R. Sabee Company, LLC

National Labor Relations Board - Administrative Judge Opinions

Feb 6, 2007

30-CA-016482 (N.L.R.B. Feb. 6, 2007)

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Appleton, WI
UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD
DIVISION OF JUDGES
R. SABEE COMPANY, LLC, DRAPER
PRODUCTS, INC., CIRCLE MACHINERY
& SUPPLY CO., SABEE PRODUCTS, INC.,
STANFORD PROFESSIONAL PRODUCTS,
SABEE REALTY, INC. AND JMS CONVERTERS,
INC. d/b/a JMS CONVERTING, as single employer,
and/or continuing enterprise; and/or
R.SABEE COMPANY, LLC, DRAPER PRODUCTS,
INC., CIRCLE MACHINERY & SUPPLY CO., STANFORD
PROFESSIONSL PRODUCTS CORPORATION,
SABEE REALTY, INC., and its successors SABEE
PRODUCTS, INC., AND JMS CONVERTERS, INC.
d/b/a JMS CONVERTING
and Case 30-CA-16482-1
UNITED STEEL PAPER AND FORESTRY, RUBBER,
MANUFACTURING, ENERGY, ALLIED INDUSTRIAL
AND SERVICE WORKERS INTERNATIONAL UNION,
LOCAL 2-932
Paul Bosanac, Esq., for the General Counsel
Marianne Goldstein Robbins, Esq., for the Charging Party
John E. Thiel, Esq. and Gordon B. Gill Esq., for the Respondent
DECISION
STATEMENT OF THE CASE
Jane Vandeventer, Administrative Law Judge. This case was tried on November
15, 2004, February 14, 15, and 16, 2005, and August 1, 2006, in Appleton, Wisconsin.
Prior to the opening of the case, the General Counsel withdrew its complaint
allegations against R. Sabee Company, LLC (herein R. Sabee), Draper Products, Inc.
(herein Draper), and Circle Machinery & Supply Co. (herein Circle), because those
three Respondents had entered into a Settlement Agreement with the General Counsel.
Facts regarding those three Respondents comprise essential parts of the evidence in
the record, but no remedy or order was sought regarding those three Respondents, and
none has been recommended. The remaining entities involved in this proceeding are
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Sabee Products, Inc. (herein SPI), Stanford Professional Products (herein Stanford),
Sabee Realty, Inc. (herein Realty), and JMS Converters, Inc. d/b/a JMS Converting
(herein JMS). These four entities will be referred to as Respondents or by their
individual names.
The complaint alleges Respondents, as a single employer, or in the alternative
as and alter ego and/or a continuance of a single employer, or in the alternative as a
successor employer, violated Section 8(a)(1) and (3) of the Act by laying off employees,
and by refusing to recall or rehire bargaining unit employees. The complaint also
alleges Respondents violated Section 8(a)(1) and (5) of the Act by laying off employees,
moving machinery and employees from one location and one employing entity to
another, failing to recall and/or rehire employees, all without notice to the Union1 and
without affording the Union an opportunity to bargain about these actions and/or the
effects of these actions, by withdrawing recognition from the Union, by failing and
refusing to apply the collective bargaining agreement to the employees, and by failing
and refusing to provide necessary and relevant information to the Union. The
Respondents filed answers denying the essential allegations in the complaint. After the
conclusion of the hearing, the parties filed briefs which I have read.
Based on the testimony of the witnesses, including particularly my observation of
their demeanor while testifying, the documentary evidence, and the entire record, I
make the following
FINDINGS OF FACT
I. JURISDICTION
Respondents SPI and JMS are corporations with offices and places of business
in Appleton, Wisconsin, where they are engaged in the manufacture of disposable
health care products. During a representative one-year period, Respondents sold and
shipped from their Appleton facility goods valued in excess of $50,000 directly to points
outside the state of Wisconsin. Accordingly, I find, as Respondents admit, that they are
employers engaged in commerce within the meaning of Section 2(2), (6), and (7) of the
Act. Respondent Stanford is a corporation with an office and place of business in
Pennsauken, New Jersey, where it is engaged in the distribution of medical and dental
products. During representative periods, Respondent Stanford sold and shipped goods
valued in excess of $50,000 directly to points outside the state of New Jersey.
Accordingly, I find, as Respondent admits, that it is an employer engaged in commerce
within the meaning of Section 2(2), (6), and (7) of the Act.
The Charging Party (the Union) is a labor organization within the meaning of
Section 2(5) of the Act.

1 The Union filed the original charges under its then name “Paper, Allied-Industrial,
Chemical and Energy Workers Union (PCE) AFL-CIO-CLC, Local 7-0932.” On the last day of
hearing in the instant matter, all parties stipulated that the Union had changed its name to that
stated in the caption of this case.
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II. UNFAIR LABOR PRACTICES
A. The Facts
1. Background
The group of companies involved in this case are owned predominantly by
related individuals in the Sabee family. The late patriarch of the family, Reinhardt
Sabee2, began Circle about 1948, and added companies over the years. Circle was a
manufacturer of packaging machinery and paper converting machinery. Two years
later, a second company, R. Sabee, was started, and manufactured disposable health
care products. Reinhardt’s son Michael Sabee first began working for R. Sabee not
long after it’s founding. After college in 1965, he joined the family businesses full time.
Draper was begun in the 1960’s, and it also manufactured disposable health care
products. By 2001, Draper was owned one-third by Reinhardt Sabee, one-third by Lois
Sabee, his wife, and one-third by Michael Sabee. The company group used two main
business locations, one on Highland Avenue (Highland facility) and, beginning in the
1960’s, a second location at West 8th Street and Linwood (Linwood facility). R. Sabee
and Draper used both facilities for their manufacturing activities. Stanford was begun by
Reinhardt Sabee and a partner, Ralph Stanford, in the late 1960’s. Initially it also
manufactured health care products, but after 1984, operated a warehouse and
distribution center in New Jersey. Michael Sabee initially owned a 45% interest in
Stanford, and continues to be a corporate director.
In 1975, Michael Sabee founded SPI and owned and operated it himself. Like
Draper, SPI manufactured health care products at both the Linwood and Highland
facilities. By 2001, these two companies, along with R. Sabee, manufactured products.
It is undisputed that manufacturing employees were nominally employed by R. Sabee,
but in fact performed work for all three companies. The manufacturing employees at
the Linwood and Highland facilities have been represented by a labor organization for
over 25 years. Since 1982, Michael Sabee has been involved in collective bargaining
negotiations for this bargaining unit, and signed seven successive collective bargaining
agreements on behalf of R. Sabee from 1982 through 1999. His name was listed along
with the title, “President” in the agreements. The last agreement was effective by its
terms from November 1,1999 until October 31, 2004. Michael Sabee was responsible
for conducting labor relations with the Union up through January 18, 2002. At the
beginning of 2002, there were approximately 200 employees in the bargaining unit.
In his testimony, Michael Sabee could not say how much time he spent on the
business of each of the three manufacturing companies, R. Sabee, Draper, and SPI,
because he did not keep track. He was paid by all three companies for some periods of
time, by R. Sabee and SPI for some periods, and by SPI only for some periods, but he
did not know when he was paid by which companies.

2 Reinhardt Sabee died in January 2005.
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Several other companies were also part of the family’s group of companies.
Realty, the majority of which is owned by Michael Sabee and his brother Craig,
operated as a real estate holding company by 2001. It owned real estate at the
Linwood and Highland facilities. There were no written leases or agreements’ showing
how much was to be paid for the use of the facilities by the three manufacturing
companies.
By the time of events relevant to this case, Reinhardt Sabee had largely retired
from active participation in the businesses. His wife, Lois Sabee, remained somewhat
involved, and all three of their children, John Michael Sabee (herein Michael Sabee),
Sherry Sabee Donovan Ahlman, and Chris Sabee, were involved in the businesses to
varying extents.
2. Businesses in 2001
The record reflects that during 2001, prior to the allegations of unfair labor
practices, the main three companies were largely run by Michael Sabee. The three
manufacturing companies, R. Sabee, Draper, and SPI, all used the same employees
and machinery in conducting their operations. There was an understanding that each
company would pay the other companies for rent, for use of their machinery and for use
of their employees, but it is not clear in the record how regularly these payments were
made pursuant to the understanding. It is clear in the record that the method of arriving
at the amounts of these payments was formulated solely by Reinhardt Sabee while he
was active in the business, and for at least the several years prior to 2002, solely by
Michael Sabee. There was no evidence that the inter-company payments were arms-
length transactions. In fact, Michael Sabee testified that money was simply moved from
one company to another as needed.
In 2001, certain other members of the family, such as Michael Sabee’s mother
and sister, became unhappy with the way he was running the companies. For
convenience, this part of the family is called the Lois Sabee group. In late 2001, they
approached Michael Sabee about agreeing to some changes, and when he would not
agree, decided to hire new managers for the business. On January 18, 2002, the Lois
Sabee group changed the locks on the buildings at the Linwood and Highland facilities,
and locked Michael Sabee out of the businesses. They hired a team of managers to
run the businesses in Michael Sabee’s absence.
3. Sabee Family Disagreement and State Court Proceedings
Immediately after the lockout, Michael Sabee filed a suit in Wisconsin State Court
seeking to regain his businesses, and shortly thereafter an injunction hearing was held.
In Michael Sabee’s testimony under oath at that hearing, he described the operation of
SPI, R. Sabee, and Draper at being “a comingling [sic] of assets and employees and
equipment.” He described himself as president or “president-type” of all three
companies. He further stated that no lines were drawn between the companies, and
“they all worked in concert with each other.” Michael Sabee described himself as being
responsible for procuring the raw materials for the manufacturing processes for all three
companies, stated that all three companies share the facilities at Linwood and Highland,
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and that all three companies use the manufacturing equipment at the two facilities. The
three companies all share front office space and employees as well as production
facilities. With regard to the payment of utilities and taxes on the facilities, Michael
Sabee stated “ the money was primarily moved around as it was needed.” When R.
Sabee and Draper experienced a need for cash during the five or so years before the
injunction hearing, Michael Sabee borrowed money personally and used it in these
businesses to pay for purchases, payroll, and inventory. Michael Sabee testified that he
did not know how much money had been moved back and forth between R. Sabee,
Draper and SPI. In his testimony, Michael Sabee estimated that SPI was “responsible
for” about 80% of the weekly payroll for the employees. The payroll account was
funded by SPI.
In testimony at the instant hearing, Michael Sabee testified that he was the main
decision maker for Draper, owned and operated SPI himself, and was the chief
operating officer for R. Sabee. All three companies were producing the same or similar
health care products at the same facilities, using the same employees and equipment.
Michael Sabee himself “allocated” customers among the three companies. Michael
Sabee admitted that as of 2001, the three companies had been commingling assets and
equipment, and “working in concert” with each other for approximately 25 years.
Michael Sabee signed the tax returns for the companies. All three companies used the
same office space, the same accountant and the same labor attorney. Michael Sabee
testified that he does not know whether there was a board of directors for any of the
three companies, or whether the boards, if they existed, ever met or took minutes of the
meetings. While Michael Sabee took out personal loans to help shore up R. Sabee and
Draper when they needed cash, the loans were repaid out of company funds, but
Michael Sabee did not know which of the two companies made payments. Other
evidence at trial showed that Michael Sabee signed various documents in his capacity
of president or chief operating officer of R. Sabee, Draper, and SPI for several years
before January 18, 2002, and decided himself how costs and payments would be
distributed among the three companies.
4. Eighteen Month Interim Period and Settlement in 2003
The preliminary injunction proceedings gave Michael Sabee access to the
business. Michael Sabee and the Lois Sabee group began negotiations to divide the
family businesses between them. During nearly eighteen months, they engaged in
mediation facilitated by a retired Wisconsin state judge. The family members finally
agreed to a division of the businesses in a document effective June 2, 2003.
During the Interim Period, in September 2002, Michael Sabee founded another
company, JMS. At trial, he explained that he did it because “it seemed like a good
idea.” He began using the JMS name for conducting the same business he had been
operating under the SPI name, using the same equipment and employees during this
period. SPI continued to operate at the Linwood and Highland locations, but between
February and August 2003, Michael Sabee moved his operations to a third facility,
called in the record the Reeve Street facility. This facility had been leased to another
company, but became available during 2003. Michael Sabee testified that he “had a
business” and that he needed a “new home for it.” He began using the JMS entity for
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his manufacturing operations beginning in early 2003. At trial he referred to JMS as
“doing business as” SPI.
During the period the parties were negotiating over the division of assets, debts,
real estate, equipment, inventory, and customers, they did not make any agreements
about the employees the three manufacturing companies shared. The settlement
agreement and related documents include great detail about the division of all the
above subjects, but contain no agreement for dividing the employees among the
companies. There is a separate agreement dealing with “Production Machinery and
Equipment” and another separate document dealing with customers. The major
mention of employees occurs in the June 2, 2003, settlement agreement and concerns
an agreement for shares of payroll costs to be borne by SPI during June and July 2003.
SPI was to pay 76% of the payroll at the beginning of June, but that amount was to
change as R. Sabee employees were laid off and SPI hired employees. The
agreements refer to SPI, not to JMS, but by this time, Michael Sabee was using the
JMS name to continue his manufacturing operations.
The only reference to employees is contained in a short paragraph near the end
of the settlement agreement. It states, in part, that “R. Sabee will be significantly
reducing the size of its workforce at the end of the Transition Period [August 2, 2003],
and that Sabee Products currently is, and will continue to be looking to hire similarly
qualified individuals to add to its workforce during and after the Transition Period. On
approximately July 1, R. Sabee will provide Sabee Products with a tentative list of those
employees which R. Sabee expects to layoff” on August 2.
According to the testimony of Joe Donovan who attended the mediation
sessions, the Lois Sabee group wanted to negotiate a division the employees between
the two family groups, just as they were negotiating a division of customers and
machinery. However, Michael Sabee did not want to do this. At one negotiation
session, a negotiator for Michael Sabee, Dan Flaherty, stated that his side of the
negotiation would not divide the employees because SPI was not going to have a union,
and that all the negotiators should be careful what they said, and be careful what was
put into the settlement document.3 Witness John Holland also testified that the Lois
Sabee group raised the subject of negotiating about the employees in January 2003,
and wanted to agree to a division of the employees. He testified that Flaherty replied
that his side of the negotiation did not want to have any agreement with regard to
employees because they didn’t want a large block of union employees there. Holland
mentioned the concept of accretion, and said he didn’t understand how Michael Sabee
could avoid having them when he would be “running the same machines in the same

3 Where Michael Sabee’s testimony conflicts with that of Donovan or John Holland, I credit
Donovan and Holland over Michael Sabee. Michael Sabee demonstrated an extremely poor
recollection of many facts, including non-controversial facts. He confessed to having a bad
memory, and his testimony contains numerous failures of recollection. Holland had worked as a
manager for R. Sabee for 2002 and 2003, and helped craft the division of the companies. His
association with R. Sabee or any other party to this case ended approximately three years
before his testimony. His demeanor and recall were both impressive, and I credit his testimony.
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building with the same people?” Flaherty replied that it would be a “cold day in hell”
before they’d let that happen without a fight. Flaherty did not testify, and another
witness did not recall the statements being made. Michael Sabee did not address this
issue in his testimony. Thus, the testimony of Holland and Donovan regarding
Flaherty’s statements are uncontradicted in the record.
R. Sabee did lay off approximately 120 employees in July 2003.
5. Status of Businesses after Division
After August 2, 2003, Michael Sabee’s businesses, JMS and SPI, continued to
manufacture the same products SPI had done for over 25 years, continued to use much
of the same equipment, but bought some new equipment. At some time after the
division of the businesses, Michael Sabee relocated JMS and SPI to the Reeve Street
facility, but his testimony was vague on the timing of the relocation. Michael Sabee
estimated SPI’s proportion as approximately 75% of the total payroll before the division
of the family businesses, and after the division, Michael Sabee continued to employ
approximately 150 employees, which is roughly equivalent to the 75% of the previous
bargaining unit of 200 employees.
The Lois Sabee group retained control of R. Sabee, Circle, and Draper. R.
Sabee continued its manufacturing operations at the Linwood and Highland facilities
with approximately 25% of the bargaining unit employees continuing to work for R.
Sabee.
6. Bargaining Demands and Information Requests
During the course of negotiations between the two Sabee factions, the Union
made several requests for information. Union representative Michael Pyne sent a letter
to R. Sabee and to Michael Sabee on February 7, 2003, requesting the names of the
companies that would be in existence after the corporate reorganization, their owners,
assets, locations, customers, and other information. The letter also requested
information regarding the Respondents’ intentions about the employees. Pyne
supplemented the information request on March 17, 2003, to include specific questions
about SPI and JMS. R. Sabee, by John Holland, provided some of the information
requested by the Union in April 2003. The Union received no information from Michael
Sabee regarding any of the three companies he was operating at the time, SPI,
Stanford, or JMS.
On April 25, 2003, the Union filed a grievance with both R. Sabee and Michael
Sabee about new employees performing bargaining unit work at the Highland facility.
These were apparently the employees hired by Michael Sabee under the JMS name.
The Union also requested information about the employees and who employed them.
John Holland, on behalf of R. Sabee, responded with some of the information
requested, but Michael Sabee never responded to the grievance in any way, neither
answering it nor providing the information requested. Upon learning that the employees
were employed by Michael Sabee as JMS, Pyne wrote a letter to Michael Sabee on
May 13, 2003, stating that the work being performed at the Highland facility was
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bargaining unit work, and requesting an answer to the Union’s grievance. Subsequently
in June 2003, Pyne, by letter, reiterated his requests for the information he had not
received, and added a request for a copy of the agreement for the division of the
businesses. The Union also added the layoff of employees to its grievance of April 25,
2003.
7. Hiring by Michael Sabee
In February 2003, Michael Sabee hired Carolyn Bruex as a personnel director for
JMS at the Reeve Street facility. Michael Sabee instructed Bruex to check on all
bargaining unit applicants by talking with either himself, his brother Craig Sabee, or one
of two supervisors of JMS, Pingel or McLeod. Within a month, Bruex developed a hiring
policy and began hiring employees for JMS. For applicants who worked for R. Sabee in
the Union-represented bargaining unit doing precisely the type of work JMS would be
performing, Bruex would talk with Michael Sabee, Pingel or McLeod about the
employee, as instructed. At times, she even talked with another employee about the
applicant. In addition, she evaluated the application and in most cases interviewed the
applicant before making a hiring decision. In all cases where one of the managers or
the employee with whom she talked recommended against hiring the bargaining unit
employee, Bruex did not hire that employee. JMS hired approximately 47 employees
who had formerly worked in the bargaining unit.
For outside applicants, only an application and an interview were required.
Bruex evaluated the application, decided whether or not to interview the applicant, and
after an interview, decided whether or not to hire the applicant. She did not check with
Michael Sabee or any other manager concerning outside applicants, but made those
hiring decisions on her own.
By October 10, 2003, JMS had 152 employees performing production work, of
whom 47 were former R. Sabee bargaining unit employees, while 105 had been hired
from among the outside applicants. Approximately 92 R. Sabee bargaining unit
employees applied for work with JMS. Bruex compiled a list of 54 R. Sabee bargaining
unit employees whom JMS did not hire. For 33 of these individuals, Bruex relied on
negative comments from Michael Sabee, Craig Sabee, Pingel, McLeod, or an employee
about the applicant’s work, which essentially vetoed their employment. In a few cases,
there was an instruction to Bruex not to hire the applicant, but no reason was cited.
Bruex gave no reason at all for not hiring six other former bargaining unit employees.
Three applicants were rejected by Bruex because they said they wanted to work the
same type of shift as they had done at R. Sabee, rather than a different one at JMS.
Respondent offered no evidence for JMS’s failure to retain or hire former bargaining unit
employees except for the comments supposedly made to Bruex.
Had Respondent JMS retained or hired the 54 bargaining unit employees cited
by Bruex in her testimony, there would have been 101 bargaining unit employees out of
a total of 152 in the JMS workforce. Thus, the bargaining unit employees would have
constituted a majority of the JMS workforce.
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B. Discussion and Analysis
1. Respondent status – 2001 and interim period
Prior to the reorganization of the Sabee family businesses, and prior to the
events herein which are alleged to comprise unlawful conduct, the record evidence
shows overwhelmingly that the companies were operated as a single enterprise. They
have a long history of being run as a single entity, first by Reinhardt Sabee, and
subsequently by his son, Michael Sabee. Not only were all the companies owned in
whole or in part by the same family members, which constitutes “common ownership”
under Board law, they operated in the same two locations in Appleton, shared offices
and office staff, and manufactured the same products or types of products. The
employees used by all the three companies which actually performed manufacturing,
SPI, R. Sabee, and Draper, were all nominally employed by R. Sabee, but it is
undisputed that they made products for all three of the companies using the same
machinery.
Common control of both labor relations and financial dealings at all three of the
manufacturing companies during this period is likewise overwhelmingly supported by
the record evidence. It is Michael Sabee’s own testimony that he was the president or
operating officer of all three companies, made all the decisions regarding relations
among and between the three companies, and made all financial decisions for all three
companies. He stated that they were commingled, and that he switched money from
one company to another as it was needed. Michael Sabee was in charge of all
collective bargaining negotiations and signed all the collective bargaining agreements
for nearly 20 years prior to 2001. Upon the undisputed facts and Michael Sabee’s
testimony alone, it is obvious that the Sabee family companies operated as a single
enterprise and was a single employer under applicable Board and court law. I find that
the record evidence demonstrates that all the named Respondents were owned by
members of one family, had integrated operations, common management, and common
control of labor relations. Radio & Television Broadcast Technicians Local 1264 v.
Broadcast Service of Mobile, Inc., 380 U. S. 255, 276 (1965); Beverly California
Corp., 326 NLRB 232, 242 (1998). Therefore, I find that the enterprise as a whole, as
well as each of its constituent companies, especially the manufacturing companies, SPI,
R. Sabee, and Draper, all had the same obligations under the Act. I further find that
Michael Sabee, as the chief executive of the three manufacturing companies, was the
person who normally did carry out those obligations up to and through the end of 2001.
2. The Interim Period: January 2002 through August 2003
When the Lois Sabee group decided that they needed to separate their business
interests from those of Michael Sabee, it took approximately eighteen months to divide
and disentangle the complexities of the Sabee family companies, their customers,
machinery, assets, and real estate. The reorganization resulting from this process was
not completely agreed until June 2, 2003, and was not fully carried out until August 3,
2003. It is therefore logical that throughout the interim period, and until August 3, 2003,
the employing entity continued to be the single enterprise it had been for fifty years or
so. During this period also, therefore, each part of the Respondent had the same
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obligations it had always had under the Act and under the collective bargaining
agreement to which it was a party. I find that the companies did not become two
separate entities until the division of the businesses was finally completed on August 3,
2003. From that date onward, the Lois Sabee group controlled R. Sabee, and
approximately one-fourth of the manufacturing business, and Michael Sabee continued
to control the majority, approximately 75%, of the manufacturing business.
3. JMS and SPI Repudiation of the Collective
Bargaining Agreement in February 2003
SPI continued to operate as one among the family group of companies, as it had
in the past. Michael Sabee continued to function as its chief operating officer, although
he no longer performed that function for R. Sabee and Draper. The managers hired by
the Lois Sabee group chiefly operated R. Sabee and Draper during the interim period.
SPI continued to be Michael Sabee’s manufacturing company, but in February
2003, he began to use the name JMS for his manufacturing operations, and apparently
to move some of them to another location, Reeve Street. In testimony, Michael Sabee
described JMS as “doing business as” SPI. By the time of his testimony in February
2005, SPI was not manufacturing, but JMS was, and Michael Sabee could not
remember which company paid him. He did recall that all the production employees
were nominally employed by JMS. I find that Michael Sabee’s production operations
were a continuation of the employing entity. SPI was one of the original Sabee family
companies found above to be part of the overall employing enterprise, and had
performed a large majority of the manufacturing work. JMS was simply a new name
created by Michael Sabee to use for his SPI portion of the business. At trial, counsel
for Respondent asked Michael Sabee a series of questions about JMS, referring to it in
questions as Michael Sabee’s “new business” and its move to the Reeve Street facility.
Michael Sabee responded, “I actually had a business; I needed to find a new home for
it.” This testimony, along with his testimony that JMS is “doming business as” SPI,
shows clearly that Michael Sabee considers JMS to be simply another name for “his”
business. In addition, ownership, management, financial control, and labor relations
control for both SPI and JMS reside solely in Michael Sabee. Based on the record
evidence, I find that SPI and JMS are alter egos of one another. See, e.g., Vallery
Electric, Inc., 336 NLRB 1272 (2001).
Beginning in February 2003, Michael Sabee began to employ employees under
the JMS name. According to the testimony of Bruex, these employees worked longer
shifts than the eight-hour shifts agreed to in the collective bargaining agreement. In
fact, it is undisputed that Michael Sabee did not continue to apply the collective
bargaining agreement to the employees who were nominally employed by JMS. On the
contrary, he repudiated the collective bargaining agreement and withdrew recognition
from the Union as to employees who continued to work for him under the JMS name.
He unilaterally changed their terms and conditions of employment, to terms and
conditions different from the agreement.
It is undisputed in this record that Michael Sabee repudiated the collective
bargaining agreement regarding continued SPI operations and JMS operations. In
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addition, it is undisputed that Michael Sabee gave the Union no notice and no
opportunity to bargain about other changes to employees’ wages, hours, and working
conditions, to the extent these were not covered by the collective bargaining agreement.
It is further undisputed that Michael Sabee failed and refused to respond to any of the
numerous information requests made by the Union. Respondent asserts only that JMS
had no obligation to recognize the Union or to continue the collective bargaining
agreement in effect.
It is further undisputed that he did not give the Union notice of his move of
employees and equipment to Reeve Street during the late winter and spring of 2003,
nor did he afford the Union an opportunity to bargain about the decision to move, the
application of the collective bargaining agreement to the relocated employees, the
movement of machinery, or any other aspect of the relocation or its effects on
employees.
As I have found above, the entities comprising the Sabee family enterprise,
including JMS, were part of a single integrated enterprise until formally reorganized an
separated on August 3, 2003. Therefore, JMS, like the other Sabee family entities, was
a party to the collective bargaining agreement, and had an obligation to recognize the
Union. It also had an obligation to provide relevant information about the terms and
conditions of employment of the bargaining unit employees. I find that Michael Sabee,
acting both as SPI and as JMS, violated Section 8(a)(5) of the Act by repudiating the
collective bargaining agreement, withdrawing recognition from the Union, and failing
and refusing to provide information to the Union.
4. Unilateral Change Allegations
The layoff of approximately 120 bargaining unit employees in June and July 2003
was announced to the bargaining unit employees by R. Sabee. However, the formal
division or reorganization of the Employer had not yet been accomplished. Consistent
with the finding above that the Employer continued to be a single employer until the
date of the formal division, I find that the layoff of employees in June and July 2003,
was conducted by the overall single employer, and was therefore the responsibility of
each constituent entity. Thus SPI and JMS, by laying off 120 employees without notice
to the Union and without affording the Union an opportunity to bargain about the layoff
or its effects, violated Section 8(a)(5) of the Act. It is axiomatic under Board law that
alter egos are liable for the actions and the unfair labor practices of one another. See,
e.g., Vallery Electric, Inc., above.
5. Status of the Employer after August 3, 2003
After August 3, 2003, the Lois Sabee group, consisting of R. Sabee, Draper, and
other non-manufacturing companies, continued manufacturing, on a smaller scale, the
same type of products for the same customers with the same machinery at the same
location. The same family group was in control of the businesses. They had only about
one-fourth of the bargaining unit employees, as their proportion of the overall
manufacturing business was smaller. Whether R. Sabee had an obligation under the
collective bargaining agreement as a continuation of the former employer, or whether it
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is more properly analyzed as a successor employer need not be decided here. No
allegations regarding R. Sabee are before me, and I decline to decide any such issues.
At the very least, it is apparent that the family businesses became two separate
bargaining units on August 3, 2003, with approximately one-fourth of the employees
continuing their employment with R. Sabee, and the remainding employees either laid
off or being “rehired” by Michael Sabee’s company, JMS.
As set forth above, SPI and JMS are alter egos of one another. Whether they
are a continuation of the former employer, the Sabee family businesses, is a different
issue. The Board has ruled that a finding of alter ego status may be appropriate even
where the motivation for a change in the employing enterprise is not undertaken for the
sole purpose of avoiding a bargaining obligation. There are situations in which an
employer takes advantage of a business change to attempt to rid itself of the union. I
find that in the instant case, Michael Sabee attempted to take advantage of the division
of the family business which was forced upon him by the Lois Sabee group to try to
evade his and his companies’ obligations under the collective bargaining agreement
and under the NLRA.
Michael Sabee formed another company, employed employees in its name,
apparently in the view that a new name was all that was needed to justify his
repudiation of the collective bargaining agreement and his bargaining obligation as a
whole. Michael Sabee, in his testimony, did not distinguish between JMS and SPI, but
for the most part, spoke generally of his business. I have found above that JMS and
SPI were and are operated by Michael Sabee as a single entity. The issue posed is
whether this single entity is a continuation (or alter ego) of the Sabee family businesses,
or a successor of the Sabee family businesses.
The record evidence supports a finding that Michael Sabee’s current business is
a continuation, or alter ego, of the Sabee family businesses. First, there is common
ownership in that Michael Sabee owned a majority of the previous family business, at
least 75% of it, as shown by the amount of business he received when the companies
were divided. Secondly, prior to the division, Michael Sabee was the chief manager of
all the manufacturing companies, and continues to be the chief manager of SPI and
JMS. Thirdly, Michael Sabee conducted labor relations for the original family entity for
nearly 20 years and continues to do so for SPI and JMS. Michael Sabee formerly
managed all the financial transactions for the original family entity, and continues to do
so for SPI and JMS. The fact that Michael Sabee relocated his manufacturing
operations to a new location in the same town is not dispositive, and cannot outweigh all
the other factors tending to show identity between his businesses and the original family
entity. The fact that SPI and JMS continued making the same products for the same
customers, and that their share of the original family entity is approximately three-
quarters of the original business is strong evidence that Michael Sabee’s companies
should be considered as the continuation of the original family entity, and thus as the
employer which was and is obligated to continue its bargaining obligation. As the Board
wrote in Martin Bush Iron & Metal, 329 NLRB 124 (1999), “as the Eighth Circuit noted
in Crest Tankers, Inc. v. National Maritime Union, 796 F.2d 234, 238, fn 2 (8th Cir.
1986), the presence of a legitimate business reason for a change in corporate
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organization does not preclude finding alter ego status.” I find that SPI and JMS, were a
continuation of the employer, and as such, were obligated to continue to abide by the
collective bargaining agreement and to recognize and bargain with the Union. By the
undisputed failure of SPI and JMS to continue the collective bargaining agreement in
effect after August 3, 2003, and by its undisputed refusal to recognize and bargain with
the Union, I find that Respondents SPI and JMS violated Section 8(a)(5) of the Act.4
6. Failure to Provide Information after Division
It is undisputed that Michael Sabee, on behalf of JMS and SPI, did not respond to
information requests of the Union nor to its grievance. Respondents’ only defense is
that they had no obligation to recognize the Union. I have found above that they do
have such an obligation, and so Michael Sabee’s companies SPI and JMS were
obligated to provide the information requested in the Union’s letters and the attachment
to the grievance. Respondents violated Section 8(a)(5) of the Act by refusing to provide
the information.
7. JMS and SPI Hiring Practices
As a continuation (alter ego) of the original family entity, SPI and JMS had an
obligation to bargain with Union about both the division of the business (and the effects
on employees) and the relocation of employees, along with the effects of the relocation
on employees. Furthermore, it had an obligation to continue the contract in effect and
therefore all its terms and conditions. If Respondents had observed their obligations,
SPI and JMS would then have continued the employment of approximately 75% of the
bargaining unit employees. Instead, those employees were laid off. SPI and JMS
established terms and conditions of employment different from those in the collective
bargaining agreement, and hired new employees. By this conduct, Respondents SPI
and JMS violated Section 8(a) 5) of the Act.
Even if JMS and SPI had not been found to be a continuation of the employing
enterprise, they are still a single employer and would be a successor under applicable
Supreme Court and Board law. Many of the same facts are relevant. Michael Sabee
continued to own and operate the “new” company, manufacturing the same products,
using most of the same equipment, and in the same location until the business division
obliged him to relocate. The record evidence shows that Michael Sabee intended from
at least early 2003 to avoid any successor bargaining obligation by not employing
current employees for precisely that reason. The statements of his representative,
Flaherty, evidence a determination to avoid retaining Union-represented employees so
as to constitute a majority of the workforce.
Even if this statement were not considered as evidence, the record is replete with

4 Even SPI and JMS were analyzed as a successor employer to the original family entity
rather than a continuation, they would still be under an obligation to recognize and bargain with
the union, as is set forth in Section B.7., below. The remedy for their actions would be the
same.
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additional evidence of Michael Sabee’s intent to avoid recognizing the Union. The
reorganization settlement agreement provides evidence that Michael Sabee refused to
deal with the other party to the division negotiations with regard to employees.
Donovan and Holland testified credibly that the Lois Sabee group desired to negotiate a
division of the employees between the two parties, but that the Michael Sabee side of
the negotiations adamantly refused to negotiate about this important business decision.
The fact that the division of employees, hitherto used by all six related companies, was
not dealt with in the discussion, specifically by the insistence of Michael Sabee
representative, when every other aspect of the businesses was carefully divided, is
strong evidence that Respondent wished to avoid its bargaining obligation. While the
plant, real estate, office space, money, company names, customers, and products, were
all dealt with in detail, the allocation of the approximately 250 bargaining unit employees
to the two divided entities of the original family entity was not mentioned at all in the
discussion. This evidence was not objected to and should be relied upon. The
settlement agreement shows that the division of all other aspects of the Sabee family
businesses was minute and detailed. Michael Sabee’s clear determination to be rid of
Union-represented employees in his approximately 75% share of the manufacturing
operation may be inferred from this conduct. I so infer.
In addition, Michael Sabee’s unlawful conduct during February through August
2003, the changes to terms and conditions of employment undertaken unilaterally and
without affording the Union notice or an opportunity to bargain about the changes or
about their effects is strong evidence of animus. Further evidence of animus against
Union-represented employees is his refusal to provide information during a time when
he still had an obligation to do so under any theory, his puzzling refusal to continue the
employment of most of the experienced employees already in his employment, and the
discriminatory hiring scheme he ordered his personnel director to use to hire new,
mainly non-Union-represented employees. Respondent advanced no reasons for its
failure to hire experienced employees who already knew the exact work they would be
doing supports the inference that Respondent did so in order to avoid majority status of
bargaining unit employees. Taken together, these facts are ample evidence from which
substantial animus against employing Union-represented employees may be, and
should be, inferred. I find that the totality of Michael Sabee’s conduct evinced intent to
avoid any obligation of SPI or JMS to continue to recognize the Union, and a
determination to get rid of a sufficient number of Union-represented employees so that
they would not constitute a majority of employees. It is well settled that a successor
employer who refuses to hire its predecessor’s employees in order to evade its
bargaining obligation will be found to have violated Section 8(a)(3) of the Act by so
doing. E. S. Sutton Realty Co., 336 NLRB 405 (2001). See also, D & K Frozen
Foods, 293 NLRB 859 (1989); U. S. Marine Corp., 293 NLRB 669 (1989).
Animus against the bargaining unit employees can also be inferred from Michael
Sabee’s discriminatory hiring scheme. Union-representative applicants were subjected
to an extra requirement which other applicants were not. Such conduct has repeatedly
been found by the Board to be unlawful discrimination. See, e.g., New Otani Hotel and
Garden, 325 NLRB 928 (1998); Monfort of Colorado, 298 NLRB 73, 79-83 (1990),
enforced in relevant part, 965 F.2d 1538 (10th Cir. 1992). Had Respondent hired all 92
bargaining unit applicants, they would have constituted a majority of its approximately
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150-person workforce. I find that Respondent SPI and JMS violated Section 8(a)(3) of
the Act by imposing additional requirements on union represented applicants for
employment, and that they discriminated in hiring union-represented employees so as
to avoid successorship status.
CONCLUSIONS OF LAW
1. By laying off employees because they were represented by the Union, by
refusing to continue the employment of employees because they were represented by
the Union, by refusing to hire or rehire employees because they had been represented
by the Union, by intentionally limiting its retention and rehiring of bargaining unit
employees in order to avoid employing a majority of the represented employees, by
refusing to continue to employ bargaining unit employees under their contractually
required terms and conditions of employment, and by discriminatorily requiring an
additional level of review for represented employees who sought to continue their
employment, or in the alternative, be rehired, Respondent has violated Section 8(a)(3)
and (1) of the Act.
2. By failing and refusing to provide necessary information about the
bargaining unit employees and the decisions affecting employees and the effects upon
them of the reorganization of Respondent’s business as requested by the Union, by
repudiating the collective bargaining agreement in effect and by refusing to continue its
terms and conditions of employment, by withdrawing recognition of the Union, by
unilaterally and without affording the Union notice or an opportunity to bargain, making
changes to employees’ terms and conditions of employment, by laying off employees
and refusing to continue their employment without affording the Union notice or an
opportunity to bargain, by unilaterally setting new terms and conditions of employment
beginning in February 2003 without affording the Union notice or an opportunity to
bargain about the decision or the effects of such conduct, and by continuing to refuse to
recognize and bargain with the Union, Respondent has violated Section 8(a)(5) and (1)
of the Act.
4. The violations set forth above are unfair labor practices affecting
commerce within the meaning of the Act.
THE REMEDY
Having found that Respondent has engaged in certain unfair labor practices, I
shall recommend that it be required to cease and desist therefrom and to take certain
affirmative action necessary to effectuate the policies of the Act.
I shall recommend that Respondent be required to restore the terms and
conditions of employment in effect at the time it unlawfully repudiated the collective
bargaining agreement and to maintain those terms and conditions in effect unless and
until changed through bargaining with the Union. I shall also recommend that
Respondent be ordered to remove from the employment records of all bargaining unit
employees any notations relating to the unlawful layoffs, refusals to continue their
employment, and/or refusals to hire them, and to make them whole for any loss of
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earnings or benefits they may have suffered due to the unlawful action taken against
them, in accordance with F. W. Woolworth Co., 90 NLRB 289 (1950), plus interest as
computed in accordance with New Horizons for the Retarded, 283 NLRB 1173 (1987).
On these findings of fact and conclusions of law and on the entire record, I issue
the following recommended5
ORDER
The Respondents, Sabee Products, Inc., JMS Converters, Inc. d/b/a JMS
Converting, Stanford Professional Products, and Sabee Realty, Inc., a single employer
and/or alter egos and continuing enterprise, or in the alternative as successor, their
officers, agents, successors, and assigns, shall
1. Cease and desist from
(a) Laying off employees because they were represented by the Union,
refusing to continue the employment of employees because they were represented by
the Union, refusing to hire or rehire employees because they had been represented by
the Union, intentionally limiting its retention and rehiring of bargaining unit employees in
order to avoid employing a majority of the represented employees, refusing to continue
to employ bargaining unit employees under their contractually required terms and
conditions of employment, and discriminatorily requiring an additional level of review for
represented employees who sought to continue their employment, or in the alternative,
be rehired.
(b) Failing and refusing to provide necessary information about the
bargaining unit employees and the decisions affecting employees and the effects upon
them of the reorganization of Respondent’s business as requested by the Union,
repudiating the collective bargaining agreement in effect and refusing to apply the
continue its terms and conditions of employment, withdrawing recognition of the Union,
unilaterally and without affording the Union notice or an opportunity to bargain, making
changes to employees’ terms and conditions of employment, laying off employees and
refusing to continue their employment without affording the Union notice or an
opportunity to bargain, unilaterally setting new terms and conditions of employment
beginning in February 2003 without affording the Union notice or an opportunity to
bargain about the decision or the effects of such conduct, and continuing to refuse to
recognize and bargain with the Union.
(c) In any like or related manner interfering with, restraining, or coercing
employees in the exercise of rights guaranteed them by Section 7 of the Act.

5 If no exceptions are filed as provided by Sec. 102.46 of the Board’s Rules and
Regulations, the findings, conclusions, and recommended Order shall, as provided in Sec.
102.48 of the Rules, be adopted by the Board and all objections to them shall be deemed
waived for all purposes.
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2. Take the following affirmative action necessary to effectuate the policies of
the Act.
(a) Recognize the Union and, upon request, bargain collectively with the
Union in a unit consisting of our employees engaged in production and maintenance;
excluding professional employees, office employees, clerical employees, guards and
supervisors.
(b) Restore the terms and conditions of employment in effect as of the date of
our repudiation of the collective bargaining agreement, and continue those terms and
conditions in effect unless and until changed through collective bargaining with the
Union.
(c) Provide the Union with the information it requested in its letters, e-mail
letters, and grievance attachments dated from February 7 through September 8, 2003.
(d) Within 14 days from the date of this Order, offer full reinstatement or a job
offer at restored terms and conditions of employment to all employees laid off or not
hired by Respondents to their former jobs or, if those jobs no longer exist, to
substantially equivalent positions, without prejudice to their seniority or any other rights
or privileges previously enjoyed.
(e) Make whole all employees laid off and not retained in employment or not
hired or rehired for any loss of earnings and other benefits suffered as a result of the
discrimination against them, in the manner set forth in the remedy section of this
decision.
(f) Make whole all employees retained in employment for any loss of
earnings and other benefits suffered as a result of the Respondent’s refusal to continue
the terms and conditions of the collective bargaining agreement, in the manner set forth
in the remedy section of this decision.
(g) Within 14 days from the date of this Order, remove from its files any
reference to the unlawful layoffs, and/or refusals to hire all the bargaining unit
employees not hired or retained, and within 3 days thereafter notify the employees in
writing that this has been done and that the actions will not be used against them in any
way.
(h) Preserve and, within 14 days of a request, or such additional time as the
Regional Director may allow for good cause shown, provide at a reasonable place
designated by the Board or its agents, all payroll records, social security payment
records, timecards, personnel records and reports, and all other records, including an
electronic copy of such records if stored in electronic form, necessary to analyze the
amount of backpay due under the terms of this Order.
(i) Within 14 days after service by the Region, post at its Appleton, Wisconsin
locations copies of the attached notice marked “Appendix.” Copies of the notice, on
forms provided by the Regional Director for Region 30, after being signed by the
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Respondent’s authorized representative, shall be posted by the Respondent and
maintained for 60 consecutive days in conspicuous places including all places where
notices to employees are customarily posted. Reasonable steps shall be taken by the
Respondent to ensure that the notices are not altered, defaced, or covered by any other
material. In the event that, during the pendency of these proceedings, the Respondent
has gone out of business or closed the facility involved in these proceedings, the
Respondent shall duplicate and mail, at its own expense, a copy of the notice to all
current employees and former employees employed by the Respondent at any time
since February 1,2003.
(j) Within 21 days after service by the Region, file with the Regional Director
a sworn certification of a responsible official on a form provided by the Region attesting
to the steps that the Respondent has taken to comply.
Dated, Washington, D.C., February 6, 2007.
____________________
Jane Vandeventer
Administrative Law Judge
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Appleton, WI
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found that we violated Federal labor law and
has ordered us to post and obey this notice.
FEDERAL LAW GIVES YOU THE RIGHT TO
Form, join, or assist a union
Choose representatives to bargain with us on your behalf
Act together with other employees for your benefit and protection
Choose not to engage in any of these protected activities
WE WILL NOT refuse to bargain collectively with the Union in the following appropriate
unit:
All employees engaged in production and maintenance; excluding
professional employees, office employees, clerical employees, guards and
supervisors.
WE WILL NOT repudiate our obligation to bargain collectively with the Union.
WE WILL NOT fail or refuse to abide by the collective bargaining agreement in effect
between us and the Union, nor to continue the terms of the collective bargaining
agreement in effect unless and until changed through bargaining with the Union.
WE WILL NOT refuse or fail to provide relevant information requested by the Union for
the purpose of carrying out its representational duties.
WE WILL NOT refuse to bargain collectively with the Union by making changes in
employees’ terms and conditions of employment without first giving the Union notice of
the proposed changes and an opportunity to bargain about them.
WE WILL NOT refuse to continue your employment or lay you off because you are
represented by a Union.
WE WILL NOT refuse to continue your employment under contractually required terms
and conditions of employment.
WE WILL NOT refuse to continue your employment or lay you off in order to avoid
employing a majority of employees who have been in the bargaining unit.
WE WILL NOT discriminate against you in hiring or rehiring because you had been
represented by the Union by imposing additional conditions on your employment
application.
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WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the
exercise of the rights guaranteed you by Section 7 of the Act.
WE WILL, upon request, bargain collectively with the Union in the unit set forth above.
WE WILL provide the Union with the information it requested in its letters, e-mail letters,
and grievance attachments dated from February 7 through September 8, 2003.
WE WILL restore the terms and conditions of employment in effect as of the date of our
repudiation of the collective bargaining agreement, and continue those terms and
conditions in effect unless and until changed through collective bargaining with the
Union.
WE WILL make whole, with interest, all employees for any loss of earnings or other
benefits they may have suffered as a result of our unlawful failure to abide by the
collective bargaining agreement and by our unlawful changes in terms and conditions of
employment.
WE WILL make whole, with interest, all employees for any loss of earnings or other
benefits they may have suffered as a result of our unlawful failure to continue their
employment and/or our refusal to hire or rehire them
WE WILL offer employment to all bargaining unit employees whom we failed to offer
employment in 2003 under the restored terms and conditions of employment set forth
above.
R. SABEE COMPANY, LLC, DRAPER PRODUCTS,
INC., CIRCLE MACHINERY
& SUPPLY CO., SABEE PRODUCTS, INC.,
STANFORD PROFESSIONAL PRODUCTS,
SABEE REALTY, INC. AND JMS CONVERTERS, INC.
d/b/a JMS CONVERTING, as single employer
(Employer)
Dated By
(Representative) (Title)
The National Labor Relations Board is an independent Federal agency created in 1935 to enforce the National Labor Relations Act. It conducts
secret-ballot elections to determine whether employees want union representation and it investigates and remedies unfair labor practices by
employers and unions. To find out more about your rights under the Act and how to file a charge or election petition, you may speak
confidentially to any agent with the Board’s Regional Office set forth below. You may also obtain information from the Board’s website:
www.nlrb.gov.
310 West Wisconsin Avenue, Federal Plaza, Suite 700
Milwaukee, Wisconsin 53203-2211
Hours: 8 a.m. to 4:30 p.m.
414-297-3861.
THIS IS AN OFFICIAL NOTICE AND MUST NOT BE DEFACED BY ANYONE
THIS NOTICE MUST REMAIN POSTED FOR 60 CONSECUTIVE DAYS FROM THE DATE OF POSTING AND MUST
NOT BE ALTERED, DEFACED, OR COVERED BY ANY OTHER MATERIAL. ANY QUESTIONS CONCERNING THIS
NOTICE OR COMPLIANCE WITH ITS PROVISIONS MAY BE DIRECTED TO THE ABOVE REGIONAL OFFICE’S
COMPLIANCE OFFICER, 414-297-1819.