A.J. Mechanical

National Labor Relations Board - Board Decisions

Aug 26, 2005

345 N.L.R.B. 295 (N.L.R.B. 2005)

A.J. MECHANICAL, INC.
345 NLRB No. 22
295
A.J. Mechanical, Inc., William A. Greene a/k/a Ar-
nold Greene and Cynthia D. Greene and Car-
penters and Millwrights, Local Union #2471, af-
filiated with United Brotherhood of Carpenters
and Joiners of America. Cases 15–CA–15350,
15–CA–15388, 15–CA–15598, and 15–CA–15618
August 26, 2005
SUPPLEMENTAL DECISION AND ORDER
BY CHAIRMAN BATTISTA AND MEMBERS LIEBMAN
AND SCHAUMBER
On January 23, 2003, Administrative Law Judge Par-
gen Robertson issued the attached supplemental decision.
Respondents William A. and Cynthia D. Greene filed
exceptions and a supporting brief. The General Counsel
filed cross-exceptions with a supporting brief and an an-
swering brief to the Respondents’ exceptions. The Re-
spondents filed an answering brief to the General Coun-
sel’s cross-exceptions and a reply brief to the General
Counsel’s answering brief. The General Counsel filed a
reply brief to the Respondents’ answering brief.
The National Labor Relations Board has considered
the supplemental decision and the record in light of the
exceptions and briefs and has decided to affirm the
judge’s rulings, findings,1 and conclusions only to the
extent consistent with this Supplemental Decision and
Order.
This is a proceeding in the compliance phase of an un-
fair labor practice case to determine the amount of back-
pay due employees who suffered financial consequences
as a result of the unfair labor practices of the now-
defunct Respondent A.J. Mechanical, Inc., and whether
the Respondent’s co-owner, William A. (Arnold)
Greene,2 and his wife, Cynthia D. Greene, alleged in this
proceeding as additional Respondents, should be held
personally liable for such backpay.3
In the underlying unfair labor practice proceeding,4 the
Board found that Respondent A.J. Mechanical, Inc. vio-

1 The Respondents William A. and Cynthia Greene have excepted to
some of the judge’s credibility findings. The Board’s established pol-
icy is not to overrule an administrative law judge’s credibility resolu-
tions unless the clear preponderance of all the relevant evidence con-
vinces us that they are incorrect. Standard Dry Wall Products, 91
NLRB 544 (1950), enfd. 188 F.2d 362 (3d Cir. 1951). We have care-
fully examined the record and find no basis for reversing the findings.
2 William A. Greene will be referred to hereafter either as “Arnold
Greene” or “A. Greene.”
3 Respondent A.J. Mechanical, Inc.’s other co-owner, James Sand-
ers, and his wife entered into a $112,500 financial settlement agreement
with the Board in February 2002.
4 330 NLRB No. 178 (2000) (not reported in Board volumes). Re-
spondent A.J. Mechanical filed no answer to the complaint alleging a
variety of violations and the Board issued a summary judgment deci-
sion.
lated Section 8(a)(5), (3), and (1) of the Act and ordered
it, its officers, agents, successors, and assigns, inter alia,
to provide limited backpay to make whole the employees
for losses suffered as a result of the Respondent’s unlaw-
ful conduct. On October 23, 2000, the United States
Court of Appeals for the Eleventh Circuit issued an un-
published judgment enforcing the Board’s Order in full.
A dispute arose over the amount of backpay due under
the Board’s Order and whether the Greenes are person-
ally liable for Respondent A.J. Mechanical’s backpay
obligations. On October 1, 2002, the Acting Regional
Director for Region 15 issued a compliance specification
and notice of hearing setting forth the wages and benefits
for which Respondents A.J. Mechanical, Arnold Greene,
and Cynthia Greene are alleged to be liable. Respondent
A.J. Mechanical, Inc. failed to answer the compliance
specification and did not appear at the hearing. Both
Arnold and Cynthia Greene appeared and testified at the
compliance hearing.5
Based on testimonial and documentary evidence deal-
ing largely with Arnold Greene’s manner of corporate
governance and his relationship to A.J. Mechanical, Inc.,
the judge imposed personal liability on the Greenes.
Applying the Board’s two-part test for “piercing the cor-
porate veil” as set forth in White Oak Coal Co.,6 the
judge determined that (1) Arnold Greene failed to main-
tain a legal identity separate from Respondent A.J. Me-
chanical Inc., and (2) adherence to the corporate shield
would unjustly result in the evasion of the defunct A.J.
Mechanical, Inc.’s backpay obligations incurred through
unfair labor practices that the Respondent, through Ar-
nold Greene and others, committed. The judge con-
cluded that the allegations set forth in the compliance
specification are true and that both Arnold and Cynthia
Greene are personally liable, jointly and severally with
Respondent A.J. Mechanical, Inc., for the established
backpay obligation. We disagree.
White Oak Coal, supra, sets forth the appropriate test
for determining whether adherence to the corporate form
should be maintained to insulate individual stockholders
from a corporation’s backpay liability. We find that the
judge misapplied that test to the evidence in this case.
Under the two-prong White Oak Coal test, both prongs
must be satisfied before the corporate veil will be pierced
and individual liability imposed. Here we find, particu-
larly with regard to the second prong of that test, that the
judge erred in concluding that adherence to the corporate
structure would unjustly result in the evasion of legal
obligations. Contrary to the judge, we find that the Gen-

5 The compliance specification covered 118 employees and totaled
$441,229.40, plus interest.
6 318 NLRB 732 (1995), enfd. mem. 81 F.3d 150 (4th Cir. 1996).
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD296
eral Counsel has failed to substantiate with convincing
evidence that the distribution of corporate assets would
unjustly result in the evasion of the Respondents’ legal
obligations. For the reasons set forth below, we reverse
the judge’s decision and dismiss the compliance specifi-
cation insofar as it applies to Arnold and Cynthia Greene.
Factual Background
Arnold Greene and James Sanders incorporated the
mechanical contracting business, A.J. Mechanical, Inc.,
in Florida in January 1993. They each contributed about
$20,000 in initial capital and were the sole stockholders
and directors.
Beginning in February 1999, Respondent A.J. Me-
chanical began distributing substantial shareholder pay-
ments to shareholders Sanders and Arnold Greene. Such
distributions were neither alleged nor found to be unlaw-
ful. From February through November 1999, Sanders
and Arnold Greene each received nine equal payments,
in amounts varying from $50,000 to $500,000. Most of
the checks were issued between February and April
1999, with some additional checks issued in June and
November 1999. On December 2, 1999, A. Greene and
Sanders met and executed a resolution to liquidate the
corporation.7 At about the same time, they received a
tenth and final payment of $16,345.73. Each received
distributions totaling $1,858,845.73.
During the period in 1999 when Respondent A.J. Me-
chanical was distributing payments to its shareholders,
Respondent A.J. Mechanical was working under contract
on a job that was scheduled to be completed in late June
1999. Because the project was not finished at that point,
the Respondent entered into another contract, allowing
the work to be completed several weeks thereafter, at
approximately the end of July 1999. Respondent A.J.
Mechanical, Inc. ceased all operations on about Septem-
ber 11, 1999.8 Immediately thereafter, its property and
equipment were offered for public auction.
While the foregoing was taking place, the Union was
organizing the employees of A.J. Mechanical. In late
1998, Carpenters and Millwrights, Local Union #2471,
a/w United Brotherhood of Carpenters and Joiners of
America (the Union) began its organizing campaign. On
April 19, 1999, the Union filed a petition for an election
and, on July 9, 1999, was certified as representative of a
unit9 of Respondent A.J. Mechanical’s employees.

7 Formal papers dissolving the corporation were filed with Florida’s
Department of State on June 16, 2000.
8 The judge discredited A. Greene’s testimony that in late 1998, he
and Sanders decided to wind up A.J. Mechanical’s business upon com-
pletion of the contract then underway.
9 The unit consisted of “[a]ll full-time and regular part-time employ-
ees including millwrights, millwright helpers, carpenters, carpenter
Beginning in May 1999, and continuing until through
November 1999, the Union filed a series of unfair labor
practice charges alleging that A.J. Mechanical violated
Section 8(a)(5), (3), and (1) of the Act. The General
Counsel issued complaints against A.J. Mechanical in
July and December 1999. In April 2000, in the absence
of an answer to the complaint, the Board issued a sum-
mary judgment decision finding that Respondent A.J.
Mechanical had engaged in a variety of unfair labor prac-
tices. Neither Arnold nor Cynthia Greene was named as
a respondent in the Board’s Order, which Order was sub-
sequently court enforced.
Analysis
Because Respondent A.J. Mechanical, Inc. ceased op-
erations prior to the Board’s Order, the General Counsel
seeks, in this compliance proceeding, to satisfy the back-
pay A.J. Mechanical owed to employees based on its
unfair labor practices by “piercing the corporate veil” of
A.J. Mechanical, Inc. and attaching the backpay obliga-
tion to the Greenes. In determining whether the corpo-
rate veil should be pierced, the proper analytical frame-
work, articulated in NLRB v. Greater Kansas City Roof-
ing,10 and set forth by the Board in White Oak Coal Co.,
is as follows:
Under Federal common law, the corporate veil
may be pierced when: (1) there is such unity of in-
terest, and lack of respect given to the separate iden-
tity of the corporation by its shareholders, that the
personalities and assets of the corporation and the
individuals are indistinct, and (2) adherence to the
corporate form would sanction a fraud, promote in-
justice, or lead to an evasion of legal obligations.21
When assessing the first prong to determine
whether the shareholders and the corporation have
failed to maintain their separate identities, we will
consider generally (a) the degree to which the corpo-
rate legal formalities have been maintained, and (b)
the degree to which individual and corporate funds,
other assets, and affairs have been commingled.22
Among the specific factors we will consider are: (1)
whether the corporation is operated as a separate en-
tity; (2) the commingling of funds and other assets;
(3) the failure to maintain adequate corporate re-
cords; (4) the nature of the corporation’s ownership
and control; (5) the availability and use of corporate

helpers and laborers employed by the employer at its Pensacola, Florida
Docks facility, including such employees who work in the field, ex-
cluding all office clerical employees, sandblasters, painters, and guards
and supervisors as defined in the Act.”
10 2 F.3d 1047 (10th Cir 1993), denying enf. in pertinent part of 305
NLRB 720 (1991).
A.J. MECHANICAL, INC. 297
assets, the absence of [same] or undercapitalization;
(6) the use of the corporate form as a mere shell, in-
strumentality or conduit of an individual or another
corporation; (7) disregard of corporate legal formali-
ties and the failure to maintain an arm’s-length rela-
tionship among related entities; (8) diversion of the
corporate funds or assets to noncorporate purposes,23
and, in addition, (9) transfer or disposal of corporate
assets without fair consideration.
When assessing the second prong, we must de-
termine whether adhering to the corporate form and
not piercing the corporate veil would permit a fraud,
promote injustice, or lead to an evasion of legal ob-
ligations. The showing of inequity necessary to war-
rant the equitable remedy of piercing the corporate
veil must flow from misuse of the corporate form.
Further, the individuals charged personally with cor-
porate liability must be found to have participated in
the fraud, injustice, or inequity that is found.11
___________________________
21 NLRB v. Greater Kansas City Roofing, supra at 1052.
22 Id.
23 Id.
For the purposes of this decision, we accept arguendo
the judge’s conclusion that the General Counsel has pre-
sented evidence sufficient to establish that the separate
legal identity of Respondent A.J. Mechanical, Inc. had
not been maintained under the first prong of the White
Oak Coal standard.12
Regarding the second prong of the White Oak Coal
standard, however, we find that the judge improperly
concluded that the General Counsel established that ad-
hering to the corporate form would “permit a fraud, pro-
mote injustice, or lead to an evasion of legal obliga-
tions.” In his analysis of the White Oak Coal second
prong, the judge focused sharply on the distribution of
Respondent A.J. Mechanical, Inc.’s assets through pay-
ments to shareholders Arnold Greene and Sanders from
the period of February though December 1999. The
judge compared the timeline of these payments with the
timeline of conduct later adjudged to have violated the
Act (during the period of December 1998 to September
1999)—some of which involved Arnold Greene, and
concluded that the distributions were made fraudulently

11 White Oak Coal, Inc., supra at 735.
12 While Member Schaumber accepts arguendo the judge’s conclu-
sion that the General Counsel has presented evidence sufficient to
establish the first prong of White Oak Coal, supra—a failure to main-
tain separate corporate identities—the evidence on this point was not
overwhelming. For example, it is hardly surprising that a small, closely
held corporation like A.J. Mechanical did not rigidly observe all corpo-
rate formalities, such as maintaining corporate meeting minutes.
and to evade legal obligations for unfair labor practices
not yet found. Having concluded that both elements of
the White Oak Coal standard had been met, the judge
determined that Arnold Greene is personally liable for
the backpay under the Board’s Order. Further, finding
that Arnold and Cynthia Greene, as husband and wife,
shared equally in the proceeds of Respondent A.J. Me-
chanical, the judge also determined that Cynthia
Greene—who was neither an officer nor shareholder of
A.J. Mechanical—likewise was jointly and severally
responsible for A.J. Mechanical’s remedial backpay ob-
ligations.
We find that the judge failed to analyze properly the
chronology of events and, without adequate record sup-
port, conflated the disbursement of corporate funds with
the unfair labor practice allegations and findings. Spe-
cifically, we find that the timing of the corporate distri-
butions does not support the judge’s conclusion that ad-
herence to the corporate form would lead to the evasion
of legal obligations. Thus, evidence falls short of satisfy-
ing the second aspect of the White Oak Coal standard.
The unfair labor practice charges were filed in May
1999 and the complaint was issued in July 1999. Thus, it
was not until these dates that Arnold Greene was aware
that the Respondent’s actions were being challenged and
that monetary liability could result. As noted above, the
process of closing down (and the attendant distribution of
assets to shareholders) began before those dates.13 Early
in 1999, the Respondent ceased pursuing new work and
decided to complete only projects already underway.
The distribution of assets to shareholders began in mid-
February 1999, more than 3 months prior to the filing of
the charges and over 5 months before the complaint was
issued. By April 24, 1999, a full month before the first
charge was filed against the Respondent, A. Greene and
Sanders had each received seven cash payments totaling
over $1 million dollars apiece. The bulk of the assets
were paid out before A. Greene had any notice that the
Respondent might be facing future liability. The post-
charge, postcomplaint payments were simply a continua-
tion and completion of a process that had began before
those dates. Consistent with that chronology, the General
Counsel does not even allege, and the evidence does not
establish, that this process and these payments were
unlawful.
Our dissenting colleague asserts that the corporate veil
should be pierced because Arnold Greene continued to
accept distributions from the Company “well after he
knew of the outstanding allegations of unlawful con-

13 The process of shutting down meant that all new contracts would
be short term and would be limited to jobs already underway.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD298
duct—in which, of course, he himself engaged.” We
disagree. The distributions were consistent with the dis-
solution of the corporation. The process of dissolution
began prior to any determination of wrongdoing.
The dissent states that the relevant issue is not whether
Arnold Greene was entitled to close its business, but
whether he was free to strip A.J. Mechanical of its assets,
thereby defeating the Board’s Order. As explained
above, we do not agree that A. Greene stripped the Com-
pany of its assets in order to defeat a Board Order. We
reiterate that the process of distribution began prior to the
filing of the unfair labor charges and to any issuance of a
complaint by the Board and, therefore, was unrelated to
the Board’s Order.
We recognize that the second prong of the White Oak
test does not necessarily depend on a finding of unlawful
intent. However, the test, in relevant part, does require a
finding that adherence to the corporate form would lead
to an evasion of legal obligations. The term “evade”
means “to elude by stratagem.”14 In the instant case, the
process of liquidation was begun for lawful reasons,
prior to the making of any claim. Although the process
continued after unfair labor practice charges were filed,
the General Counsel has not shown that the process
would have ended in the absence of those charges. Thus,
so far as this record shows, the process of liquidation
would have continued irrespective of the presence or
absence of an unfair labor practice claim. In these cir-
cumstances, we cannot say that there has been an evasion
of legal obligations.
Our dissenting colleague also concludes, but does not
really demonstrate, that A. Greene told the Board that the
distributions made were part of a strategy to defeat the
Board’s remedies. This is premised on an annotated
copy of the notice of auction of A.J. Mechanical’s prop-
erty sent to the Board’s Regional Office by A. Greene.
A. Greene wrote on the notice that the sale was made
possible by Millwright Local 2471 and the Board, both
of whom should feel very proud of their efforts in putting
a small, independent contractor out of business and cost-
ing a lot of people a chance to make a decent living.
While the note obviously indicates anger and perhaps
antiunion animus, it neither states nor implies that the
decision to close the Company and make distributions to
its owners was a stratagem for defeating the Board’s
remedies. Again, the decision to close, which triggered
the distributions, took place long before any unfair labor
practice charges were filed or a complaint issued.
Accordingly, we reverse the judge’s finding concern-
ing the allegations set forth in the compliance specifica-

14 Webster’s New Collegiate Dictionary (1977).
tion insofar as they apply to William A. Greene and Cyn-
thia D. Greene.
ORDER
The compliance specification is dismissed against Re-
spondents William A. Greene and Cynthia Greene.
MEMBER LIEBMAN, dissenting.
This is a textbook case for piercing the corporate veil
to prevent injustice. Instead, the majority rewards a
business owner who committed a series of unfair labor
practices in a failed attempt to defeat a union organizing
drive and who then sought a final victory by making sure
there was no money left in the corporate treasury to pay
his victims. My colleagues justify their decision by
pointing out that the process of draining funds from the
Company began before unfair labor practice charges ac-
tually were filed. What they gloss over, however, is that
the process was clearly part of a strategy to defeat the
Union and the Board’s remedies—as the owner essen-
tially told the Board. If that were not enough, the evi-
dence establishes: (1) that most of the backpay owed to
employees stems from the Company’s shutdown after
the Union was certified and the Company unlawfully
refused to bargain with it; and (2) that the funds distrib-
uted to the owner after the first unfair labor practice
charge was filed exceed the monetary liability involved.
That the Board would sanction the result here is incom-
prehensible.
I.
In the underlying unfair labor practice proceeding, the
Board found that beginning in December 1998, Respon-
dent A.J. Mechanical, Inc.—of which William A. Greene
(A. Greene) was a joint owner—embarked on a course of
unlawful conduct in violation of Section 8(a)(5), (3), and
(1) of the Act. The Respondent engaged in a litany of
threats, interrogations, and other unlawful statements. It
also discriminated against union supporters: imposing
more onerous working conditions, firing two employees,
laying off six employees, and refusing to hire or consider
for hire union supporters 23 times. Ultimately, the Re-
spondent unlawfully refused to bargain with the Union
following its July 1999 certification, including refusing
to bargain over the effects of the cessation of its opera-
tions.
The Board found that A. Greene himself engaged in
many of these unlawful acts. They included warning
employees of the futility of unionizing, threatening plant
closure, job loss, loss of benefits, and business relocation
if employees did not end their union activities; discarding
employment applications of union supporters, and threat-
ening to shut down operations and reopen with employ-
ees who did not support the Union.
A.J. MECHANICAL, INC. 299
Simultaneous with the commission of these unfair la-
bor practices, A. Greene and the Respondent’s coprinci-
pal, James Sanders, began draining the Respondent’s
financial resources through an unprecedented series of
“shareholder distributions.”1 They accomplished this by
writing checks to themselves on A.J. Mechanical, Inc.’s
account. In the first 4 months of 1999, A. Greene re-
couped well over $1 million in this manner and by the
end of 1999, the Respondent corporation had its assets
fully depleted.2 There was no attempt to characterize
these payments as sale of stock, current or deferred com-
pensation, or return of capital. Nor was there documen-
tation or credible evidence that this process was in keep-
ing with a corporate decision to wind down operations in
anticipation of closing. Rather, A. Greene simply began
diverting the Respondent’s finances to his (and his
wife’s) personal account coincident with his campaign of
threats that the Respondent would shut down and em-
ployees would lose their jobs if they chose union repre-
sentation.
Over $700,000 in assets—more than the $441, 229.40
at stake here—were distributed to A. Greene in the
months following the first unfair labor practice charge in
May 1999. A. Greene’s conduct following notice of the
unfair labor practice charges and receipt of the complaint
are telling. After seeking legal advice, A. Greene did not
merely fail to answer the complaint, but instead for-
warded to the Board’s Regional Office a copy of the no-
tice of auction of the Respondent’s property annotated as
follows:
This sale was made possible by Millwright Local 2471
and the National Labor Relations Board. Both parties
should feel very proud of their efforts in putting a
small, independent contractor out of business and cost-
ing a lot of people a chance to make a decent living.
When this rebuke to the Board was made, the Respondent
still held sufficient assets to cover the amounts ultimately
claimed in the compliance specification, and A. Greene had
yet to receive the final, almost $250,000 in distributions.
II.
Under these circumstances, failing to pierce the corpo-
rate veil clearly “would permit a fraud, promote injustice,
or lead to an evasion of legal obligation,” the controlling
standard to which the majority pays lip service. White

1 The record shows that the longstanding practice had been for A.
Greene and Sanders each to draw $4000 per month from the Respon-
dent and at the end of each year, an additional sum as financial condi-
tions warranted.
2 Sanders, who with his wife, reached a financial settlement with the
Board concerning their personal liability for backpay, received a like
amount.
Oak Coal, Inc., 318 NLRB 732, 735 (1995). The Board,
thus, should impose personal liability on A. Greene and
his wife.3
A. Greene showed that he was determined not only to
thwart employees’ rights under the Act, but also to make
sure they never got the remedy due them. While A.
Greene began taking his “shareholder distributions” be-
fore any charges were filed, he continued to tap the Re-
spondent’s till well after he knew of the outstanding alle-
gations of unlawful conduct—in which, of course, he
himself engaged. While A. Greene was entitled to close
his business in response to employees’ union activities,
see Darlington Mfg. Co., 380 U.S. 263 (1965), he was
not free to strip the company of its assets and thereby
effectively defeat the Board’s order. According to my
colleagues, he was indeed. Ambrose Bierce defined a
corporation as “an ingenious device for obtaining indi-
vidual profit without individual responsibility.”4 Today,
the majority proves Bierce right. I dissent.
Stephen C. Bensinger, Esq., for the General Counsel.
Eric J. Holshouser, Esq., of Jacksonville, Florida, for the Re-
spondent.
SUPPLEMENTAL DECISION
PARGEN ROBERTSON, Administrative Law Judge. This mat-
ter was heard in Pensacola, Florida, on October 30, 2002. On
April 14, 2000, the National Labor Relations Board (the Board)
issued a decision and order in this proceeding.1 The Order
directed Respondent A.J. Mechanical, Inc., inter alia, to make
whole employees who was unlawfully denied a pay increase;
that were unlawfully laid off and not recalled; that were unlaw-
fully discharged; and that Respondent unlawfully refused to
consider for hire and to hire; and limited backpay2 because

3 In addition, I would grant the General Counsel’s cross-exception
and find that the Greenes are also derivatively liable for providing
backpay. As the judge explained in his decision, Cynthia D. Greene
shared equally with her husband in the fruits of his financial pillage of
the Respondent.
4 Ambrose Bierce, The Devil’s Dictionary (1881–1906).
1 330 NLRB No. 178 (2000) (not reported in Board volumes).
2 The remedy for employees terminated by Respondent’s unlawful
refusal to bargain over the effects of its decision to close its facility,
should be similar to that in Transmarine Navigation Corp., 170 NLRB
389 (1968). The Board in Transmarine directed that respondent shall
pay its employees terminated by closing its facility backpay “at the rate
of their normal wages when last in the Respondent’s employ from 5
days after the date of this Decision and Order until occurrence of the
earliest of the following conditions: (1) the date the Respondent bar-
gains to agreement with the Union on those subjects pertaining to the
effects of the closing of its facility on its employees; (2) a bona fide
impasse in bargaining; (3) the Union’s failure to request bargaining
within 5-business days after receipt of this Decision and Order, or to
commence negotiations within 5-business days after receipt of the
Respondent’s notice of its desire to bargain with the Union; (4) the
Union’s subsequent failure to bargain in good faith, but in no event
shall the sum paid to these employees exceed the amount they would
have earned as wages from the date on which the Respondent termi-
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD300
Respondent closed its facility without bargaining with the Un-
ion about the effects of its decision to close its facility. On Oc-
tober 23, 2000, the United States Court of Appeals for the
Eleventh Circuit entered its judgment enforcing in full the
Board’s Order.
A controversy having arisen over the amount of backpay due
under the Board’s Order and as to whether William A. Greene
a/k/a Arnold Greene and Cynthia D. Greene are liable for back-
pay3 the Acting Regional Director for Region 15 on October 1,
2002, issued a compliance specification4 and notice of hearing.
The compliance specification sets forth the alleged liability for
wages and benefits of Respondents A.J. Mechanical, Inc., Wil-
liam A. Greene, and Cynthia D. Greene. Although copies of the
compliance specification and notice of hearing were duly
served on Respondent A.J. Mechanical, Inc. by certified mail,
A.J. Mechanical, Inc. failed to answer and A.J. Mechanical,
Inc. did not appear at the hearing held in Pensacola.
The compliance specifications alleged that among other
things, the underlying decision directed A.J. Mechanical, Inc.,
to perform affirmative action including making 12 employees it
terminated in violation of Section 8(a)(1) and (3) whole for loss
of pay or benefits, and making its former employees whole
because of its failure to bargain with the Union over its decision
to cease operations.
The compliance specification alleged that the following
amounts, plus interest, are due the following discriminatees:
James R. Adams $11,836.97
Darryl L. Henderson 6,613.00
Eddy Lee Jordan 6,410.04
William G. Krajewski 4,950.46
Jeremy P. McCall 1,797.00
Ronald W. Morrell 8,431.99
David J. North 9,093.60
John P. Schifko 7,734.93
Scottie B. Steele 2,736.40
Frank Tournabene 3,080.00
Matthew R. Weaver 12,913.41
Garry B. West $12,575.60
The compliance specification also alleged that net backpay
in the amount of $2,992, plus interest, is due to each of the
following employees as a result of Respondent closing its facil-
ity without bargaining with the Union over the effects of its
decision to close:

nated its operations, to the time they secured equivalent employment
elsewhere, or the date on which the Respondent shall have offered to
bargain in good faith, whichever occurs sooner; provided, however, that
in no event shall this sum be less than the employees would have
earned for a 2-week period at the rate of their normal wages when last
in the Respondent’s employ.”
3 In apparent error, the third paragraph of the compliance specifica-
tion failed to state the full nature of the controversy regarding William
A. and Cynthia D. Greene. However, the full compliance specification
as well as matters included in the record of the hearing, show that a
matter at issue is whether the Greens should be liable for backpay.
4 The General Counsel’s motion to substitute pages in the compli-
ance specification was granted during the hearing (see ALJ Exhs. 1 and
2).
Abernathy, Jerry Henriquez, Juan F.
Adams, James R.5 Hicks, Kenneth S.
Adams, Timothy E. Hill, Marshal D.
Baker, James B. Holley, Junior
Baker, Jason L. Jackson, Darryl J.
Barahona, Rolando L. Johnson, Glen, Jr.
Best, Tracey C Joiner, Charles W.
Black, Joel L. Jordan, Eddy Lee7
Bradshaw, Randall S. Judson, Shane P.
Brooks, Byron S. Kirchharr, James E.
Brumley, Bradley S. Knight, James E.
Caraway, Robert B. Krajewski, William G.8
Cameron, Andrew Lambert, Raymond T.
Carnley, James C. Land, W. Roger
Carnley, Sherral P. Lazar, Harry J.
Chessher, Jerry D. Lee, James H.
Chessher, Terry L. Lee, Roger M.
Cleary, William R. Lee, Ronald W.
Cooey, Clay W. Luklar, Mark T.
Copeland, Barry E. McCall, Jeremy P.9
Cowart, Douglas R. Madden, Stephen
Crow, Terry C. Maddox, Frankie
Davidson, Wade N. Mason, John W.
Davis, Diane W. Maxson, Dennis M.
Dick, Richard J. Mayton, Deborah L.
Durdin, Quillie Miller, George M.
Ellis, Pamela A. Millins, Phillip O.
Evans, Marcus D. Millwood, Robert M.
Ford, Christopher Morrell, Ronald W.10
Foster, Aaron D. Mosley, Ronald R.
Graham, Luther Nguyen, Su Van
Graham, Marvin Nichols, Christopher S.
Grantland, John Nix, Randall S.
Green, Ronald A. North, David J.11
Hall, Michael C. Nunnally, Patrick E.
Harper, Michael C. Nunnally, Troy A.
Harrelson, Cecil Jr. Odom, Curtis L.
Harrison, Robert D. Odom, Jakie E.
Hawthorne, James L. Owen, Cecil R.
Henderson, Darryl L.6 Pedicord, Brian K.

5 This is in addition to the $11,836.97 Adams is entitled to as a dis-
criminate under Sec. 8(a)(1) and (3).
6 This is in addition to the $6,613 Henderson is entitled to as a dis-
criminate under Sec. 8(a)(1) and (3).
7 This is in addition to the $6,410.04 Jordan is entitled to as a dis-
criminate under Sec. 8(a)(1) and (3).
8 This is in addition to the $4,950.46 Krajewski is entitled to as a dis-
criminate under Sec. 8(a)(1) and (3).
9 This is in addition to the $1,797 McCall is entitled to as a discrimi-
nate under Sec. 8(a)(1) and (3).
10 This is in addition to the $8,431.99 Morrell is entitled to as a dis-
criminate under Sec. 8(a)(1) and (3).
11 This is in addition to the $9,093.60 North is entitled to as a dis-
criminate under Sec. 8(a)(1) and (3).
A.J. MECHANICAL, INC. 301
Pennington, David E. Taylor, Paul
Petty, Jimmy D. Tournabene, Frank S.14
Phillips, Donald W. Tyra, Ron
Phillips, Douglas W. Vick, Armon R.
Phillips, Gail A. Walker, Christina J.
Phillips, Jason C. Walker, Lisa M.
Raines, Mary R. Walker, Michael
Revill, Charles W. Ward, Ivy
Roberts, Glenn Ward, Tim
Rodregues, Julio Ceasa Weaver, Matthew R.15
Scarborough, Daniel E. West, Garry B.16
Shachle, Paul F. Whitson, Carl R.
Schachle, Vincent C. Williams, Clinton S.
Schifko, John P.12 Williams, Donald
Shields, Douglas A. Willis, James R.
Steele, Scottie B.13 Wolfe, Theodore D.
Steeverson, Gregory J. Woods, Kelly B.
Stough, David A. Wynn, Edward L.
Stroud, Robert K. Young, Cornelius L.
As shown above, A.J. Mechanical, Inc. did not answer the
compliance specifications and it did not appear at the hearing.
The General Counsel’s motion for a finding that A.J. Mechani-
cal, Inc. admitted the pleadings in the compliance specifications
was granted.
The remaining issues deal with whether William A. Greene
and Cynthia D. Greene17 are liable for back wages. The General
Counsel contended that the applicable principles are those
which were applied in White Oak Coal Co., 318 NLRB 732
(1995). There, the Board concluded that the corporate veil may
be pierced when (1) the shareholder and corporation have failed
to maintain separate identities; and (2) adherence to the corpo-
rate structure would sanction a fraud, promote injustice, or lead
to an evasion of legal obligations.
The Record Evidence:
A.J. Mechanical, Inc. was a corporation and its only share-
holders were William A. Greene and James Sanders.18 Several
witnesses including William A. Greene and Cynthia D. Greene
testified during the hearing.19

12 This is in addition to the $7,734.93 Schifko is entitled to as a dis-
criminate under Sec. 8(a)(1) and (3).
13 This is in addition to the $2,736.40 Steele is entitled to as a dis-
criminate under Sec. 8(a)(1) and (3).
14 This is in addition to the $3,080 Tournabene is entitled to as a dis-
criminate under Sec. 8(a)(1) and (3).
15 This is in addition to the $12,913.41 Weaver is entitled to as a dis-
criminate under Sec. 8(a)(1) and (3).
16 This is in addition to the $12,575.60 West is entitled to as a dis-
criminate under Sec. 8(a)(1) and (3).
17 Respondents William A. Greene is sometimes referred to as Ar-
nold Greene.
18 James Sanders is referred to as Jim Sanders in the underlying
Board decision (330 NLRB No. 178 (2000) (not reported in Board
volumes).
19 Additionally, I received transcripts of earlier testimony and ac-
companying exhibits of William A. Greene, Cynthia D. Greene, and
others.
A union organizing campaign started among the A.J. Me-
chanical, Inc. employees and a representation petition was filed
with the NLRB in early 1999. Several unfair labor practice
charges were filed against A.J. Mechanical, Inc. beginning in
May 1999.
William A. Greene testified that in 1999 A.J. Mechanical,
Inc. was in the process of dissolving.20 He testified that he
made the decision to dissolve the corporation sometime late
1998. Among other things A.J. Mechanical agreed in a written
resolution to meet its debts. As to vendors of its equipment and
consumable supplies, A.J. Mechanical paid those bills. William
A. Greene admitted that he has not paid anything on the unfair
labor practice charges or the complaint or judgment that even-
tually resulted from the unfair labor practice charges.
A.J. Mechanical, Inc. held a public auction of September 11.
The announcement of that auction indicated it was a complete
liquidation. William Greene admitted that he attached the fol-
lowing note to that announcement and mailed the announce-
ment and the note to the Board about September 13, 1999:
This sale was made possible by Millwright Local 2471
and The National Labor Relations Board. Both parties
should feel very proud of their efforts in putting a small
independent contractor out of business and costing a lot of
people a chance to make a decent living.
William A. Greene testified that A.J. Mechanical21 was in-
corporated in Florida and that he and James Sanders were each
50-percent owners (shareholders). Both he and James Sanders
paid working capital to start up the corporation.22 The corpora-
tion was dissolved through a joint meeting of the stockholders
on December 2, 1999. Greene testified that he and James
Sanders met with the corporation’s attorney to discuss dissolu-
tion on July 6, 1999. He testified the corporation was directed
to close its Pensacola, Florida job by June 25, 1999, at 4 p.m.
However, according to Greene, A.J. Mechanical acquired a 2-
month contract with Enron to finish up that Pensacola job and
the corporation completed that work in about 4 or 5 weeks after
June 25.
Greene testified that he loaned money to A.J. Mechanical
and that the corporation never loaned money to him. A.J. Me-
chanical had its own separate credit cards and Greene never
charged personal items to those company credit cards. He used
his own funds to make incidental expense payments occasion-
ally on behalf of the corporation but he was reimbursed for
those payments. Both William A. Greene and James Sanders
had A.J. Mechanical trucks. Greene’s truck was leased to him
but the corporation made the lease payments. Greene testified
that he used the truck for business.
William A. Greene testified that he normally deposited all
funds received from the corporation in his joint checking ac-
count. He and his wife Cynthia D. Greene shared that checking
account. That and their other assets including home, automo-

20 A.J. Mechanical worked on a turbine project in Pensacola, Florida,
from October 1998.
21 A.J. Mechanical is sometimes referred to as the corporation.
22 Respondent pointed out that Greene and Sanders each paid in ap-
proximately $20,000 in working capital when A.J. Mechanical was
formed in 1993 (Tr. 86, 100; GC Exh. 11(a), p. 35).
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD302
biles and investments are all shared. The funds he received
from the corporation dissolution were also shared between
William A. and Cynthia D. Greene.
Cynthia D. Greene23 testified that she formerly worked as a
mechanic for A.J. Mechanical. She did some part-time book-
keeping and clerical work for the corporation in 1998 and 1999
and was not paid for that work. She wrote checks for bill pay-
ment but she normally did not write checks for shareholder
distributions. However, she did write one check for shareholder
distribution at the direction of her husband. Cynthia Greene
testified that none of the shareholder distribution checks were
made out to her. She testified that she never discussed the un-
fair labor practice proceedings with her husband.
It is not disputed that William A. Greene as well as James
Sanders, received cash distributions from A.J. Mechanical be-
ginning on February 16, 1999. Those distributions to William
A. Greene24 were as follows:
February 16, 1999 $ 225,000.00
February 24, 1999 50,000.00
March 5, 1999 100,000.00
March 26, 1999 100,000.00
April 13, 1999 100,000.0025
April 21, 1999 250,000.00
April 22, 1999 300,000.0026
June 10, 1999 500,000.00
November 4, 1999 217,500.0027
December 2, 1999 16,345.7328
TOTAL DISTRIBUTION $1,858,845.7329
Ralph Carr testified that he was employed as an inspector
deputy U.S. marshal in July 2001. He went to the home of Ar-
nold and Cynthia Greene in order to serve a subpoena. As Carr
approached he noticed that Greene was manually cutting wood
on a horizontal band saw. Carr saw Greene manually lay one
board on a tractor with forklifts after cutting it with the saw.
Carr approached Arnold Greene at the back of Greene’s
house and identified himself. Greene identified himself as
Woodcutter. Subsequently Greene admitted that he was Arnold
Greene. Carr then returned to Greene’s house where Cynthia
Greene accepted the subpoena after being told by Arnold
Greene to take the paper.
Sue Crochet is a field examiner with the NLRB in New Or-
leans. She worked on a representation case involving A.J. Me-
chanical. On April 21, 1999, she phoned William A. Greene.
Crochet asked Greene if A.J. Mechanical would recall laid-off

23 Respondent pointed out that Cynthia Greene was never an officer,
director, or shareholder of A.J. Mechanical.
24 Except as specifically noted, James Sanders received the same
amounts on the same dates noted for A. Greene.
25 Sanders did not receive a distribution on April 13. He did receive
a $100,000 distribution on April 16, 1999.
26 Sanders did not receive a distribution on April 22. He did receive
a $300,000 distribution on April 23, 1999.
27 Sanders did not receive a distribution on November 4. He did re-
ceive a $217,500 distribution on November 5, 1999.
28 Sanders did not receive a distribution on December 2. He did re-
ceive a $16,345.73 distribution on December 6, 1999.
29 James Sanders also received a total distribution of $1,858,845.73.
employees. Greene replied that most of the people that would
be recalled would not be union people, because they only cause
trouble. Greene said that he was going to fight to the bitter end
and he did not want an election. Greene said that the Depart-
ment of Labor was against him. He said that he could move the
job, that the job was portable, that he didn’t need any union
people. Greene said that he could shut down the business and
sell it.
Annie Archie is the compliance officer with the New Orleans
regional office of the NLRB. Archie testified to the accuracy of
the compliance specification computations.
Conclusions
Credibility
William A. Greene testified in the October 30 hearing. Addi-
tionally, earlier testimony by Greene was admitted in evidence.
Former Inspector Deputy U.S. Marshall Ralph Carr testified
without rebuttal that A. Greene misrepresented himself to Carr
after Carr identified himself to A. Greene. Greene initially iden-
tified himself as Woodcutter but subsequently admitted to Carr
that he was Arnold Greene.
Moreover, there was testimony by William A. Greene that
could have been corroborated by others including his former
business associate James Sanders. Arnold Greene admitted that
James Sanders was in the hearing room during his testimony.
Among other things, A. Greene testified that he and Sanders
decided in late 1998, to wind up the A.J. Mechanical, Inc. busi-
ness after their existing contract. That testimony was seriously
contested by among other things, evidence that the corporate
business was not terminated after the late 1988 contract (see
below). Additionally, A. Greene admitted there was no existing
documentary evidence of that meeting and decision. Neverthe-
less, Sanders was not called to corroborate A. Greene.
Additionally, a transcript of earlier testimony by A. Greene
during a representation case hearing was admitted in evidence.
Greene testified on May 6, 1999. There he testified among
other things, that his Pensacola contract that existed from No-
vember 1998 had ended about 2 months before his May 1999
testimony when Turbine Technologies was removed from the
project. When Turbine Technologies was removed from the
project A.J. Mechanical, Inc. contracted with IBC Turbo. That
contract lasted until the end of April and on May 1, 1999, A.J.
Mechanical, Inc. started a third contract. That one was with
Enron and the job, as both jobs before, was located at Pensacola
docks. Greene testified the Enron job was scheduled to end at 7
o’clock on the day after the May 6 hearing.
William A. Greene’s testimony during the instant hearing
conflicted with his testimony on May 6, 1999. For example,
Greene testified that he received a fax from IBC Turbo direct-
ing him to close their Pensacola job by June 25, 1999. At the
May 1999 hearing, A. Greene testified the IBC Turbo contract
was completed at the end of April and that he started another
contract with Enron on May 1, 1999. He also testified in the
instant hearing that he acquired a 2-month contract with Enron
after the IBC Turbo job ended on June 25. That conflicted with
his May 6, 1999 testimony that he started the Enron contract 8
or 9 days before that hearing.
A.J. MECHANICAL, INC. 303
Nevertheless, it is apparent under either of A. Greene’s ver-
sion of events that A.J. Mechanical, Inc. entered into at least
two additional contracts after the end of 1998. That does not
square with A. Greene’s testimony to the effect that he and
James Sanders decided in late 1998 to dissolve A.J. Mechanical
at the completion of the then existing contract.
Additionally, there is evidence that conflicts with A.
Greene’s testimony that he and Sanders decided to dissolve A.J.
Mechanical, Inc. before he learned the employees were in-
volved in union organizing activity. For example, A. Greene
admitted30 that he mailed a copy of the announcement of the
public auction of A.J. Mechanical, Inc. property, to the NLRB
along with a pasted note stating:
This sale was made possible by Millwright Local 2471 and
The National Labor Relations Board. Both parties should feel
very proud of their efforts in putting a small independent con-
tractor out of business and costing a lot of people a chance to
make a decent living. [GC Exh. 10.]
That note by A. Greene showed that he felt both the Union
and the NLRB were at fault in the dissolution of the corpora-
tion. Even thought A. Greene testified that the above statement
was untrue, several matters are apparent. One, A. Greene testi-
fied in conflict with his note to the NLRB. Two, at one time A.
Greene held out that the Union, as well as the NLRB, caused
the demise of the corporation. Three, there is a serious doubt
surrounding A. Greene’s testimony that he and Sanders decided
to dissolve the corporation before learning of the employees’
union organizing activities.
In view of all the above, the full record and A. Greene’s de-
meanor, I find that A. Greene was not credible. I shall not credit
any of his testimony, except that which other credited evidence
corroborates or that which constitutes an admission against
interest.
Findings
Counsel for the General Counsel argued that the compliance
specifications were proven in regard to gross backpay, interim
earnings, and interim expenses. In regard to Respondent A.J.
Mechanical, Inc., the General Counsel’s motion to the effect
that A.J. Mechanical, Inc. be deemed to have admitted the
pleadings and for judgment against A.J. Mechanical, Inc. was
granted during the October 30, 2002 hearing. As to Respon-
dents William A. Greene and Cynthia Greene, the General
Counsel’s motion for a finding that William A. Greene and
Cynthia Greene admitted the compliance specifications gross
backpay pleadings and precluding receipt of evidence disputing
gross backpay was also granted at the hearing.31 Additionally,
the compliance specifications, when coupled with the Greenes’

30 A. Greene evaded counsel for the General Counsel’s question of
did he mail GC Exh. 10 to the NLRB Regional Office by answering, “I
may have,” on several occasions. Eventually, after the administrative
law judge asked whether he recalled mailing the document, A. Greene
admitted that he had mailed the document.
31 A. Greene’s answer to the compliance specification formed the
basis for counsel for the General Counsel’s motion and the order grant-
ing that motion (Tr. 19; GC Exh. 2).
answer and the full record, proved the interim earnings and
interim expenses.32
The compliance specifications included allegations that Wil-
liam A. Greene and Cynthia D. Greene are jointly and severally
liable for backpay to the same extent as Respondent A.J. Me-
chanical, Inc.
Respondent argued that where, as here, a newly added party
was not shown to be an alter ego, successor, or single employer
at the time of the service of the initial unfair labor practice
complaint and underlying proceedings, that party is not af-
forded due process because the party’s individual interests were
not represented in those proceedings (Viking Industrial Security
v. NLRB, 225 F.3d 131, 134 (2d Cir. 2000)). In that regard, the
record shows that neither William A. Greene nor Cynthia D.
Greene, were alleged as party in the unfair labor practice pro-
ceeding before issuance of the compliance specification.
Viking Industrial Security v. NLRB, supra, involved an issue
of derivative liability based a single-employer theory. Two
corporations, Viking New York and Viking New Jersey, were
formed and operated as a single business for a time. At some
time in 1988 or 1989, the two corporations split into two sepa-
rate businesses. Before the split Viking New York unlawfully
fired an employee, Marrero, on September 23, 1989, because of
his protected conduct. An unfair labor practice complaint issued
on December 29, 1989, alleging only that Viking New York
engaged in unlawful conduct by, among other things, discharg-
ing Marrero. When a compliance specification issued on July 2,
1994, Viking New Jersey was added for the first time and it
was alleged that Viking New York and Viking New Jersey
constituted a single employer. The court denied enforcement
against Viking New Jersey. It held that in “order for Viking
New Jersey to be bound by an unfair labor practice proceeding
brought only against Viking New York, the affiliation between
the two companies must be shown to have existed at the time of
the proceeding, or at least at the time that the complaint was
served.”
Here, there is no question as to whether the Greenes severed
their ties with A.J. Mechanical, Inc. at some time before the
unfair labor practice proceedings or before the complaint was
served. William A. Greene and James Sanders were the only
stockholders throughout the existence of A.J. Mechanical, Inc.
Each held 50 percent of the stock. Here, the question is not one
of due process but one of whether there ever was a corporate
entity that should provide protection for the Greenes against a
finding of liability. That question was considered in White Oak
Coal Co., 318 NLRB 732, 734 (1995),33 where the Board con-
sidered the principle of “piercing the corporate veil.”34
The Board stated the precedent relied on by the administra-
tive law judge in White Oak Coal Co., supra, did not properly
resolve the personal liability issue. Instead, the Board decided
to adopt the 10th Circuit Court’s two-pronged analytical

32 Including especially the testimony and supporting documentation
of Compliance Officer Annie B. Archie.
33 See also Reliable Electric Co., 330 NLRB 714 (2000).
34 Respondent argued that the General Counsel has not shown that
the corporate veil should be pierced as required in White Oak Coal Co.,
supra.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD304
framework for piercing the corporate veil in NLRB v. Greater
Kansas City Roofing.35 The corporate veil may be pierced
when: (1) the shareholder and corporation have failed to main-
tain separate identities, and (2) adherence to the corporate
structure would sanction a fraud, promote injustice, or lead to
an evasion of legal obligations.
The Board stated in White Oak Coal:
When assessing the first prong to determine whether
the shareholders and the corporation have failed to main-
tain their separate identifies, we will consider generally (a)
the degree to which the corporate legal formalities have
been maintained, and (b) the degree to which individual
and corporate funds, other assets, and affairs have been
commingled. Among the specific factors we will consider
are: (1) whether the corporation is operated as a separate
entity; (2) the commingling of funds and other assets; (3)
the failure to maintain separate corporate records; (4) the
nature of the corporation’s ownership and control; (5) the
availability and use of corporate assets, the absence of
same, or under capitalization; (6) the use of the corporate
form as a mere shell, instrumentality or conduit of an indi-
vidual or another corporation; (7) disregard of corporate
legal formalities and the failure to maintain an arm’s-
length relationship among related entities; (8) diversion of
the corporate funds or assets to noncorporate purposes;
and in addition (9) transfer or disposal of corporate assets
without fair consideration.” [318 NLRB at 735.]
Here, as to (1) there were no records of corporate meetings
such as meetings of the shareholders, the board of directors, or
officers, with the exception of the December 2, 1999 meeting to
dissolve the corporation. There was no evidence of corporate
decisionmaking. In fact the evidence revealed that the two
shareholders made individual decisions on a job or shift without
consulting the other shareholder when either A. Greene or
Sanders, respectively, was directly involved in a particular job
or shift. That applied regardless of whether the decisionmaker
was William A. Greene or James Sanders. As to (2) the funds
and assets were commingled. The owners made loans to the
corporation without documentation. Assets including pickup
trucks were treated as individual property. Sanders’ pickup
truck was titled in his name and A. Greene’s pickup was leased
to him. However, the corporation paid for both trucks. Regard-
ing (3), A.J. Mechanical, Inc. did not routinely maintain sepa-
rate corporate records such as minutes of corporate meetings or
records of loans to the corporation. As to (5), A.J. Mechanical
was under capitalized from its initiation and its payroll was
satisfied through undocumented loans from its shareholders.
Regarding (6), the evidence showed that at most, A.J. Mechani-
cal, Inc. was a partnership between Sanders and A. Greene. As
to (7), there was an almost complete disregard of corporate
legal formalities until December 2, 1999, when Sanders and A.
Greene met to dissolve the corporation. As shown herein, a
representation petition was filed and a hearing was held on May
6, 1999. Unfair labor practices were filed against A.J. Mechani-

35 NLRB v. Greater Kansas City Roofing, 2 F.3d 1047 (10th Cir.
1993), denying enf. in pertinent part of 305 NLRB 720 (1991).
cal, Inc. on May 24, June 11, 16, and 26, August 30, October
28, and November 12, 1999. Therefore, the only documented
corporate meeting occurred after A. Greene and Sanders knew
of the employees’ union organizing activity.
In regard to (8) and (9), as shown herein, corporate funds
were diverted to Greene and Sanders.
There was no showing of fair consideration for distribution
of the corporate funds to A. Greene and Sanders. Instead, as
shown herein, there were outstanding unfair labor practice
charges pending from May 24, 1999. After that date, A. Greene
and Sanders each received $733,845.73 from the corporation.
After December 2, 1999, the corporation had no money to dis-
tribute to creditors, shareholders, or anyone else.
The Board in White Oak Coal Co., supra, also stated:
When assessing the second prong, we must determine
whether adhering to the corporate form and not piercing
the corporate veil would permit a fraud, promote injustice,
or lead to an evasion of legal obligations. The showing of
inequity necessary to warrant the equitable remedy of
piercing the corporate veil must flow from misuse of the
corporate form. Further, the individuals charged person-
ally with corporate liability must be found to have partici-
pated in the fraud, injustice, or inequity that is found. [318
NLRB at 735.]
The evidence showed that all the A.J. Mechanical assets
were distribution to William A. Greene and James Sanders. A.
Greene, Sanders and their spouses simply wrote checks for the
distribution of the assets. A. Greene and, except as noted with a
footnote, Sanders, received funds as noted herein:
February 16, 1999 $ 225,000.00
February 24, 1999 50,000.00
March 5, 1999 100,000.00
March 26, 1999 100,000.00
April 13, 1999 100,000.0036
April 21, 1999 250,000.00
April 22, 1999 300,000.0037
June 10, 1999 500,000.00
November 4, 1999 217,500.0038
December 2, 1999 16,345.7339
The evidence is undisputed that William A. and Cynthia D.
Greene, as husband and wife, shared equally in the funds dis-
tributed by A.J. Mechanical, Inc. By applying the two-pronged
analytical framework, I recommend that the corporate veil be
pierced and that William A. Greene and Cynthia D. Greene are
jointly and severally liable for the remedial and backpay obliga-
tions of A.J. Mechanical, Inc. The Greenes have disregarded
the separate identifies of their corporate alter ego, A.J. Me-

36 Sanders did not receive a distribution on April 13. He did receive a
$100,000 distribution on April 16, 1999.
37 Sanders did not receive a distribution on April 22. He did receive a
$300,000 distribution on April 23, 1999.
38 Sanders did not receive a distribution on November 4. He did re-
ceive a $217,500 distribution on November 5, 1999.
39 Sanders did not receive a distribution on December 2. He did re-
ceive a $16,345.73 distribution on December 6, 1999.
A.J. MECHANICAL, INC. 305
chanical, Inc. Adherence to the corporate form would result in
injustice and would lead to an evasion of legal obligations.40
Moreover, as shown in the Board decision in the underlying
unfair labor practice case,41 William A. Greene personally en-
gaged in action in violation of the National Labor Relations Act
by threatening employees on December 20 and 23, 1998, and
January 28, 1999, that he would shut down the job and reopen
using employees who did not support the Union; by threatening
employees that he would move its business if the employees
did not cease their activities on behalf of the Union; by threat-
ening employees in April and on May 6, 1999, with a loss of
benefits if they selected the Union as their bargaining represen-
tative; and on January 16, 1999, he discarded numerous appli-
cations because those applications indicated support for the
Union.
Moreover, as shown above, Sue Crochet is a field examiner
with the Board in New Orleans. On April 21, 1999, she phoned
William A. Greene. Crochet asked A. Greene if A.J. Mechani-

40 White Oak Coal Co., 318 NLRB 732 (1995).
41 A.J. Mechanical, Inc., 330 NLRB No. 178 (2000) (not reported in
Board volumes).
cal would recall laid-off employees. A. Greene replied that
most of the people that would be recalled would not be union
people, because they only cause trouble. A. Greene said that he
was going to fight to the bitter end and he did not want an elec-
tion. A. Greene said that the Department of Labor was against
him. He said that he could move the job, that the job was port-
able, that he didn’t need any union people. A. Greene said that
he could shut down the business and sell it.
By their actions the Greenes along with James Sanders, en-
gaged in blurring the separate corporate entity of A.J. Mechani-
cal, Inc. and their misuse of the corporate assets and form, is
unfair, unjust, and has resulted in an evasion of A.J. Mechani-
cal’s remedial and backpay obligations for unfair labor prac-
tices that William A. Greene and others, committed.
I find the allegations contained in the compliance specifica-
tions are true and I recommend that the Respondents A.J. Me-
chanical, Inc., William A. Greene, and Cynthia D. Greene be
ordered to pay these amounts to the below listed employees,
plus interest accrued to the date of payment.
[Recommended Order omitted from publication.]