DocketNumber： 95-1294
Filed Date： 10/20/1995
Status： Precedential
Modified Date： 9/21/2015
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
No. 95-1294
UNION BUILDERS, INC.,
Petitioner,
v.
NATIONAL LABOR RELATIONS BOARD,
Respondent.
____________________
DISTRICT COUNCIL 94, UNITED BROTHERHOOD OF
CARPENTERS AND JOINERS OF AMERICA, AFL-CIO,
Intervenor.
____________________
ON PETITION FOR REVIEW AND CROSS-APPLICATION
FOR ENFORCEMENT OF AN ORDER OF
THE NATIONAL LABOR RELATIONS BOARD
____________________
Before
Torruella, Chief Judge, ___________
Aldrich and Coffin, Senior Circuit Judges. _____________________
_____________________
Andrew B. Prescott, with whom Donald P. Rothschild and ____________________ _____________________
Tillinghast Collins & Graham were on brief for petitioner. ____________________________
Joseph A. Oertel, Senior Litigation Attorney, National Labor ________________
Relations Board, with whom Frederick L. Feinstein, General ________________________
Counsel, Linda Sher, Acting Associate General Counsel, Aileen A. __________ _________
Armstrong, Deputy Associate General Counsel, and Charles _________ _______
Donnelly, Supervisory Attorney, National Labor Relations Board, ________
were on brief for respondent.
____________________
October 20, 1995
____________________
TORRUELLA, Chief Judge. The petitioner, Union TORRUELLA, Chief Judge. ____________
Builders, Inc. ("UBI") seeks review of the decision of the
respondent, the National Labor Relations Board ("the Board" or
"the NLRB"), ordering UBI to supply requested information to
District Council 94, United Brotherhood of Carpenters and Joiners
of America, AFL-CIO (the "Union"). The NLRB cross-applies, under
10(e) of the National Labor Relations Act ("the Act"), 29
U.S.C. 160(e), for enforcement of its order against UBI. The
Board has ordered UBI to cease and desist from violating
8(a)(5) and (1) of the Act, 29 U.S.C. 158(a)(1) and (a)(5),
furnish the Union with the information it requested, and post
appropriate notices. For the following reasons, we affirm the
Board's Decision and Order.
I. BACKGROUND I. BACKGROUND
In 1989, a Rhode Island company called O. Ahlborg &
Sons ("O. Ahlborg") executed a three-year collective bargaining
agreement ("CBA") with the Union. On or about March 24, 1992,
O. Ahlborg notified the Union that it planned to terminate the
agreement as of May 31, 1992, as was O. Ahlborg's contractual
right. As a result of collective bargaining with the Union's
then business manager (Herbert F. Holmes), O. Ahlborg reached an
agreement (the "Holmes-Ahlborg Agreement") with the Union
(confirmed by a letter dated May 29, 1992) whereby a new employer
entity, UBI, would be formed. Under the Holmes-Ahlborg
Agreement, UBI would enter into a collective bargaining agreement
(the "new CBA") with the Union and would continue all union
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bargaining unit work performed at that time by O. Ahlborg. The
Board found that the Holmes-Ahlborg Agreement also provided that,
as between UBI and O. Ahlborg, UBI would be allotted all
prevailing rate jobs.
Additionally, under the Holmes-Ahlborg Agreement, UBI
would assume all employees currently performing union bargaining
unit work for O. Ahlborg, and there would be no interruption in
production, employment or wages of union members despite the
termination of the O. Ahlborg-Union CBA. Shortly thereafter, UBI
and the Union entered into the new CBA, which provided that
[UBI] will not subcontract any work
covered by the terms of this agreement
which is to be performed at the jobsite
except to a contractor who holds an
agreement with the United Brotherhood of
Carpenters and Joiners of America, or one
of its subordinate bodies, or, who
agrees, in writing, prior to or at the
time of the execution of the sub-
contract, to be bound by the terms of
this agreement.
The new CBA covered the period from June 1, 1992 to June 4, 1995.
On December 8, 1993, David F. Palmisciano, who had
replaced Holmes as union business representative, sent a letter
to UBI's chief executive Eric Ahlborg, expressing concern that
UBI was "operating a second company" as "an alter ego." The
letter also requested that Eric Ahlborg fill out and return an
enclosed questionnaire. Eric Ahlborg refused to reply to the
questionnaire.
Subsequently, the matter came before an administrative
law judge ("ALJ") on the NLRB General Counsel's complaint
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alleging that UBI violated 8(a)(5) and 8(a)(1) of the Act by
refusing to furnish information that the Union alleged was
necessary for, and relevant to, the performance of its duties as
the exclusive collective-bargaining representative of unit
employees. Palmisciano testified before an ALJ that, during
three previous onsite inspections, he saw evidence that UBI had
violated his interpretation of the Holmes-Ahlborg Agreement: that
as between O. Ahlborg and UBI, UBI would garner all state,
Federal and other work with high wage rates, particularly
"prevailing rates," and that such work would all go to union
carpenters.
The ALJ concluded that the Union reasonably believed
that UBI was operating O. Ahlborg as an "alter ego" and
subcontracting in a manner that violated the Holmes-Ahlborg
Agreement's award of prevailing rate jobs to UBI and its union
member employees only.1 Thus, the ALJ concluded that the
Union's reasonable belief justified the request for information,
and ordered UBI to comply. The Board affirmed the ALJ's rulings,
findings and conclusions, and adopted his recommended Order. UBI
seeks review of the Board's decision, and the Board cross-applies
for enforcement of its order against UBI.
____________________
1 UBI was organized as a Rhode Island corporation on June 1,
1992, to engage in the business of building construction and
related activities. UBI's officers are related to, and overlap
substantially with, those of O. Ahlborg. For example, UBI's
chief executive, Eric Ahlborg, is the son of O. Ahlborg's chief
executive; UBI's vice president is the daughter of O. Ahlborg's
chief executive; and UBI's chief financial officer, who holds the
same position at O. Ahlborg, is another son of O. Ahlborg's chief
executive.
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II. STANDARD OF REVIEW II. STANDARD OF REVIEW
We will enforce a Board order if the Board correctly
applied the law and if substantial evidence on the record
supports the Board's factual findings. Penntech Papers, Inc. v. _____________________
NLRB, 706 F.2d 18, 22-23 (1st Cir. 1983), cited in NLRB v. Acme ____ ________ ____ ____
Tile and Terrazo, Co., 984 F.2d 555, 556 (1st Cir. 1993). We ______________________
uphold the Board's findings of a violation as long as substantial
evidence on the record as a whole supports them, even if we would
have reached a different conclusion. 29 U.S.C. 160(e) and
(f); 3-E Co., Inc. v. NLRB, 26 F.3d 1,3 (1st Cir. 1994); _______________ ____
Cumberland Farms, Inc. v. NLRB, 984 F.2d 556, 559 (1st Cir. ________________________ ____
1993).
III. DISCUSSION III. DISCUSSION
As part of the 8(a)(5) duty to bargain, an employer
must furnish all information requested by a union that is
necessary to the union in order to fulfill its obligation as
representative of bargaining unit employees. NLRB v. Acme ____ ____
Industrial Co., 385 U.S. 432, 435-36 (1967); NLRB v. New England _______________ ____ ___________
Newspapers, Inc., 856 F.2d 409, 413 (1st Cir. 1988). Thus, an ________________
employer must produce information that is "relevant to [the
bargaining representative's] duties," including information
necessary to police the CBA. New England Newspapers, Inc., 856 _____________________________
F.2d at 413. Because the duty to bargain "unquestionably extends
beyond the period of contract negotiations and applies to labor-
management relations during the term of an agreement," NLRB v. ____
Acme Industrial Co., 385 U.S. at 436, the Union could have ____________________
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requested the information simply because of its relevance to its
ongoing agreement with UBI. In this regard, we note that the
Board may determine that the employer has a duty to provide
information if it finds even "a probability that the information ___________
is relevant and that it will be of use to the union in carrying
out its statutory duties." NLRB v. Pfizer, Inc., 763 F.2d 887, ____ ____________
889 (7th Cir. 1985) (emphasis added). See also General Electric ________ ________________
Co. v. NLRB, 916 F.2d 1163, 1168 (7th Cir. 1990) (relevance is ___ ____
most often viewed liberally to allow for broad disclosure of
information).
As an initial matter, we reject UBI's argument that,
via the Holmes-Ahlborg Agreement, the Union approved the
coexistence of O. Ahlborg and UBI, and thereby waived its right
to challenge O. Ahlborg as UBI's alter ego. UBI has cited
neither legal authority nor requisite factual evidence to support
its waiver argument. Furthermore, nothing in the Holmes-Ahlborg
Agreement shows an unequivocal waiver by the Union of its right
to investigate the alleged diversion to O. Ahlborg of prevailing
rate jobs. Communication Workers of America AFL-CIO, Local 1051 _____________________________________________________
v. NLRB, 644 F.2d 923, 927 (1st Cir. 1981) ("the union may ____
relinquish a statutory right only by 'clear and unmistakable'
waiver") (quoting NLRB v. Perkins Machine Co., 326 F.2d 488, 489 ____ ___________________
(1st Cir. 1964)). Finally, the ALJ specifically rejected UBI's
waiver argument based on the facts presented.
The ALJ correctly distinguished the issue of whether
UBI must supply the requested information from the issue of
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whether O. Ahlborg and UBI are in fact intertwined in an alter
ego relationship. We agree that only the information issue bears
on this case. With respect to this issue, we are persuaded that
we should apply a "discovery-type" standard so that the Union may
gather "'a broad range of potentially useful information . . .
for the purpose of effectuating the bargaining process'." NLRB ____
v. Illinois-American Water Co., 933 F.2d 1368, 1378 (7th Cir. ____________________________
1991) (quoting Procter & Gamble Manufacturing Co. v. NLRB, 603 ___________________________________ ____
F.2d 1310, 1315 (8th Cir. 1979)). In particular, the Supreme
Court has stressed that the Board should apply a more liberal
standard of relevance to information requests under the duty to
bargain in good faith than would be appropriate at trial. NLRB ____
v. Acme Industrial Co., 385 U.S. 432, 437 & n.6 (1967). Thus, ____________________
the Union cannot be required to prove that UBI is in breach of
its CBA or that O. Ahlborg is UBI's alter ego before the Union
can receive information that could help prove such allegations.
In deciding to apply such a standard, the ALJ correctly noted
that such information does not only benefit unions. In fact,
requiring employers to divulge information of even merely
potential relevance improves the efficiency of the arbitration
system as a whole, since otherwise, unions might be forced "to
take grievances all the way through to arbitration without [] the
opportunity to evaluate the merits of the claim." Id. at 438. __
As a policy matter, employers as a whole may also benefit, since
the information they supply may generally aid unions in filtering
out meritless cases. Id. __
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Substantial evidence on the record supports the ALJ's
conclusion, adopted by the NLRB, that the Union supplied
sufficient objective evidence to show that its belief in
requesting the information was reasonable. The record supports
the finding that Palmisciano reasonably believed that the purpose
of the Holmes-Ahlborg Agreement was to permit O. Ahlborg to bid
nonunion work and to award all "prevailing rate" jobs to UBI.
Furthermore, the Union had entered the new CBA with UBI. Thus,
the ALJ and the Board correctly concluded that the questionnaire,
with its inquiries into UBI's ownership, corporate directors,
suppliers and relationship to an alleged nonunion employer,
sought information necessary to Palmisciano's collective
bargaining duties.
The ALJ heard testimony from Palmisciano regarding the
latter's observations at three different job sites. Palmisciano
testified that at the three sites, all with O. Ahlborg as general
contractor and paying prevailing rates, he had seen Union member
UBI employees supervising nonunion employees doing unit work, and
he had seen both Union member UBI employees and nonunion workers
doing unit work for subcontractors. Additionally, the ALJ
questioned Palmisciano regarding the meaning of the Holmes-
Ahlborg Agreement, especially with respect to the allotment of
work between O. Ahlborg and UBI. Furthermore, the ALJ questioned
Palmisciano regarding O. Ahlborg's responses to Palmisciano's
demands that O. Ahlborg use union subcontractors on carpentry
work at the three job sites.
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While UBI takes offense at the ALJ's refusal to hear
Eric Ahlborg's testimony to show that UBI and O. Ahlborg had a
different understanding of the Holmes-Ahlborg Agreement, the
issue before the ALJ was whether Palmisciano could supply
objective evidence supporting a reasonable belief that made his
information request relevant to his collective bargaining duties.
Naturally, the ALJ drew his conclusions primarily from the
testimony of Palmisciano, since the chief issue was whether or
not Palmisciano's beliefs were reasonable given objective facts.
UBI also argues that because objective facts show that
it is not operating an alter ego, Palmisciano could not have had
a reasonable belief that would render the requested information
relevant. The proposition that a union's information request may
be denied if the company in question can show that objective
facts render the union's concerns untenable appears logical.
See, e.g., San Diego Newspaper Guild v. NLRB, 548 F.2d 863, 867 ___ ____ __________________________ ____
(9th Cir. 1977) ("If the information requested has no relevance
to any legitimate union collective bargaining need, a refusal to
furnish it could not be an unfair labor practice."). However, in
the instant case, the issue is moot, since even if this
proposition were settled law applicable here, UBI has not made
the required showing.
In the course of this argument, UBI relies on the fact
that the relationship between it and O. Ahlborg is not the
classic alter ego situation of "a disguised continuance of the
old employer." Therefore, runs the argument, because O. Ahlborg
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is not UBI's alter ego, the Union cannot demonstrate reasonable
belief necessary to support its request for information.
However, this argument must fail for two reasons.
First, UBI argues that this Court has previously used
the existence of a motive to evade labor law responsibilities in
corporate organization as a factor in identifying an alter ego,
NLRB v. Hospital San Rafael, Inc., 42 F.3d 45, 50 (1st Cir. ____ ___________________________
1994), and that no "disguise" or motive existed here, since the
Union knew and agreed to the creation of UBI from O. Ahlborg.
However, in Hospital San Rafael, the Court also called cases that ___________________
involve formation of new entities with direct evasionary intent
only "the easiest example[s]" of alter egos. Id. Presumably __
there are also harder examples, as the Union may show here.
Additionally, even if the issue before us here were
whether O. Ahlborg constituted UBI's alter ego, the paper
relationship between the two corporations would not be
dispositive, since the alter ego doctrine looks behind the
corporate form to determine whether nominally distinct
corporations are "in truth . . . but divisions or departments of
a 'single enterprise.'" NLRB v. Deena Artware, Inc., 361 U.S. 398, ____ ___________________
402 (1960). Note that this Court has previously upheld the
Board's finding of an alter ego "where the companies were not
successors but rather parallel operations." C.E.K. Industrial _________________
Mechanical Contractors, Inc. v. NLRB, 921 F.2d 350, 354-55 (1st ____________________________ ____
Cir. 1990) (denying enforcement of the Board's order on other
grounds). Thus, the fact that O. Ahlborg did not succeed UBI
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does not, by itself, render the alter ego doctrine inapplicable
and Palmisciano's belief unreasonable.
Thus, the ALJ correctly avoided turning the hearing
into an inquiry into the agreement's ultimate meaning, since such
a decision was beyond the scope of the only issue before him:
whether or not to compel information disclosure. With respect to
testimony directed at this question, an ALJ's credibility
determinations are entitled to great weight because the ALJ saw
and heard the witnesses testify. Holyoke Visiting Nurses Ass'n ______________________________
v. NLRB, 11 F.3d 302, 308 (1st Cir. 1993), cited in 3-E Co., Inc. ____ ________ _____________
v. NLRB, 26 F.3d 1, 3 (1st Cir. 1994). We will set aside ____
findings only if we believe the ALJ overstepped the bounds of
reason. Id. Here, we find no such transgression. __
IV. CONCLUSION IV. CONCLUSION
The ALJ's findings, adopted by the Board, are supported
by substantial evidence on the record as a whole and stand
without error. UBI's request for review is denied, and the
Board's request for enforcement of its order is granted. Costs
to respondent.
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communication-workers-of-america-afl-cio-local-1051-v-national-labor , 644 F.2d 923 ( 1981 )
the-procter-gamble-manufacturing-company-v-national-labor-relations , 603 F.2d 1310 ( 1979 )
Holyoke Visiting Nurses Association and O'COnnell ... , 11 F.3d 302 ( 1993 )
national-labor-relations-board-v-hospital-san-rafael-inc-and-centro , 42 F.3d 45 ( 1994 )
national-labor-relations-board-v-acme-tile-and-terrazzo-co-admiral-tile , 984 F.2d 555 ( 1993 )
National Labor Relations Board v. Deena Artware, Inc. , 80 S. Ct. 441 ( 1960 )
National Labor Relations Board, International Brotherhood ... , 763 F.2d 887 ( 1985 )
The 3-E Company, Inc. v. National Labor Relations Board , 26 F.3d 1 ( 1994 )
General Electric Company v. National Labor Relations Board, ... , 916 F.2d 1163 ( 1990 )
National Labor Relations Board v. Illinois-American Water ... , 933 F.2d 1368 ( 1991 )
National Labor Relations Board v. Perkins MacHine Company , 326 F.2d 488 ( 1964 )
penntech-papers-inc-tp-property-corporation-and-kennebec-river-pulp , 706 F.2d 18 ( 1983 )
san-diego-newspaper-guild-local-no-95-of-the-newspaper-guild-afl-cio , 548 F.2d 863 ( 1977 )
National Labor Relations Board v. Acme Industrial Co. , 87 S. Ct. 565 ( 1967 )
Cumberland Farmis, Inc. v. National Labor Relations Board , 984 F.2d 556 ( 1993 )
National Labor Relations Board v. New England Newspapers, ... , 856 F.2d 409 ( 1988 )
cek-industrial-mechanical-contractors-inc-v-national-labor-relations , 921 F.2d 350 ( 1990 )