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NLRB Law Memo 08/06/2008
by Ross Runkel at LawMemo
NLRB Law Memo 08/06/2008
by LawMemo - First in Employment Law.
Also by free weekly email.
NLRB - Staff summarized 5 decisions.
A.J.
Mechanical, Inc., William A. Greene a/k/a Arnold Greene and Cynthia D.
Greene (15-CA-15350, et al. ; 352 NLRB No. 108) Pensacola, FL July
23, 2008.
http://www.nlrb.gov/shared_files/Board%20Decisions/352/v352108.htm
On remand from the circuit court, the Board reversed its supplemental
decision and order and, applying the test set forth in White Oak Coal Co.,
318 NLRB 732 (1995), pierced
the corporate veil of A. J. Mechanical, Inc. and imposed personal liability
for backpay on the now-defunct corporation's president and his wife.
Under White Oak Coal, the Board will pierce the corporate veil when : (1) there is such unity of interest, and lack of respect given to the
separate identity of the corporation by its shareholders, that the
personalities and assets of the corporation and the individuals are
indistinct ; and (2) adherence
to the corporate form would sanction a fraud, promote injustice, or lead to
an evasion of legal obligations.
In
the underlying supplemental decision and order (345 NLRB 295 (2005)),
the Board reversed the administrative law judge 's determination that A.J.
Mechanical 's former president and co-owner, William A. (Arnold) Greene, and his wife, Cynthia Greene, should be held jointly
and severally liable for backpay along with the corporation. Assuming without finding that the first prong of White Oak Coal had
been met, the Board determined that the evidence was insufficient to
establish that the second prong had been met. The court of appeals disagreed.
In Carpenters & Millrights Local 2471 v. NLRB, 481 F.3d 804 (D.C. Cir 2007), the court summarily enforced the judgment against
the corporation, but vacated the Board 's decision refusing to pierce the
corporate veil. Finding that
the Board 's analysis neither provided sufficient evidence to substantiate
its conclusion nor accounted for significant countervailing evidence, the
court remanded the proceeding to the Board.
Applying prong one of White Oak Coal to the
evidence for the first time, the Board determined that throughout its
existence, the principals of A.J. Mechanical disregarded corporate
formalities and structure with respect to decision-making, record-keeping
and accounting. The Board additionally found that the Greenes routinely
commingled personal and corporate assets and property. Accordingly, the Board found sufficient unity of interest and lack of
respect for the separate identity of the corporation to conclude that the
first prong of White Oak Coal was satisfied.
Accepting the court 's decision as law of
the case with respect to the evidence previously relied upon relating to
prong two, the Board determined that the remaining record evidence also
supports the conclusion that adherence to the corporate form would unjustly
result in the evasion of A.J. Mechanical 's backpay obligations. Arnold Greene 's role as owner, officer, and director coupled with
his day-to-day business involvement and diversion of corporate assets to his
personal benefit demonstrates his individual participation in the inequity.
Cynthia Greene 's writing checks payable to her husband on the
corporate account, which amounts were thereafter placed in their joint
account as a shared asset, demonstrates that she was more than merely a
passive recipient of benefits but rather an active participant in the
dissipation of corporate assets. Accordingly,
the Board determined that the second prong of White Oak Coal had been
satisfied with respect to both Arnold and Cynthia Greene and held both
individually liable for A.J. Mechanical 's outstanding backpay obligations.
(Chairman
Schaumber and Member Liebman participated.)
***
Tower
Industries d/b/a Allied Mechanical, Inc. (31-CA-26120, et al. ; 352 NLRB No. 110) Ontario, CA July 24, 2008.
http://www.nlrb.gov/shared_files/Board%20Decisions/352/v352110.htm
In this compliance case, the Board adopted the administrative law judge 's
finding that discriminatee Walter Reddoch adequately searched for interim
employment.
(Chairman
Schaumber and Member Liebman participated.)
Hearing
at Los Angeles, Dec. 3-4, 2007 and Feb. 5, 2008. Adm. Law Judge William G. Kocol issued his supplemental decision
March 13, 2008.
***
Goya
Foods of Florida (12-CA-23524,
et al. ; 352 NLRB No. 109) Miami, FL July 25, 2008.
http://www.nlrb.gov/shared_files/Board%20Decisions/352/v352109.htm
The Board adopted the administrative law judge 's findings that the
Respondent violated Section 8 (a) (5) and (1) of the Act by unilaterally changing pension plans and
health-insurance plans on two occasions and by refusing the Union 's
information requests for a detailed seniority list, unit employees '
addresses and phone numbers, the employee handbook, and any benefit
policies. The Board also
adopted the judge 's finding that the Respondent violated Section 8 (a) (1)
by informing employees that "Union
employees . . . are not eligible " to participate in its 401 (k) plan.
The Board explained that the Respondent would have an opportunity in
compliance to litigate whether it is impossible or unduly or unfairly
burdensome to restore either of the two prior health insurance plans. Further, the Board explained that make-whole relief would be
inapplicable if the Union chose continuation of the final unilaterally
implemented health plan.
(Chairman
Schaumber and Member Liebman participated.)
Charges filed by UNITE HERE ; complaint
alleged violation of Section 8 (a) (1) and (5). Hearing at Miami on
Nov. 5, 2007. Adm. Law Judge
Keltner W. Locke issued his decision
Jan. 23,
2008.
***
Proper
Steel Erectors, Inc. and its alter ego B & M Steel Erectors, Inc. (3-CA-24700 ; 352 NLRB No. 113) Pompey and Central Square, NY July
25, 2008.
http://www.nlrb.gov/shared_files/Board%20Decisions/352/v352113.htm
The Board granted the General Counsel 's motion for reconsideration of its
prior decision to deny in part the General Counsel 's motion seeking default
judgment on allegations regarding the Respondent 's backpay obligations and
contributions owed to union benefit funds set forth in the March 26, 2007
amended compliance specification. (See 352 NLRB No. 11) Based
on statements by the Respondent 's counsel in a March 21, 2007 letter and
email submitted in support of the motion, and the Respondent 's failure to
file a timely response to the May 20, 2008 Notice to Show Cause, the Board
found that the Respondent does not contest any of the allegations set forth
in the amended compliance specification. Accordingly, the Board deemed those
allegations to be admitted, and granted the General Counsel 's motion for
default judgment in its entirety.
(Chairman
Schaumber and Member Liebman participated.)
***
The
McBurney Corp. (26-CA-17564, et
al. ; 352 NLRB No. 112) Norcross, GA July 23, 2008.
http://www.nlrb.gov/shared_files/Board%20Decisions/352/v352112.htm
In an earlier proceeding, the Board found that the Respondent unlawfully
refused to hire certain union-affiliated applicants, and ordered the
Respondent to provide instatement and backpay to all the discriminatees.
The Board specified, however, that those remedies would be subject to
the limitations established in Oil Capitol, 349 NLRB No. 118 (2007).
Subsequently,
the General Counsel moved for reconsideration of that qualification,
asserting that retroactive application of Oil Capitol would cause manifest
injustice. The Board denied
that motion.
In the present case, the Board denied the
General Counsel 's second motion for reconsideration, which asserted that
the Board—in denying the General Counsel 's first motion—failed to
consider adequately whether applying Oil Capitol would cause manifest
injustice. The Board noted that
that issue was considered and rejected by the Board in the first motion for
reconsideration, and thus the second motion did not establish extraordinary
circumstances within the meaning of Section 102.48 of the Board 's Rules.
For institutional reasons, Member Liebman
concurred in the denial of the General Counsel 's second motion. She noted that denying the motion avoids delay in the disposition of
the case, including the completion of a compliance proceeding. Member Liebman also stated her view that, if retroactive application
of Oil Capitol ultimately has a demonstrably adverse effect on backpay, the
General Counsel and the Charging Party would be free to pursue the manifest
injustice issue.
(Chairman
Schaumber and Member Liebman participated.)
***
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Editor: Ross Runkel, Professor of Law Emeritus. email Ross@LawMemo.Com, Phone 503-399-8028. Copyright LawMemo, Inc.
