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Parties Involved:
National Labor Relations Board
Respondent
Peter O'Dovero
Petitioner
O'Dovero Construction, Inc.
Petitioner

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 10, 1999 Decided October 22, 1999

No. 98-1433

Peter O'Dovero d/b/a Associated Constructors,

and O'Dovero Construction, Inc.,

Petitioners

v.

National Labor Relations Board,

Respondent

On Petition for Review and Cross-Application

for Enforcement of an Order of the

National Labor Relations Board

Charles W. Gorham argued the cause and was on the briefs

for petitioner.

Richard A. Cohen, Attorney, National Labor Relations

Board, argued the cause for respondent. With him on the

brief were Linda Sher, Associate General Counsel, and John

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D. Burgoyne, Acting Deputy Associate General Counsel.

David S. Habenstreit, Attorney, entered an appearance.

Before: Sentelle, Randolph and Rogers, Circuit Judges.

Opinion for the Court filed by Circuit Judge Rogers.

Rogers, Circuit Judge: Petitioner Peter O'Dovero d/b/a

Associated Constructors and O'Dovero Construction, Inc. appeals the decision and order of the National Labor Relations

Board finding that it violated s 8(a)(1), (a)(3) and (a)(5) of the

National Labor Relations Act ("Act"), 29 U.S.C. ss 158 (a)(1),

(a)(3), and (a)(5), and directing that petitioner henceforth

cease and desist from "[d]iverting work from one group of

employees to another in order to discourage union activity,"

and "[r]esume bidding for jobs to be performed by unit

employees under bidding practices as they existed prior to

the unlawful diversion of union work." Peter O'Dovero d/b/a

Associated Constructors and O'Dovero Construction, Inc.,

325 N.L.R.B. No. 187, 1998 WL 380989, at *5 (1998). Before

the court, petitioner makes four claims of error: first, that

the Board was precluded from making a single employer

finding in light of a prior prosecutorial decision not to pursue

such a union complaint and the union was estopped from

bringing the instant case; second, the Board's finding that

O'Dovero has not ceased its operations is unsupported by

substantial evidence in view of the evidence that it was

performing no work nor bidding on contracts and that discussions about dissolving O'Dovero began two years earlier;

third, that the Board's finding that work was diverted from

O'Dovero to Associated elevates treatment of a union subcontractor and distorts the underlying contractual relationship;

and fourth, that the Board abused its discretion by imposing

an unduly burdensome remedy, effectively forcing resumption

of unprofitable operations. Only the latter contention requires some explication. Because the Board's findings are

supported by substantial evidence in the record, and because

the Board did not abuse its discretion in requiring resumption

of the status quo pro ante, we deny the petition and order

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enforcement of the Board's order.1

I.

Associated Constructors ("Associated") and O'Dovero Construction, Inc. ("O'Dovero") are family owned and run construction companies. Associated, founded in the 1980s, is

owned entirely by Peter O'Dovero, while O'Dovero, established in the 1960s, is owned by Peter O'Dovero, his wife Lois,

and his son James, who is president of O'Dovero. Historically, O'Dovero has performed work on Associated's projects,

specializing in laying underground pipe. That work is performed by unionized employees, who are hired on an as

needed basis during the construction season, which generally

runs from mid-April to the end of November. O'Dovero has

recognized the International Union of Operating Engineers,

Local 324 ("the Union") since its incorporation, although the

Union was not certified until 1993. Associated has never

recognized the Union, although the Union has made attempts

to organize its employees.

The instant case arises in connection with a project begun

in April 1995 to replace underground water pipes in Caspian,

Michigan. The heavy equipment work involved in laying

underground pipe was assigned to O'Dovero. On several

occasions before the job shut down in November, Craig

Dufresne, job superintendent of the O'Dovero equipment

operators, as well as supervisor of approximately ten Associated laborers, told the heavy equipment operators that the

job was non-union, although the operators were then being

paid union wages and receiving union benefits, and were paid

as well for show-up as required under the collective bargain-

__________

1 Petitioner does not challenge the Board's findings that petitioner violated s 8(a)(1) and (a)(5) by failing to bargain with the

Union for a new contract and with respect to the diversion of work

on the Caspian project, by making coercive statements regarding

employees' decisions to join or to stay in the Union, and by dealing

directly with Union represented employees. Accordingly, we affirm

those findings. See, e.g., Corson and Gruman Co. v. NLRB, 899

F.2d 47, 50 n.4 (D.C. Cir. 1990).

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ing agreement between the Union and O'Dovero. Because

considerable pipe laying work remained to be done, Dufresne

told the operators that the project would start up again when

the weather broke.

In April 1996, shortly before O'Dovero's contract with the

Union was to expire, Bill Gray, the Union's bargaining representative, asked James O'Dovero about bargaining the terms

of a successor contract. Gray was informed that a new

contract might not be possible because Peter O'Dovero was

upset that the Union had tried to organize Associated's

employees. On June 20, 1996, Gray was told that O'Dovero

had decided to cease operations. Similar statements were

made regarding Peter O'Dovero's anger at the Union by

Dufresne, when he tried in the spring of 1996 to recruit

O'Dovero employees who had worked on the Caspian project

in 1995 on the basis that the project work would be nonunion. Dufresne informed at least two O'Dovero employees

who had worked in 1995 that the project would be entirely

non-union because Peter O'Dovero was angry at the Union

and particularly at Union representative Gray. The Union

members refused to accept work on these terms, and the

Caspian project was completed by Associated employees on a

non-union basis.

In response to the Union's filing of charges alleging, among

other things, failure to bargain a successor contract and

illegal work diversion, an Administrative Law Judge ("ALJ")

found that O'Dovero and Associated were a single employer,

that O'Dovero had ceased operations, and that various of

petitioner's actions violated the Act, including unlawful diversion of Caspian project work for anti-union purposes from

O'Dovero to Associated in violation of s 8(a)(3) and (a)(1).

The National Labor Relations Board ("Board") adopted the

ALJ's decision except as to O'Dovero's operations. The

Board found no cessation of operations, but only the continued diversion of work to non-union represented Associated

employees.

The court will set aside the Board's decision and order only

if the Board " 'acted arbitrarily or otherwise erred in applying

established law to the facts' at issue, International Union of

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Elec., Elec., Salaried, Mach. and Furniture Workers, 41 F.3d

at 1536 (citations and internal quotation marks omitted), or if

its findings are not supported by 'substantial evidence'. 29

U.S.C. s 160(e), (f) (1988)." Plumbers and Pipe Fitters

Local Union No. 32 v. NLRB, 50 F.3d 29, 32 (D.C. Cir. 1995).

See also Elastic Stop Nut Div. of Harvard Ind., Inc. v.

NLRB, 921 F.2d 1275, 1279 (D.C. Cir. 1990). Moreover, the

court owes great deference to the Board's determination of an

appropriate remedy for violations of the Act, setting aside

that remedy only if the Board's remedy "is a patent attempt

to achieve ends other than those which can fairly be said to

effectuate the policies of the Act." Virginia Elec. & Power

Co. v. NLRB, 319 U.S. 533, 540 (1943). See also Teamsters

Local Union No. 171 v. NLRB, 863 F.2d 946, 957 (D.C. Cir.

1988).

II.

Petitioner's challenges to the Board's findings for lack of

substantial evidence do not merit extended discussion.

Notably, petitioner does not challenge the Board's finding

that Associated and O'Dovero are a single business enterprise. Rather, petitioner maintains that the Board and the

Union were estopped from making a single employer argument in view of the Board's rejection in 1995 of a similar

complaint by the Union, and in view of the Union's alleged

twenty years of "knowledge of the O'Dovero-Associated relationship". Neither contention has merit. The 1995 decisions

by the Board's Acting Regional Director and General Counsel

not to pursue prosecution of the Union's 1995 charges were

based solely upon the limited evidence then provided by the

Union, and not upon independent investigation by the Board.

Prosecutorial decisions by the Regional Director and General

Counsel are not adjudications and have no preclusive effect

on future actions of the Board. NLRB v. United Food &

Commercial Workers Union, 484 U.S. 112, 125-26 (1987);

Bryant & Stratton Bus. Inst. Inc. v. NLRB, 140 F.3d 169, 185

(2d Cir. 1998); Ball Corp., 322 NLRB 948, 951 (1997). Petitioner's waiver or estoppel argument, that the Union has long

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known of the single employer relationship between Associated

and O'Dovero, is no less flawed because, as the ALJ pointed

out, the existence of a single integrated enterprise does not

alone constitute an unfair labor practice; there must be other

evidence on which to base an unfair labor practice.

Petitioner's challenge to the Board's finding that Peter

O'Dovero unlawfully diverted pipe work on the Caspian project in violation of s 8(a)(3) and (a)(1), also is meritless. See

Laro Maintenance Corp. v NLRB, 56 F.3d 224, 228 (D.C. Cir.

1995). See also NLRB v. Transportation Mgmt. Corp., 462

U.S. 393, 395, 397-403 (1995); Wright Line, 251 NLRB 1083

(1980). First, there was substantial evidence to show antiunion motivation. Two witnesses, whom the ALJ credited,

recounted statements by O'Dovero's supervisor on the Caspian project that the project had "gone nonunion" because

Peter O'Dovero was angry with the Union. Petitioner concedes in the reply brief that there was substantial evidence

that the statements were made. A third witness, also credited by the ALJ, recounted being told by James O'Dovero that

Peter O'Dovero was angry at the Union because it had

attempted to organize Associated's employees. In addition,

the ALJ found "that the very fact that Peter O'Dovero and

[the O'Dovero supervisor] gave differing reasons [for the

diversion of pipe laying work] itself undermines [petitioner's]

case on this issue." 2 See Southwest Merchandising Corp. v.

NLRB, 53 F.3d 1334, 1340 (D.C. Cir. 1995).

Substantial evidence thus supports the Board's conclusion

that anti-union animus was a "motivating factor" in the

Caspian work diversion. Indeed, petitioner's conflicting ex-

__________

2 While Peter O'Dovero claimed that the change in crew was

due to the fact that "[t]he job was tapering down"--"[w]e went from

two crews to one crew and it was an Associated project to start with

so ... on Associated projects we do give preference to Associated

people," the supervisor claimed that the work was diverted because

"we had problems with O'Dovero Construction [in 1995]", although

the only problems he could identify involved Associated's employees

and he agreed as to every O'Dovero employee about whom he was

asked that the employee had performed well and was asked to

return, albeit as an Associated employee.

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planations for the reassignment of work hardly constitute the

showing that it must make, namely that "the same action

would have taken place even in the absence of the protected

conduct". See Laro, 56 F.3d at 228, 229. That work was

assigned to O'Dovero employees after the Union attempted to

organize Associated, and after the Union had filed its 1995

unfair labor practices complaint, demonstrates only that there might have been

other, earlier opportunities for Peter O'Dovero to develop

anti-union animus and does not demonstrate that Peter

O'Dovero did not act on anti-union animus in diverting Caspian project work to Associated employees.

There also was substantial evidence that O'Dovero never

ceased operations. The Board noted in view of the evidence

of the single employer status of O'Dovero and Associated, see,

e.g., Radio & Television Broadcast Technicians Local Union

1264 v. Broadcast Services of Mobile, Inc., 380 U.S. 255, 256

(1965) (per curiam), which finding petitioner does not challenge, that "it is not entirely clear what it means to say that

one of them, but not the other, has ceased operations." In

any event, Peter O'Dovero admitted that the corporate entity

is "still in existence", "did not file papers of dissolution," and

could resume a project "tomorrow" if it so chose. Other than

evidence that discussions about dissolution of O'Dovero occurred as early as 1994, petitioner can point to nothing that

would support its distinction between existence and cessation.

Petitioner's contention that the Board erred by failing to

undertake a partial closing analysis under Textile Workers v.

Darlington Mfg. Co., 380 U.S. 263 (1965), is unpersuasive

inasmuch as that case involved a corporate liquidation and

physical closing of a mill; nothing of the kind is shown here.

That O'Dovero was not bidding on work or performing work

misses the mark; O'Dovero's work was seasonal and performed upon assignment by Associated.

III.

Turning to petitioner's challenge to the Board's remedial

order, the Board directed that O'Dovero must resume operaUSCA Case #98-1433 Document #471720 Filed: 10/22/1999 Page 7 of 11
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tions inasmuch as there was no showing that it would be

unduly burdensome to resume the work that it historically

had done. The Board clarified, however, that nothing in its

Order "prohibit[s petitioner] from abandoning any operations,

or from declining to bid on projects, for legitimate business

reasons." Peter O'Dovero, 325 N.L.R.B. No. 187, 1998 WL

380989, at *5.

Under s 10(c), the Board "has wide discretion in ordering

affirmative action" to remedy the effects of unfair labor

practices, Virginia Electric, 319 U.S. at 539. Thus, the court

will decline to enforce the Board's remedial order only if the

order represents "a patent attempt to achieve ends other

than those which can fairly be said to effectuate the policies of

the Act." Virginia Electric, 319 U.S. at 540; Teamsters

Local Union No. 171, 863 F.2d at 957. A remedial order

directing the resumption of operations cannot stand, however,

where a company demonstrates that "compliance with the

order is unduly economically burdensome." Teamsters Local

Union No. 171, 863 F.2d at 957-58. See also Coronet Foods,

Inc. v. NLRB, 981 F.2d 1284, 1288 (D.C. Cir. 1993); Lear

Siegler, Inc., 295 N.L.R.B. 857, 861 (1989). While a determination of undue burden necessarily is case specific, courts

have found an undue burden to exist where a plant was

ordered reopened "at an estimated operating loss of several

hundred thousand dollars to the company a year", Frito-Lay

v. NLRB, 585 F.2d 62, 68 (3d Cir. 1978), or where a "substantial capital outlay" would have been required of a small

company with a "minimal profit margin." NLRB v. R & H

Masonry Supply, Inc., 627 F.2d 1013, 1014 (9th Cir. 1980).

Similarly, the Board itself acknowledged in Lear Siegler that

requiring "an entity to reopen a demonstrably unprofitable

facility", even where it could "offset losses from the reopened

facility with profits from others ... might well be found to be

unduly burdensome." 295 N.L.R.B. at 861.

Petitioner contends that the Board abused its discretion in

ordering O'Dovero to resume operations. In support of its

contention, petitioner points to evidence that the compiled

financial statements of O'Dovero prepared by Anderson,

Tackman & Company, showed operating losses in 1993

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through 1996 of $20,367, $4,630, $32,398, and $97,689, respectively. Consequently, petitioner claims, the decision was

made to cease operations at the annual shareholders meeting

in December 1995. From this evidence petitioner maintains

that the Board is requiring the cross subsidization that it

warned against in Lear Siegler, 295 N.L.R.B. at 861.

The difficulty with petitioner's contention is not its theory

but its deficiency of evidence to support its theory. As the

Board explained, the operating losses shown in O'Dovero's

financial statements have little meaning in view of the intermingled and integrated operations of O'Dovero and Associated. The evidence of record does not isolate O'Dovero's losses

in a sufficient manner. Some of O'Dovero's major expenses

inure to the integrated company's benefit, such as rent being

paid to another Peter O'Dovero company, and his wife's and

son's salaries being paid by O'Dovero, yet much of the work

that O'Dovero had performed in recent years was bid by

Associated. Thus, it was impossible to tell whether on these

projects the company as a whole lost money on the work that

O'Dovero performed during the period in question, or whether the losses shown were more than offset by profits realized

by Associated. Consequently, the financial statements do not

establish, and no witness claimed, that the Company did not

realize an overall profit on the work that O'Dovero performed. Indeed, the accountants' telling qualification stated

that their financial statements were prepared with "management[ ] elect[ing] to omit substantially all of the disclosures

and the statements of cash flows required by generally accepted accounting principles," and that those omissions

"might influence the user's conclusions about [O'Dovero's]

financial position, results of operations and cash flows."

Moreover, the 1996 statement reflected losses when O'Dovero

performed virtually no unit work.

Even assuming the validity of petitioner's contention that

O'Dovero has sustained operating losses for several years,

petitioner still fails to show that the Board's order is unduly

burdensome. Given the highly intermingled infrastructure of

O'Dovero and Associated, which remained virtually unchanged, as demonstrated by Peter O'Dovero's testimony that

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O'Dovero could resume operations "tomorrow", the Board

could properly find that its resumption directive imposes no

significant operational costs upon petitioner. Petitioner did

not claim that resumption of prior bidding practices would

entail any capital investment, or involve other financial commitments, such as moving costs. Furthermore, the limiting

language in the Board's order makes clear that O'Dovero may

decline to bid on a particular project if it has a legitimate

reason for doing so; what petitioner may not do is fail to bid

on work for anti-union reasons. Contrary to petitioner's

contention, the Board's order does not require it to resume an

operation that it has already determined to be intolerably

unprofitable. The Board simply found that petitioner had

failed to show that its actions were impelled by a determination that it was incurring intolerable operating losses.

Put otherwise, the Board's order requires no more than a

return to the status quo ante with respect to "work assignment decisions". See, e.g., Emhart Indus. v. NLRB, 907 F.2d

372, 378 (2d Cir. 1990). Thus, if and when Associated enters

into a contract that involves in whole or in part ground pipe

work of the type that would have been performed by O'Dovero's unionized employees prior to the unlawful diversion of

work and O'Dovero's purported "cessation" of operations,

then that work must be continued to be assigned to the

unionized employees. The same would be true if O'Dovero

were to enter into a contract; work under that contract could

not be shifted to Associated's nonunion employees unless

prior to the purported "cessation" of O'Dovero's operations

such work would have been shifted for reasons unrelated to

anti-union animus.

Additionally, nothing in the Board's order would prevent

the owners of O'Dovero from taking steps to bring about the

dissolution of O'Dovero in a lawful manner. If the owners of

O'Dovero conclude that O'Dovero and its bargaining unit type

of work is an economic drain, and, therefore, formally dissolve

O'Dovero, nothing in the Board's order would prevent Associated from performing non-O'Dovero type work under future

contracts with non-union employees. So understood, the

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itable operations. Petitioner having failed to show that the

remedial order was unduly burdensome," it necessarily follows that the Board did not abuse its discretion in directing

resumption of O'Dovero's operations.

Accordingly, we deny the petition and order enforcement of

the Board's order.

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