NLRB v. Newark Electric ( 2021 )

18-2784
NLRB v. Newark Electric
In the
United States Court of Appeals
For the Second Circuit
______________
August Term, 2019
(Argued: February 11, 2020 Decided: September 17, 2021)
Docket No. 18-2784
______________
NATIONAL LABOR RELATIONS BOARD,
Petitioner,
–v.–
NEWARK ELECTRIC CORPORATION, NEWARK ELECTRIC 2.0, INC.,
COLACINO INDUSTRIES, INC.,
Respondents.
______________
B e f o r e:
WALKER, CARNEY, Circuit Judges, and KOELTL, District Judge. 1
______________
The National Labor Relations Board (the “NLRB” or the “Board”) petitions for
enforcement of its Decision and Order, 366 N.L.R.B. 145 (July 31, 2018), requiring
Respondents Newark Electric Corporation, Newark Electric 2.0, Inc., and Colacino
1Judge John G. Koeltl, of the United States District Court for the Southern District of New York,
sitting by designation.
Industries, Inc. (together, the “Companies”) to reinstate a former employee and to
comply with their collective bargaining obligations with the International Brotherhood
of Electrical Workers Local 840 (“the Union”). The Companies oppose the petition. They
first challenge the basic legitimacy of the Order, arguing that it resulted from a
complaint issued by an Acting General Counsel of the Board who, under the terms of
the Federal Vacancies Reform Act, lacked the requisite authority. Second, the
Companies assail the Order’s predicate finding that Newark Electric and Colacino
Industries are a single employer and alter egos. Third, they resist the Order insofar as it
reinstates and awards damages to a discharged former employee of Colacino
Industries. At the threshold, although we agree with the Companies that the Board’s
original complaint was invalid, we reject their challenge to its ratification by the NLRB’s
General Counsel and conclude that the Board’s Order may be enforced. Next, we decide
that the Board’s conclusion that Newark Electric and Colacino Industries were a single
employer and alter egos is supported by substantial evidence. We find unpersuasive the
Companies’ further argument that Colacino Industries’ termination of its Letter of
Assent with the Union also ended Newark Electric’s obligations toward the Union.
Finally, we find that substantial credible evidence supports the Board’s conclusion that
Colacino Industries violated section 8(a)(3) of the Act when it terminated the employee.
We therefore GRANT the Board’s petition for enforcement.
PETITION GRANTED.
______________
MILAKSHMI V. RAJAPAKSE (Peter B. Robb, Julie B. Broido,
Alice B. Stock, David Habenstreit, on the brief),
National Labor Relations Board, Washington, DC, for
Petitioner.
EDWARD A. TREVVETT, Harris Beach PLLC, Pittsford, NY, for
Respondents.
______________
CARNEY, Circuit Judge:
This case arises from a long-pending labor dispute between the International
Brotherhood of Electrical Workers Local 840 (“the Union”) and three closely related
corporations doing business in Newark, New York: Newark Electric Corporation,
Newark Electric 2.0, Inc. (“Newark 2.0”), and Colacino Industries, Inc. (the three
2
collectively, “the Companies”). The Board seeks enforcement of its Order to the
Companies, premised on a finding that, for purposes of the National Labor Relations
Act (“NLRA” or the “Act”), the Companies are alter egos and a single employer. 2 The
Companies contest that finding as to Newark Electric and Colacino Industries.
Resolution of the dispute has been protracted in part because of concerns raised
under the Federal Vacancies Reform Act (“FVRA”), 5 U.S.C. § 3345-3349d, about the
lawfulness of the original complaint, which was issued in 2013 by the Board’s then-
Acting General Counsel, Lafe Solomon. See NLRB v. Sw. Gen., Inc., 137 S. Ct. 929, 943-44
(2017) (“Southwest General”) (holding Acting General Counsel Lafe Solomon was
prohibited from serving in that position following his nomination to serve as the
NLRB’s General Counsel on a permanent basis). And so, relatedly, this case requires us
to address the effect of the later ratification of the original complaint by a fully
confirmed General Counsel. The Companies assail the ratification’s effectiveness.
For the reasons set forth below, we reject the Companies’ challenges and GRANT
the Board’s petition for enforcement.
BACKGROUND 3
I. The Companies and the Letters of Assent
During the 1980s and 1990s, Newark Electric was an electrical contractor solely
owned by Richard Colacino (“Richard”). In 2000, some substantial changes to Newark
Electric’s structure began: Richard’s son James Colacino (“James”) purchased Newark
2The parties stipulated that Colacino Industries and Newark 2.0 were a single employer and
alter egos. J.A. 14 n.5.
3Unless otherwise noted, our description of the facts is drawn largely from the Administrative
Law Judge’s (“ALJ”) decision of January 6, 2014, which is based on testimony and documentary
evidence presented to him. J.A. 13-26. We note the parties’ differences where relevant.
3
Electric’s assets, goodwill, equipment, customer database, and website from his father,
leaving the liabilities behind. James formed a new corporation, Colacino Industries, and
placed in it the assets that he had purchased.
A little over a decade later, in March 2011, James formed a third company,
“Newark Electric 2.0.” The record suggests that at least Colacino Industries and Newark
2.0 provided some form of technical electrical contracting services during this time; the
parties dispute whether Newark Electric was entirely dormant, but the record is clear
that it was not dissolved. James ran the three entities from two office spaces that he
owned on Harrison Street in Newark, NY. J.A. 15.
In the early 2000s, Michael Davis worked as an organizer for the Union in the
same part of New York State, and in those years, he devoted time to persuading
employers to sign a Letter of Assent (“LOA”) with the Union as a first step toward their
anticipated full participation in the Union’s multi-employer collective bargaining
agreement (“MCBA”) with the Finger Lakes NY Chapter of the National Electrical
Contractors Association (the “NECA”) (an employer organization). The form of LOA
then in use bound the assenting employer for 180 days to the MCBA. After the end of
the 180-day trial period—and at any time in the five-month period between the 181st
day and the day that is 30 days before the LOA’s first anniversary—the employer may
cancel the LOA by simply providing a “written 30-day notice” to the Union. J.A. 16. If
that five-month period expires without delivery of such a notice, however, the
employer becomes generally bound by the MCBA and may not terminate until the
MCBA itself expires.
In 2005, Davis began an effort to persuade James to enroll Newark Electric and
Colacino Industries in the LOA process. About six years later, the effort paid off: on
February 24, 2011, James signed a Letter of Assent with the Union. (As we describe
later, on exactly which company’s behalf he signed the first LOA became subject to
4
dispute.) And not long after, in July 2011, James approached Davis, asking for a second
LOA. On July 20, Davis and James executed the second LOA, with Davis again signing
for the Union and James signing for Colacino Industries.
Both LOAs adopted the timeline that we have described: a 180-day trial period
followed by a five-month cancellation period, after which the MCBA’s terms governed
until the MCBA’s expiration. The first LOA thus set up a trial period that ran from
February 24 until August 24, 2011, after which the company had until January 24, 2012,
to terminate. The second LOA created a trial period running from July 20, 2011, until
January 19, 2012, after which the company had until June 20, 2012, to terminate.
The relationships did not last long. By letter dated April 12, 2012, James wrote to
Davis that Colacino Industries intended to terminate the second LOA effective as of
May 26. Thus, under the second LOA the termination notice was timely: the deadline
for terminating it was in June and the notice was delivered in April, months before.
Not long after receiving James’s April letter, Davis met with various employees
of the Companies to discuss their Union membership. On June 29, during one such
meeting, two Colacino Industries employees handed Davis a letter written on Newark
Electric letterhead advising Davis that James thereby terminated Newark 2.0’s
agreement with the Union, effective immediately. (Davis later testified that this was the
first time he became aware of an entity called Newark Electric 2.0.)
Davis and James met a few days later, on July 2. In the meeting, James took the
position that the second LOA superseded the first and governed the Union’s
relationship with both Newark 2.0 and Colacino Industries. The April termination
notice was therefore effective for both companies, in his view. Davis countered that the
Union’s first LOA was with Newark Electric (not Newark 2.0) and that it was still in
5
effect; that Newark Electric had missed its January 24, 2012 deadline for terminating the
first LOA; and that, accordingly, Newark Electric was still bound by the MCBA.
Thereafter, both Newark Electric and Colacino Industries refused to comply with
the MCBA. A few months later, in September 2012, James dissolved Newark 2.0, and in
2013, Richard dissolved Newark Electric. After 2013, only Colacino Industries survived
in corporate form.
After the Union filed a complaint with the Board in 2012, on May 30, 2013, the
Board filed a complaint against all three Companies. Two years later, in May 2015, the
applicable MCBA expired, opening a window for the surviving Colacino Industries to
terminate its relationship with the Union by giving written notice no less than 100 days
before the expiration date, no matter the ultimate effect of their earlier termination
efforts.
II. Anthony Blondell’s Discharge from Newark Electric
Anthony Blondell was an electrician and longstanding Union member who
began working for Newark Electric in March 2011, after James signed the first LOA. In
July 2012, when James and Davis were sparring over the status of the LOAs, James
discharged Blondell. The circumstances of the discharge are disputed. But, the record is
clear that as the July 20 end date for the second LOA approached, James told Blondell
that he planned to cease being a union employer. J.A. 23. On July 20, James gave
Blondell a termination letter advising that Colacino Industries was “lay[ing] [Blondell]
off” for “lack of work.” J.A. 333.
III. Procedural History
On May 30, 2013, Lafe E. Solomon, then the Board’s Acting General Counsel,
issued a complaint charging the Companies with various unfair labor practices.
Following a lengthy hearing, an ALJ found that the Companies violated sections 8(a)(5)
6
and (1) of the Act by repudiating and failing to comply with the two LOAs and the
MCBA. The ALJ also ruled that the Companies violated sections 8(a)(3) and (1) of the
Act when they unlawfully terminated Blondell’s employment based on anti-union
animus.
Almost two years later, in March 2015, the Board affirmed the ALJ’s judgment,
with minor revisions, 362 N.L.R.B. 44 (2015), and the Companies appealed the decision
to the U.S. Court of Appeals for the District of Columbia Circuit. In July 2017, that court
vacated the Board’s decision and remanded for further proceedings in light of the
Supreme Court’s then-recent decision in Southwest General. See Order, Newark Elec. Corp.
v. NLRB, No. 15-1111, 2017 WL 5662145 (D.C. Cir. July 14, 2017). As described above,
the Supreme Court ruled in that case that the Board’s Acting General Counsel was
prohibited from issuing complaints because his continued service as Acting General
Counsel after January 5, 2011, violated the FVRA. Southwest General., 137 S. Ct. at 937,
943-44.
One month later, in August 2017, Board General Counsel Richard F. Griffin, Jr.,
who was duly appointed by the President and confirmed by the Senate, formally
ratified the 2013 complaint. J.A. 30, 34-41. The Board then affirmed its earlier rulings,
stating that it had given de novo consideration to the prior proceedings and the parties’
updated submissions. 366 N.L.R.B. 145 (2018). It then petitioned this Court for
enforcement of its Order. 4 See 29 U.S.C. § 160(e). It is that petition that is before us now.
4The Board’s Order requires the Companies (1) to cease and desist from the unfair labor
practices found by the Board, (2) to give full force and effect to the terms and conditions of
employment in the collective bargaining agreement, (3) to make employees whole for the
Companies’ failure to honor the terms of the collective bargaining agreement, (4) to offer
Blondell full reinstatement to his former job or the equivalent; make him whole for any loss of
earnings and other benefits suffered as a result of his unlawful discharge, and (5) to post a
remedial notice. J.A. 7-8.
7
DISCUSSION
We examine the Board’s findings of fact to determine whether they are
supported by substantial evidence. 29 U.S.C. § 160(e); Universal Camera Corp. v. NLRB,
340 U.S. 474, 488-89 (1951); NLRB v. Pier Sixty, LLC, 855 F.3d 115, 121 (2d Cir. 2017), as
amended (May 9, 2017). “Substantial evidence is more than a mere scintilla.” NLRB. v.
Long Island Ass’n for Aids Care, Inc., 870 F.3d 82, 87 (2d Cir. 2017). 5 “The substantial
evidence standard requires us to review the record in its entirety, including the body of
evidence opposed to the NLRB’s view. We may not, however, displace the NLRB’s
choice between two fairly conflicting views, even though we would justifiably have
made a different choice had the matter been before us de novo.” Id.We review the NLRB’s legal conclusions de novo. Pier Sixty, LLC, 855 F.3d at 122.
We give “considerable deference,” however, to “legal conclusions based upon the
Board’s expertise.” Id.; see also NLRB v. Town & Country Elec., Inc., 516 U.S. 85, 89-90
(1995).
I. The General Counsel’s Ratification of the Complaint Was Effective
The Companies advance three separate challenges to the Board’s proceedings on
the complaint ratified by the General Counsel. First, they argue that the proceedings are
void altogether: because the Acting General Counsel was acting without authority
under the FVRA when he filed the first complaint, they maintain that all subsequent
proceedings are a nullity. Second, they urge that the General Counsel’s ratification of
the first complaint was invalid in and of itself because certain “boilerplate” language
that appears in a series of ratification notices that he issued reflects that he had less than
5Unless otherwise noted, in quotations from case law, this Opinion omits all alterations,
brackets, citations, emphases, and internal quotation marks.
8
the “full knowledge” of relevant facts that is necessary for a valid ratification.
Respondents’ Br. 23-24. Finally, they identify a due process violation in the Board’s
decision on remand to adopt the 2015 decision in full without giving the Companies a
chance to fully re-litigate the issues. We address each of these arguments in turn. 6
A. FVRA Challenge
The FVRA is codified in 5 U.S.C. §§ 3345-3349d. Section 3345(a) empowers the
President to name an acting official to an office for which a permanent appointment
requires Senate confirmation. Id. § 3345(a)(1)-(3). 7 The universe of persons eligible to
serve in an acting capacity is limited, however, by the categories enumerated in
section 3345(a). See Southwest General, 137 S. Ct. at 936 (“Section 3345(a) of the FVRA
permits three categories of Government officials to perform acting service in a vacant
PAS office [that is, one for which a Presidential appointment and Senate confirmation
are required].”). The pool of possible acting officials is additionally limited by
subsection (b)(1) of section 3345, which provides in relevant part that “a person may not
serve as an acting officer for an office under this section, if . . . the President submits a
nomination of such person to the Senate for appointment to such office.” Id.§ 3345(b)(1)(B).
6The Companies also briefly argue that, by allowing the President to appoint “Principal
Officers” without the advice and consent of the Senate, the FVRA violates the Constitution’s
Appointments Clause. See Respondents’ Br. 21-22 (citing Southwest General, 137 S. Ct. at 946(Thomas, J., concurring)). Because we conclude that the General Counsel lawfully ratified the
original complaint, we have no need to address this argument.
7Lafe E. Solomon, the official whose action here was challenged, was named Acting General
Counsel of the NLRB under subsection (a)(3) of § 3345. See Southwest General, 137 S. Ct. at 937(“Solomon satisfied the requirements for acting service under subsection (a)(3) of the FVRA
because he had spent the previous ten years in the senior position of Director of the NLRB’s
Office of Representation Appeals.”). The other categories of eligible officials are not at issue
here.
9
The FVRA also sets a time limit for acting officers: those serving in that capacity
under § 3345 may do so for “no longer than 210 days beginning on the date the vacancy
occurs.” Id. § 3346(a)(1). Section 3347 of the FVRA makes sections 3345 and 3346 the
“exclusive means for temporarily authorizing an acting official,” unless another
statutory provision authorizes otherwise, or a recess appointment is made. Id.
§ 3347(a)(1)-(2).
Section 3348 provides broadly that “[a]n action taken by any person who is not
acting under section 3345, 3346, or 3347 . . . in the performance of any function or duty
of a vacant office . . . shall have no force or effect.” Id. § 3348(d)(1). Additionally, it
establishes that “[a]n action that has no force or effect . . . may not be ratified.” Id.
§ 3348(d)(2). In other words, under section 3348, if an official who is exercising the
duties of a vacant office in an acting capacity does not meet the requirements of
sections 3345, 3346, or 3347, then that official’s actions have no force or effect and cannot
be ratified.
Critically here, section 3348 expressly exempts from its purview actions taken by
the General Counsel of the National Labor Relations Board. 8 The existence of this
explicit exemption implies strongly that, with regard to actions taken by that official, the
converse of the “no force and effect” provision will hold: actions taken by an Acting
General Counsel of the Board are not automatically void and may be ratified by a
lawfully appointed acting official, even if the actions were not authorized when first
taken. Cf. Sw. Gen., Inc. v. NLRB, 796 F.3d 67, 79 (D.C. Cir. 2015) (assuming without
deciding that “section 3348(e)(1) renders the actions of an improperly serving Acting
General Counsel voidable, not void”); Southwest General, 137 S. Ct. at 938 n.2 (declining to
8Section 3348(e)(1) provides in relevant part: “This section shall not apply to – (1) the General
Counsel of the National Labor Relations Board.” 5 U.S.C. § 3348(e)(1).
10
reach issue). We thus read the text of the statute to foreclose the Companies’ argument
that the Acting General Counsel’s complaint was void at the inception and not
amenable to ratification.
The parties do not dispute that, under Southwest General, Solomon’s 2010
appointment as an acting officer under section 3354(b)(1) became invalid in January
2011, when he was formally nominated to serve as the General Counsel by then-
President Obama. The Board issued its Complaint against the Companies on May 30,
2013, well after Solomon’s nomination to serve as permanent General Counsel in
January 2011, but before General Counsel Griffin was confirmed in November 2013. The
Complaint was therefore issued after Solomon’s authority to act as Acting General
Counsel ceased, and under the FVRA, it is void unless it was subsequently ratified by a
lawfully serving official. See 5 U.S.C. § 3348(e)(1) (discussed above).
The parties also accept that General Counsel Griffin was validly appointed and
confirmed by the Senate on November 4, 2013. He issued a “Notice of Ratification” with
regard to the 2013 Complaint against the Companies on August 14, 2017. The question
before us, then, is whether General Counsel Griffin’s ratification of the Complaint was
valid. We conclude that it was.
Our Court has not yet had occasion to pass on the issue of a duly appointed
official’s ratification of the actions of an acting official. In Federal Election Commission v.
NRA Political Victory Fund, 513 U.S. 88 (1994), however, the Supreme Court reasoned
that general principles of agency law, “and in particular the doctrine of ratification,”
apply when dealing with ratification of agency action within the executive branch—in
that case, the Solicitor General’s authority to ratify a petition for certiorari filed by the
Federal Election Commission. Id. at 98. The Supreme Court held in that case that,
consistent with principles of agency law, for its ratification to be effective, the ratifying
11
party had to possess the authority himself to do the ratified act “at the time the
ratification was made.” Id.Adhering to this instruction, the D.C. Circuit has upheld agency ratifications in
circumstances similar to those before us here. After the Supreme Court disallowed
recess appointments to the Board in NLRB v. Noel Canning, 573 U.S. 513, 519-20 (2014),
the D.C. Circuit upheld ratifications of the recess-appointed Board’s actions by the
properly constituted Board. See Wilkes-Barre Hosp. Co. v. NLRB, 857 F.3d 364, 371 (D.C.
Cir. 2017). The D.C. Circuit’s precedents “establish[ed] that ratification can remedy a
defect arising from the decision of an improperly appointed official . . . when . . . . a
properly appointed official has the power to conduct an independent evaluation of the
merits and does so.” Id.; see also Intercollegiate Broad. Sys., Inc. v. Copyright Royalty Bd.,
796 F.3d 111, 117-21, 124 (D.C. Cir. 2015). Valid ratification, in the view of the D.C.
Circuit, required the Board to “conduct an independent evaluation of the merits,” and
make “a detached and considered judgment.” Wilkes-Barre Hosp., 857 F.3d at 371-72.
Finding no evidence that the Board failed to do so, the D.C. Circuit held that “the
properly constituted Board’s ratification remedied any defect” arising from the lack of a
quorum of Board members. Id. at 371.
The Third Circuit reached a similar conclusion in Advanced Disposal Services East,
Inc. v. NLRB, 820 F.3d 592 (3d Cir. 2016). It described the requisite process, derived from
earlier case law dealing with a principal’s later ratification of an agent’s actions:
First, the ratifier must, at the time of ratification, still have the authority
to take the action to be ratified. Second, the ratifier must have full
knowledge of the decision to be ratified. Third, the ratifier must make a
detached and considered affirmation of the earlier decision. These last
two requirements are intended to ensure that the ratifier does not blindly
affirm the earlier decision without due consideration.
Id. at 602-03.
12
We have recognized similar principles of agency law governing the ratification of
an agent’s acts by a principal. See, e.g., Monarch Ins. Co. of Ohio v. Ins. Corp. of Ireland, 835
F.2d 32, 36 (2d Cir. 1987) (“Ratification requires acceptance by the principal of the
benefits of an agent’s acts, with full knowledge of the facts, in circumstances indicating
an intention to adopt the unauthorized arrangement.”); Breen Air Freight, Ltd. v. Air
Cargo, Inc., 470 F.2d 767, 773 (2d Cir. 1972) (“Under the law of agency[,] ratification can
only occur when the principal, having knowledge of the material facts involved in a
transaction, evidences an intention to ratify it.”).
Following the Supreme Court’s instructions in NRA Political Victory Fund and our
own case law, we apply the same principles now to the Board General Counsel’s
ratification of an Acting General Counsel’s earlier-filed complaint. Valid ratification
occurs, therefore, when the General Counsel, possessing the authority necessary to
undertake the ratified act at the time of ratification, see NRA Political Victory Fund, 513
U.S. at 98, and with full knowledge of the material facts, see Monarch Ins. Co., 835 F.2d at
36, manifests an intent to ratify the act in question. See generally Restatement (Third) of
Agency § 4.01 (2006) (defining “Ratification”).
We therefore decide that agency actions can be ratified, so long as the actions of
the agency official that are being ratified are not automatically void under the FVRA.
See 5 U.S.C. § 3348. If an action is merely voidable, and not void, that action can be
ratified by a properly serving official who (1) has authority to take the action, and (2)
with full knowledge of the underlying matter, (3) makes an independent and detached
evaluation of the merits. See Wilkes-Barre Hosp. Co., 857 F.3d at 371; Advanced Disposal
Servs. E., Inc., 820 F.3d at 602-03. In reaching this conclusion, we join the D.C. and Third
Circuits, which have upheld ratifications made by General Counsel Griffin after the
Supreme Court’s decision in Southwest General. See Midwest Terminals of Toledo Int’l, Inc.
13
v. NLRB, 783 F. App’x 1, 6-7 (D.C. Cir. 2019); 1621 Route 22 W. Operating Co. v. NLRB,
725 F. App’x 129, 137 (3d Cir. 2018) (non-precedential).
B. Challenge to General Counsel Griffin’s ratification
The Companies maintain that General Counsel Griffin’s ratification was
nevertheless invalid because his order affirming the prior complaint used language that
they view as “boilerplate” and as indicating something less than “full knowledge” of
the facts. Respondents’ Br. 23-24. Because General Counsel Griffin used the same
language in many ratifications, they argue, he must not have had full knowledge of this
proceeding.
This argument is unpersuasive. Unless the record includes clear evidence to the
contrary, agency action is entitled to a presumption of regularity. See Nat'l Archives &
Recs. Admin. v. Favish, 541 U.S. 157, 174 (2004). We thus presume the agency has
considered all the evidence and properly discharged its duties. Id.; see also J. Andrew
Lange, Inc. v. FAA, 208 F.3d 389, 394 n.7 (2d Cir. 2000) (“Absent a showing to the
contrary, it is presumed the agency considered all evidence in the record when making
its determination.”). Absent additional record evidence, the Companies’ conclusory
claims that the use of “boilerplate language” shows less than “full knowledge of the
underlying facts” is not sufficient to overcome the presumption that the ratifying
official has considered the relevant evidence. Respondents’ Br. 24; see also Wilkes-Barre
Hosp. Co., 857 F.3d at 372 (absent evidence suggesting a failure to make a detached and
considered judgment, “the better course is to take [the] ratification at face value and
treat it as an adequate remedy”). Therefore, we conclude that the General Counsel’s
ratification was valid.
14
C. Due Process challenge
Finally, the Companies assert that on remand from the D.C. Circuit, the Board
violated their due process rights by not affording them an opportunity to present new
legal arguments about laches, in conflict with the invitation extended by the D.C.
Circuit in its remand order. 9 Respondents’ Br. 25-26. But on remand, the NLRB asked
each party for position statements, and the Companies submitted a merits position
statement that addressed laches. J.A. 34-41. The Companies persist, nevertheless
arguing that the position statements were not sufficient to permit the Board to
adjudicate their laches arguments “fully and fairly.” Respondents’ Br. 27.
To prevail on such a claim in the context of agency proceedings, the Companies
must show “some violation of established law or procedures or that [they were]
specifically prejudiced”; we have held that “an element of confusion or novelty alone
does not violate due process.” NLRB v. Washington Heights-W. Harlem-Inwood Mental
Health Council, Inc., 897 F.2d 1238, 1244 (2d Cir. 1990) (emphasis added). Agency
regulations contemplate requests for position statements after remand. See 29 C.F.R.
§ 102.46(i)(2) (“Where a case has been remanded by the court of appeals, the motion [to
file an amicus curiae brief] must be filed no later than 21 days after the parties file
statements of position on remand.”). The letter that the Board sent to the Companies
and the General Counsel after remand stated that statements of position would be
subject to section 102.46(h), the regulatory provision that governs page limits and other
requirements for principal briefs filed before the Board. J.A. 28 (citing 29 C.F.R.
§ 102.46(h)). That the Board rejected Respondents’ laches argument on remand hardly
9See Order, Newark Electric Corp. v. NLRB, No. 15-1111, 2017 WL 5662145, at *1 (D.C. Cir. July 14,
2017) ( “Petitioners may raise their laches argument on remand and seek judicial review if
unsatisfied with the result.”).
15
establishes a due process violation. Again, we apply the presumption of regularity: the
argument was made, and the Board simply did not accept it.
In sum, we identify no violation of established law or procedure in the agency
proceedings on remand nor any prejudice accruing to the Companies by the agency’s
acceptance of position statements instead of completely new briefing.
II. The Board’s Conclusions of Fact and Law
A. The Companies are a single employer and alter egos
Whether two corporations are a single employer or alter egos for purposes of
labor law presents a question of fact. Lihli Fashions Corp. v. NLRB, 80 F.3d 743, 747 (2d
Cir. 1996). We review the Board’s factual findings to determine whether they are
supported by substantial evidence. 29 U.S.C. § 160(e).
The Board concluded that the three Companies were a single employer and alter
egos of one another. 10 Although closely related, the single-employer and alter-ego
doctrines differ slightly. The single employer doctrine applies to determine whether
two concurrently ongoing businesses “are part of a single integrated enterprise” and
therefore should be treated as one for purposes of the Act. Lihli Fashions Corp., 80 F.3d at
747. The Board focuses on four factors in making this determination: “interrelation of
operations, common management, centralized control of labor relations and common
ownership.” Id. “[N]ot every factor need be present,” however, to support a finding of
single employer status, and “no particular factor is controlling.” Id. “When two entities
are found to be a single employer, one entity’s collective bargaining agreement covers
the other entity as well, provided that the two entities’ employees constitute a single
10In the ALJ’s precise words, “Based on its operations described above and the parties’
stipulation, Respondent Newark Electric, Respondent Newark Electric 2.0, and Respondent
Colacino Industries constitute a single-integrated business and have been at all material times
alter egos and a single employer within the meaning of the Act.” J.A. 24.
16
appropriate bargaining unit.” Id. at 748 (quoting Stardyne, Inc. v. NLRB, 41 F.3d 141, 144
(3d Cir. 1994)). 11
The alter ego doctrine, if applicable, “has the same binding effect” as the single
employer doctrine, but it is “conceptually distinct.” Id. The focus of the alter ego inquiry
is on whether there has been an “attempt to avoid the obligations of a collective
bargaining agreement through a sham transaction or technical change in operations.”
Id. 12 When considering whether two employers are alter egos, therefore, the Board
considers the four factors relevant to the single employer doctrine described above, and
in addition asks “whether the two enterprises have substantially identical management,
business purpose, operation, equipment, customers, supervision, and ownership.”
Goodman Piping Prods., Inc. v. NLRB, 741 F.2d 10, 11 (2d Cir. 1984). A finding of anti-
union motivation is not necessary to conclude that two entities are alter egos, but it may
be “germane.” Id. at 12; see also NLRB v. G & T Terminal Packaging Co., 246 F.3d 103, 118
(2d Cir. 2001).
Under our circuit’s precedent, “[a]n employer found to be the alter ego of
another is automatically responsible for the other’s legal and contractual obligations
under the labor laws.” Newspaper Guild of N.Y., Local No. 3 of Newspaper Guild v. NLRB,
261 F.3d 291, 298-99 (2d Cir. 2001). Thus, “[a]lter egos are bound by each other’s
collective bargaining agreements.” G & T Terminal Packaging Co., 246 F.3d at 118.
Respondents did not argue that the employees of Newark Electric and Colacino Industries did
11
not constitute a single appropriate bargaining unit, therefore this aspect of the single employer
doctrine is not at issue. See Respondents’ Br. 28-31.
12See also 9 Emp. Coord. Labor Relations § 4:8 (“The alter ego theory was developed by the
NLRB to prevent employers from evading labor obligations by restructuring. . . . [It] also is used
to prevent entities from using ‘double-breasted’ operations, the term used to describe
commonly owned unionized and nonunion firms.”).
17
The tests relevant to application of both the single employer and alter ego
doctrines are easily satisfied here. As the ALJ determined, between 2000 and 2012,
James operated Newark Electric and Colacino Industries interchangeably, using both
names in commercial dealings with customers and the public. J.A. 17, 20. All three
Companies shared the same office space, phone system, copiers, and email mailbox.
The Newark Electric and Colacino Industries logos were both displayed on the shared
office, stationery, employee timesheets, and job cards. Employees of all three companies
serviced the same customers and used the same warehouse for supplies. James
managed the employees and made personnel decisions for all three companies, and the
payroll reports for the employees and the Union contributions and deductions listed all
three Companies.
The Companies also had common, although not completely coextensive,
ownership. James owned 100 percent of Colacino Industries and Newark 2.0, as well as
Newark Electric’s assets, customer base, goodwill, and logo, while his father, Richard,
retained responsibility for Newark Electric’s earlier debts. Further, the ALJ determined
that, even if Richard retained formal ownership of Newark Electric until it was
dissolved in 2013, “the active control of both companies was in the hands of James
Colacino.” J.A. 20 n.11. Thus, the Board’s determination that Newark Electric and
Colacino Industries are a single employer and also alter egos was supported by
substantial evidence.
The Companies assail that conclusion, contending that the Board misapplied the
alter ego doctrine. Newark Electric was not operational during the relevant time period,
they allege. Rather, they say it had been “completely dormant since 2000.”
Respondents’ Br. 29. They deny any overlap in the management or ownership of the
Companies: “While James Colacino worked for Richard Colacino at NEC [that is,
Newark Electric] prior to forming his own company and Richard Colacino works for
18
James Colacino at Colacino Industries, neither ever had any ownership or management
role in the other’s company.” Respondents’ Br. 31. Therefore, they say, the Companies
cannot be alter egos.
This argument is unavailing. First, common ownership is not the only factor
relevant to determining alter ego status; no single factor is controlling. See A & P Brush
Mfg. Corp. v. NLRB, 140 F.3d 216, 219 (2d Cir. 1998). Second, the Board determined
based on record evidence that Newark Electric was not “dormant” after 2000, but rather
that it “was holding itself out to the public as an active operating company from the
years 2000 to 2012.” J.A. 15. Newark Electric continued to make employee contributions
to the Union in its own name after James signed the first LOA. During that time, the
Board determined, James maintained “active control” over both Newark Electric and
Colacino Industries, even if formal ownership of Newark Electric remained with
Richard. J.A. 20 n.11. This finding, too, is supported by substantial evidence, and
satisfies the element of common ownership underpinning the Board’s determination
that the Companies were a single employer or alter egos during the relevant period. See
Kenmore Contracting Co., 289 NLRB 336, 337 (1998). We thus conclude that the record
supports the Board’s alter ego determination.
B. As a matter of law, the second LOA did not supersede or merge
with the first
The Companies next assert that, if they are single employers and alter egos,
contract principles should relieve them of liability for failing to bargain with the Union
because the second LOA “merged with and superseded” the first. Respondents’ Br. 32.
According to the Companies, if Colacino Industries is correctly treated as a single entity
with and an alter ego of Newark Electric for the purpose of binding it to the first LOA,
then the two must also be treated as a single entity for the purpose of extinguishing the
relationship with the Union through Colacino Industries’ cancellation of the second
19
LOA. Respondents’ Br. 32-33. The argument has some force, but in the end, we are
constrained to disagree.
Under New York’s common-law doctrine of contract merger, 13 when parties who
have entered first into one agreement subsequently enter into a second regarding the
same subject matter, the first agreement “merges” with the second, and the terms of the
second agreement control: “It is famil[i]ar law, of course, that upon the execution of a
valid substituted agreement, the original agreement merges with it and is
extinguished.” Shubin v. Surchin, 280 N.Y.S.2d 55, 59 (App. Div. 1st Dep’t 1967); see also
Applied Energetics, Inc. v. NewOak Cap. Mkts., LLC, 645 F.3d 522, 526 (2d Cir. 2011)
(“Under New York law . . . a subsequent contract regarding the same matter will
supersede the prior contract.”).
The two LOAs at issue here concern the same subject matter: an agreement to
become a union employer subject to the master collective bargaining agreement
between the Union and NECA. See J.A. 253-55; 273-75. But the doctrine of merger just
described applies only when two successive agreements governing the same subject
matter are entered into by identical parties. See Mumin v. Uber Techs., Inc., 239 F. Supp.
3d 507, 524 (E.D.N.Y. 2017) (applying New York law) (“It is a well settled principle of
contract law that a new agreement between the same parties on the same subject matter
13The Companies cite no case to support their contention that “if Colacino Industries is to be
treated as a single entity with and alter ego of NEC for the purpose of binding it by NEC’s
agreement with the Union, it must also be treated as a single entity for the purpose of
extinguishing its relationship and agreement with the Union.” Respondents’ Br. 32-33; see also
Respondents’ Reply Br. 7-9. They point to two decisions that they claim are “not to the
contrary,” Respondent’s Br. 33, but these decisions straightforwardly apply the alter ego
doctrine to find the alter ego companies liable for the unfair labor practices identified. Concourse
Nursing Home, 328 N.L.R.B. 692 (1999); Crawford Door Sales Co., 226 N.L.R.B. 1144 (1976). Thus, to
the extent the Companies seek to invoke the common-law doctrine of contract merger, we look
to the contract law of New York State for guidance, as the Companies are located in New York
and all relevant acts occurred there.
20
supersedes the old agreement.”) (quoting Ottawa Office Integration Inc. v. FTF Bus. Sys.,
Inc., 132 F. Supp. 2d 215, 219 (S.D.N.Y. 2001)).; see also 17A Am. Jur. 2d Contracts § 489
(emphasis added) (“Parties to a contract may, by their mutual agreement, accept the
substitution of a new contract for the old one with the intent to extinguish the obligation
of the old contract, but one party to a contract cannot, by his or her own acts, release or
alter its obligations; the intention must be mutual.”).
As to this issue—the identity of the entities that were party to the first LOA with
the Union—the Companies and the Board differ. Newark Electric was listed on the first
LOA as the “Name of Firm” that was bound by the LOA. J.A. 255. The document also
bore Newark Electric’s Federal Employer Identification number. James testified during
the agency proceedings, however, that he thought he was signing the first LOA on
behalf of Newark 2.0, a “division” of Colacino Industries. J.A. 17. 14 Davis testified in
contrast that he understood the first LOA to be between the Union and Newark Electric
and did not even know that a company called Newark 2.0 existed. 15 The
misunderstanding was not recognized at the time.
James testified that he approached Davis about the second LOA because he had
determined for accounting and administrative reasons that operating Newark 2.0 as an
14In support, James testified that he told Davis the first LOA was for Newark 2.0, and did not
notice that the “2.0” symbol was missing from the document. James is listed as “CEO” on the
document, but he asserts that in 2011 he was not CEO of Newark Electric; rather, he held that
position for only Colacino Industries and Newark 2.0. Further supporting his position, James
stated that after he purchased Newark Electric’s assets from his father in 2000, that company
became “dormant” and, between 2000 and 2012, it did not conduct any business. J.A. 15.
15Davis testified that the business card James gave him then identified James, and not Richard,
as the President and CEO of Newark Electric. Further, the documents incorporating Newark 2.0
were not filed until March 8, 2011, almost two weeks after James signed the first LOA, so
Newark 2.0 technically did not exist when James executed the document.
21
entity separate from Colacino Industries was impracticable. It made better sense to him,
he said, to agree on behalf of the whole of Colacino Industries—rather than just a
division, in James’s mind—to a second Letter of Assent so that the entire enterprise (i.e.,
both Colacino Industries and Newark 2.0) was covered by an agreement with the
Union. James testified that he intended the second LOA to supersede the first, or that
the first would be re-dated to sometime after the date of the second LOA, so that both
LOAs would have the same 180-day trial period.
Davis testified, in contrast, that in his conversation with James about the second
LOA, he understood James to be referring to Newark Electric and Colacino Industries
as two separate companies. This led Davis to check with the Union about whether the
Union permitted a single owner to have separate LOAs for two distinct companies.
Davis denied telling James that the second LOA would supersede the first or agreeing
to re-date the first LOA so that it would in effect mirror the second. James did not
receive a re-dated version of the first LOA.
On their respective faces, the first and second LOAs were not executed by the
same parties: the first was between Newark Electric and the Union and the second was
between Colacino Industries and the Union. See J.A. 255 (agreement between “Newark
Electric” and the Union, bearing Federal Employer Identification number XX-XXXXXXX,
assigned to Newark Electric); id. 273 (agreement between “Colacino Industries” and the
Union, bearing Federal Employer Identification number XX-XXXXXXX, assigned to
Colacino Industries). Now that the Board has determined, years later, that Colacino
Industries is Newark Electric’s alter ego for purpose of its NLRA obligations, the
Companies are arguing that Colacino Industries canceled Newark Electric’s obligations
in the first LOA through its repudiation of the second LOA.
As detailed above, the alter ego theory prevents employers from evading labor
obligations by restructuring their operations or by creating parallel entities. The
22
Companies have not cited authority for their proposition that the doctrine will apply to
relieve one entity of its obligations based on the actions of its alter ego. 16 Indeed,
although the notion advanced has some superficial appeal, we conclude that it would
be misguided to apply the merger doctrine to two contracts signed by facially distinct
parties, relieving one of its voluntarily undertaken obligations, premised on an
administrative agency’s post hoc application of a doctrine intended to further
Congressionally endorsed aims to the contrary. To allow an employer to seize on such a
post hoc finding and transform it into a shield that allows it to avoid its labor law
obligations would conflict with the purposes of both the alter ego and the merger
doctrines.
Moreover, the ALJ determined there was no actual agreement to re-date or
otherwise revise the first LOA. James also testified that he thought the first LOA was
re-dated to reflect the fact that the second LOA was in effect amending the first to cover
the entire enterprise, i.e., both Colacino Industries and Newark 2.0. Davis testified for
the Union that he understood that he was signing up a second, distinct company, and
pointed out that the first LOA was not re-dated or amended in light of the second. See
J.A. 18 (“Contrary to [James’s] testimony, Davis testified that the letter of assent for
Respondent Newark Electric was still in effect since he had already been informed by
the IBEW that there were no problems with a single owner having two different letters
for two different companies.”). The ALJ labeled as “not worthy of belief” James’s
testimony about the re-dating of the first LOA. J.A. 22. In light of the additional
16The Companies cite Doctor’s Associates, Inc. v. Distajo, 66 F.3d 438, 453 (2d Cir. 1995), for the
broad principle that “the consequence of applying the alter ego doctrine is that . . . the acts of
one are the acts of all.” Respondents’ Reply Br. 7. Despite the suggestive language, Doctor’s
Associates and the cases it cites all concern obligations imposed on an alter ego—not acts taken
to relieve an entity from duties like the cancellation of a contract. We are aware of no case
holding that an alter ego’s acts relieved the related entity of an obligation.
23
evidence that Davis lacked authority to dissolve the first LOA, that James never
received a copy of the purportedly re-dated first LOA, and the absence of notes
memorializing a conversation in which any such arrangement was made, the ALJ
rejected the narrative advanced by the Companies. J.A. 22.
In sum, substantial evidence supports the Board’s conclusions that the
Companies are a single employer and alter egos of each other and that Davis and James
did not orally agree to re-date or repudiate the first LOA. Further, as a matter of New
York contract law, the second LOA did not supersede the first; the first LOA was not
timely canceled; it remained binding on Newark Electric until May 2015. We therefore
affirm the decision of the Board that the Companies violated the Act by repudiating the
terms of the first LOA and failing to abide by the MCBA.
C. The Companies violated section 8(a)(3) by terminating Blondell’s
employment
Section 8(a)(3) of the Act makes it an unfair labor practice, “by discrimination in
regard to hire or tenure of employment or any term or condition of employment[,] to
encourage or discourage membership in any labor organization.” 29 U.S.C. § 158(a)(3).
If an employee’s protected labor organization-related conduct is a “substantial or
motivating factor prompting [a] discharge,” then the discharge violates section 8(a)(3).
G & T Terminal Packaging Co., 246 F.3d at 115.
In its Wright Line decision, the Board long ago established a two-step test for
ascertaining whether an adverse employment action was taken because of union
activity such that the action would violate section 8(a)(3). Wright Line, a Div. of Wright
Line, Inc., 251 N.L.R.B. 1083, 1087 (1980). Under the Wright Line test, the Board must first
“present evidence that proves that protected conduct was a motivating factor in the
discharge.” G & T Terminal Packaging Co., 246 F.3d at 116. If the Board meets its burden,
the employer then has an opportunity to demonstrate “by a preponderance of the
24
evidence that it would have reached the same decision absent the protected conduct,”
and thereby defend against liability. Id.“An employer’s motivation is a factual question committed in the first instance to
the Board.” NLRB v. Bridgeport Ambulance Serv., 966 F.2d 725, 730 (2d Cir. 1992); see also
G & T Terminal Packaging Co., 246 F.3d at 115-16. When the Board’s factual findings
depend on credibility determinations made by an administrative law judge and
adopted by the Board, those determinations “may not be disturbed [on review] unless
incredible or flatly contradicted by undisputed documentary testimony.” NLRB v. Katz’s
Delicatessen of Houston St., Inc., 80 F.3d 755, 763 (2d Cir. 1996).
The Companies argue that the Board erred in concluding that they constructively
discharged Anthony Blondell because of anti-union sentiment. In support, they
highlight James’s testimony that Blondell asked to be laid off so that he could keep his
Union pension and “good standing” intact. Respondents’ Br. 33, 35. Thus, according to
the Companies, Blondell was not terminated based on his membership in the Union;
rather, he left the Company of his own volition. Respondents’ Br. 35. James’s testimony
derived general support from that of a Colacino Industries employee, Scott Barra,
another Union employee who resigned his Union membership around the time Blondell
was discharged. Barra testified that his decision to resign from the Union was “made
between himself and his spouse,” and that James did not tell him to resign from the
Union. J.A. 23.
The ALJ found James’s testimony in this regard not credible, commenting that it
was “difficult . . . to reasonably believe” that Blondell asked to be laid off when he was
“in the middle of completing a project and . . . there was work available for him to
perform.” J.A. 23. The ALJ instead credited Blondell’s testimony that James told him he
would have to be laid off once James terminated the second LOA because James would
25
no longer be operating a union shop. 17 The ALJ therefore concluded that the Companies
failed to meet their burden in the second step of Wright Line to show that, “regardless of
Blondell’s union affiliation or activities, he would have been laid-off due to a lack of
work.” J.A. 23-24.
The Companies’ challenge to this conclusion rests solely on the ALJ’s decision to
credit the testimony of Blondell over that of James and Barra. See Respondents’ Br. 34-
35. But, as previewed above, to be effective this type of challenge must meet a
demanding standard: “When the NLRB’s findings are based on the ALJ’s assessment of
the credibility of witnesses,” such findings “will not be overturned unless they are
hopelessly incredible or they flatly contradict either the law of nature or undisputed
documentary testimony.” Kinney Drugs, Inc. v. NLRB, 74 F.3d 1419, 1427 (2d Cir. 1996).
That standard is not met here. Accepting the ALJ’s credibility determination, as we
therefore must, we conclude that substantial evidence supports the ALJ’s finding that
Blondell was terminated because of anti-union animus, in violation of section 8(a)(3).
We thus have no basis for declining to enforce the Board’s order that the Companies
offer Blondell reinstatement to his former job or a substantial equivalent, and make
Blondell whole for any resulting loss of earnings and other benefits.
17Blondell testified that, contrary to James’s account, the company had work for him to perform
at the time, and that he believed he was discharged because Colacino Industries was “going
nonunion” and, as a union member, he could no longer work for the company. J.A. 23. James,
however, testified that Blondell told him, “[Y]ou’re going to have to lay me off,” and that
Blondell was insistent that James lay him off from Colacino Industries “for lack of work.” J.A.
132. The record shows that, after the second LOA was terminated, James retained two other
employees on the Colacino Industries payroll. They had resigned their Union memberships.
26
CONCLUSION
For the foregoing reasons, we hereby GRANT the Board’s application for
enforcement of its 2018 Decision and Order.
27