Reigel Electric/Central Electrical Services

National Labor Relations Board - Board Decisions

Aug 24, 2004

342 N.L.R.B. 847 (N.L.R.B. 2004)

REIGEL ELECTRIC/CENTRAL ELECTRICAL SERVICES
342 NLRB No. 83
847
Reigel Electric/Central Electrical Services (Alter Ego
and/or Successor) and Local 577, International
Brotherhood of Electrical Workers. Case 30–
CA–15265(E)
August 24, 2004
SUPPLEMENTAL DECISION AND ORDER
BY MEMBERS LIEBMAN, SCHAUMBER, AND MEISBURG
On May 27, 2004, Chief Administrative Law Judge
Robert A. Giannasi issued the attached supplemental
decision. The Applicant filed exceptions and a support-
ing brief. The General Counsel filed an answering brief,
and the Applicant filed a reply brief.
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the supplemental decision
and the record in light of the exceptions and briefs and
has decided to affirm the judge’s rulings, findings, and
conclusions and to adopt the recommended Order.
ORDER
The National Labor Relations Board adopts the rec-
ommended Order of the administrative law judge.

Paul Bosanac, Esq., for the General Counsel.
Kevin J. Kinney, Esq. and Timothy C. Kamin, Esq., of Milwau-
kee, Wisconsin, for the Respondent.
SUPPLEMENTAL DECISION AND ORDER GRANTING
MOTION TO DISMISS APPLICATION
On February 11, 2004, the Board issued its decision and or-
der in this case, affirming the decision of Judge Irwin H. So-
coloff. 341 NLRB 198 (2004). Judge Socoloff had dismissed
allegations that Respondent Central was a single employer
with, or the alter ego or successor of, Respondent Reigel Elec-
tric and, thus, obligated to continue the bargaining relationship
between Reigel Electric and Charging Party Union. The judge
also dismissed allegations that Central discriminatorily failed to
hire the union employees of Reigel Electric upon the latter’s
dissolution and that Central’s owner, Dan Reigel, made a coer-
cive statement in violation of the Act. The judge did, however,
find that Reigel Electric violated the Act by failing to provide
and delaying in providing relevant information to the Union
about the relationship of Reigel Electric to Central.
On March 12, 2004, Respondent filed an application for
costs and fees pursuant to the Equal Access to Justice Act
(EAJA), 5 U.S.C. § 504, and Section 102.143 through 102.155
of the Board’s Rules and Regulations. On April 21, 2004, the
General Counsel filed a motion to dismiss the application on
two procedural grounds and on the ground that the complaint
and the subsequent litigation were “substantially justified” un-
der the applicable law, regulations, and authorities. On May
11, 2004, Respondent submitted a response to the motion to
dismiss. Because I find that the General Counsel was substan-
tially justified in issuing the complaint and litigating the case at
all stages, I grant the motion to dismiss and reject the applica-
tion.1
I. THE UNDERLYING CASE
The pivotal and most important issue in the case was
whether Central and Reigel Electric were alter egos or consti-
tuted a single employer. The Board finds alter ego status be-
tween two entities if they have “substantially identical man-
agement, business purpose, operations, customers, equipment,
and supervision.” Other factors include common ownership or
control, familial relationships, lack of arm’s length dealings
between the two entities and whether one entity was formed or
used to avoid union obligations. No one factor is controlling.
Kenmore Contracting Co., 289 NLRB 336, 337 (1988), enfd.
888 F.2d 125 (2d Cir. 1989), and cases there cited. Similarly,
the Board has set forth the following “four factors [for] deter-
mining whether separate entities constitute a single employer:
(1) interrelation of operations, (2) common management, (3)
centralized control of labor relations, and (4) common owner-
ship or financial control. No one factor is controlling, nor do
all need to be present to support a single employer finding.
However, the Board has held that the first three factors are
more critical than the last, and, further, that centralized control
of labor relations is of particular importance because it tends to
demonstrate “operational integration.” Single employer status
is characterized by the absence of an arm’s length relationship
found among unintegrated companies [citations omitted].”
RBE Electronics of S.D., Inc., 320 NLRB 80 (1995).
Judge Socoloff found that Central and Reigel Electric had
the same business purpose, a similar type of operation and the
same supervision; he also found that the firms operated from
the same location, property owned by Lyle Reigel, with the
same equipment and in the same market. But he found no in-
terrelationship of operations and no centralized control because
Lyle Reigel controlled management functions, set policy and
handled the labor relations of Reigel Electric, whereas, his son,
Dan, handled these matters for Central. Judge Socoloff found
separate ownership and control of the two enterprises, and no
evidence that Central was formed for other than legitimate rea-
sons or that there were inappropriate dealings between the two
companies. He therefore found no alter ego relationship. 341
supra at 201. Relying on the same evidence, and because there
was “a lack of common management, centralized control of
labor relations, interrelationship of operations or common own-
ership or control of the two businesses,” within the meaning of
RBE Electronics, supra, he also found no single employer rela-
tionship. Id. at 202.
The evidence shows that Reigel Electric, an employer sub-
ject to a collective-bargaining agreement with the Union, was
77 percent owned by Lyle Reigel and 23 percent owned by his
son, Dan.2 Lyle Reigel was the president of Reigel Electric and

1 Because Judge Socoloff has retired and is unavailable to handle the
EAJA case, I assigned it to myself under Sec. 102.36 of the Board’s
Rules and Regulations.
2 The testimony of Dan and Lyle Reigel and the judge’s decision list
the percentages as 78 and 22; but the documentary evidence submitted
in connection with the dissolution of Reigel Electric sets the percent-
ages at 77.133 for Lyle and 22.867 for Dan (GC Exh. 20).
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 848
Dan Reigel was vice president. Dan Reigel’s ownership inter-
est in Reigel Electric was based on intermittent gifts of stock
over a period of years. Reigel Electric was dissolved on June 1,
2000. Central was formed that same day, with Dan Reigel
holding all the stock and being designated as president. Five
other former Reigel Electric employees joined Dan at Central
and two new employees were hired. The three remaining union
electricians at Reigel Electric were laid off and Central began
operations as a nonunion company. Upon the dissolution of
Reigel Electric, Dan Reigel received, as his portion of the as-
sets, a return of capital valued at $172,151 (GC Exh. 20). This
was composed of inventory, property and equipment of Reigel
Electric, valued at $100,452, which was immediately trans-
ferred to Central, as well as a note reflecting monies that Dan
Reigel owed Reigel Electric, and a cash distribution. Ibid.
II. DISCUSSION AND ANALYSIS
Substantial justification for EAJA purposes means a position
justified to a degree that could satisfy a reasonable person.
David Allen Co., 335 NLRB 783, 784 (2001), citing applicable
authorities. The substantial justification standard does not re-
quire the Government to establish that its decision to litigate
was based on substantial probability of prevailing and the Gov-
ernment’s position can be deemed reasonable even if the Gen-
eral Counsel failed to establish a prima facie case. Substantial
justification may be found where the General Counsel proceeds
on the basis of legitimate credibility issues, including docu-
ments and other objective evidence obtained in the investiga-
tory stage of the proceeding. Ibid. Moreover, “[f]ee determina-
tions under EAJA are to be made by examining the case as an
‘inclusive whole.’” Fantasia Fresh Juice Co., 339 NLRB 928,
929 (2003), and cases there cited.
In the instant case, the judge credited the testimony of Lyle
and Dan Reigel that Dan’s duties at Reigel Electric “were lim-
ited to estimating and purchasing” and “he did not exercise
management functions and was not responsible for any aspects
of labor relations matters.” Supra at 930. He also found, in
effect, that the transaction dissolving Reigel Electric and creat-
ing Central was at arm’s length. But, on those crucial issues,
and, on this record, the judge could reasonably have discredited
Lyle and Dan Reigel and made contrary findings. See Mar-Kay
Cartage, 277 NLRB 1335, 1340 (1985) (a judge may not only
discredit a witness but believe the opposite of his testimony,
citing Supreme Court authority). Indeed, consideration of the
entire record, including the documentary evidence, would rea-
sonably permit the inference that Reigel Electric and Central
were alter egos or a single employer.
For example, the Reigels convinced Judge Socoloff that
Dan’s duties at Reigel Electric were limited to estimating and
purchasing. But Dan Reigel was also vice president of Reigel
Electric. Dan did not put a penny of his own money in Reigel
Electric; his 23-percent interest was the result of gifts from his
father over a period of years (Tr. 102). Moreover, pursuant to
1991 resolutions (GC Exh. 14), Dan and Lyle were the only
individuals with the authority to execute contracts on behalf of
Reigel Electric. Although Dan Reigel carried a salary of $1
more than the pay of a journeyman electrician, he received
what Judge Socoloff called “very sizeable bonuses” based on
profits. Supra at 930. That alone would reasonably support a
finding that Dan Reigel was more than simply an estimator and
purchaser, and, in reality, a member of management. There is
no evidence that anyone else, with the possible exception of
Lyle, received bonuses based on profits. The amounts of Dan
Reigel’s compensation themselves are an indication of man-
agement responsibilities commensurate with his title. Accord-
ing to a table set forth in the General Counsel’s brief to the
Board in this case (Br. at 11, based on GC Exh. 29), in the last
2-1/2 years of Reigel Electric’s existence, Dan Reigel earned a
total of $447,209, compared to a total for Lyle Reigel of
$663,585 and a total for Supervisor-Foreman Tom Giesen of
$151,688. Indeed, despite the familial relationship with Lyle,
his gifted ownership interest, title, contractual authority and
compensation, Dan Reigel denied being a member of manage-
ment. On cross-examination, counsel for the General Counsel
confronted him with his pretrial affidavit, in which Dan admit-
ted that, after several years working as an electrician for his
father’s company, in 1984, he “went to work in management at
Reigel Electric.” That statement was not negated by the next
sentence in the affidavit, which stated that, at that point, he
began training as an “estimator.” Tr. 164–165. Based on the
evidence discussed above, it would have been more than rea-
sonable for a judge to discredit the contrary testimony of Lyle
and Dan Reigel and conclude that Dan Reigel was indeed a
member of the management of Reigel Electric.
The evidence of Dan Reigel’s involvement in labor relations,
especially in the last few years of Reigel Electric’s existence,3
is certainly enough to reasonably permit an inference that he
responsibly handled labor relations for Reigel Electric. This is
particularly so because, as indicated above, he could reasonably
be viewed as a member of management. First, as a small com-
pany, Reigel Electric did not separately negotiate an agreement
with the Union. It was at one point a member of a multi-
employer association that dealt with the Union, but more re-
cently it simply signed a letter of assent, agreeing in effect to
abide by the multiemployer agreement with the Union. Reigel
Electric last signed such a letter of assent in 1990 (Tr. 130).
Thus, involvement in labor relations for Reigel Electric essen-
tially meant dealing with the Union on contract interpretation,
grievance issues or deciding upon the need for and requesting
personnel from the Union. Significantly, Dan and Lyle Reigel
denied that Dan handled any labor relations matters for Reigel
Electric (Tr. 25, 173). But the General Counsel introduced
documentary evidence that clearly called into question that

3 The record contains a series of letters from Lyle Reigel to the Un-
ion on various matters from about 1990 through 1997 (GC Exh. 19, Tr.
72). Letters to the Union thereafter are signed by Dan Reigel, as shown
below. There is also evidence that Lyle at one time signed apprentice-
reporting forms, a matter also discussed below, but, between 1997 and
2000, Dan signed those forms (Tr. 391–395, GC Exh. 36). As the
judge found, supra at 930, Lyle and Dan started talking about somehow
transferring the business to Dan “[d]uring 1999.” It also appears that
Lyle Reigel spent much of his time working on matters for one of his
other businesses, U.S. Paper Converters (Tr. 32, 38, 84). In these cir-
cumstances, it would be reasonable to infer that, at least during the last
portion of Reigel Electric’s existence, Lyle was ceding some of his
responsibilities to his son.
REIGEL ELECTRIC/CENTRAL ELECTRICAL SERVICES 849
blanket denial and reasonably warranted discrediting their tes-
timony and supporting the General Counsel’s position that Dan
Reigel was responsible for labor relations. The judge rejected
the General Counsel’s position in a footnote (supra at 930 fn.
3). It would have been reasonable, however, to make a con-
trary inference both on credibility grounds and on the extent of
Dan’s involvement in the labor relations of Reigel Electric.
The judge referred to some, but not all, of the General Coun-
sel’s evidence of Dan Reigel’s involvement in labor relations
for Reigel Electric: “In 1998, Dan Reigel signed a letter to the
Union concerning a grievance, which had been drafted by his
father, as Lyle Reigel was not there to sign it.” What is omitted
is that the letter from the Union, dated February 4, 1998, which
prompted Dan Reigel’s response, was addressed to Reigel Elec-
tric, attention Dan Reigel, in the form, “Dear Dan.” (GC Exh.
23.) The record includes one other letter from the Union, dated
April 5, 1999, also addressed to “Dan.” (GC Exh. 24.) Dan
Reigel’s response to the Union’s letter of February 4, which
discusses application of the labor agreement, shows on its face
that it is from Dan, who signed the letter over his typed name
and title. GC Exh. 23. The typist’s notation clearly indicates
that the letter was written by Dan, not Lyle, Reigel; other letters
in the record show a difference in the typist’s notation depend-
ing on who wrote the letters (see GC Exhs. 19, 24). In rejecting
the objective content and context of the 1998 letter, the judge
made a credibility determination, accepting Dan’s testimony
that he signed the letter drafted by his father because his father
was not available to sign it. It would have been reasonable for
the judge to come out the other way.
The judge also gave little or no weight to evidence that Dan
Reigel attended grievance meetings because he found that, on
the one occasion he did so, while dealing with an apprentice-
ship matter, he acted as a substitute for his father, as Lyle
Reigel testified. But the documentary evidence relied upon by
the General Counsel clearly permitted the inference that Dan
Reigel was Reigel Electric’s labor relations representative at
that meeting. The General Counsel introduced a copy of the
minutes of a grievance meeting between Union and employer
representatives on September 10, 1997. (GC Exh. 37.) The
minutes state that Dan Reigel appeared for Reigel Electric, and
Dan described, in great detail, the duties of the apprentice, who,
the Union apparently alleged, was doing journeyman work.
Dan made the point that the apprentice’s work did not directly
involve electricity, but that it provided a “good learning experi-
ence.” There is no indication in the minutes that Dan was sub-
stituting for his father. In his decision, the judge only men-
tioned the apprenticeship grievance. But the minutes of the
September 10 meeting show that there was a second grievance
discussed by Dan Reigel, which was not addressed in Lyle
Reigel’s testimony or by the judge. That grievance involved a
request for manpower. According to the minutes, Dan Reigel
said he had called the union hall to see if teledata people were
available. None were available so he used a material handler
instead of a teledata person. Dan Reigel’s participation in this
grievance meeting not only shows his involvement in labor
relations for Reigel Electric, but it also shows that he reas-
signed employees based on his judgment, thus reasonably per-
mitting a rejection of testimony that he did not handle labor
relations. The minutes of this meeting, which have an inherent
reliability because they were prepared years before the events
and the litigation of this case, also bear on the judge’s finding,
discussed below, about Dan Reigel’s handling of apprentice-
ship issues.
The judge stated that Dan Reigel “sometimes filled out and
signed apprentice reporting forms as a convenience to request-
ing apprentices, a ministerial act.” Those forms, covering a
period of about the last 3 years of Reigel Electric’s existence
(GC Exh. 36), were introduced in evidence. All were signed by
Dan Reigel as the employer’s representative. Contrary to the
judge, it would have been reasonable to view the forms as more
than simply a convenience to requesting apprentices or ministe-
rial acts.4 They include evaluations by Dan Reigel of Reigel
Electric apprentices on several job-related factors, including
attitude, craftsmanship, and mechanical and electrical ability.
The forms also clearly indicate that the evaluations are used by
the apprenticeship committee to advance apprentices through
the apprentice program and to increase their pay accordingly.
Indeed, an official from the apprenticeship committee con-
firmed that this was the purpose of the evaluations (Tr. 391–
395). This evidence also reasonably supports the inference that
Dan Reigel handled labor relations functions for Reigel Elec-
tric, contrary to his testimony and that of his father.
The judge also rejected the General Counsel’s contention that the
transaction surrounding the dissolution of Reigel Electric and the
formation of Central on the same day was not at arm’s length. Fo-
cusing only on the transfer of Reigel Electric’s inventory, property,
and equipment to Dan Reigel and Central, he concluded that the
transfer was at arm’s length because the property was transferred at
book value and “may not have had an ascertainable market value,”
notwithstanding that “an itemized list of the transferred property had
not been completed at the time possession passed.” Supra at 932.
But consideration of all of the evidence on this issue could reasona-
bly have led to the opposite inference, namely, that the transaction
was not at arm’s length. Dan Reigel was gifted his interest in Reigel
Electric from his father, Lyle. It was reasonable to infer that Dan
Reigel used the capital distributed to him upon the dissolution of
Reigel Electric as capital to form Central.5 As part of his interest,
Dan received what was represented by Lyle Reigel as the “book
value” of all of the inventory, property, and equipment of Reigel
Electric. (Tr. 76.) But Lyle Reigel admitted (Tr. 77, 122–123) that
he, Lyle, also received some property and equipment at the time of
dissolution, contrary to the document reflecting the distribution of
Reigel Electric’s assets (GC Exh. 20). Nor was any bill of sale, in-

4 In this respect, it appears that the judge may have confused appren-
tice reporting forms, which included evaluations by Dan Reigel (GC Exh.
36), with another form titled “Request for Men,” which identified the
person making the request, including, at times, Dan Reigel (GC Exh. 38).
5 As the judge found, upon the dissolution of Reigel Electric, Dan
received tangible assets, in the form of inventory, property, and equip-
ment, in the value of $100,452, and liquid assets of $71,699 (supra at
930). It is unclear whether Dan invested any additional capital to form
Central. He did testify that he received cash from equity in his resi-
dence to obtain a line of credit (Tr. 243–245), but no documents or
other details were provided with respect to that testimony so it can not
be determined whether, when, or under what circumstances, this trans-
action had anything to do with an infusion of capital.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 850
voice, or other documentary support produced for any transfer of
property to Lyle. More importantly, no itemized list of the inventory,
property, and equipment transferred to Dan Reigel and Central was
ever produced. The General Counsel’s point was not that such a list
was not prepared at the time “possession passed,” but that such a list
was never prepared and, of course, never produced at trial. There
was thus no way to authenticate the book value of the property trans-
ferred to Dan Reigel and Central. On this record, it would have been
reasonable to infer that these were the types of “irregularities” that the
Board has found to militate against an arm’s length transaction. See
Fugazy Continental Corp., 265 NLRB 1301, 1302 (1982), enfd. 725
F.2d 1416 (D.C. Cir. 1984). Similarly, the capital used by Dan
Reigel in forming Central could reasonably be viewed as having
been originally gifted to him by his father, another indicia that the
transaction was less than arm’s length. See Kenmore Contracting
Co., supra at 337.
Perhaps the most significant evidence of alter ego or single
employer status revolves around one of Central’s first jobs as a
separate entity, evidence that the judge did not mention in his
decision. At the beginning of its operations, Central handled
one job that Reigel Electric had bid on some 2 weeks before its
dissolution. On May 17, 2000, Dan Reigel had submitted a bid
on work at the Fox Cities Racquet Club for Hoffman Corpora-
tion. Hoffman apparently accepted the bid, and, sometime in
July, its agent, Scott Fleming, called Dan Reigel about doing
the job. Dan told Fleming that Reigel Electric was out of busi-
ness, but that he had formed a new company, Central, and that
Central was interested in doing the job (Tr. 144–146). Dan
Reigel then submitted a bid for the job on behalf of Central.
That bid carried the same date, May 17, 2000, as the Reigel
Electric bid (GC Exh. 27), although it is clear from other evi-
dence (R. Exh. 2; Tr. 150–151) that the Central bid was submit-
ted on or about July 17, 2000. The deadline for submitting bids
for the Racquet Club job was May 17, 2000 (GC Exh. 27). Dan
Reigel’s bid on behalf of Central was for the exact same work
and the same amount as his bid on behalf of Reigel Electric (Tr.
146). Hoffman accepted the Central bid and Central performed
the work using nonunion labor. From this evidence, it would
have been reasonable for the judge to find that Hoffman permit-
ted Dan Reigel to submit an untimely bid to perform work un-
der Central that he had timely bid for under Reigel Electric,
thus allowing Dan to do the job without following the union
contract that would have bound Reigel Electric. Because it was
also reasonable to infer that, in substance if not in form, Hoff-
man regarded Central as the same entity as Reigel Electric, it
would have been reasonable for the judge to conclude that
Reigel Electric and Central were alter egos.6

6 Within weeks of Central’s formation, it started performing other
work through Hoffman. GC Exh. 41. Dan Reigel was contacted to
perform this work based on his past association with Reigel Electric.
He was, for example, contacted to do additional work for the Omor
School District, for which Reigel Electric had performed work from the
summer of 1999 through March 2000. See Tr. 218–220, 228; and 374–
377, 378–379, 381–383. In June and July of 2000, Central used the
nonunion labor of Thomas Electrical Services to perform some of its
jobs. Thomas paid those employees, subject to reimbursement by
Central, but they used Central tools, were supervised by Central per-
All of the above provides a reasonable basis for finding alter
ego and single employer status, and for discrediting the testi-
mony of Lyle and Dan Reigel. In these circumstances, I find
that the General Counsel was substantially justified in alleging
alter ego and single employer status and litigating that aspect of
the case through all stages of the proceeding. The other allega-
tions are so interrelated to the alter ego and single employer
issues that it was reasonable to include them, thus providing
substantial justification for the General Counsel doing so. For
example, Dan Reigel’s statement that he was going nonunion
and his failure to hire Reigel Electric’s union work force not
only provided a reasonable basis for independent allegations of
successorship, discriminatory failure to hire, and coercion, but
also reasonably supported the allegation that the dissolution of
Reigel Electric and the formation of Central was based on a
desire to avoid union representation, an element of alter ego
status, although, as the judge pointed out, not the sine qua non
of such a finding. As indicated above, the judge found a viola-
tion in the failure to provide and the delay in providing the
Union information concerning Central’s relationship with
Reigel Electric. In this respect, the judge found that the Union
“had an objective factual basis for believing that” Reigel Elec-
tric and Central “constituted a single employer, or that Central
was the alter ego of Reigel.” Supra at 931. Thus, by examin-
ing the case as an “inclusive whole,” I find that the General
Counsel was substantially justified in his “overall position in
the case.” Fantasia Fresh Juice, supra at 929.7
In sum, I find that the General Counsel was substantially jus-
tified in issuing the entire complaint in this case and in litigat-
ing all phases of the case before the Board. The General Coun-
sel’s motion to dismiss the application for costs and fees is
therefore granted and the application is denied.8

sonnel and drove a Central truck to their jobs, sometimes from the
Central office location (Tr. 157–159, 202–203, 340–343, 346).
7 The above analysis applies as well to the General Counsel’s appeal
of Judge Socoloff’s decision. Respondent’s reliance (response at 9) on
Fantasia Fresh Juice, supra, is unavailing on this point. In that case,
the Board found that the General Counsel was not substantially justified
in filing unsuccessful credibility-based exceptions. But the Board
stated that it was not suggesting “that there can never be substantial
justification for filing unsuccessful credibility-based exceptions, only
that such justification was lacking here.” Supra. In contrast to the
situation in Fantasia Fresh Juice, here, the General Counsel, relying on
documentary and other objective evidence, was substantially justified
not only in litigating the case before the administrative law judge, but
also in appealing his adverse decision to the Board.
8 In view of my disposition of the matter based on the substantial
justification issue, I do not reach the other grounds set forth in the
General Counsel’s motion to dismiss—that the attorney’s fees charged
were above the limits set forth in the Board’s Rules and Regulations
and included work on matters, namely, the information request, on
which the Respondent did not prevail.