
Kiewit, however, asserts that the contract unit consists of
employees employed by all the signatory employers.36 Peter
Kiewit heavily relies on article, 20 of the contract, which is
automatically renewed from year to year absent written
notice, during a specified period prior to the anniversary
date, of a desire to change or terminate it. Article 20 pro-
vides for such renewal "unless either party to this Agree-
ment" gives such notice; states that any such notice by "the
Union" is to be given by the chairman of the Oklahoma
State Subcommittee of the National Joint Heavy and High-,
way Construction Committee "to at least a majority of the
Contractors signatory to this Agreement which will consti-
tute notice to all"; and further states that any such notice
by "the Contractors" is to be signed "by at least a majority
of the Contractors signatory hereto" and sent to the chair-
man of the Oklahoma State Subcommittee with a copy to
the National Joint Heavy and Highway Construction Com-
mittee.
Even allowing for the right of any party to a multiemploy-
er agreement to withdraw from a multiemployer bargaining
relationship at an appropriate time,37 article 20, standing
alone, does suggest that the contract contemplated a mul-
tiemployer unit. A similar suggestion might be conveyed by
the contract preamble's recitation that the agreement is "en-
tered 'into by and between CONTRACTORS signatory
hereto, hereinafter referred to as `CONTRACTOR.' " How-
ever, after reading the contract as a whole and considering
the evidence regarding its negotiation and administration,
I conclude that a unit excluding employees of signatory
employers other than Peter Kiewit was contemplated.
Thus, whatever might otherwise be inferred from the
preamble and from the recognition clause describing the
unit as "all employees to be employed by the Contractor"
on certain work, the agreement repeatedly uses the term
"contractor" in contexts where the allusion is plainly to an
individual employer.38 Moreover, Local 627's business
36 The signatures of seven contractors, including Peter Kiewit, appear on
the copy of the contract which is in evidence. An undisclosed number of
other contractors later signed identical agreements . Peter Kiewit does not
make clear whether it believes such subsequent signatures rendered the em-
ployees of such employers part of the alleged multiemployer unit.
The complaint asserts the appropriateness of a unit limited to Peter
Kiewit's employees. At the hearing, the General Counsel initially took the
position that the contract unit was a multiemployer unit. Local 627's business
representative, who represented it at the hearing , then stated that he did not
take a different position; he further stated that during negotiations "each
contractor represent[ed] his company . . . The contractors were separate
entities, but they negotiated as a body." The General Counsel thereafter
asserted that a unit limited to Peter Kiewit's employees is appropriate "so far
as Peter Kiewit goes" but "that doesn't mean to say there is not also an
appropriate unit as far as the multiemployer group is concerned also." Nei-
ther the General Counsel's nor South Prairie 's brief discusses this unit issue,
and Local 627 has not filed a brief.
37 Hearst Consolidated Publications, 156 NLRB 210, enfd. 364 F 2d 293
(C.A 2, 1966), cert. denied 385 U S. 971 (1966)
agent testified that when a grievance was filed against Peter
Kiewit, it would be Peter Kiewit which selected the , griev-
ance committee member who, under the contractual griev-
ance procedure , is to be "named by the Contractor." Also,
grievances against Peter Kiewit under the contract were
settled through Peter Kiewit's attorney , Doyle . Further-
more, during the negotiations which led up to the execution
of the contract, Peter Kiewit had its own representative,
Darveau, who actively participated in the negotiations, and
the contract was executed on its behalf by its own attorney,
Doyle . I do not agree with Peter Kiewit that this evidence
of its retained right ultimately to choose action indepen-
dently of the other negotiating contractors (and, therefore,
of Local 627 's retained right to accept or even to seek to
compel such action) is nullified by Ellis' testimony about the
bargaining conduct of one Saxton (in the employ of Dravo
Corporation , which eventually executed the agreement
through another representative), who also represented sev-
eral other contractors who were otherwise unable to attend
some or all of the negotiating sessions. 9 Ellis testified that
Saxton
... was in effect representing all of the contractors,
during the progress of the negotiations. However, they
had representatives there. They had quite a big buffet
during the course of the bargaining that I think we all
agreed at the first meeting that he was going to do all
the talking and then as it turned out, everybody did all
the talking.
Such informal (and unsuccessful) efforts to speed up the
negotiations hardly constitute the "unequivocal agreement
of the parties to bind themselves to a course of group bar-
gaining in the future" 40 which is the prerequisite' to estab-
lishment of a multiemployer unit.
c. Whether Local 627 alone is the contractually recognized
representative of a unit limited to operating engineers
At the outset of the hearing, Peter Kiewit's counsel (who
executed the contract, and handled grievances thereunder,
on its behalf) stated that the various unions which signed the
1970-1973 agreement 41 are not joint representatives of all
38 For example, the "Contractor" is to receive a fair day's work, is to judge
workmen's performance, has the right to discharge for cause, must comply
with requests for discharge for noncompliance with the union-security clause,
is to determine the number of employees to be employed and the number of
pieces of equipment to be operated by each, has the right to use any type of
equipment consistent with safe operating practices, must hire employees
through the Union, may reject employees referred by the Union, may de-
termine the number of shifts and their hours, is obligated to give notice prior
to any change in starting time, may shift workers between projects and
between classifications within the craft jurisdiction, may iequire certain em-
ployees to work without supervision during certain periods, and must honor
checkoff authorization and remit the funds to Local 627 Further, a steward
must be "One of the Contractor's employees" and may not be a nonworking
steward
39 Frazier-Davis Construction Company was not otherwise represented
during the negotiations , but Saxton announced that he was its bargaining
representative, and it signed the agreement through another representative.
40 Johnson Sheet Metal,` supra, 442 F 2d at 1060, quoting from Electric
Theatre, Inc., 156 NLRB 1351, 1352. See also Komatz Construction, supra, 458
F.2d at 321.
41 The agreement ' is signed by Local 627, 16 Carpenters locals, 3 Teamsters
PETER KIEWIT SONS' CO. 571
of Peter Kiewit's employees, that Local 627 represents a
"certain group of employees that are employed" by Peter
Kiewit, and that he did not "believe" that there was any
overlap between the various groups of employees repre-
sented by the various unions. Nonetheless, Peter Kiewit's
brief contends that the complaint should be dismissed be-
cause there was "no evidence at all presented as to the
representative status of the other four unions [sic] who to-
gether with Operating Engineers Local 627 constitute the
multi-union bargaining unit."
In my view, such evidence would be wholly immaterial in
view of the record evidence establishing that (as Peter
Kiewit's counsel in effect admitted at the outset of the hear-
ing) Peter Kiewit has recognized Local 627, and Local 627
alone, as the representative of its operating engineers and of
no other employees. Thus, Local 627's initial wage demands
were not the same as the initial wage demands of all the
other unions. 2 Moreover, no other union spoke for Local
627 on any subject covered by the agreement, except that
toward the end of negotiations all the unions agreed to "take
a uniform increase in wages"; and even then, Local 627
wanted to put part of the increase into an insurance, health,
and welfare program. Further, the contract contains sepa-
rate provisions for operating engineers regarding wages,
health and welfare program, apprentice program, work
rules, and checkoff, and was executed by Local 627. More-
over, in the administration of the contract, grievances by
employees who are operating engineers are handled by Lo-
cal 627 alone. Additionally, whatever might otherwise be
inferred from the preamble's recitation that the agreement
was "entered into by and between . . . the UNIONS signa-
tory hereto, hereinafter referred to as `UNION,"' followed
by a clause recognizing "the Union as the sole collective
bargaining agency . . . for all employees to be employed by
the Contractor," the contract repeatedly uses the term
"Union" in contexts where, plainly, the signatory labor or-
ganizations are not being referred to as a single entity. Thus,
employees are required to join or remain members of "the
Union" to keep their jobs, new employees must be referred
through "the Union," and the business representative of
"the Union" is to have access to jobs. Moreover, notwith-
standing the preamble's purported definition, the contract
at various points carefully refers in terms to all the signatory
unions (arts. 10, 11, 15, 16, 18). In view of the foregoing
contract language, the provisions for notice to be filed by
"the Union" of desire to terminate or modify the agreement
as it approaches the automatic renewal date are ambiguous
as to the effectiveness under the contract of any such notice
filed by Local 627 alone 43 and, therefore, fail to support the
contention that other unions shared with Local 627 the
locals, the Oklahoma Laborers District Council, and 9 Cement Masons lo-
cals.
42 1 so infer from Ellis' testimony that "the negotiations more or less got
in the state of being finalized wherein the five crafts agreed they would take
a uniform increase in wages."
43 This ambiguity is not resolved by the requirement that the notice be
given to "the Contractors" by the Oklahoma State Subcommittee. This provi-
sion does not afford the subcommittee the right to refuse to forward such a
notice because only one union desired to file it . This provision may well have
been inserted as a means of assuring that all the remaining signatory unions
would learn that one or more of them would not, as previously, engage in
joint negotiations for a new contract.
representation of Peter Kiewit's operating engineers.
2. Whether Respondents violated the Act by failing and
refusing to apply the contract to the operating engineers
on South Prairie's payroll
a. Introduction: The issue defined
The motivation for South Prairie's entry into the Oklaho-
ma highway construction business is admitted and undis-
puted. Thus, Darveau testified that the motivating factor
that brought South Prairie into Oklahoma was that Peter
Kiewit allegedly could not competitively bid on contracts in
Oklahoma because, owing to the union contract, "our com-
petitors were several cents or quite a little bit below us on
the salaries they were paying." Darveau further stated that
it was he who made the decision that South Prairie should
come into Oklahoma. While Coyne (who is a vice president
of Peter Kiewit and a director of Inc.) credibly testified that
it was Inc.'s board of directors that made this decision, he
admitted that its reasons therefor were essentially the same
as those cited by Darveau when he complained to Peter
Kiewit's board of directors that Peter Kiewit could not com-
petitively bid on Oklahoma highway contracts-namely,
the wage scale and benefits called for by the union agree-
ment. Moreover, Darveau admittedly recommended to Inc.
that a nonunion company should be brought in. Indeed,
South Prairie asserts in its helpful brief (p. 3):
Peter Kiewit is the only highway contractor in Okla-
homa to have signed the collective-bargaining agree-
ment (GC Ex. 5). All of the company's competitors
operate non-union and pay a lower wage scale than the
contract requires. Because of this disparity in labor
costs, PETER KIEWIT SONS', INC. recognized that
its subsidiary, Peter Kiewit, was not sufficiently com-
petitive in highway construction in Oklahoma and that
a non-union subsidiary (South Prairie) should be acti-
vated in Oklahoma, to compete on equal terms with the
non-union competitors. (Tr. 127-128, 134-143,
151-152)44
44 The General Counsel's brief requests me to make a specific finding that
Respondents "entered into" the "scheme" which brought South Prairie into
Oklahoma "with the intention that Peter Kiewit cease doing business in the
State of Oklahoma ." It is true that in May or June 1970, Darveau told Local
627 that if it did not get more contractors signed to the collective -bargaining
agreement, Peter Kiewit was going to quit bidding work in Oklahoma and
leave the State . Further, Coyne conceded that "We probably discussed
[whether to make this decision ] for a period of time." Moreover, when asked
whether "you all" had decided to get out of Oklahoma but, when the instant
charges were filed, had reconsidered and decided to stay , Coyne testified, "I
don't think so"; and when then asked whether the charges had affected Peter
Kiewit's decision to stay . Coyne replied, "Not that I know of ." The cautious-
ness of this testimony by Coyne (apparently an attorney ) suggests that al-
though without direct knowledge , he may have suspected that some of his
fellow directors or other executives may have privately decided to have Peter
Kiewit stop doing business in Oklahoma and may have later had second
thoughts about their private decision because of the charges herein . Further,
when South Prairie came into the State it took over what had been Peter
Kiewit's main office, its area manager , its engineer estimator , and some of
its supervisors . South Prairie had already performed elsewhere all of the same
kinds of work performed by Peter Kiewit in Oklahoma . Nor is there any
specific record evidence that Peter Kiewit began to perform or successfully
Continued
572 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Moreover, this motivation is chargeable to both Respon-
dents even giving unqualified respect to corporate lines.
Thus, Darveau was Peter Kiewit's area manager when he
complained to its board of directors about its alleged non-
competitive status, and when he recommended to Inc. that
a nonunion company should be brought in. Further, Dar-
veau was South Prairie's president when he refused to honor
the agreement with respect to the employees on South
Prairie's payroll on the ground that South Prairie "had elect-
ed to be non-union and do their work non-union," and
when he testified at the hearing that "We activated [South
Prairie] to be competitive with our competitors." In making
these decisions, Darveau was unquestionably acting solely
on behalf of the corporate interest, for he owns no stock in
either Respondent.
rFurther, I conclude that as a consequence of the fore-
going arrangement , work was performed by South Prairie
which, absent the arrangement, would have been performed
by Peter Kiewit and, therefore, by employees concededly
protected by the bargaining agreement. Thus, Respondents
bid on and performed the same kind of work in the same
price range. the parties to the arrangement to bring in
South Prairie manifestly contemplated that South Prairie
would thereby obtain highway construction work on which,
absent South Prairie's presence, Peter Kiewit might have
bid. Moreover, although the bargaining agreement required
Peter Kiewit to pay rank-and-file employees higher wages
bid on any work after South Prairie's advent, where the record refers to Peter
Kiewit work currently in progress, all specifically identified projects on which
such work was being done are pre-South Prairie work in the course of
completion . See also supra, fn 10.
On the other hand, Coyne testified that when initially deciding to bring in
South Prairie, Inc. 's board of directors "specifically decided that [Peter]
Kiewit would stay [in Oklahoma] and try to compete in some of the types
of work in some of the areas where possibly they could be competitive."
Although this testimony was not corroborated by other directors or by docu-
mentary evidence such as the corporate minutes, and (even if untrue) could
not likely be directly contradicted by evidence reasonably available to the
General Counsel or Local 627, Coyne's demeanor in tendering it impressed
me favorably. Furthermore, although Darveau testified on direct examina-
tion as an adverse witness for the General Counsel that South Prairie is
engaged in heavy and highway work in Oklahoma, on cross-examination by
South Prairie's attorney he testified that in Oklahoma South Prairie is en-
gaged solely in the highway construction business There is no specific evi-
dence of any Oklahoma nonhighway work sought or performed by South
Prairie, and a number of Oklahoma heavy-construction contractors in addi-
tion to Peter Kiewit had executed the bargaining agreement Moreover, in
July and August 1972, Peter Kiewit bid on three state highway department
contracts; and while these bids were unsuccessful, they were not so far out
of line with the successful bids as to suggest they were a sham (infra, fn 46).
Further, at the time of the hearing Peter Kiewit had just acquired a new office
in Oklahoma For these reasons, and the additional reasons summarized
supra, fn 10, 1 conclude that the record fails preponderantly to show that
when it was initially decided to bring in South Prairie, it was intended that
Peter Kiewit cease doing business in Oklahoma
45 Cf. Frank N. Smith Associates, Inc., 194 NLRB 212 (fn 5), where the
decision to arrange for a separate corporation in order to bid on jobs without
union labor was made by an individual (Frank Smith) who not only was the
president of both the union corporation and the nonunion corporation but
also was a majority stockholder in each. Accordingly, there, unlike here, the
decision could be attributed to either corporation only on the assumption
(which largely begged the question at issue) that in making this decision
Smith was acting for them rather than to forward his personal interests as
a shareholder. A similar situation was presented in Gerace Construction, Inc,
193 NLRB 645, where moreover, the common stockholder transferred his
stock in,one of the two corporations. Both Smith Associates and Gerace are
discussed in greater detail infra
and benefits than nonunion competitors, that same agree-
ment afforded Peter Kiewit the assistance of the union hir-
ing hall (never used by South Prairie) in obtaining qualified
employees. Accordingly, Peter Kiewit bid (in some cases,
successfully) on a number of Oklahoma highway depart-
ment contracts until 3 months before South Prairie's advent,
and also bid on such contracts beginning 5 months thereaf-
ter.16 When asked why Peter Kiewit failed to bid on any
highway department contracts during this interval, Darveau
and Coyne did not suggest that such bids would have been
futile, but merely explained that Peter Kiewit had too much
other work or was having a hard time finishing up its other
projects. Furthermore, Respondents', exhibits suggest that
as a whole, Peter Kiewit's unsuccessful bids were, if any-
thing, proportionally closer than South Prairie' s to those of
the successful bidders.47 In any event, Respondents' pur-
pose in bringing in South Prairie and their failure to submit
any bids on the same job 48 lead me to conclude that any
doubts about whether Peter Kiewit could have obtained
work awarded to South Prairie should be resolved against
Respondents. See N.L.R.B. v. Swinerton, 202 F.2d 511, 515-
516 (C.A. 9), cert. denied 346 U.S. 814.49
Furthermore, the undisputed evidence establishes that
both before and after South Prairie's entry into Oklahoma,
Peter Kiewit performed and bid on the same kind of high-
way work as that performed by South Prairie. Moreover,
South Prairie's Oklahoma operation used the same top man-
agement, the same offices, the same clerical staff, the same
check-issuing system, many of the same managers and, su-
pervisors, and some of the same operating engineers, 'and
decided on whether and how much to bid through the same
individuals, as had Peter Kiewit in its Oklahoma highway
1 construction operation. I conclude that if such South Prairie
projects had been performed by Peter Kiewit, a unit consist-
ing of the operating engineers'on such projects and Peter
Kiewit's operating engineers on the remaining projects
would be appropriate.50 I further conclude that if such pro-
jects had been performed by Peter Kiewit, the operating
engineers on such projects would have been covered by the
46 While the three post-South Prairie bids (July-August 1972) were unsuc-
cessful, they were proportionally closer to the successful bids than some of
Peter Kiewit's unsuccessful pre-South Prairie bids.
47 This is true whether one compares Respondents' 1972 bids as a whole
or compares as a whole all bids by Respondents described in the exhibits.
48 While it is true that as to much of this work, a bid by one Respondent
legally foreclosed any bid by the other, Respondents must have been aware
of this limitation when participating in the arrangements to bring South
Prairie into Oklahoma. Further, it was Peter Kiewit's own failure to file a
financial report or seek an extension for such filing which caused its absence
from the prequalified bidders list between May and July 5, 1972.
49 Cf. Gerace, supra, where the union firm performed much larger jobs than
the nonunion firm, and there was no showing that the union firm had lost
any business to the nonunion firm or that any employee of the union firm
ha lost work he otherwise would have had
See Manitowoc Shipbuilding, Inc, 191 NLRB 786 Cf. Smith Associaties,
supra, and Gerace Construction, supra, where the union corporation's contract
covered a craft unit and the nonunion corporation had no craft divisions
And see Central New Mexico Chapter, National Electric Contractors Associa-
tion, Inc, 152 NLRB 1604, 1607-1068, holding that the employees of a
residential contractor could not appropriately be included in a unit including
the employees of a commercial and industrial contractor which occupied
single-employer status with the residential contractor The Board there relied
on, inter aba, "the fact that the labor policies of [the] residential contractor
are based on its own needs and are not dependent on those of [the]
commercial and industrial contractor." See the discussion infra, sec. II,E,2b.
PETER KIEWIT SONS' CO.
bargaining agreement between Peter Kiewit and Local
627.51 Accordingly, if the South Prairie projects had been
performed by Peter Kiewit, a failure and,refusal by Peter
Kiewit to apply the bargaining agreement to such employ-
ees would have violated Section 8(a)(5) and (1) of the Act.
L See the discussion supra, sec. II,E,I.
Succinctly stated, the instant case therefore boils down to
this: Peter Kiewit and Local 627 had a collective-bargaining
agreement which covered all of Peter Kiewit's heavy and
highway construction in Oklahoma and which Peter Kiewit
was under a statutory duty to honor. Peter Kiewit believed
that because it was bound by this contract, it was not suffi-
ciently competitive with other firms engaged in Oklahoma
highway construction, which firms were nonunion and paid
lower wages and benefits than those required by the con-
tract. Peter Kiewit recognized that its own ability to com-
pete and its own profits were subject to the union contract.
However, because Peter Kiewit is a ,wholly owned subsid-
iary of Inc., Peter Kiewit, as well as Inc. were concerned
about the effect of the union contract on Inc.'s profits de-
rived from Oklahoma highway construction, which profits
Inc. was then receiving solely in the form of dividends on
Peter Kiewit's stock. Accordingly, for the purpose of max-
imizing Inc.'s dividends derived from Oklahoma highway
construction whose profits would eventually enure to Inc.,
Inc. and Respondents arranged to bring another who11
owned subsidiary of Inc., South Prairie, into Oklahoma. As
a result of this arrangement, South Prairie performed con-
struction work which Peter Kiewit would otherwise have
performed with a work force concededly covered by the
union contract; and South Prairie performed such work
with a work force whom Local 627 had not knowingly
agreed to exclude from the contract's coverage and who, if
they had been working on projects concededly performed
by Peter Kiewit, would have been validly included in the
contract unit Accordingly, this arrangement put Inc. in the
same economic position, with respect to these projects, as it
would have been in had no union contract ever been agreed
to by another wholly owned subsidiary, Peter Kiewit. The
General Counsel contends that under these circumstances,
Respondents' failure and refusal to apply the contract to
South Prairie's operating engineers violated Section 8(a)(5)
and (1) of the Act. For the reasons stated hereafter, I
agree.52
51 The fact that South Prairie did not start its operations in Oklahoma until
after the execution of the bargaining agreement (which, indeed , was the very
reason for South Prairie's entry) establishes that in executing the agreement,
Local 627, at least, could not and did not have in mind the question of
whether it covered employees on South Prairie's payroll.B & B Industries,
Inc, 162 NLRB 832, where the nonunion firm was in operation at the time
the union firm executed the bargaining agreement , and there was no effort
to conceal its existence from the union.
52 In disposing of the instant case on the merits, I am aware of the 1970-
1973 contract's "Settlement of Disputes" clause , which is applicable by its
terms to "cases of violation , misunderstanding or differences in interpreta-
tion of this agreement " A "matter" not previously settled under this clause
is to be disposed of by a three-man comnuttee (including a neutral member)
whose decision is "binding on the parties hereto and on all persons and
organizations in any way involved hereunder " However, because South
Prairie contends that it is in no respect bound by the bargaining agreement
which contains this provision , and because the question of whether South
Prairie is obligated to apply the contract to employees on its payroll could
not be submitted to the committee until' after judicial determination of the
573
b. Whether Respondents violated the Act
Critical to the question of whether Respondents violated
the Act by failing and refusing to apply the bargaining
agreement to the operating engineers on South Prairie's
payroll is the fact that South Prairie was brought into Okla-
homa for the specific purpose of circumventing Peter
Kiewit's statutory duty to honor the agreement. Where, as
here, a particular legal entity has participated in or has been
used as a means of circumventing a statutory duty imposed
on an at least nominally separate entity, cases presenting a
wide variety of factual situations have held both entities
answerable for an unfair labor practice even where each
would be treated separately where the intended evasion
would not be effectuated by respecting corporate lines or
like legal distinctions.53 While the conclusion of liability is
frequently couched in terms of a finding that the nominally
separate entities occupy single-employer status , or that one
is the alter ego or successor of the other,54 liability may be
imposed without selecting any of these labels 55
Moreover, the record contains other evidence which has
been held (ordinarily, through an intervening label of "sin-
gle employer," "alter ego", or "successor") to point toward
the imposition of such liability. Thus, both Respondents are
wholly owned subsidiaries of a single parent corporation,
which maintains close supervision over their financial af-
fairs by performing their accounting services, and in the
past have had common officers. Respondents' respective
boards of directors have the same Omaha, Nebraska, office,
and the same switchboard. Both Respondents are engaged
in highway construction in Oklahoma. When South Prairie
threshold question of whether South Prairie was bound by the agreement's
arbitration clause (John Wiley & Sons v. Livingston, 376 U.S. 543, 546-547
(1964) ), I conclude that the Board's policy of deferring the disposition of
certain unfair labor practice cases to the arbitration process (Collyer Insulated
Wire, 192 NLRB 837) is mapplicable here. Cf. Medical Manors, Inc, 199
NLRB 840 Nor do Respondents suggest otherwise.
53 See, e.g, N L R.B. v. DeenaArtware, Inc, 361 U.S. 398 (1960); Southport
Petroleum Co. v. N L.R B, 315 U.S. 100, 105-107; Textile Workers Union v.
Darlington Mfg. Co., 380 U.S. 263 (1965); Majestic Molded Products, Inc. v.
N.L.R.B., 330 F.2d 603, 607 (C.A. 2, 1964); AAA Electric, Inc., 190 NLRB
247; N.L.R B. v. U.S. Air Conditioning Corp., 302 F.2d 280 (C.A. 1, 1962);
and court cases cited infra fns. 55-56.
A particularly clear example of the extent to which such liability may turn
on the purpose to evade is presented by Diaper Jean Manufacturing Co., 109
NLRB 1045, enfd 222 F.2d 719 (C.A. 5), where the Respondents included
a two-man partnership and two propnetorships, each solely owned by a
different partner. One of the proprietorships was not included in the order
directed against the partnership, but the other proprietorship was named on
the ground that its formation "was part of the plan which culminated in the
move [of part of the plant initially operated by the partnership , and] it follows
that it is liable for all the unfair labor practices consequent upon that move."
Cf Joe Robertson & Son, Inc, 174 NLRB 1073, where there was no finding
that both Respondents were involved in an effort to evade the statutory
obligation of either.
The complaint alleges that Respondents "constitute a single employer
for purposes of collective bargaining . . . or in the alternative , Respondent
South Prairie is a successor employer to Respondent Peter Kiewit, or in the
alternative Respondent South Prairie is the alter ego of Respondent Peter
Kiewit" The General Counsel's brief seems to disclaim the single-employer
theory, and asserts that South Prairie is Peter Kiewit s alter ego. For reasons
indicated herein, I find it unnecessary to pass on the issues so raised.
55 E.g., N.L.R.B. v. Frontier Guard Patrol, 399 F.2d 716 (C.A. 10, 1968);
N.L.KB v. Gluek Brewing Co., 144 F.2d 847, 855-856 (C A. 8); N.L.R.B. v.
Ozark Hardwood Co., 282 F 2d 1,4-5 (C.A. 8, 1960); Manley Transfer Compa-
ny, Inc, v. N.LR.B., 390 F.2d 777 (C.A 8, 1968); N.L R.B. v. Mastro Plastics
Corp, 354 F.2d 170, 179-180 (C.A. 2, 1965), cert denied 384 U.S. 972 (1966).
574 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
came into Oklahoma to perform such work, Peter Kiewit's
"top man" in Oklahoma (Darveau) became South Prairie's
president and its "top man" on its Oklahoma operations,
continued to, prepare bids with the assistance of the same
estimator, and continued to' occupy the same office staffed
by the same individuals. South Prairie began to occupy the
storage yard previously occupied by Peter Kiewit, under the
same yard superintendent. Most of South Prairie's supervi-
sors had previously worked for Peter Kiewit in the same
capacity, with the same salaries and under the same insur-
ance plan. Most of these former Peter Kiewit supervisors
transferred between the two firms without any break in their
employment, and (frequently if not usually) South Prairie
hired them after being notified by Peter Kiewit of their
availability. Paychecks for both firms are made out in Oma-
ha on the same machine. A supervisor who served as job
superintendent for both firms described as a Peter Kiewit
job a job to be performed by South Prairie. Further, most
of the equipment used by South Prairie on the Tulsa Paving
job came from Peter Kiewit's Nowata job, and Peter
Kiewit's "batch plant" crew went onto the Tulsa Paving
project without applying to South Prairie for ajob. Further,
South Prairie's willingness to make its personnel's unique
skills available to build a steel inserter acutely needed by
Peter Kiewit (and it alone) seems to reflect concern about
protecting Inc. from any losses incident to South Prairie's
Oklahoma entry, rather than considerations of ordinary in-
dustrial courtesy.
In disclaiming the commission of unfair labor practices,
South Prairie heavily relies on the testimony of Coyne and
Darveau that Peter Kiewit has nothing to do with South
Prairie's labor policy. Plainly, however, this policy includes,
as a matter of fundamental importance, South Prairie's ad-
mitted decision to operate in Oklahoma (as elsewhere) on
a nonunion basis, a decision in which Peter Kiewit partici-
pated- according to Darveau's uncontradicted testimony.
Decision in an unfair labor practice case which arose for the
very reason that the two Respondents and Inc. decided that
South Prairie would follow a nonunion labor policy in Okla-
homa in order to circumvent Peter Kiewit's union agree-
ment can hardly be based on a finding that Respondent
Peter Kiewit had nothing to do with Respondent South
Prairie's labor policy.56 In any event, the credited evidence
establishes that Inc. directly determines Peter Kiewit's labor
policy and instructs South Prairie's board of directors as to
the labor policy to be followed by South Prairie. Indeed,
Peter Kiewit's attorney, conceded to Local 627 that Peter
Kiewit was "a controlling company of South Prairie."
Furthermore, the weight of other evidence on which
South Prairie relies is to some extent limited by additional
considerations. Thus, while only a limited number of rank-
and-file employees transferred between Respondents' re-
spective projects, the record shows that in the highway con-
struction industry such employees are ordinarily hired for
the duration of a particular job only, and obtain their next
job with little or no reference to whether it was performed
56 Cf. Frontier Guard Patrol, supra; N L.R.B. v. Royal Oak Tool & Machine
Co., 320 F.2d 77 (C A. 6). In Gerace Construction, supra, unlike here, one of
the participants in the decision to bring in another company thereafter relin.
quished his stockholdings in that company.
by the same employer which performed their last job. Ac-
cordingly, little employee interchange would likely occur
even between Peter Kiewit's or South Prairie's own jobs.
Further, although Darveau testified that leasing of surplus
equipment between highway construction firms is a com-
mon practice and that Respondents reimburse each other
for such equipment at the "full going" rate, even as between
Respondents' immediate management the "rent" for such a
lease between Respondents has the short-term effect of a
non-interest-bearing unsecured loan, while a lease between
a Respondent and an outside firm involves an immediate
cash inflow or outflow.57 Moreover, the accessibility to
South Prairie of Peter Kiewit's equipment is facilitated by
South Prairie's list (inferentially, supplied by Peter Kiewit)
of Peter Kiewit's equipment; there is no evidence that Re-
spondents either provide such lists to or receive them from
outside contractors. Additionally, although the State laws'
limitations on the amount of unperformed Highway De-
partment work are much higher for Peter Kiewit (more than
$500 million) than for South Prairie ($15 million), the dollar
amounts of the contracts let by the Department render this
difference of little practical effect. Furthermore, the limits
on South Prairie will increase as it acquires further experi-
ence on highway department work; and presumably, Inc.
can also have the limit increased by transferring assets to
South Prairie's account, either from Peter Kiewit or from
other sources. Further-although Darveau testified that he
decides what jobs South Prairie will bid on and that Nie-
brugge (a former Darveau subordinate who had became
Peter Kiewit's acting area manager) or some other Peter
Kiewit officer makes this decision for Peter Kiewit-in the
absence of affirmative, specific, detailed, and credible testi-
mony otherwise, I infer that from time to time Respondents'
top Oklahoma officials conferred with each other and Inc.
on which Respondent was to bid on particular jobs 58 Nor
do I construe Local 627's and its parent International's
unsuccessful efforts to procure South Prairie's signature on
the agreement as an admission that absent such a signature,
South Prairie was under no 8(a)(5) obligation to Local 627.
South Prairie's signature would probably have not affected
its 8(a)(5) obligation vel non to honor the agreement, while
it might well have afforded Local 627 a Section 3,01 cause
of action without regard to South Prairie's duties under
Section 8(a)(5). See Smith Construction, supra. In any event,
a party's effort to obtain acknowledgement of its rights
without the expense and delay of litigation can hardly be
construed as an admission that they could not be estab-
lished through litigation if necessary.
To be sure, Respondents are separate corporations with
separate accounting records, separate bank accounts, and
57 Of course, as to every such transaction between Respondents, the ulti-
mate interest is Inc.'s, both as creditor and as debtor.
58 I so infer from the fact that Respondents and their officials were all
working in the ultimate interest of Inc.; from the further fact that Darveau
had previously worked for Peter Kiewit for 35 years (the last 12 as its area
manager) and obviously had acquired a number of contacts there; from the
fact that Respondents have never bid against each other on any jobs; from
Darveau's testimony that he was aware in advance of Peter Kiewit's plan to
make certain bids in July and August, 1972 (supra, fn. 15); and from the fact
that on June 20, 1972, then South Prairie's President Darveau correctly
advised International Representative Clark that Peter Kiewit was not going
to bid on the turnpike authority jobs being let that day. Darveau repeatedly
used the term "we" when referring to Peter Kiewit.
PETER KIEWIT SONS' CO. 575
different officers. They have separate offices in Oklahoma
with separate telephone numbers, and separate Oklahoma
area supervisors with separate supporting office staffs.
The supervisors for each Respondent work full time on the
payroll of that Respondent, and Respondents do not partic-
ipate in any of the same projects. Respondents do not share
hand tools or raw materials. Further, neither has ever sub-
contracted work to the other; nor has Peter Kiewit ever
assigned any jobs or contracts to South Prairie. Moreover,
the employees on Peter Kiewit's payroll receive the wages
and benefits called for by the Union contract; while the
employees on South Prairie's payroll receive lower wages
and no benefits 60 However, I regard such evidence as insuf-
ficient to insulate Respondents from each other in view of
the record as a whole.
No--different result is indicated by Gerace Construction,
supra, or Smith Associates, supra.61 In Gerace the bargaining
agreement was executed after the nonunion corporation's
formation, whose purpose was to obtain a job for which an
assurance against strikes was required rather than to cir-
cumvent the agreement. In Smith Associates, the nonunion
corporation was reincorporated to bid on jobs which the
union corporation was "not given a chance to bid 'on be-
cause of its high union carpenter-labor costs." (fns. 4, 5, 14).
In the instant case, Peter Kiewit was qualified to bid on the
same kind of or on the same highway construction work as
that performed or bid on by South Prairie, and actually
obtained and performed some of this kind of highway work.
CONCLUSIONS OF LAW
1. Respondents are an employer or employers engaged in
commerce within the meaning of Section 2(2), (6), and (7)
of the Act.
2. Local 627 is a labor organization within the meaning
of Section 2(5) of the Act.
3. The following employees constitute a unit appropriate
for collective-bargaining purposes within the meaning of
Section 9(b) of the Act: All employees on the payroll of
Respondent Peter Kiewit Sons' Co. and Respondent South
Prairie Construction Co. in the job classifications listed un-
der "Schedule A, Operating Engineers" and "Schedule B,
Operating Engineers" in the collective-bargaining agree-
59 Darveau performs for South Prairie the same Oklahoma functions he
had previously performed as Peter Krewit's area manager.
60 If not constrained to reason otherwise , I would conclude that this differ-
ential was entitled to little or no weight in justifying the contention that
Respondents are to be treated as separate entities , because this alleged sepa-
ration is offered as the principal legal justification for the differential. How-
ever, the reasoning which I would prefer appears to be rejected in Gerace,
supra.
61 These cases have been touched on supra, fns . 45,49,50,56,60.
ment executed by Local 627 and Peter Kiewit and effective
July 1, 1970, and who perform work in Oklahoma listed in
Article I of such agreement, excluding engineers, clerical
employees, guards, timekeepers, superintendents, "mechani-
cal superintendents , assistant superintendents, genoral fore-
men, professional employees , watchmen, and supervisors-as
defined in the Act.
4. At all times on and after July 1, 1970, Local 627 has
been the exclusive bargaining representative of all the em-
ployees in the aforesaid unit pursuant to Section 9(a) of the
Act.
5. By failing and refusing, on and after February 1972,
to recognize and bargain with Local 627 as the exclusive
representative of employees on South Prairie's payroll in the
aforesaid unit, to honor-the aforesaid collective-bargaining
agreement with respect to such employees, and to apply to
such employees the terms and conditions of that agreement,
Respondents have violated Section 8(a)(5) and (1) of the
Act.
6. The aforesaid unfair labor practices are unfair labor
practices affecting commerce within the meaning of Section
2(6) and (7) of the Act.
THE REMEDY
Having found that Respondents have committed certain,'
unfair labor practices, I shall recommend that they cease
and desist from such conduct and from any like or related
invasion of employees' Section 7 rights, and take certain
affirmative action which I find necessary to remedy and to
remove the effects of the unfair labor practices and to effec-
tuate the policies of the Act. I shall recommend that Re-
spondents recognize and bargain with Local 627, on
request; that Respondents, on Local 627's request, give ret-
roactive effect to the aforesaid agreement with respect to the
aforesaid employees on South Prairie's payroll; that they
make such employees whole for any losses they may have
suffered by reason of Respondents' failure to apply the
aforesaid agreement to them, with interest as prescribed in
Isis Plumbing & Heating Co., 138 NLRB 716; and that they
pay to the appropriate source the contributions with respect
to such employees prescribed in such agreement for an ap-
prentice program and the health and welfare fund of Local
627, with interest as prescribed in Isis, supra. I shall also
require Respondents to post appropriate notices. Because
some of the South Prairie projects covered by the reimburse-
ment order have or may have been completed, and some of
the affected employees who worked on such projects may
no longer be working for Respondents, I shall also require
Respondents to mail a copy of the notice to each affected
employee who is no longer working for them when the
notices are posted.
[Recommended Order omitted from publication.]