Court Opinion

ID: 196356
Source: CourtListenerOpinion
Date Created: 2011-02-07 03:04:07+00
Date Added: 2024-06-11T17:26:41.855208
License: Public Domain

UNITED STATES COURT OF APPEALS
                      FOR THE FIRST CIRCUIT
                                           

No. 95-1294

                      UNION BUILDERS, INC.,
                           Petitioner,

                                v.

                 NATIONAL LABOR RELATIONS BOARD,
                           Respondent.

                                           

            DISTRICT COUNCIL 94, UNITED BROTHERHOOD OF
           CARPENTERS AND JOINERS OF AMERICA, AFL-CIO,
                           Intervenor.

                                           

           ON PETITION FOR REVIEW AND CROSS-APPLICATION
                  FOR ENFORCEMENT OF AN ORDER OF
                THE NATIONAL LABOR RELATIONS BOARD

                                           

                              Before

                     Torruella, Chief Judge,
                                                     
            Aldrich and Coffin, Senior Circuit Judges.
                                                               

                                           

     Andrew  B.  Prescott, with  whom  Donald  P. Rothschild  and
                                                                      
Tillinghast Collins & Graham were on brief for petitioner.
                                      
     Joseph A. Oertel, Senior Litigation Attorney, National Labor
                               
Relations  Board,  with  whom  Frederick  L.  Feinstein,  General
                                                                 
Counsel, Linda Sher, Acting  Associate General Counsel, Aileen A.
                                                                           
Armstrong,   Deputy  Associate   General  Counsel,   and  Charles
                                                                           
Donnelly, Supervisory  Attorney, National Labor  Relations Board,
                  
were on brief for respondent.

                                           

                         October 20, 1995
                                           

          TORRUELLA,   Chief  Judge.     The   petitioner,  Union
                    TORRUELLA,   Chief  Judge.
                                             

Builders,  Inc.  ("UBI") seeks  review  of  the decision  of  the

respondent, the  National Labor  Relations Board ("the  Board" or

"the  NLRB"), ordering  UBI  to supply  requested information  to

District Council 94, United Brotherhood of Carpenters and Joiners

of America, AFL-CIO (the "Union").  The NLRB cross-applies, under

   10(e)  of the  National Labor  Relations  Act ("the  Act"), 29

U.S.C.   160(e),  for enforcement of its order against  UBI.  The

Board  has ordered  UBI  to cease  and  desist from  violating   

8(a)(5) and (1)  of the Act, 29  U.S.C.    158(a)(1)  and (a)(5),

furnish the  Union with  the information  it requested,  and post

appropriate notices.   For the  following reasons, we  affirm the

Board's Decision and Order.

                          I.  BACKGROUND
                                    I.  BACKGROUND

          In  1989, a  Rhode Island  company called O.  Ahlborg &

Sons ("O.  Ahlborg") executed a three-year  collective bargaining

agreement ("CBA")  with the Union.   On or about  March 24, 1992,

O. Ahlborg notified  the Union that  it planned to  terminate the

agreement as of  May 31,  1992, as was  O. Ahlborg's  contractual

right.  As  a result  of collective bargaining  with the  Union's

then business manager (Herbert F. Holmes), O. Ahlborg  reached an

agreement  (the  "Holmes-Ahlborg   Agreement")  with  the   Union

(confirmed by a letter dated May 29, 1992) whereby a new employer

entity,  UBI,   would  be  formed.     Under  the  Holmes-Ahlborg

Agreement, UBI would enter into a collective bargaining agreement

(the  "new  CBA") with  the Union  and  would continue  all union

                               -2-

bargaining unit work  performed at that time by  O. Ahlborg.  The

Board found that the Holmes-Ahlborg Agreement also provided that,

as  between UBI  and  O.  Ahlborg,  UBI  would  be  allotted  all

prevailing rate jobs.

          Additionally, under the  Holmes-Ahlborg Agreement,  UBI

would  assume all employees currently performing union bargaining

unit work for O. Ahlborg,  and there would be no  interruption in

production,  employment or  wages  of union  members despite  the

termination of the O. Ahlborg-Union CBA.  Shortly thereafter, UBI

and the Union entered into the new CBA, which provided that

            [UBI]  will  not  subcontract   any  work
            covered  by the  terms of  this agreement
            which is  to be performed  at the jobsite
            except  to  a  contractor  who  holds  an
            agreement with the United  Brotherhood of
            Carpenters and Joiners of America, or one
            of  its  subordinate   bodies,  or,   who
            agrees,  in writing, prior  to or  at the
            time  of   the  execution  of   the  sub-
            contract,  to be  bound  by the  terms of
            this agreement.

The new CBA covered the period from June 1, 1992 to June 4, 1995.

          On  December 8,  1993,  David F.  Palmisciano, who  had

replaced Holmes  as union business representative,  sent a letter

to UBI's  chief executive  Eric Ahlborg, expressing  concern that

UBI  was "operating  a second  company" as  "an alter ego."   The

letter  also requested that Eric  Ahlborg fill out  and return an

enclosed  questionnaire.  Eric  Ahlborg refused  to reply  to the

questionnaire.

          Subsequently,  the matter came before an administrative

law  judge  ("ALJ")  on  the  NLRB  General  Counsel's  complaint

                               -3-

alleging that UBI  violated    8(a)(5) and 8(a)(1)  of the Act by

refusing  to  furnish  information  that the  Union  alleged  was

necessary  for, and relevant to, the performance of its duties as

the  exclusive  collective-bargaining   representative  of   unit

employees.   Palmisciano  testified  before an  ALJ that,  during

three previous onsite inspections,  he saw evidence that UBI  had

violated his interpretation of the Holmes-Ahlborg Agreement: that

as  between O.  Ahlborg  and UBI,  UBI  would garner  all  state,

Federal  and  other  work  with  high  wage  rates,  particularly

"prevailing  rates," and  that such  work would  all go  to union

carpenters.

           The ALJ  concluded that the  Union reasonably believed

that  UBI  was  operating  O.  Ahlborg  as  an  "alter  ego"  and

subcontracting  in a  manner  that  violated  the  Holmes-Ahlborg

Agreement's  award of prevailing rate  jobs to UBI  and its union

member  employees  only.1    Thus,  the ALJ  concluded  that  the

Union's reasonable belief justified the  request for information,

and ordered UBI to comply.  The Board affirmed the ALJ's rulings,

findings and conclusions, and adopted his recommended Order.  UBI

seeks review of the Board's decision, and the Board cross-applies

for enforcement of its order against UBI.
                    
                              

1   UBI was organized  as a Rhode  Island corporation on  June 1,
1992, to  engage  in the  business of  building construction  and
related activities.   UBI's officers are related  to, and overlap
substantially with,  those of  O. Ahlborg.    For example,  UBI's
chief executive, Eric Ahlborg,  is the son of O.  Ahlborg's chief
executive; UBI's vice president  is the daughter of  O. Ahlborg's
chief executive; and UBI's chief financial officer, who holds the
same position at O. Ahlborg, is another son of O. Ahlborg's chief
executive.

                               -4-

                     II.  STANDARD OF REVIEW
                               II.  STANDARD OF REVIEW

          We will  enforce a Board  order if the  Board correctly

applied  the  law  and  if  substantial  evidence  on the  record

supports the Board's  factual findings.  Penntech Papers, Inc. v.
                                                                        

NLRB, 706 F.2d 18, 22-23  (1st Cir. 1983), cited in NLRB  v. Acme
                                                                           

Tile and  Terrazo, Co., 984  F.2d 555, 556  (1st Cir. 1993).   We
                                

uphold the Board's findings of a violation as long as substantial

evidence on the record as a whole supports them, even if we would

have reached a  different conclusion.   29 U.S.C.     160(e)  and

(f);  3-E  Co.,  Inc.  v.  NLRB, 26  F.3d  1,3  (1st  Cir. 1994);
                                         

Cumberland  Farms,  Inc. v.  NLRB, 984  F.2d  556, 559  (1st Cir.
                                           

1993).

                         III.  DISCUSSION
                                   III.  DISCUSSION

          As part of the    8(a)(5) duty to bargain,  an employer

must  furnish all  information  requested  by  a  union  that  is

necessary  to the  union in  order to  fulfill its  obligation as

representative  of  bargaining  unit  employees.   NLRB  v.  Acme
                                                                           

Industrial  Co., 385 U.S. 432, 435-36 (1967); NLRB v. New England
                                                                           

Newspapers, Inc.,  856 F.2d 409, 413  (1st Cir. 1988).   Thus, an
                          

employer  must  produce information  that  is  "relevant to  [the

bargaining   representative's]  duties,"   including  information

necessary to police the  CBA.  New England Newspapers,  Inc., 856
                                                                      

F.2d at 413.  Because the duty to bargain "unquestionably extends

beyond the  period of contract negotiations and applies to labor-

management relations during  the term of  an agreement," NLRB  v.
                                                                       

Acme  Industrial Co.,  385  U.S. at  436,  the Union  could  have
                              

                               -5-

requested the information simply because of its relevance to  its

ongoing agreement with  UBI.   In this regard,  we note that  the

Board  may  determine that  the employer  has  a duty  to provide

information if it  finds even "a probability that the information
                                                      

is relevant  and that it will be of  use to the union in carrying

out  its statutory duties."  NLRB  v. Pfizer, Inc., 763 F.2d 887,
                                                            

889  (7th Cir. 1985) (emphasis added).  See also General Electric
                                                                           

Co. v.  NLRB, 916 F.2d 1163,  1168 (7th Cir. 1990)  (relevance is
                      

most  often viewed  liberally to  allow for  broad disclosure  of

information).

          As an  initial matter,  we reject UBI's  argument that,

via  the   Holmes-Ahlborg  Agreement,  the   Union  approved  the

coexistence of O. Ahlborg  and UBI, and thereby waived  its right

to challenge  O.  Ahlborg as  UBI's  alter ego.   UBI  has  cited

neither legal authority nor requisite factual evidence to support

its waiver argument.   Furthermore, nothing in the Holmes-Ahlborg

Agreement shows an unequivocal  waiver by the Union of  its right

to investigate the alleged diversion  to O. Ahlborg of prevailing

rate jobs.  Communication Workers of America AFL-CIO, Local  1051
                                                                           

v.  NLRB,  644 F.2d  923,  927 (1st  Cir.  1981) ("the  union may
                  

relinquish  a statutory  right only  by 'clear  and unmistakable'

waiver")  (quoting NLRB v. Perkins Machine Co., 326 F.2d 488, 489
                                                        

(1st Cir. 1964)).  Finally,  the ALJ specifically rejected  UBI's

waiver argument based on the facts presented.

          The  ALJ correctly distinguished  the issue  of whether

UBI must  supply  the requested  information  from the  issue  of

                               -6-

whether O. Ahlborg and  UBI are in  fact intertwined in an  alter

ego relationship.  We agree that only the information issue bears

on this case.  With respect  to this issue, we are persuaded that

we should apply a "discovery-type" standard so that the Union may

gather  "'a broad range of  potentially useful information  . . .

for the purpose of  effectuating the bargaining process'."   NLRB
                                                                           

v. Illinois-American Water  Co., 933  F.2d 1368,  1378 (7th  Cir.
                                         

1991)  (quoting Procter &  Gamble Manufacturing Co.  v. NLRB, 603
                                                                      

F.2d 1310, 1315  (8th Cir.  1979)).  In  particular, the  Supreme

Court has stressed  that the  Board should apply  a more  liberal

standard of relevance  to information requests under  the duty to

bargain in good  faith than would be appropriate  at trial.  NLRB
                                                                           

v. Acme  Industrial Co., 385 U.S.  432, 437 & n.6  (1967).  Thus,
                                 

the Union  cannot be required to  prove that UBI is  in breach of

its CBA  or that O. Ahlborg  is UBI's alter ego  before the Union

can receive  information that could help  prove such allegations.

In deciding to  apply such  a standard, the  ALJ correctly  noted

that such information  does not  only benefit unions.   In  fact,

requiring  employers  to  divulge  information  of  even   merely

potential  relevance improves  the efficiency of  the arbitration

system  as a whole, since  otherwise, unions might  be forced "to

take grievances all the way through to arbitration without [] the

opportunity to evaluate the  merits of the  claim."  Id. at  438.
                                                                 

As a policy matter,  employers as a whole may also benefit, since

the information they supply may generally aid unions in filtering

out meritless cases.  Id.
                                  

                               -7-

          Substantial evidence  on the record supports  the ALJ's

conclusion,  adopted  by  the   NLRB,  that  the  Union  supplied

sufficient  objective  evidence  to   show  that  its  belief  in

requesting the  information was reasonable.   The record supports

the finding that Palmisciano reasonably believed that the purpose

of the Holmes-Ahlborg Agreement  was to permit O. Ahlborg  to bid

nonunion work and  to award  all "prevailing rate"  jobs to  UBI.

Furthermore, the Union  had entered the new CBA with  UBI.  Thus,

the ALJ and the Board correctly concluded that the questionnaire,

with  its  inquiries into  UBI's ownership,  corporate directors,

suppliers  and  relationship  to  an  alleged nonunion  employer,

sought   information   necessary   to  Palmisciano's   collective

bargaining duties.

          The ALJ  heard testimony from Palmisciano regarding the

latter's observations at three  different job sites.  Palmisciano

testified that at the three sites, all with O. Ahlborg as general

contractor  and paying prevailing rates, he had seen Union member

UBI employees supervising nonunion employees doing unit work, and

he  had seen both Union member UBI employees and nonunion workers

doing  unit  work  for  subcontractors.   Additionally,  the  ALJ

questioned  Palmisciano regarding  the  meaning  of  the  Holmes-

Ahlborg Agreement,  especially with  respect to the  allotment of

work between O. Ahlborg and UBI.  Furthermore, the ALJ questioned

Palmisciano  regarding O.  Ahlborg's  responses to  Palmisciano's

demands  that O.  Ahlborg use  union subcontractors  on carpentry

work at the three job sites.

                               -8-

          While UBI takes  offense at the  ALJ's refusal to  hear

Eric Ahlborg's testimony to  show that UBI and  O. Ahlborg had  a

different  understanding  of  the Holmes-Ahlborg  Agreement,  the

issue  before  the  ALJ  was  whether  Palmisciano  could  supply

objective evidence  supporting a reasonable belief  that made his

information request relevant to his collective bargaining duties.

Naturally,  the  ALJ  drew  his conclusions  primarily  from  the

testimony  of Palmisciano, since  the chief issue  was whether or

not Palmisciano's beliefs were reasonable given objective facts.

          UBI also argues that  because objective facts show that

it is not operating an alter ego,  Palmisciano could not have had

a reasonable  belief that would render  the requested information

relevant.  The proposition that a union's information request may

be  denied if  the company  in question  can show  that objective

facts  render the  union's  concerns  untenable appears  logical.

See, e.g., San  Diego Newspaper Guild v. NLRB, 548  F.2d 863, 867
                                                       

(9th Cir. 1977)  ("If the information requested has  no relevance

to any legitimate union collective  bargaining need, a refusal to

furnish it could not be an unfair labor practice.").  However, in

the  instant  case,  the  issue  is  moot,  since  even  if  this

proposition were  settled law applicable  here, UBI has  not made

the required showing.

          In  the course of this argument, UBI relies on the fact

that  the relationship  between  it and  O.  Ahlborg is  not  the

classic alter ego  situation of "a  disguised continuance of  the

old  employer."  Therefore, runs the argument, because O. Ahlborg

                               -9-

is not  UBI's alter ego, the Union  cannot demonstrate reasonable

belief  necessary   to  support  its  request   for  information.

However, this argument must fail for two reasons.

          First, UBI  argues that this Court  has previously used

the  existence of a motive to evade labor law responsibilities in

corporate organization as a  factor in identifying an alter  ego,

NLRB  v. Hospital  San Rafael,  Inc., 42  F.3d  45, 50  (1st Cir.
                                              

1994), and that no  "disguise" or motive existed here,  since the

Union knew and  agreed to the  creation of UBI  from O.  Ahlborg.

However, in Hospital San Rafael, the Court also called cases that
                                         

involve formation  of new entities with  direct evasionary intent

only "the easiest  example[s]" of  alter egos.   Id.   Presumably
                                                             

there are also harder examples, as the Union may show here.

          Additionally,  even if  the issue  before us  here were

whether  O. Ahlborg  constituted  UBI's   alter  ego,  the  paper

relationship   between  the   two  corporations   would  not   be

dispositive,  since  the  alter  ego doctrine  looks  behind  the

corporate   form   to   determine  whether   nominally   distinct

corporations are "in truth . . . but divisions or departments  of

a 'single enterprise.'"  NLRB v. Deena Artware, Inc., 361 US 398,
                                                              

402  (1960).   Note  that this  Court  has previously  upheld the

Board's finding of  an alter  ego "where the  companies were  not

successors but  rather parallel  operations."   C.E.K. Industrial
                                                                           

Mechanical Contractors, Inc. v.  NLRB, 921 F.2d 350, 354-55  (1st
                                               

Cir. 1990) (denying  enforcement of  the Board's  order on  other

grounds).   Thus, the fact  that O. Ahlborg  did not succeed  UBI

                               -10-

does not,  by itself, render the alter  ego doctrine inapplicable

and Palmisciano's belief unreasonable.

          Thus,  the  ALJ correctly  avoided turning  the hearing

into an inquiry into the agreement's ultimate meaning, since such

a decision  was beyond the  scope of  the only issue  before him:

whether or not to compel information disclosure.  With respect to

testimony  directed   at  this  question,  an  ALJ's  credibility

determinations are entitled  to great weight because the  ALJ saw

and heard the  witnesses testify.  Holyoke  Visiting Nurses Ass'n
                                                                           

v. NLRB, 11 F.3d 302, 308 (1st Cir. 1993), cited in 3-E Co., Inc.
                                                                           

v.  NLRB,  26 F.3d  1, 3  (1st  Cir. 1994).   We  will  set aside
                  

findings only if  we believe  the ALJ overstepped  the bounds  of

reason.  Id.  Here, we find no such transgression.
                     

                         IV.  CONCLUSION
                                   IV.  CONCLUSION

          The ALJ's findings, adopted by the Board, are supported

by  substantial evidence  on  the record  as  a whole  and  stand

without  error.   UBI's  request for  review  is denied,  and the

Board's request for enforcement  of its order is granted.   Costs

to respondent.

                               -11-