IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 10-60749

OAKTREE CAPITAL MANAGEMENT, L.P.; TBR PROPERTY, L.L.C., doing

business as Turtle Bay Resorts; BENCHMARK HOSPITALITY, INC.,

Petitioners - Cross-Respondents

v.

NATIONAL LABOR RELATIONS BOARD,

Respondent - Cross-Petitioner

Petition for Review and Cross Petition for Enforcement 

of an Order of the National Labor Relations Board

Before JONES, Chief Judge, and BARKSDALE and GRAVES, Circuit Judges.

PER CURIAM:*

Oaktree Capital Management, L.P. (formerly L.L.C.), TBR Property,

L.L.C., doing business as Turtle Bay Resorts, and Benchmark Hospitality, Inc.,

challenge the National Labor Relations Board’s (NLRB or the Board) affirming

an administrative law judge’s (ALJ) decision in favor of the NLRB. NLRB seeks

order enforcement. 

At issue are the Board’s findings that: Oaktree and TBR constitute a

single employer for purposes of the National Labor Relations Act (NLRA), 29

United States Court of Appeals

Fifth Circuit

F I L E D

September 26, 2011

Lyle W. Cayce

Clerk

 Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not *

be published and is not precedent except under the limited circumstances set forth in 5TH CIR.

R. 47.5.4.

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U.S.C. §§ 151-69; and petitioners engaged in unfair labor practices regarding

Union representatives’ access to, and collection of dues at, the Turtle Bay Hotel

and Resort (the Resort), in violation of NLRA § 8(a)(1), 29 U.S.C. § 158(a)(1)

(unfair labor practice “to interfere with, restrain, or coerce employees in the

exercise of the rights [to engage in or refrain from self-organization, to form, join,

or assist labor organizations, and to bargain collectively]”), and § 8(a)(5), 29

U.S.C. § 158(a)(5) (unfair labor practice “to refuse to bargain collectively with the

representatives of employees”). PETITION FOR REVIEW DENIED; BOARD’S

ORDER ENFORCED.

I.

The Resort is located in Kahuku, Hawaii, on the island of Oahu. UNITE

HERE! Local 5 (the Union), representing approximately 360 employees at the

Resort, claimed petitioners engaged in unfair labor practices arising from the

Union’s campaign, during February 2004 through September 2005, to obtain a

new collective bargaining agreement (CBA). The prior CBA had either expired

or been terminated (ended) on 25 November 2003. The parties agree that the

CBA’s access provision survived and was in effect while a new CBA was being

negotiated.

The NLRB charged: Oaktree and TBR constituted a single employer for

purposes of the NLRA; and petitioners violated NLRA § 8(a)(1) and (5) by, inter

alia, restricting Union representatives’ access to the Resort on 14 and 18

February 2004, and prohibiting them from collecting dues at the Resort. Only

these three claims are at issue.

During all times relevant to this proceeding, Oaktree was a California

limited liability company (L.L.C.). It became a limited partnership (L.P.) in

2007. Oaktree was either the general partner or investment manager for several

investment funds, three being: Oaktree Capital Management Real Estate

Opportunities Fund A, L.P.; Oaktree Capital Management Real Estate

Opportunities Fund B, L.P.; and Gryphon Domestic VII, L.L.C. (collectively, the

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Funds). In 2000, Oaktree, on behalf of the Funds, purchased entities that owned

Kuilima Resort Company (Kuilima), which had, with its predecessor in interest,

Kuilima Development Company, owned the Resort. Oaktree retained Kuilima

as part of the Resort’s ownership structure.

In August 2001, TBR, a newly created Kuilima subsidiary, leased the

Resort from Kuilima. That September, TBR contracted with Benchmark to

manage the Resort. 

Those working at the Resort, however, are not solely Benchmark

employees—Benchmark employees manage other employees at the Resort. In

that regard, unchallenged here is the Board’s finding that TBR and Benchmark

are joint employers. On the other hand, at issue is whether, for purposes of the

NLRA, Resort employees are employed by Oaktree and TBR, as a single

employer, or only by TBR. 

As noted, the CBA ended on 25 November 2003. Negotiations for a new

CBA were ongoing in 2004 when the charged unfair labor practices occurred. 

On 12 February 2004, while a wedding was taking place at the Resort,

Union representatives and Resort employees held a rally on a public beach

adjacent to the Resort. The rally was held to demonstrate support for the CBA

negotiations. Wedding guests confronted the group and asked it to disperse

because the wedding was being disrupted. After the group declined, Resort

security evicted its members and called the police.

Shortly thereafter, on 14 and 18 February, Union representatives were at

the Resort to conduct normal Union business. They were issued trespass notices

and directed to leave the premises.

That April, the practice of deducting Union dues from employees’

paychecks was ended. That May, Union representatives were informed that

they were prohibited from collecting Union dues at the Resort from employees.

In 2006, after extensive hearings in 2005, the ALJ ruled, inter alia: 

Oaktree and TBR constituted a single employer, based on finding, inter alia, that

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Oaktree “acquired ownership and control of Turtle Bay Resort in 2000”; and

petitioners violated NLRA § 8(a)(1) and (5), by restricting Union representatives’

access to the Resort on 12 and 14 February 2004 and by prohibiting them from

collecting Union dues at the Resort. Oaktree Capital Mgmt., L.L.C., 353

N.L.R.B. No. 127, at *9, *17-21, *27-29, *31, *60-67, *86-87 (2009). In 2009, a

Board two-member panel affirmed the ALJ’s decision, and the petition and crosspetition were filed here. Our court remanded in the light of New Process Steel,

L.P. v. NLRB, 130 S. Ct. 2635, 2644-45 (2010) (holding Board panels must

consist of three or more members). Oaktree Capital Mgmt., L.P. v. NLRB, No.

09-60327 (5th Cir. 7 July 2010) (order granting NLRB’s unopposed motion to

remand). In 2010, a Board three-member panel affirmed the ALJ’s decision and

incorporated the Board’s 2009 decision. See Oaktree Capital Mgmt., L.L.C., 355

N.L.R.B. No. 147, at *1 (2010). 

Through a brief decision and order, that 2009 decision affirmed the ALJ’s

78-page rulings, findings, and conclusions, adopted a modified version of the

ALJ’s recommended order, attached the ALJ’s decision, and, for the reasons

stated by the ALJ, ruled, inter alia: Oaktree and TBR constituted a single

employer; petitioners violated NLRA § 8(a)(1) on 12 and 14 February 2004, by

informing Union representatives that they were trespassing, contrary to their

contractually-established right of access, issuing trespass notices to them,

evicting them from the Resort, and summoning law enforcement to remove them;

and petitioners violated NLRA § 8(a)(5) by unilaterally changing CBA access

provisions. Oaktree Capital Mgmt., 353 N.L.R.B. No. 127 at *1-5 & nn.5-6.

II.

At issue are: the single-employer finding (Oaktree and TBR jointly and

severally liable for remedying unfair labor practices at the Resort), contested

only by Oaktree; and some of the findings on claimed NLRA § 8(a)(1) and (5)

violations, regarding Union representatives’ access to, and dues collection at, the

Resort, contested by all petitioners. NLRB cross petitions for enforcement of the

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Board’s order. See Raven Servs. Corp. v. NLRB, 315 F.3d 499, 509 (5th Cir.

2002) (NLRB order must be enforced by federal court to carry effect of law).

Our review is of the Board’s decision, which, inter alia, affirmed the ALJ’s

rulings, findings, and conclusions. See, e.g., J. Vallery Elec., Inc. v. NLRB, 337

F.3d 446, 449-50 (5th Cir. 2003). The Board’s findings of fact, and its

applications of law to those facts, are reviewed for substantial evidence; its legal

conclusions, de novo, and accorded deference if they are reasonably based in the

law and not inconsistent with the NLRA. E.g., Sara Lee Bakery Grp., Inc. v.

NLRB, 514 F.3d 422, 428 (5th Cir. 2008); Tellepsen Pipeline Servs. v. NLRB, 320

F.3d 554, 559 (5th Cir. 2003); see also 29 U.S.C. § 160(f) (“the findings of the

Board with respect to questions of fact if supported by substantial evidence on

the record considered as a whole shall in like manner be conclusive”).

“Substantial evidence” is “such relevant evidence as a reasonable mind would

accept to support a conclusion”. Sara Lee Bakery, 514 F.3d at 428 (citation and

internal quotation marks omitted).

In other words, under the substantial-evidence standard, the record is

reviewed as a whole, and the Board’s findings of fact, along with its application

of law to those facts, “must be upheld if a reasonable person could have found

what [it] found, even if the appellate court might have reached a different

conclusion had the matter been presented to it in the first instance”. Valmont

Indus., Inc. v. NLRB, 244 F.3d 454, 463 (5th Cir. 2001) (citation and internal

quotation marks omitted); e.g., Tellepsen Pipeline, 320 F.3d at 559. “In

determining whether the Board’s factual findings are supported by the record,

we do not make credibility determinations or reweigh the evidence.” NLRB v.

Allied Aviation Fueling of Dallas, L.P., 490 F.3d 374, 378 (5th Cir. 2007)

(citation omitted). Therefore, under this standard of review, “the possibility of

drawing two inconsistent conclusions from the evidence does not prevent an

administrative agency’s finding from being supported by substantial evidence”. 

Consolo v. Fed. Mar. Comm’n, 383 U.S. 607, 620 (1966).

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A.

Before reaching the three issues raised in the petition, we address NLRB’s

contention that it is entitled to summary enforcement of the Board’s uncontested

findings. “Case law has established that when an employer does not challenge

a finding of the Board, the unchallenged issue is waived [in our court], entitling

[NLRB] to summary enforcement.” Sara Lee Bakery, 514 F.3d at 429 (citing

NLRB v. Brookshire Grocery Co., 919 F.2d 359, 363 n.2 (5th Cir. 1990)). 

As noted, challenged are only the Board’s findings regarding: the singleemployer determination; and claimed NLRA § 8(a)(1) and (5) violations involving

Union access to, and dues collection at, the Resort. Because petitioners do not

contest findings regarding the numerous other unfair labor practices addressed

in the Board’s order, NLRB is entitled to summary enforcement of those

findings. See Oaktree Capital Mgmt., 353 N.L.R.B. No. 127 at *2-5 (e.g.,

maintaining overly broad rules that prohibit employees from soliciting or

distributing literature in nonwork areas and during nonwork time; following

Union representatives, eavesdropping on their conversations with employees,

and videotaping or photographing them engaged in peaceful demonstrations;

preventing them and employees from accessing public beaches adjacent to the

Resort; threatening to close the Resort in retaliation for protected activity, such

as demonstrations and boycotts; and failing or refusing to bargain in good faith

with the Union, by failing to provide requested information).

B.

Regarding the Board’s finding that Oaktree and TBR constituted a single

employer, at issue is whether Oaktree is sufficiently connected to TBR so that

Oaktree is jointly and severally liable with TBR, as a single employer, for

remedying unfair labor practices. See, e.g., Vance v. NLRB, 71 F.3d 486, 488-89,

494-95 (4th Cir. 1995) (companies found to be single employer held jointly and

severally liable for remedying claimed unfair labor practices); Apex Elec. Servs.,

Inc., 356 N.L.R.B. No. 172, at *2 (2011) (same); Summit Express, Inc., 350

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N.L.R.B. 592, 596-97 (2007) (same). The objective is to ensure that the Board’s

decision and order are binding on the entity or entities responsible for

controlling labor relations at the Resort. 

As noted supra, petitioners do not contest the finding that Benchmark and

TBR constitute a joint employer. At issue is whether Oaktree is part of that

joint employment. The ALJ found that TBR was “a shell corporation with no

purpose other than to provide insulation to Kuilima and Oaktree from TBR[’s]

. . . selection of Benchmark as the operator and manager of the resort”. Oaktree

Capital Mgmt., 353 N.L.R.B. No. 127 at *11. For the reasons discussed below,

substantial evidence supports the single-employer finding. See, e.g., NLRB v.

DMR Corp., 699 F.2d 788, 791 (5th Cir. 1983) (single-employer determination

is primarily factual and reviewed under substantial-evidence standard).

“Single employer status ultimately depends on ‘allthe circumstances ofthe

case’ and is characterized as an absence of an ‘arm’s length relationship found

among unintegrated companies.’” Id. at 791 (quoting Local 627, Int’l Union of

Operating Eng’rs v. NLRB, 518 F.2d 1040, 1045-46 (D.C. Cir. 1975)); see, e.g.,

Covanta Energy Corp., 356 N.L.R.B. No. 98, at *35 (2011) (absence of arm’s

length relationship is hallmark of single employer). Whether two or more

entities are sufficiently integrated to be deemed a single employer is determined

by analyzing the following factors: (1) common ownership or financial control;

(2) common management; (3) centralized control of labor relations; and (4)

interrelation of operations. Radio & Television Broad. Technicians Local Union

1264 v. Broad. Serv. of Mobile, Inc., 380 U.S. 255, 256 (1965); DMR Corp., 699

F.2d at 790-91; Carnival Carting, Inc., 355 N.L.R.B. No. 51, at *6-8 (2010). “[N]o

one of these factors is controlling, nor need all criteria be present”. DMR Corp.,

699 F.2d at 791. “A single-employer analysis is appropriate where two ongoing

businesses are coordinated by a common master.” Covanta Energy Corp., 356

N.L.R.B. No. 98 at *34 (citations omitted). For this analysis, “the fundamental

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inquiry is whether there exists overall control of critical matters at the policy

level”. Id. (citation and internal quotation marks omitted).

“The Board has held that the factors of common control over labor

relations, common management, and interrelation of operations are more critical

than the factor of common ownership or financial control, and that centralized

control of labor relations is of particular importance because it tends to

demonstrate operational integration.” Id. at *35 (citation and internal quotation

marks omitted). In any event, substantial evidence supports all four singleemployer criteria being present.

The dissent takes issue with the NLRB, rather than this opinion, for, in

the dissent’s view, applying the single-employer theory to Oaktree “when no

labor law policy is advanced”. Dissent at 9. As demonstrated below, that is not

the case. In any event, the dissent never attempts to come to grips with our

above-discussed, controlling standard of review: whether substantial evidence

supports the single-employer finding. As also demonstrated below, it does. In

replying to this opinion’s noting this fundamental failure by the dissent, it

justifies, as a matter of law, not applying the substantial-evidence standard by

maintaining: “as applied to this case, the single employer theory itself is

unjustifiable”. Id. at 1 n.1. This point of law, however, was not raised here by

Oaktree; accordingly, we can not consider it. Alternatively, even if an extremely

strained reading of Oaktree’s opening brief so much as suggests that point of

law, it was not adequately briefed by Oaktree and is, of course, waived. Finally,

in the further alternative, even if that point of law can be considered, it fails for

the reasons discussed below. Simply put, the extensive record reflects, inter alia,

that Oaktree, an asset manager in addition to being an investment manager or

financial adviser, was far more involved in management of the Resort, including

labor relations, than the dissent recognizes. 

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1.

Regarding common ownership or financial control, Oaktree contends that,

in 1998, the Funds purchased entities that collectively owned the Resort. On the

other hand, the NLRB contends that Oaktree purchased the Resort in 2000 from

a Japanese corporation. It is not clear whether Oaktree directly owned the

Resort. Substantial evidence, however, supports the finding that Oaktree

initially purchased the Resort on behalf of the Funds and participated

significantly in its financial control, as discussed infra. 

At the hearing before the ALJ, Oaktree’s custodian of records and senior

vice president, legal, Marc Porosoff, testified: the Resort is owned by Kuilima,

a Hawaii general partnership; Kuilima has two general partners, one of

which—Turtle Bay Holding, L.L.C.—is a “99 percent general partner”, and the

other—A.J. Plaza Hawaii Company, Limited—is wholly owned by Turtle Bay

A.J. Plaza, L.L.C.; there are three members of Turtle Bay Holding, L.L.C., and

Turtle Bay A.J. Plaza, L.L.C.; those three members are the Funds, with OCM

Real Estate Opportunities Fund A, L.P., owning 28%, OCM Real Estate

Opportunities Fund B, L.P., 68%, and Gryphon Domestic VII, L.L.C., 4%;

Oaktree is the general partner for OCM Real Estate Opportunities Funds A and

B and the investment manager for Gryphon Domestic VII; TBR, Kuilima’s

wholly-owned subsidiary, leases the Resort from Kuilima; and TBR entered into

a management agreement with Benchmark to operate the Resort “on a day-today basis”. 

Oaktree’s brief for the ALJ, filed here via motion granted by our court,

however, reflects that Oaktree, directly or indirectly through the Funds,

purchased the Resort from a Japanese corporation in 2000. That brief states: 

“[that Japanese corporation] was unable to invest in Turtle Bay’s upkeep and,

in 2000, sold the resort to Oaktree Capital Management, LLC, an asset and

investment manager”. (Emphasis added.) Further, Benchmark’s staff handbook

lists Oaktree as the Resort owner and notes that Oaktree purchased the Resort

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in 2000. The ALJ found: “Oaktree owns the owner of Kuilima, which, in turn,

owns TBR . . . .” Oaktree Capital Mgmt., 353 N.L.R.B. No. 127 at *12. 

Accordingly, substantial evidence supports the finding that Oaktree

purchased the Resort as an investment for the Funds. Substantial evidence also

shows that, since 2000, Oaktree has invested $50 million to renovate the Resort

and has created or purchased various other entities and placed them in the

ownership chain between itself and the Resort. As noted, it is not clear whether

Oaktree itself owned the Resort; however, ownership is relatively unimportant

in the light of substantial record evidence, discussed below, that Oaktree

maintained ultimate control over the Resort, including its labor relations.

2.

Regarding common management, substantial evidence supports the

finding that it exists for Oaktree and TBR. Russell Bernard, who did not testify,

was a member and principal of Oaktree, as well as the portfolio manager for

Oaktree’s real-estate funds, including OCM Real Estate Opportunities Funds A

and B. Bernard was also the president of TBR.

In addition to being Oaktree’s senior vice president, legal, Porosoff was

TBR’s vice president and treasurer. Oaktree provided Porosoff, as its custodian

of records, to testify on its behalf. Notably, at the hearing before the ALJ, when

asked his positions with TBR, Porosoff responded: “I believe I’m a vice president

of TBR . . . . I may also be the treasurer of TBR . . . but I would have to see the

operating agreement to be sure”. (Emphasis added.) Porosoff stated he

“believed” he had been an officer with TBR since it was formed, which he

“believed” was in “2001, probably August or September . . . .”

When questioned about a chart his office had created, that was provided

to the ALJ to assist in explaining the Resort’s ownership structure, Porosoff

testified: “We create organizational charts for different assets that we manage”. 

(Emphasis added.) When asked who he meant by “we”, he answered: “Oaktree. 

Oaktree is an investment manager and an asset manager”. (Emphasis added.) 

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Additionally, Porosoff reiterated that Oaktree manages “assets”. Substantial

evidence shows that the Resort was an asset, and that Oaktree, as its manager,

was the entity that had to be consulted before any significant decisions were

made at the Resort, as discussed infra. 

Stephanie Schulman served as Oaktree in-house counsel and TBR vice

president and secretary. Along that line, there is no record evidence that TBR

“ha[d] any officers, managers, or principals other than [those] of Oaktree”. 

Oaktree Capital Mgmt., 353 N.L.R.B. No. 127 at *12. 

Further, although Hy Adelman did not testify, Nancy Ramos, Benchmark’s

director of human resources, testified that Adelman was “a representative of

Oaktree” and had an office on the Resort’s grounds. Abid Butt, Benchmark’s

vice president and general manager, testified: Adelman was an Oaktree

employee; he had an office on the Resort’s grounds; and Butt met with Adelman

in Adelman’s capacity as the “owner representative”. When asked if that “owner

representative” was Oaktree, Butt testified: “[Adelman is] the person

responsible for the overall resort . . . .” On the other hand, Porosoff testified that

he believed Adelman worked for Kuilima and was not an Oaktree employee. On

at least one occasion, Adelman signed a housekeeping supply agreement as

“general manager” on behalf of “owner/representative”.

Oaktree does not dispute that it shared common managers with TBR. 

Instead, it relies on Lusk v. FoxMeyer Health Corporation, 129 F.3d 773, 779-80

(5th Cir. 1997), for the rule that individuals with roles in the parent and a

subsidiary company may wear multiple hats, discharging responsibilities to

more than one entity. Lusk ruled, however, under de novo review, that there

was no single employer because appellants had failed to point to any evidence

demonstrating that officers holding positions with both the parent and

subsidiary were acting in their capacity as officers of the parent when they

engaged in alleged discriminatory conduct. Id. at 776, 779-81 (“appellants point

us to no evidence that these three [officers] ever sought approval from or even

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consulted anyone else in the [parent] organization”). As demonstrated infra,

substantial evidence supports the finding that Bernard was acting on Oaktree’s

behalf in controlling the Resort’s labor relations.

3.

Regarding centralized control of labor relations, substantial evidence

supports the finding that Oaktree, through Bernard, controlled those relations

and negotiations between the Resort and the Union. As noted, the underlying

incidents began in February 2004. Earlier, by a 24 April 2003 letter on Oaktree

letterhead, addressed “Dear Partner” and signed Oaktree “principal”, Bernard

discussed, inter alia, labor negotiations with the Union: 

You may have recently received correspondence from

Local 5, the union representing . . . employees at our

Turtle Bay Resort. I am writing to give you some

background. . . . The stated purpose of Local 5’s letter

is to express its concern regarding the pace of

negotiations for a new contract with its members who

work at the hotel. We would like to assure you that,

contrary to the union’s assertions, we have been acting

in good faith to reach a fair and equitable agreement

with Local 5. . . . Since our funds acquired 100%

ownership and control of the Turtle Bay Resort in the

fourth quarter of 2000, we have worked diligently to

turn around the property, guided by the principle that

if the hotel is successful, then the employees will be

among the beneficiaries of that success. . . . [W]e have

invested approximately $50 million over the last two

years to renovate the [Resort] . . . . [W]e have not cut

the number of employees on the payroll and we have

actually increased the employment opportunities at the

property. . . . While many of the other unions

representing . . . employees support [a ballroom

renovation], Local 5’s management has lobbied against

it . . . . We wish the hotel’s performance allowed us to

offer Local 5 the generous contract it wants. . . . [W]e

believe we have offered Local 5 a fair and equitable

agreement . . . . Once the hotel’s performance improves

. . . we will be happy to share the property’s success

with Local 5’s members.

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 (Emphasis added.) Oaktree contends “we” means TBR; NLRB, that it means

Oaktree. 

Later, on 8 November 2003, the Union’s financial secretary-treasurer sent

a letter to Bernard, in his capacity as Oaktree representative (“Russ Bernard[,]

Oaktree Capital Management[,] Via email: [to his Oaktree email address]”). 

The letter discussed, inter alia, “contract negotiations for the Turtle Bay Resort

[employment] agreement”, a “settlement offer”, “the employer’s wage offer”, and

an offer to “withdraw the outstanding NLRB charge . . . on condition that you

direct your management staff and security chief to cease and desist their

unwarranted interference with our legitimate right of access . . . .” (Emphasis

added.) That letter stated in pertinent part:

Thank you for your telephone communication with me. 

We have discussed the situation in our contract

negotiations for the Turtle Bay Resort agreement, and

I agreed to clearly outline the open [collective

bargaining] issues for you, and to offer what the Union

believes is the basis for a settlement. . . . [A]s I

indicated in our phone conversation, we are willing to

withdraw the outstanding NLRB charge, assuming

there is a satisfactory settlement on the outstanding

items listed above, and on condition that you direct

your management staff and security chief to cease and

desist their unwarranted interference with our

legitimate right of access to the property and our

membership.

Accordingly, substantial evidence supports the finding that Bernard was

acting on Oaktree’s behalf when he participated in labor negotiations with the

Union—a failed activity which ultimately lead to the above-described publicbeach rally on 12 February 2004 and the charged unfair labor practices

regarding Union access and dues collection. See, e.g., Asher Candy, Inc. v.

NLRB, 258 F. App’x 334, at *1 (D.C. Cir. 2007) (“[C]entralized control of labor

relations is evident from the [subsidiary’s] inability to enter into a collective

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bargaining agreement without the approval of [the parent company’s] board of

directors”. (citation omitted)).

Oaktree contends that involvement in high-level decisions affecting labor

relations was insufficient for the Board to “pierce the corporate veil” and find

Oaktree to be a single employer with TBR. The Board did so by reaching

through the subsidiary (TBR) to hold the parent (Oaktree) liable for unfair labor

practices. See Johnson v. Flowers Indus., Inc., 814 F.2d 978, 980-81 (4th Cir.

1987) (“Courts will peer behind the corporate veil if the parent dominates the

subsidiary ‘to the extent that the [subsidiary] . . . functions solely to achieve the

purposes of the [parent] corporation.’” (quoting Krivo Indus. Supply Co. v. Nat’l

Distillers & Chem. Corp., 483 F.2d 1098, 1106 (5th Cir. 1973)). 

Oaktree maintains a single employer must be involved in the day-to-day

management of labor relations, citing Lusk, 129 F.3d at 777 n.3, which stated:

[B]efore piercing the corporate veil in the employment

discrimination context, we and other courts have

focused on the core activities regulated by the antidiscrimination laws and, therefore, on whether the

parent corporation was so involved in the daily

employment decisions of the subsidiary as to justify

treating the two corporations as a single employer.

 (Emphasis added.) As Oaktree notes, Lusk held, in that context, that the

“analysis ultimately focuses on . . . whether the parent corporation was a final

decision-maker in connection with the employment matters underlying the

litigation . . . .” Id. at 777 (citation omitted). 

Although this is true for an employment-discrimination claim, which

usually involves a single person or entity responsible for a definitive act of

discrimination, it is not necessarily true for a dispute, as here, concerning labor

practices and failed CBA negotiations. Notably, even in the employmentdiscrimination context, our court has held no single-employer status because

appellant “fail[ed] to present any evidence that [the parent entity] actually made

any of [the subsidiary’s] labor decisions, including decisions regarding [the

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underlying litigation]”. Johnson v. Crown Enters., 398 F.3d 339, 344 (5th Cir.

2005) (emphasis added).

4.

Regarding interrelation of operations, in its above-referenced brief for the

ALJ, Oaktree acknowledged: “TBR . . . is nothing more than the legal lessor of

the property upon which the . . . Resort is situated”. Oaktree Capital Mgmt., 353

N.L.R.B. No. 127 at *11 (internal quotation marks omitted). That admission is

further demonstrated by substantial evidence of interrelation of operations. 

That evidence supports the finding that, in addition to controlling labor

relations, Bernard (Oaktree member and principal and TBR president)

participated in negotiating sessions, in which he was involved in discussing and

approving the Resort’s economic package, which included the Resort’s position

on, inter alia, successorship and subcontracting. Bernard was copied on an email from petitioners’ outside counsel to the Union’s financial secretarytreasurer, with the subject line reading “Re: turtle bay”, regarding a draft of

“our subcontracting proposal” that had been “reviewed and approved by

[Bernard]”. Bernard also reviewed financial reports for the Resort and required

information from human resources concerning Resort “staff bodies or salaries for

an owners[’] report”.

Also, the lease agreement between Kuilima and TBR was signed for each

by Bernard and Porosoff, in their respective capacities as Oaktree principal and

senior vice president, legal. The “Landlord” description on the signatory page

for that agreement provides: “Kuilima . . . [,] By: Turtle Bay Holding, L.L.C.,

its general partner[,] By: Oaktree . . . , its manager[,] By: Russel S. Bernard

. . . [,] Principal[, and] . . . Marc Porosoff . . . [,] Senior Vice President, Legal”. 

The “Tenant” section on that page similarly provides: “TBR . . . [,] By: Oaktree

. . . , its manager[,] By: Russel S. Bernard . . . [,] Principal[, and] . . . Marc

Porosoff . . . [,] Senior Vice President, Legal”. Further, the management

agreement between TBR and Benchmark was signed for TBR by Bernard and

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Porosoff, again in their respective capacities as Oaktree principal and senior vice

president, legal. Again, beneath TBR’s name appears the description: “TBR

. . . [,] By: Oaktree . . . , its Manager[,] By: Russel S. Bernard . . . [,] Principal[,

and] . . . Marc Porosoff . . . [,] Senior VP, Legal”.

Accordingly, neither of these two agreements provide a signature “by” a

TBR representative; each is signed “by” an Oaktree representative. Substantial

evidence supports the ALJ’s finding that having Oaktree representatives sign

these agreements on behalf of Oaktree is unusual because “Oaktree was not

ostensibly a party to those agreements, unless the parties to those agreements

recognized that Oaktree was the entity in control of TBR . . . , Kuilima, and [the

Resort]”. Oaktree Capital Mgmt., 353 N.L.R.B. No. 127 at *12.

Porosoff (Oaktree senior vice president, legal, and TBR’s vice president

and treasurer) assisted in negotiating the management agreement between TBR

and Benchmark. In addition, that agreement not only listed TBR as having the

same address as Oaktree, but also gave notice that correspondence should be

sent to TBR, in care of Oaktree, to the attention of Bernard and Porosoff. Under

the terms of the management agreement, TBR was liable for all of the Resort’s

operating expenses, including payroll and employee benefits, and TBR controlled

the bank accounts which Benchmark used for management of the Resort. 

Section 9.02(c) of that agreement provides that all funds in each bank account

used by Benchmark are property of TBR and those funds are controlled by

designated TBR signatories, two of whom are Bernard and Porosoff. Further,

as provided in the reciprocal trade agreement contract between the Resort and

a video-production company, before that company was allowed to film at the

Resort, it was required to obtain insurance covering, inter alia, “Oaktree Capital

Management, . . . individually and as agent”. 

In sum, substantial evidence supports the finding that “[t]he overbearing

presence in these relationships is Oaktree, the effective owner of the resort,

which must be consulted, either directly or through TBR . . . before any

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significant decisions are made by or at [the Resort], including decisions on labor

matters”. Id. at *11. Nevertheless, Oaktree contends that, as noted supra, we

should follow our court’s employment-discrimination decision in Lusk, 129 F.3d

at 780, and hold there was no single-employer relationship. Oaktree fails to

acknowledge, however, that, like our decision here, Lusk was decided on its own

facts (and, as noted supra, under a more lenient de novo review). Id. Lusk

stated: “[I]t appears that on every occasion in which [the officers working for

both the subsidiary and parent] took any action in connection with the [layoff]

plan, they were acting in concert only with other [subsidiary] officials. In fact,

the record is replete with examples of how executives from [the subsidiary

companies] . . . devised and implemented every aspect of the [layoff] plan”. Id.

(emphasis added). 

Unlike Lusk, substantial evidence does not support: that TBR (the

subsidiary), not Oaktree (the parent), was the entity controlling labor relations

with the Union; that TBR officers, if there were any that were not also Oaktree

officers, were involved with labor relations or details of the Union access and

dues-collection issues before us; or that the persons directly involved in

preventing Union representatives from accessing the Resort or collecting dues

there, were employees of TBR, not Oaktree.

Oaktree also contends: it can not be found to be an “employer” of Resort

employees because it is an investment manager; and, therefore, its only role is

to advise Oaktree’s investors, who are the Resort owners, but who exercise no

day-to-day control over the Resort or any aspect of labor relations. As discussed

supra, Oaktree was not acting solely as an “investment manager” or “financial

adviser”; it was admittedly also acting as an “asset manager”. Substantial

evidence supports finding the Resort was one of those managed assets. 

As Oaktree notes, Lusk described as “deficient” any “approaches to

piercing the corporate veil which fail to recognize the[] important public policy

considerations underlying the doctrine [of limited liability]”. 129 F.3d at 777 n.3. 

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“Limited liability prevents a parent . . . from being held responsible for the acts

of its subsidiaries unless the separateness of the entities is a sham, and ‘there

is an absence of an arm’s-length relationship among the companies.’” Romano

v. U-Haul Int’l, 233 F.3d 655, 666 (1st Cir. 2000) (quoting Knowlton v. Teltrust

Phones, Inc., 189 F.3d 1177, 1184 (10th Cir. 1999) (holding the “heart of the

[single-employer] inquiry is whether there is an absence of an arm’s-length

relationship”)); DMR Corp., 699 F.2d at 791; Covanta Energy Corp., 356 N.L.R.B.

No. 98 at *35. On the other hand, “the fiction of corporate separateness is not

sacrosanct. . . . Courts will peer behind the corporate veil if the parent

dominates the subsidiary ‘to the extent that the subservient corporation

manifests no separate corporate interests of its own and functions solely to

achieve the purposes of the dominant corporation.’” Flowers Indus., 814 F.2d at

980-81 (quoting Krivo Indus. Supply Co., 483 F.2d at 1106) (internal citations

omitted). For the numerous above-discussed reasons, substantial evidence

supports the Board’s finding that Oaktree and TBR constituted a single

employer.

C.

In challenging the above-described Union access and dues-collection

findings, petitioners maintain the Board failed to hold NLRB to its burden of

establishing violations of NLRA § 8(a)(1) and (5). Substantial evidence, however,

supports the Board’s findings.

NLRA § 8(a)(1), 29 U.S.C. § 158(a)(1), provides that it “shall be an unfair

labor practice for an employer . . . to interfere with, restrain, or coerce employees

in the exercise of the rights guaranteed in section 157 of this title” (e.g., to

self-organize,form and join labor organizations, and bargain collectively through

chosen representatives). Similarly, § 8(a)(5), 29 U.S.C. § 158(a)(5), provides that

it “shall be an unfair labor practice . . . to refuse to bargain collectively with the

representatives of [an employer’s] employees . . . .” Together, these provisions

require petitioners to notify and consult the Union before making changes in,

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inter alia, wages, hours, and conditions of employment. NLRB v. PinkstonHollar Constr. Servs., Inc., 954 F.2d 306, 310 (5th Cir. 1992). 

At issue are the events on four dates: 14 and 18 February 2004,

concerning restricting Union representatives’ access to the Resort; and 24 May

and 22 June 2004, concerning preventing Union representatives from collecting

dues from Resort employees in the employee cafeteria at the Resort. For those

dates, the Board found: restricting access and preventing dues collection

constituted unfair labor practices. Oaktree Capital Mgmt., 353 N.L.R.B. No. 127

at *1-2.

As discussed supra, a Board decision is upheld if supported by substantial

evidence, based upon the record as a whole. E.g., Strand Theatre of Shreveport

Corp. v. NLRB, 493 F.3d 515, 518 (5th Cir. 2007); Entergy Gulf States, Inc. v.

NLRB, 253 F.3d 203, 208 (5th Cir. 2001) (“Substantial evidence is evidence a

reasonable mind might accept as adequate to support a conclusion.”). As also

discussed supra, the Board’s findings of fact, along with its applications of law

to facts, are reviewed for substantial evidence; its legal conclusions, such as the

interpretation of a CBA provision, de novo. E.g., Strand Theatre, 493 F.3d at

518.

1.

As noted, NLRA § 7, 29 U.S.C. § 157, gives employees the right to

self-organize, to form and join labor organizations, “to bargain collectively

through representatives of their own choosing, and to engage in other concerted

activities for the purpose of collective bargaining . . . .” Along that line, NLRA

§ 8(a)(5), 29 U.S.C. § 158(a)(5), prevents an employer from making unilateral

changes to the terms of employment that are mandatory bargaining subjects

without first giving notice to, and bargaining with, employees’

representatives—here, the Union. NLRB v. Katz, 369 U.S. 736, 742-43 (1962). 

Consequently, an employer’s unilateral change in employment conditions that

are under negotiation is equivalent to refusal to bargain when those changes

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concern, inter alia, wages, hours, and conditions of employment. Id. at 743;

Pinkston-Hollar Constr. Servs., Inc., 954 F.2d at 310.

The terms of a CBA inform whether a § 8(a)(5) violation has occurred. 

Along that line, deference is accorded to the Board’s “expertise in interpreting

collective bargaining agreements”. J. Vallery Elec., Inc., 337 F.3d at 450

(citation and internal quotation marks omitted).

As discussed, the CBA ended in November 2003; however, as also

discussed, the parties agree that its access provision (allowing Union access to

the Resort) survived and was in effect while the parties were negotiating a new

CBA in 2004. See NLRB v. Great W. Coca-Cola Bottling Co., 740 F.2d 398,

403-04 (5th Cir. 1984) (employer commits unfair labor practice by unilaterally

imposing new access restrictions after contract expiration but while employeerepresentation question pending). Accordingly, the CBA access provision was

in effect in February 2004, when the events leading to the access-restriction

issues occurred. That provision stated: “Authorized representatives of the

Union shall be free to visit the [Resort] hotel at all reasonable hours and shall

be permitted to carry on their duties, provided they shall first notify the

management or its designated representative, and there shall be no interference

with the normal conduct of business”. 

Prior to the relevant dates, Union representatives were allowed to

frequent, among other places, certain work areas, the lower level of the Resort’s

hotel lobby, and the employee cafeteria. On 14 February 2004, Marian Marsh,

a Union representative assigned to the Resort, entered it and met with

employees in that cafeteria. Tom Dougher, the Resort’s head of security, entered

the cafeteria and informed Marsh: she was not allowed on the Resort property;

she was trespassing (because she had received a verbal trespass notice on 12

February, following the public-beach rally); and he had notified the Honolulu

Police Department of her unwanted presence at the Resort. Dougher then

directed Resort security officials to escort Marsh off the property. (Marsh left

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before the police officer arrived.) In addition to escorting Marsh from the Resort,

Resort personnel gave her a verbal trespass notice, stating that Union

representatives were excluded from the property.

On 18 February, two Union representatives, Marsh and Claire

Shimabukuro entered the property and met with Resort employees in the

employee cafeteria. A Resort security officer: directed them to leave; gave them

written trespass notices; and contacted the Honolulu Police Department. Upon

arriving and finding that the Union had not disturbed the Resort, the police

officer informed Marsh, Shimabukuro, and Resort personnel: Union presence

at the Resort fell under the NLRB’s jurisdiction; and the Union’s alleged

trespass was not a criminal matter.

Based upon the foregoing, substantial evidence supports the Board’s

finding that petitioners committed an unfair labor practice in violation of NLRA

§ 8(a)(5). That is, there is substantial evidence to support the finding that

petitioners denied the Union access to the Resort on 14 and 18 February 2004,

which constituted a material change in past practice. Prior to those dates, Union

representatives were allowed to frequent certain hotel areas, including the

employee cafeteria, to speak with employees and conduct Union business.

Additionally, substantial evidence supports the Board’s finding that a

§ 8(a)(1) violation (unfair labor practice to interfere with rights to, inter alia,

engage in self-organization, join labor organizations, and bargain collectively)

occurred when Union representatives were deprived Resort access on 14 and 18

February 2004. See TRW-United v. NLRB, 637 F.2d 410, 415 (5th Cir. 1981)

(employer violates NLRA § 8(a)(1) when conduct tends to interfere, coerce, or

restrain employees in exercise of § 7 rights). Trespass notices’ (verbal and

written) being issued and Union representatives’ being ordered off Resort

property constitute substantial evidence supporting the Board’s finding that

petitioners violated § 8(a)(1). That is, there is substantial evidence showing that

petitioners interfered with Union activities at the Resort. Additionally, as noted

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by the ALJ, Oaktree Capital Mgmt., 353 N.L.R.B. No. 127 at *62, petitioners’

acts of contacting police on 14 and 18 February constituted an ipso facto

violation of § 8(a)(1). See, e.g., NLRB v. Consol. Biscuit Co., 301 F. App’x 411,

438 (6th Cir. 2008); Cumberland Farms, Inc. v. NLRB, 984 F.2d 556, 559 (1st

Cir. 1993). 

Although petitioners acknowledge Union access was denied on 14 and 18

February, they contend the access was not “material” and had “no significant

consequences” because the Union was not deprived of access to its employees. 

Their position, however, is meritless in the light of substantial evidence showing

the CBA contractual provision was clearly breached on 14 and 18 February. See,

e.g., Frontier Hotel & Casino, 309 N.L.R.B. 761, 766-67 (1992) (breach of CBA

contractual provision, designed to protect employees’ § 7 rights, is material

change in violation of § 8(a)(1) and (5)); see also Great W. Coca-Cola Bottling Co.,

740 F.2d at 403-04 (“[A] unilateral change in the manner and degree of access

afforded . . . employees’ representative[s] constitutes a ‘basic change’ in the

agreement”.). 

Further, to the extent petitioners assert § 8(a)(1) was not violated because

they were acting on the basis of a reasonable concern (fearful that Union

representatives would disturb the Resort and its guests, in the light of the 12

February disruptive beach rally), substantial evidence supports that position’s

being equally unavailing. On 14 February, only Union representative Marsh,

and on 18 February, only Marsh and Shimabukuro, were on the premises when

Resort officials ejected them from the property. Substantial evidence supports

their presence not posing a reasonable concern for public safety or business

operations. There was no indication that either Union representative interfered

with, or disrupted, the Resort’s normal business operations—particularly in the

light of the much larger number of individuals protesting on 12 February. In

fact, one Resort security official informed the police officer on 18 February that

the two Union representatives had not then been disruptive.

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2.

Petitioners claim the Board failed to hold NLRB to its burden of

establishing a § 8(a)(5) violation regarding Union dues-collection; specifically,

that it failed to establish a past practice for that collection at the Resort. In that

regard, petitioners contend there was no evidence that they unilaterally, and

without notice, made a material, substantial, and significant change in a

contractual, premises-access provision. As a threshold matter for this point,

petitioners do not contest the findings underpinning the ruling thatthey violated

§ 8(a)(5) and (1); in other words, they concede they prohibited the Union from

collecting dues on 24 May and 22 June 2004.

Petitioners do challenge, however, whether that denial was a departure

from past practice. Determining whether the dues-collection denial was an

unlawful, material change requires de novo review of the CBA’s access provision,

according deference to the Board if its decision is reasonably grounded in law

and not inconsistent with the NLRA. Sara Lee Bakery, 514 F.3d at 428. 

NLRA § 8(a)(5), 29 U.S.C. § 158(a)(5), makes it an unfair labor practice for

an employer “to refuse to bargain collectively with the representatives of his

employees”. The Board adopted the ALJ’s findings that: “collecting dues . . . is

within the union access provision that contractually bound [petitioners]”;

“[p]reventing the Union from collecting dues at [the Resort] was a material,

substantial, and significant change and interference with the Union’s access to

[the Resort]”; and “[petitioners] unilaterally imposed this change and this

restriction on the Union. . . . [And,] [b]y doing so . . . violated [§] 8(a)(5) and (1)

of the [NLRA]”. Oaktree Capital Mgmt., 353 N.L.R.B. No. 127 at *2, *66. 

Before and after the CBA ended in 2003, petitioners deducted Union dues

from Resort employees’ wages; however, in April 2004, petitioners stopped doing

so. And, on 6 May 2004, petitioners notified the Union that it was prohibited

from collecting dues from employees at the Resort. As a result, on 24 May and

22 June 2004, when Union representatives attempted to collect dues at the

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Resort, petitioners prevented their doing so by giving them trespass notices and

ejecting them from the property.

As discussed supra, although the CBA ended in November 2003, the

parties agree that its access provision remained in effect. Again, it provided: 

“Authorized representatives of the Union shall be free to visit the [Resort] hotel

at all reasonable hours and shall be permitted to carry on their duties, provided

they shall first notify the management or its designated representative, and

there shall be no interference with the normal conduct of business”. (Emphasis

added.) Although there is no precise definition for the term “duties”, union

access provisions are generally interpreted broadly. See generally Gilliam

Candy Co., 282 N.L.R.B. 624 (1987). And, the parties do not dispute that

“[c]ollecting dues from members is one of the duties of the Union . . . .” Oaktree

Capital Mgmt., 353 N.L.R.B. No. 127 at *66; see Pleasantview Nursing Home,

Inc. v. NLRB, 351 F.3d 747, 754 (6th Cir. 2003) (“Collection of union fees is . . .

intricately connected to the right to bargain collectively protected by the NLRB

under NLRA § 8(a)(5) . . . .”); Int’l Union, 337 N.L.R.B. 237, 241 (2001) (noting

dues-collection prohibition interferes with union’s ability to fulfill

“representative functions”).

Accordingly, dues collection, a necessary function and requirement of

maintaining representative organizations, guaranteed the Union the right to

access the Resort under the existing access provision—the permission “to carry

on duties”. Furthermore, substantial evidence supports that: petitioners

understood Union representatives could collect dues, unless they were disorderly

or harassing; and those representatives did not interfere with petitioners’

normal business operations on 24 May or 22 June 2004. 

Therefore, substantial evidence supports the Board’s conclusion that

preventing dues collection on 24 May and 22 June was a material, substantial,

and significant change and interference with the Union’s access to the Resort. 

That evidence is particularly substantial in the light of: the broad interpretation

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of access provisions; the general understanding that dues collection is a

necessary Union function; and substantial evidence that Union representatives

were neither disorderly nor harassing on 24 May or 22 June. See NLRB v. Am.

Nat’l. Can Co., 924 F.2d 518, 524 (4th Cir. 1991) (“[W]hen it is found that

responsible representation requires union access to the employer’s premises, the

employer’s property rights must yield to the extent necessary to achieve this end

without unwarranted interruption of the employer’s operations”.); Great W.

Coca-Cola Bottling Co., 740 F.2d at 403 (“It is clear that access by the employees’

representatives constitutes a mandatory bargaining subject, . . . and a unilateral

change in the manner and degree of access afforded the employees’

representative constitutes a basic change in the agreement.” (citations and

internal quotation marks omitted)).

III.

For the foregoing reasons, the petition for review is DENIED and the

Board’s order is ENFORCED.

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EDITH H. JONES, Chief Judge, dissenting:

With due respect to the meticulous opinion for the majority, I cannot agree

with the NLRB’s imposition of liability on Oaktree Capital Management, L.P.,

an investment adviser, for labor law violations committed by Turtle Bay Resorts

(TBR) and Benchmark Hospitality, the resort lessor/operators. NLRB cites no

authority that applies the “single employer” theory to an investment

adviser/manager. See Oaktree Capital Management, L.L.C., 353 NLRB No. 127

(2009) (adopted by the Board by reference in Oaktree Capital Management,

L.L.C., 355 NLRB No. 147, at *1). Although the Board’s use of the single

employer theory has been sanctioned by the Supreme Court in two narrow

instances, more recent pronouncements demonstrate the Court’s fidelity to

enforcing corporate separateness, a doctrine on which much of our current

economy depends to safeguard risk-taking and investment. The Board’s use of

single employer theory in this case is gratuitous and unnecessary inasmuch as

TBR and Benchmark together are indisputably joint employers whose ability

and motivation to comply with the Board’s order are not in doubt. 

1

In response to the majority’s focus on the substantial evidence standard of review, 1

Majority at 8, I note that as applied to this case, the single employer theory itself is

unjustifiable. The NLRB’s interpretation of the NLRA, its governing statute, is ordinarily due

Chevron deference. Lechmere, Inc. v. NLRB, 502 U.S. 527, 536-37 (1992). Courts give no

deference to the NLRB, however, if its interpretation “rest[s] on erroneous legal foundations,”

Id. at 539 (quoting NLRB v. Babcock & Wilcox Co., 351 U.S. 105, 112 (1956)), or the NLRB’s

position is an unreasonable interpretation of the Act. First Healthcare Corp. v. NLRB,

344 F.3d 523, 546 (6th Cir. 2006). Given the recent Supreme Court precedent on the corporate

form, the NLRB’s extension of the “single employer” doctrine is on shaky legal ground. The

NLRB’s unprecedented attempt to disregard the complex corporate structure in the instant

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The Board’s single employer theory evolved from a rule regulating the

jurisdictional limit of the NLRB, Radio & Television Broad. Technicians Local

Union 1264 v. Broad. Serv. of Mobile, Inc., 380 U.S. 255 (US 1965), to one

concerned with various manipulations oftraditionalintracorporate relationships

that, deliberately or not, evaded federal labor law. S. Prairie Constr. Co. v. Local

No. 627, Int’l Union of Operating Eng’rs, 425 U.S. 800 (1976). The Board’s four

part test to assess single employer liability is thus understandably a somewhat 2

lower bar than the common law doctrine necessary to pierce the corporate veil. 

See, e.g., Dole Food Co. v. Patrickson, 538 U.S. 468, 475 (2003) (noting that “[t]he

doctrine of piercing the corporate veil . . . is the rare exception, applied in the

case of fraud or certain other exceptional circumstances”); Vance v. NLRB,

71 F.3d 486, 490-91 (4th Cir. 1995) (noting that piercing the corporate veil

generally requires unlawful motive or intent while finding single employer

status requires no such finding). 

Taken too generally, however, the elements of the NLRB test would

impose responsibility on virtually any corporate parent for subsidiary or affiliate

actions, because the subsidiary is ultimately accountable to its parent company

and because they often share common employees or officers. But a unanimous

case is unreasonable especially given the facts in this case where a culpable and solvent

subsidiary is not denying liability.

The four part test to determine “single employer” status includes the following

2

considerations: “interrelation of operations, common management, centralized control of labor

relations and common ownership.” Radio & Television Broad. Technicians, 380 U.S. at 256.

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Supreme Court has recognized that “it cannot be enough to establish liability

here that dual officers and directors made policy decisions and supervised

activities at the facility.” United States v. Bestfoods, 524 U.S. 51, 69-70 (1998). 

Indeed, the Court relied on this court’s decision in Lusk v. FoxMeyer Health

Corporation, 129 F.3d 773, 779 (5th Cir. 1997), observing the “well established

principles” that not only do such officers frequently “change hats” in

representing a parent or subsidiary, but courts “generally presume ‘that they are

wearing the “subsidiary’s hat” . . . when acting for the subsidiary.’” Bestfoods,

524 U.S. at 69. Even more recently, the Court refused to affix liability on an

investment adviser under federal securities law for misleading statements made

by a fund administered by the advisor. Janus Capital Grp., Inc. v. First

Derivative Traders, 131 S. Ct. 2296, 2305 (2011). The majority declined “to

disregard the corporate form” because the entities maintained legal separateness

and followed corporate formalities, id. at 2304, even though all of the officers of

the fund were also employees of the advisor, id. at 2306 (Breyer, J., dissenting).

The Board’s reliance on the single employer theory to conflate “Oaktree”

and TBR bears no relation to the corporate structure of the entities and even less

to labor law policy. On the latter score, it is clear that TBR, rather than being

a mere “shell”, as alleged by the Board in Oaktree Capital Management, L.L.C.,

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353 NLRB No. 127, at *11 (2009), was the financial center for the resort, while 3

Benchmark had a contract for day to day management. Only on-site employees

took the actions that became the subject of the Board’s findings of unfair

practices. Together, as an admitted joint employer, TBR and Benchmark were

fully accountable, solvent and responsible parties for the Board’s purposes. No

obvious labor law policy is being served by holding Oaktree liable in addition.

How the Board applied the single employer theory, however, is as

unfortunate as its lack of policy grounding. First, Oaktree did not “own” TBR

or even stand within the corporate chain that leads back to the investment funds

for which Oaktree LP is the general partner. This chart portrays the complex,

albeit hardly extraordinary, corporate structure. 

All revenues from the operation of Turtle Bay Resort are deposited into an account 3

controlled by TBR and TBR is liable for all operating expenses. Oaktree Capital Management,

L.L.C., 353 NLRB No. 127, at *11.

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Oaktree, despite being an investment adviser and asset manager to the

funds and involved in managing TBR, holds no direct ownership of the resort as

evidenced by the chart above. NLRB simply erred, as the majority opinion

almost admits. Thus, to conclude that TBR was a “conduit”, id. at *12, for

Oaktree has no legal significance. There is no evidence disputing TBR’s

financial independence as the resort’s lessor or that corporate formalities within

the members of the ownership chain were ignored. 

OAKTREE IS G.P. OF FUND B

OAKTREE IS INVESTMENT

OAKTREE IS G.P. OF FUND A ADVISOR TO GRYPHON

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Second, the NLRB’s finding of “common management” between Oaktree

and TBR proves nothing more than is allowed by “general principles” of

corporate law, as emphasized by the Supreme Court. The majority opinion

elaborates on this element of NLRB’s test by stating, inter alia, that Russell

Bernard, President of TBR, was also a principal in Oaktree and “portfolio

manager” for the investment funds; and the majority concludes that Bernard

was “acting on Oaktree’s behalf in controlling the Resort’s labor relations.” This

conclusion is unsupported by evidence showing why or how “Oaktree” directly

benefitted from controlling the resort’s labor relations. In other single employer

cases, the “common management” criterion demonstrates that a corporate

parent, or sibling, will benefit by the closing down of one (unionized) operation; 

shifting operations from a union to non-union subsidiary; or otherwise

reorganizing the company to the detriment of a union contract. See., e.g., NLRB

v. O’Neill, 965 F.2d 1522, 1525-26, 1530 (9th Cir. 1992) (finding that an owner

shut down his union factory only to use other entities he owned to reopen the

factory without union workers). Not so here. In fact, nothing distinguishes the

NLRB’s finding against “Oaktree” from a finding it could equally have made

against the Funds themselves: Oaktree, after all, is general partner of two of the

funds and adviser to the third! NLRB has inverted the Supreme Court’s

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proposition in Bestfoods that corporate officers or managers may indeed wear

two hats, and are presumed to wear the proper hat, in attending to their dual

duties. 

Third, the most important element of the test is centralized control of

labor relations. Naperville Ready Mix, Inc. v. NLRB, 242 F.3d 744, 752 (7th Cir.

2001); O’Neill, 965 F.2d at 1529. The majority rely on just two pieces of

correspondence, one in which Bernard reported to the Funds on the status of

labor negotiations (in response to a letter sent by the Union to the Fund

investors), and one sent by the Union to Bernard on a similar subject. Yet

Bernard was authorized to wear separate hats in reporting as the funds’

investment adviser, on one hand, and dealing through TBR, on the other. 

Moreover, in the absence of some scheme to deceive the Union as to the identity

of the “employer,” how the Union addresses Bernard should not be probative

against Oaktree. The “control” exhibited for purposes of these violations,

however, had nothing to do with Bernard’s correspondence. All violations were

committed by employees on the premises at Turtle Bay (eg, the resort’s director

of human resources, the security chief, Benchmark’s general manager, resort

restaurant managers). Oaktree Capital Management, L.L.C., 353 NLRB No. 127,

at *53-86. None of the violations were committed by or at the behest of Bernard

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and other “Oaktree” personnel headquartered in New York. That there is no

evidence linking “Oaktree” to the retaliatory acts of on-site management

personnel for the union’s extremely disruptive conduct speaks loudly to the lack

of “centralized” labor relations between Oaktree and TBR. 

And this lack of evidence stands in stark contrast to the traditional cases

in which NLRB has applied the single employer test. In prior cases, the uniform

theme is that one integrated company in an integrated business is managing

overall labor relations among the related entities in order to disadvantage a

union and directly benefit its bottom line. See, e.g., Covanta Energy Corp.,

356 NLRB No. 98 at *34, 38 (2011) (finding that the subsidiary was an

integrated part of the corporate parent and that this integrated employer

discontinued paying corporate bonuses to workers to discourage union activity). 

Here, there is no “centralization” of the enterprise. Oaktree’s business is the

management of some $80 billion in forty investment funds for clients like

universities, charitable trusts, and public and private pension funds. Global

Presence, OAKTREE, http://www.oaktreecapital.com/about/global-presence.aspx

(last visited Sept. 12, 2011). The Resort’s business, managed by

TBR/Benchmark, is unrelated functionally to that of Oaktree. There is no

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“there” behind the conclusion that management of the Resort’s labor relations

was centrally controlled by Oaktree.

The final element of NLRB’s test, as related by the majority, is operational

integration. The majority supports the NLRB’s conclusion with reference, again,

to the overlap between Oaktree representatives and TBR’s management. Even

if this is so, and even if Oaktree “operated” TBR, and TBR, along with

Benchmark, ran the Resort, this is not the type of “operational integration”

contemplated in the NLRB’s prior cases. Oaktree created or used TBR as a

self-sufficient corporate vehicle for an individual investment opportunity. It had

no integrated relationship with other resort properties that could be affected by

Turtle Bay’s unions or could disadvantage those unions. Yet it is the overall

consequence for the integrated operation to which NLRB has looked in the past

and that alone justifies ignoring the integrity of corporate relations. 

I reiterate one major point. There is no dispute that together, TBR and

Benchmark Hospitality are solvent, responsible and liable parties. Fixing

additional liability on an unrelated corporate entity, Oaktree, was wholly

superfluous. The cost of discarding the corporate form is not justified when no

labor law policy is advanced. For all these reasons, the shell of the NLRB’s test

appears to be intact, but the substance of the test—and its connection with the

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purposes of federal labor policy—are absent. I respectfully dissent from the

enforcement of the Board’s order against Oaktree. 

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