Urban Laboratories, Inc.

National Labor Relations Board - Board Decisions

Jul 31, 1989

295 N.L.R.B. 1120 (N.L.R.B. 1989)

1120 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Urban Laboratories , Incorporated and Hotel and
Restaurant Employees and Bartenders Union of
San Diego, Local 30, AFL-CIO and Gerald G.
Burke, Lemont Combs , Jr. and Carl J. Brown,
Parties Charged with Derivative Liability and
Urban Laboratories, Inc. and Gerald G. Burke,
and Lemont Combs, Jr. and Carl J. Brown,
Parties Charged with Derivative Liability and
Carolyn Ramseur and National Maritime Union
of America, AFL-CIO, ITPE Division and Jac-
queline C. Williams and Esperanza Rodriguez.
Cases 21-CA-18910, 21-CA-19213, 21-CA-
25279 (formerly 1-CA-14531), 21-CA-25280
(formerly 1-CA-14554), 21-CA-25281 (for-
merly 1-CA-14587), and 21-CA-25282 (for-
merly 1-CA-14588)1
July 31, 1989
SUPPLEMENTAL DECISION AND
ORDER REMANDING
BY CHAIRMAN STEPHENS AND MEMBERS
CRACRAFT AND DEVANEY
On November 28, 1979, the National Labor Re-
lations Board issued a Decision and Order in Cases
1-CA-14531, 1-CA-14554, 1-CA-14587, and 1-
CA-145882 ordering Urban Laboratories, Incorpo-
rated (Respondent corporation ), inter alia, to make
whole employees for any loss of pay suffered as a
result of the Respondent corporation 's unfair labor
practices . On January 13, 1981, the United States
Court of Appeals for the Ninth Circuit entered its
judgment enforcing in full the provisions of the
Board 's Order . On January 14, 1981, the Board
issued a Decision and Order in Cases 21-CA-18910
and 21-CA- 192133 ordering the Respondent cor-
poration , inter alia , to remit to the Union the dues
it withheld from employees' paychecks and to
make whole employees for its unlawful failure to
transmit required contributions to the union health
and welfare fund. On August 11, 1981, the United
States Court of Appeals for the Ninth Circuit en-
tered its judgment enforcing in full the provisions
of the Board 's Order.
A controversy having arisen over the amounts
due under the terms of the Board's Orders, the Re-
gional Director for Region 1 on April 30, 1986,
issued a backpay specification and notice of hearing
alleging the backpay due under the Board's Deci-
sion and Order of November 28, 1979 (backpay
specification I), and on May 13, 1986 , the Regional
Director for Region 21 issued a backpay specifica-
tion and notice of hearing alleging the amounts due
I On March 17, 1987, Cases 1 -CA-14531, l-CA-14554, 1-CA-14587,
and 1-CA-14588 were transferred to Region 21
a 246 NLRB 590 (1979).
a 254 NLRB 515 (1981).
under the Board 's Decision and Order of January
14, 1981 (backpay specification 11).4 The backpay
specifications alleged that , at the time the unfair
labor practices were committed , Gerald G. Burke,
Lemont Combs Jr., and Carl J. Brown were share-
holders and members of the board of directors of
the Respondent corporation ; that on dissolution of
the Respondent corporation , Burke, Combs, and
Brown , as members of the board of directors, as-
sented to a distribution of assets to shareholders,
which rendered the Respondent corporation unable
to pay its debts; that Burke , Combs, and Brown, as
shareholders in the Respondent corporation, re-
ceived assets of the corporation on dissolution; and
that Burke , Combs, and Brown were jointly and
severally liable for the backpay obligations of the
Respondent corporation and for the payment of
union dues and trust fund payments to the Union.
On May 20, 1986 , Respondent Combs filed an
answer to backpay specification II. On June 16,
1986, Respondent Burke filed an answer and on
July 3, 1986, filed a supplemental answer to that
backpay specification . The Respondent corporation
and Respondent Brown did not file answers.5
On July 15 , 1986, Respondent Combs filed an
answer to backpay specification I. Respondents
Brown and Burke filed answers to that backpay
specification on, respectively , July 21 and 31, 1986.
The Respondent corporation did not file an
answer.
On January 17, 1989 , the General Counsel filed
directly with the Board a Motion to Partially
Strike Respondents ' Answers and Motion for Par-
tial Summary Judgment . Subsequently , on January
23, 1989 , the Board issued an order transferring the
proceeding to the Board and a Notice to Show
Cause why the General Counsel's motion should
not be granted.
Respondents Combs and Burke each filed a re-
sponse to the Notice to Show Cause on, respective-
ly, February 6 and 8, 1989 . Neither Respondent
Brown nor the Respondent corporation filed a re-
sponse to the Notice to Show Cause . On February
23, 1989 , the Board issued a Supplemental Notice
to Show Cause. On March 7, 1989, the Unlicensed
Division , District No. 1-MEBA/NMU, AFL-CIO,
the successor to the National Maritime Union of
America , AFL-CIO, ITPE Division , one of the
Charging Parties in the underlying cases, filed a re-
sponse to the Supplemental Notice to Show Cause.
No other party filed a timely response to the Sup-
4 On September 10, 1987, by order of the Acting Regional Director for
Region 21 , Cases 21-CA-25279, 21-CA-25280, 21-CA-25281, and 21-
CA-25282 were consolidated with Cases 21-CA-18910 and 21-CA-
19213.
S The Respondent corporation was dissolved in 1979.
295 NLRB No. 136
URBAN LABORATORIES
plemental Notice to Show Cause. On April 4, 1989,
the Board issued a Second Supplemental Notice to
Show Cause, to which no responses were filed.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
On the entire record, the Board makes the fol-
lowing
Ruling on Motion to Partially Strike
Respondents ' Answers and Motion for Partial
Summary Judgment
Section 102 . 56(a)6 of the Board 's Rules and Reg-
ulations provides that a respondent shall file an
answer within 21 days from service of a backpay
specification . Section 102 . 56(b) and (c) provides:
(b) Contents of answer to specification. The
answer shall specifically admit , deny, or ex-
plain each and every allegation of the specifi-
cation , unless the respondent is without knowl-
edge, in which case the respondent shall so
state , such statement operating as a denial. De-
nials shall fairly meet the substance of the alle-
gations of the specification at issue. When a re-
spondent intends to deny only a part of an al-
legation , the respondent shall specify so much
of it as is true and shall deny only the remain-
der. As to all matters within the knowledge of
the respondent , including but not limited to
the various factors entering into the computa-
tion of gross backpay, a general denial shall
not suffice . As to such matters, if the respond-
ent disputes either the accuracy of the figures
in the specification or the premises on which
they are based , the answer shall specifically
state the basis for such disagreement , setting
forth in detail the respondent 's position as to
the applicable premises and furnishing the ap-
propriate supporting figures.
(c) Effect of failure to answer or to plead spe-
cifically and in detail to backpay allegations of
specification . If the respondent fails to file any
answer to the specification within the time
prescribed by this section , the Board may,
either with or without taking evidence in sup-
port of the allegations of the specification and
without further notice to the respondent, find
the specification to be true and enter such
order as may be appropriate . If the respondent
files an answer to the specification but fails to
6 Formerly Sec 102.54 . The Board amended its rules governing pro-
ceedings concerning compliance with Agency orders effective November
13, 1988 . The substance of former Secs. 102.54 and 102 .55 has been incor-
porated into Sec 102 56 as revised , and former Sec. 102 . 56, with some
modification , has become the new Sec. 102.57 , while the substance of
former Sec . 102 57 has become par. (c ) of the new Sec. 102 55, in the
revised rules
1121
deny any allegation of the specification in the
manner required by paragraph (b) of this sec-
tion, and the failure so to deny is not adequate-
ly explained, such allegation shall be deemed
to be admitted to be true, and may be so found
by the Board without the taking of evidence
supporting such allegation, and the respondent
shall be precluded from introducing any evi-
dence controverting the allegation.
The General Counsel submits in his motion that
the answers to the backpay specifications filed by
the individual Respondents contain only general
denials about the backpay figures and premises al-
leged, without setting forth any basis for disagree-
ment with those figures and premises on which the
figures were based. Accordingly, the General
Counsel argues that the answers are not in compli-
ance with the Board's Rules and Regulations as set
forth above. The General Counsel thus requests
that the Board strike the Respondents' answers to
the allegations regarding the backpay figures,
premises, and amounts due, and grant summary
judgment as to those matters.'
In their answers to the backpay specifications,
Respondents Burke and Combs denied the backpay
figures and premises alleged, averring that they did
not have sufficient information regarding those al-
legations.8 Burke and Combs also denied the alle-
gations that they were jointly and severally liable
for the backpay obligations of the Respondent cor-
poration.
In his response to the Notice to Show Cause,
Burke argued, inter alia, that because of the consid-
erable passage of time between the Board's unfair
labor practice findings and the issuance of the
backpay specifications, he did not have access to
the corporation's records with which to answer in
detail the allegations in the backpay specifications.
Burke thus contends that he complied with Section
102.56(b) by stating in his answers that he had in-
sufficient knowledge with which to answer the al-
legations, and accordingly denying those allega-
tions. Respondent Combs argues, inter alia, in his
response to the Notice to Show Cause that he does
not have access to the corporation's records be-
cause Burke has had exclusive control of those
records pursuant to ongoing litigation between
them. Combs argues that he has thus been unable
7 In the motion , the General Counsel does not seek summary judgment
regarding the Respondent corporation but only regarding the individual
Respondents. Further, the General Counsel does not seek summary judg-
ment on the issue of the joint and several liability of the individual Re-
spondents.
8 Without pleading insufficient information, Burke denied par 6 of
backpay specification I that alleges that the amount unilaterally deducted
for the employees' life insurance program was 16 cents per hour
1122 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
to obtain any of the records of the Respondent cor-
poration.9
Respondent Brown 's answer to backpay specifi-
cation I was in letter form and did not specifically
address the enumerated paragraphs of the specifica-
tion . Brown stated that although he was made a
shareholder and director of the Respondent corpo-
ration in return for his investment , he was never in-
volved in the daily management of the corporation,
received no compensation, and on dissolution only
received back his initial investment . Brown thus
denied liability for any part of the backpay obliga-
tions alleged in the specification . Brown also stated
that subsequent to the dissolution of the corpora-
tion and his association with Combs and Burke, he
discarded all documents relating to his involvement
with the corporation, and was therefore unable to
provide specific responses to the allegations con-
tained in the backpay specification.
In light of the foregoing , a factual issue exists re-
garding whether the individual Respondents
charged with derivative liability had access to the
corporation's records with which to answer specifi-
cally the allegations contained in the backpay spec-
ifications.1 ° We shall, therefore, deny without prej-
9 Combs also contends , inter alia, that the amounts alleged due regard-
ing backpay are incorrect because the hours of military dining facilities
operated by the Respondent corporation were divided into two working
shifts of 5 hours per day rather than 8 hours.
10 We note that in this case there is no indication that the pertinent
corporate records are in the possession of the General Counsel Under
such circumstances , we do not require the Respondents to demonstrate
efforts taken to obtain the records from the General Counsel . Cf Work-
udice the General Counsel' s motion . Accordingly,
we shall order a hearing before an administrative
law judge to determine the amounts due pursuant
to the Board's Orders in these proceedings and to
determine the issue of the derivative liability of Re-
spondents Burke, Combs, and Brown. The General
Counsel may renew his motion at the hearing.
ORDER
It is ordered that the General Counsel's Motion
to Partially Strike the Respondents' Answers and
Motion for Partial Summary Judgment be denied
without prejudice.
IT IS FURTHER ORDERED that this proceeding be
remanded to the Regional Director for Region 21
for the purpose of issuing a notice of hearing and
scheduling a hearing before an administrative law
judge, which hearing shall be limited to taking evi-
dence concerning the amounts due pursuant to the
Board 's Orders in these proceedings and the issue
of the derivative liability of Respondents Burke,
Combs, and Brown.
IT IS FURTHER ORDERED that the administrative
law judge shall prepare and serve on the parties a
decision containing findings of fact, conclusions of
law, and recommendations based on all the record
evidence . Following the service of the administra-
tive law judge's decision on the parties, the provi-
sions of Section 102.46 of the Board 's Rules and
Regulations shall be applicable.
room for Designers, 289 NLRB 1437, 1438 (1988), Schnabel Associates, 286
NLRB 630 (1987).