American Eagle Protective Services Corporation and Paragon Systems, Inc., Joint Employers

National Labor Relations Board - Administrative Judge Opinions

Sep 22, 2015

05-CA-126739 (N.L.R.B. Sep. 22, 2015)

JD–55–15
Washington DC
UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD
DIVISION OF JUDGES
AMERICAN EAGLE PROTECTIVE SERVICES
CORPORATION AND PARAGON SYSTEMS, INC.,
JOINT EMPLOYERS
and Case 5-CA-126739
UNITED GOVERNMENT SECURITY OFFICERS OF
AMERICA, LOCAL 034, AFFILIATED WITH UNITED
GOVERNMENT SECURITY OFFICERS OF AMERICA
INTERNATIONAL UNION
Chad M. Horton, ESQ.,
for the General Counsel.
Thomas P. Dowd, ESQ., of Washington, D.C.
for the Respondent.
Jeffrey C. Miller, of Westminster, Colorado,
for the Charging Party.
DECISION
STATEMENT OF THE CASE
Eric M. Fine, Administrative Law Judge. This case was tried in Washington, D.C. on
February 18 and 19, 2015. The United Government Security Officers of America, Local 034,
Affiliated with United Government Security Officers of America International Union (the Union)
filed the initial charge against American Eagle Protective Services Corporation (AEPS) on April
16, 2014, and the first amended charge against AEPS and Paragon Systems, Inc. (Paragon),
Joint Employers on April 28, 2014.1 The complaint issued on November 26, 2014, alleges AEPS
and Paragon (collectively referred to as Respondents) are joint employers. The complaint
alleges Respondents have violated Section 8(a)(5) and (1) of the Act by, without bargaining with
the Union, since October 28: (a) changing the threshold for full-time status from 32 to 40 hours;
(b) reducing employee’s regularly scheduled work hours upon changing the definition of full-time
status; (c) discontinuing the option of paying health and welfare benefits directly into employees
paychecks; (d) changing break structures and reducing the number of paid breaks; (e) reducing
the rate of training pay; (f) discontinuing providing a uniform and shoe allowance; and (g)
changing paydays from bi-weekly to bi-monthly.
On the entire record, including my observation of the witnesses' demeanor, and after
considering the briefs filed by the General Counsel and the Respondents, I make the following:2

1 All dates are in 2013 unless otherwise indicated.
2 In making the findings, I have considered the witnesses’ demeanor, the content of their
testimony, and the inherent probabilities of the record as a whole. In certain instances, I have
credited some but not all of what a witness said. See NLRB v. Universal Camera Corporation,
179 F. 2d 749, 754 (C.A. 2) ), reversed on other grounds 340 U.S. 474 (1951).
JD–55–15
2

Findings of Fact
I. JURISDICTION5
AEPS, a corporation, with an office and place of business in Austin, Texas, and Paragon,
a corporation, with an office and place of business in Herdon, Virginia, each have been engaged
in the business of providing security services to commercial and governmental entities, including
at the United States Department of Agriculture (USDA) headquarters in Washington, D.C.. 10
Annually AEPS and Paragon each performed services valued in excess of $50,000 in states
outside of the District of Columbia. Respondents admit and I find that AEPS and Paragon are
each are employers engaged in commerce under Section 2(2), (6), and (7) of the Act and the
Union is a labor organization under Section 2(5) of the Act.
15
II. ALLEGED UNFAIR LABOR PRACTICES
At the outset of the hearing, the parties entered into evidence a written stipulation, which
reach reads, in part, as follows:
20
1. In August 2013, the U.S. Department of Agriculture awarded American Eagle
Protective Services Corporation (AEPS) a federal contract (AG-3144-C-13-0003) to
provide guard services at the USDA Headquarters facility, which consists of the South
Building, the Whitten Building, the Yates Building and the George Washington Carver
Center. 25
2. Under the federal contract, AEPS was scheduled to take over operational control
of the USDA Headquarters facility effective October 28, 2013 replacing USEC, Inc. and
USEC’s subcontractor Securiguard, Inc.
3. AEPS awarded Paragon Systems, Inc. a subcontract in August 2013 to perform
certain security work at the USDA Headquarters facility. Under the terms of the 30
subcontract agreement, Paragon provided security services at the Whitten Building, the
Yates Building and the Carver Center while AEPS was responsible for providing guard
services at the South Building.
4. AEPS and Paragon are joint employers on the USDA Headquarters federal
contract, as defined under the National Labor Relations Act.335
5. United Government Security Officers of America, Local 034 (the Union) was the
certified bargaining representative for the protective service officers (PSOs) who worked
for USEC and Securiguard at the South Building and at the Whitten Building prior to
October 28, 2013. The Union had a collective bargaining agreement with USEC and
Securiguard effective for the period of time covering October 1, 2011 through September 40
30, 2014 (hereinafter the Predecessor CBA).
6. As federal contractors on a service contract, AEPS and Paragon were subject to
the requirements of Executive Order 13495, Non-Displacement of Qualified Workers as
well as the McNamara-O'Hara Service Contract Act, 41 U.S.C. §§ 351–358.4

3 Respondents admit in their answer to the complaint that, “At all material times, AEPS has
exercised control over the labor relations policy of Paragon and administered a common labor
policy with Paragon for the employees of AEPS and Paragon.”
4 Respondents admit in their answer to the complaint that under Executive Order 13495,
Respondents were obligated and planned to offer employees of their predecessors USEC and
Securiguard a right of first refusal of employment in positions for which they were qualified.
JD–55–15
3
7. In August 2013, after AEPS was awarded the USDA federal contract and after
Paragon was awarded the related subcontract, AEPS/Paragon arranged for job fairs to be
held for incumbent employees who were working on the USDA federal contract. Paragon
held job fairs for incumbents on September 14, 2013 and September 29, 2013 off-site at
the Marriott Hotel in Greenbelt, Maryland. 5
8. At the Paragon job fairs in Greenbelt, applicants who had not yet completed
applications were given the opportunity to do so on-line, and all incumbent PSOs who
completed applications were provided with contingent offer letters that were identical in
content for all incumbents, other than being personalized with the incumbent’s name and
address in the title of the letter and at the acknowledging signature block for each 10
incumbent. Incumbents were then asked to complete other new hire paperwork,
including federal and state tax documents, direct deposit authorization, employment
eligibility verification, and other documents acknowledging receipts of Paragon policies
and procedures.
9. Paragon has a variety of other federal contracts with the Federal Protective 15
Service to provide guard services at federal buildings in the Washington, D.C. area. As a
result, throughout 2013, Paragon placed advertisements on Monster.com and other
applicant-related publications seeking applicants for any positions that might become
available on its federal contract in the event that incumbents did not accept the
employment offers extended by Paragon at the Job Fair meeting.20
10. On or about September, 2013, AEPS placed an advertisement on its website
seeking security guards for the USDA contract.
11. Paragon subsequently held a New Hire Orientation meeting on October 19, 2013
for employees who had been hired to fill PSO positions at the USDA Buildings. At this
meeting, PSOs were given copies of Paragon’s Security Officer Handbook and a 25
presentation regarding employment at Paragon.
12. On October 26, 2013, in the Jefferson Auditorium, AEPS/Paragon employees
attended a quarterly meeting presented by USDA representatives. Following the
quarterly meeting, AEPS held a New Hire Orientation for which both Paragon and AEPS
employees were present. 30
13. Article 7.1 of the Predecessor CBA states, in relevant part, that a “full-time
employee” shall be considered an individual regularly scheduled to work and regularly
work 32 or more hours per regular workweek, less holidays. When AEPS/Paragon
assumed operational control on October 28, 2013, Paragon defined a “full-time
employee” to be an individual who regularly works a minimum of 40 or more hours per 35
week on a continuing basis.
14. Article 12.1 of the Predecessor CBA states, in relevant part, that employees will
receive a Health and Welfare payment on all hours paid up to 40 hours per week and
2,080 hours per contract year. The Predecessor CBA states that the employer will
continue the practice of paying the Health and Welfare payments on the employee’s 40
check, unless otherwise directed by the employee in accordance with the employee’s
election to participate in other fringe benefit options. When AEPS/Paragon assumed
operational control on October 28, 2013, AEPS/Paragon did not provide employees with
the option of receiving the Health and Welfare payments on their checks. Instead,
AEPS/Paragon offered employees the option of applying the Health and Welfare payment 45
to an AEPS/Paragon health plan with any excess fringe benefit amount directed into the
employee’s 401(k) account, or, alternatively, having the entirety of the Health and Welfare
payment directed into the employee’s 401(k) if the employee demonstrated health care
coverage from another source.
15. Article 7.6 of the Predecessor CBA states, in relevant part, that employees shall 50
receive two (2) 15-minute paid rest periods and one (1) 30-minute paid lunch period for
each 8-hour shift when properly relieved. The Predecessor CBA further states that
JD–55–15
4
employees shall receive an additional 15-minute paid rest period for every four (4) hours
worked by an employee past the employee’s regular 8-hour shift. When AEPS/Paragon
assumed operational control on October 28, 2013, AEPS/Paragon implemented a break
structure that was different from the break structure set forth in the Predecessor CBA.
16. Article 15.3 of the Predecessor CBA states, in relevant part, that employees 5
participating in required training and testing shall be paid appropriate wages. The Union
and USEC/Securiguard had an established past practice wherein employees would
receive their base pay rate for attending required training and testing. When
AEPS/Paragon assumed operational control on October 28, 2013, AEPS/Paragon paid
employees $8.25 per hour for attending required training and testing. 10
17. Article 12.4 of the Predecessor CBA states, in relevant part, that the employees
shall receive a uniform allowance of forty cents ($0.40) per hour worked. These monies
were paid to employees as wages in their paychecks. When AEPS/Paragon assumed
operational control on October 28, 2013, AEPS/Paragon did not provide an hourly
uniform allowance15
18. Article 12.4 of the Predecessor CBA further states, in relevant part, that
employees may receive shoe allowance as a reimbursable expense, up to $100 per year.
When AEPS/Paragon assumed operational control on October 28, 2013, AEPS did not
provide a shoe allowance.
19. Article 8.2 of the Predecessor CBA states, in relevant part, that employees will be 20
paid on a biweekly basis, subject to change by mutual agreement. When AEPS/Paragon
assumed operational control on October 28, 2013, AEPS paid employees twice monthly,
while Paragon continued paying employees on a biweekly basis.
20. The differing terms and conditions of employment described in paragraphs 13-19
were announced and implemented without bargaining with the Union.25
21. AEPS/ Paragon assumed operational control of security for the USDA Building on
October 28, 2013 with a workforce consisting of a majority of PSOs who formerly worked
for Securiguard/USEC at the USDA Building.
22. Thereafter, AEPS/Paragon recognized the Union as the collective bargaining
representative of the PSOs at the USDA Building and bargained with the Union for a new 30
collective bargaining agreement.
23. AEPS/Paragon and the Union reached a collective-bargaining agreement on or
about October 16, 2014 covering the time period of October 16, 2014 through October
27, 2017.
35
A. The General Counsel’s Witnesses
James Jones began working for Paragon as a special police officer (SPO) on October 28,
at the USDA Whitten Building, which is staffed by Paragon. Jones has been employed at the
USDA buildings as an SPO since 2002 for prior contractors. Jones testified other bargaining unit 40
employees work in the South Building which is staffed by AEPS. Jones testified the project
manager for the SPOs at USDA is Joey Ortman, who is employed by AEPS.5 At the time of his
testimony, Jones held the position of treasurer of the Union and he had been a shop steward
since 2005.
45
Jones learned in early August 2013 that AEPS and Paragon would be taking over the
security contract at USDA. Jones testified as follows: On September 3, Jones reported for duty

5 Respondents admitted in their answer to the complaint, that Ortman has the title Project
Manager, AEPS, and that he is supervisor and agent for the Respondents as defined in Section
2(11) and 2(13) of the Act.
JD–55–15
5
at the daily pre-shift meeting known as a guard mount, and Lt. Hayes instructed the SPOs to look
at the bulletin board to see if their name was listed for Paragon. The instructions on the posted
memo were to report to a job fair on September 14. Hayes said if someone’s name was not on
the list, they would be working for AEPS and would receive information later. The September 3
memo stated the job fair was going to be at the Marriott in Greenbelt, Maryland. Neither AEPS 5
nor Paragon’s logos were on the memo. There were about 10 or 15 names on the memo. Jones
identified two additional memos containing the name “Paragon Systems.” It states in the first
memo that Paragon would be holding a “Job Fair” on September 14, and in the second memo
that Paragon would be holding a job fair on September 29. Jones testified these memos were
distributed at work. Jones testified he had to complete an employment application on line prior to 10
attending the Paragon September 14 job fair. Jones learned about completing the application
from the supervisors and from the memos. The second memo announcing the September 14
Paragon job fair stated it would take place at the Greenbelt Marriott, and gave time frames for the
guard’s arrivals based on an alphabetized listing. The memo stated “Paragon Systems is
currently accepting applications from incumbent Security Officers only. To be considered for 15
employment, incumbents MUST complete all parts of the Paragon application process no later
than 24 hours before the job fair.” The memo directed applicants to two websites as to where to
complete the application. It stated the applicants must bring an original and copy of the following
documents to the job fair: driver’s licenses or state ID; social security card; birth certificate,
passport or naturalization; high school diploma, transcript or GED certificate; DD-214, if 20
applicable; void check or bank letter signed by a bank representative. The memo stated, “Offers
of employment are contingent upon successfully passing all pre-employment requirements,
attending all scheduled training and passing all contract-required performance standards. A
medical exam and a drug screen are also required.”6
25
Jones applied online to Paragon as directed in the described memos. Jones testified
when he filled out the application there was nothing indicating his terms of employment existing
at USEC would change with Paragon. Jones testified the only thing it said was that they would
be “at will” employees. Jones testified the on line application did not mention anything about the
following: shoe allowance, training pay, a change in how they would receive their health and 30
welfare benefit, break structure, or threshold for full-time employment. However, the applicant
signature page of the Paragon’s application submitted into evidence contains the following:
If hired, I agree and understand that I will conform with the policies, practices and
procedures of Paragon. I further agree that my employment is “at-will.” This means that 35
either Paragon or I may terminate the employment relationship at any time, with or without
notice, and with or without cause. I understand that Paragon retains the right to establish
compensation, benefits and working conditions for all of its employees. Accordingly, I
understand and agree that Paragon retains the sole right to modify my compensation and
benefits, position, duties, and other terms and conditions of employment, including the 40
right to impose disciplinary action that Paragon, at its sole discretion, determines to be
appropriate. No employee or representative of Paragon, other than the President of
Paragon, Inc. has the authority to alter the at will nature of my employment relationship, or
make any agreement inconsistent to the foregoing.
I acknowledge that I have been given the opportunity to ask questions regarding 45
Paragon’s policies and procedures, and my potential status as an employee “at-will,” and
no Paragon representative has promised or implied to me that if I am hired, I will be
employed under any terms other that stated above. I agree that this constitutes an

6 The memo announcing Paragon’s September 29 job fair was largely duplicative of the
second memo announcing the September 14 job fair described above.
JD–55–15
6
integrated, binding agreement with respect to the “at-will” nature of my employment
relationship.
Jones attended the Paragon job fair held on September 14. Jones testified as follows: No
AEPS applicants attended and there were no SPO’s in attendance who were not working for the 5
then incumbent employers. Paragon representatives attended the event, including two men who
were doing uniform sizing and handing out hiring packets. Paragon officials Rick Waddell and
Lori Raines were in attendance.7 Jones testified that: When he arrived, Jones was asked his
name and whether he filled out the online application to which he said yes. Jones was given a
hiring packet containing his name, told to fill it out, and then see human resources. Included in 10
the packet was a Paragon offer letter for employment, a direct deposit authorization form, and
federal and state tax forms. Jones recalled there were two policies in the packet, one for sexual
harassment and the other for workplace violence.
The September 14 offer letter stated Jones was being extended, on behalf of Paragon, a 15
contingent offer of employment with an effective date of October 28. There was an appendix
attached setting forth base pay and other benefits. It stated Jones would be offered the
company’s sponsored health/dental benefits under the terms of the company’s plan. It stated if
Jones chose not to receive health and medical coverage, the health and welfare hourly rate
indicated in the appendix would automatically be contributed into a company sponsored 401(k) 20
retirement plan, pre-tax, for Jones’ benefit. It stated, “You will not have the option of receiving a
cash payment in lieu of health and retirement benefits.” The letter stated, “Shift schedules will be
determined in accordance with the operational needs of the contract. Breaks will be provided in
accordance with Company policy and in compliance with any applicable State and Federal law
requirements and subject to the operational needs of the contract.” The letter stated vacation as 25
specified in the appendix will vest after a year of continuous employment with the company and
its predecessors. The letter stated Paragon considers a full time employee one who works an
average of 40 hours per week. It stated employment is contingent on successfully passing all
pre-employment requirements, with certain requirements listed. It was stated Jones’ employment
would be at will, with a description of what that meant. It stated that, in compliance with 30
Executive Order 13495, “you are hereby given a first right of refusal for this job opening.” It
stated the offer of employment must be accepted by October 1, by tendering a copy of the
applicant’s acceptance by certain specified methods. Jones offer letter was the same in content
as all offer letters tendered by Paragon to the predecessors’ employees. Jones signed and
turned in his offer letter on September 14, along with the hiring packet. Jones testified, after he 35
filled out the hiring packet, he reviewed the packet with Raines and then gave it to her. Jones
testified he had been requested to bring his driver's license, birth certificate, passport, social
security card, diploma, and a voided check for direct deposit, all of which he presented to Raines.
Jones met with Raines for about 15 minutes. Jones testified Raines said “congratulations,
welcome to the company” and she told him to go back out front to get sized for his uniform. 40
Raines told Jones he would be hearing about an orientation meeting. Jones left after he was
sized for the uniform and hat. Jones testified Raines did not ask him any questions about his
work history, education, or his strengths or weaknesses. She did not ask him why he wanted to
be employed by Paragon.8
45

7 Respondents admit in their complaint answer that Waddell and Raines are supervisors and
agents of the Respondents, with Waddell’s title as project manager; and Raines’ title as human
resources generalist.
8 I have concluded based on Jones’ credited testimony that he was not interviewed for the
position, but rather Raines just reviewed his paper work with him to ensure it was complete.
JD–55–15
7
Jones testified, on re-direct exam, that: Jones phoned Ortman on September 14, shortly
after Jones left the job fair. Jones knew Ortman had been hired as project manager for AEPS
at the time of the call. Jones had submitted his signed offer letter accepting employment with
Paragon prior to the call. Jones told Ortman about the offer letter and Ortman asked what it said.
Jones told Ortman what it said and Ortman stated that “American Eagle was the prime and that5
nothing was going to change, everything was going to stay structurally the same, and not to
worry about it.” Jones testified he told Ortman about the offer letter “because it was a grave
concern of a lot of officers.” Jones testified he told Ortman about Paragon taking their health and
welfare stating that was the main concern. Jones testified Ortman said Paragon is the subprime
and AEPS is the prime, and they have to do what AEPS does. Jones test i f ied that as 10
of September 14, he did not know what AEPS was going to do as no employee
had contact with AEPS. Jones test i f ied the employees at the t ime “didn't know it
was going to be different. Their thing was that everything was supposed to stay the same, just
changing shirts.”
15
Jones testified, after the job fair, his next contact about Paragon was Lt Hayes telling
Jones about an orientation meeting. Hayes told Jones during a guard amount to look at the
bulletin board for his name and for the date for orientation. Jones testified that: The memo
on the bulletin board had a list of names, the date, and the location for the orientation. Jones
received an additional memo at a later date, under Paragon’s letter head stating that on 20
October 19, there was a mandatory new hire orientation at the Greenbelt Marriott which could
take between 2 and 3 hours. Jones attended October 19 orientation. It was for future
Paragon employees only and it was attended only by incumbent employees of the prior
contractors. Future AEPS employees did not attend. Jones was given documents at the new
hire orientation including: a Paragon employment handbook, and a folder for the benefit 25
package. Waddell spoke at the meeting, and one officer asked whether they could wear the
boots they were already wearing or if the boots had to be company issued. Waddell said
company boots had to be worn unless it was okayed by the government. However, Jones
testified he currently does not wear company issued boots and he has never been disciplined
for not doing so. During the meeting, Raines also spoke. Jones testified that neither said 30
anything about training pay rate, unpaid lunch breaks, uniform allowance, or shoe allowance.
Jones testified, during the meeting, the floor was opened for questions. One officer asked
about the health plan and whether if they already had their own health insurance could they
still be paid a cash payment in their paycheck. The response was no it would be put in a
401(k) plan. After the presentation was complete, Raines told the officers they could go to 35
the parking lot and get their uniforms. Jones went to pick up his uniform and then left. Jones
received a name tag as part of his uniform. The Paragon handbook Jones received states
under the heading of “Uniforms and Appearance” that “You will be issued either ‘wash-and-
wear’ or ‘dry clean-only’ uniforms, at no cost to you.” It later states, “If you are issued a
uniform that requires dry cleaning, the local contract office will make arrangements to either 40
provide clean uniforms to you, or reimburse you for dry cleaning expenses.”
On October 26, Jones attended a mandatory quarterly USDA training meeting conducted
by USDA employees. The whole force of SPOs attended which included SPOs to be hired by
Paragon and AEPS. Jones testified security officers working in the Carver Center building in 45
Beltsville also attended the meeting, although they are not part of the bargaining unit. Jones
testified that, after the quarterly meeting was over, George Devers, a representative of AEPS
spoke.9 Devers stated AEPS was the prime contractor and Paragon the subprime. Jones did not

9 Respondents in their answer state Devers’ title is director of security operations for AEPS,
and they admit that he is a statutory supervisor and agent of Respondents.
JD–55–15
8
remember Devers taking questions. Jones testified he did not ask Devers any questions
because AEPS did not concern him.
Jones testified it was after AEPS and Paragon assumed operational control that he
learned that he was no longer receiving an hourly uniform allowance. Jones testified he learned 5
that, “When we got our first paycheck.” Jones testified that, at that point, no one from the
company had told him that he would not be receiving a uniform allowance. Jones testified that
AEPS had sent shoes to the site so Jones thought this would take the place of the prior shoe
allowance. However, he testified that Paragon never sent shoes. Jones testified that prior to
October 28 he was never told by a representative of Respondents that the shoe allowance would 10
be discontinued but he was told this at a later date. Jones testified that for the October 26, 2013,
training he received training pay at $8.25. Jones testified that when he received training while
employed by USEC they received their regular hourly rate. Jones testified the typical length of
their shift was 8 hours when he worked for USEC. Jones testified for that company when he was
scheduled for 8 hours he was paid for 8 hours. Jones testified that when he worked for Paragon,15
prior to the parties agreeing to a new collective-bargaining agreement, when he worked 8 hours
he was paid for 7 ½ hours. He testified the change was he was receiving an unpaid 30 minute
lunch break, while he was paid for his lunch break by the prior employer. Jones testified that his
lunch break first changed to being unpaid a couple of weeks after Paragon and AEPS took over
the contract. Jones testified his breaks were not changed the first day of his employment. Jones 20
testified for the first couple of weeks, he believed he was receiving a paid lunch break. Jones
testified in his capacity of union officer he was only aware of one predecessor employee who was
not h i r e d b y R e s p o n d e n t s a n d t h a t w a s b e c a u s e the employee failed a drug test.
Jones attended a guard mount meeting at the beginning of every one of his shifts. He 25
testified that in, August and September 2013, Lt. Hayes was giving the guard mounts Jones
attended. Jones testified he works 5 days a week and he did so in August and September.
Jones testified he never heard a guard mount supervisor talk about the substance of a document
which Ortman later identified as a document he had generated concerning the transition and
which Ortman testified had been discussed regularly at guard mounts. Jones testified he was 30
never told he was going to receive a 30 minute unpaid lunch break when the contract turned over
to AEPS or Paragon during the pre-transition guard mounts. Jones testified during the last 90
days while he was working for USEC, he was working the 11 to 7 shift. Jones tested then Major
Peter Covington and Ortman never conducted guard mounts Jones attended.10
35
Timisha Fitzgerald Walker (Walker) testified her name has also been Timisha Fitzgerald,
and currently Fitzgerald is her middle name. Walker is an SPO employed by AEPS in the South
Building. Walker became a security officer at USDA in 2000, and has worked there continuously
since. Walker has been a union steward since 2006. She has never been a chief steward.
Walker testified all of her coworkers with USEC and Securiguard became employees with 40
Respondents, except one. Walker testified as follows: In mid-September 2013 Walker saw a
posting on the officers’ bulletin board that Paragon and AEPS would be taking over the USDA
contract. The memo contained no company logos, and it stated the security officers needed to
see Ortman in reference to the new contracts to find out which company the employees were
assigned to. Walker spoke to Covington prior to speaking to Ortman. Covington told Walker to 45
speak with Ortman in reference to her company assignment, and the officers would probably
have to provide their email address so they could be sent to a link as Covington believed
everything would be done online. Covington told Walker it was more likely she would be working

10 Respondents admit in their answer that Covington is a captain at Paragon, and he is a
statutory supervisor and agent of Respondents.
JD–55–15
9
for AEPS since she was currently assigned to the South Building. Around 2 days later, Ortman
called Walker and stated she needed to give the company her email address so they could send
her the link to apply for employment with AEPS. Ortman told Walker she needed to make sure
she had her dates of certification to complete the process. Walker gave her email address to her
supervisor that evening. The bargaining unit is only security officers and excludes, sergeants, 5
lieutenants, captains, and majors. Walker testified Ortman was the liaison for AEPS during the
contract transition process.
Walker testified she received an email from AEPS on September 23. Walker testified the
email “was generally a basic e-mail offering employment and to go to the link.” The email 10
provided an on line link for employees to begin the application process. Walker testified other
than the link there was no substantive writing in the email. Walker explained her reference to the
email as an offer of employment stating it said, “if you wanted to apply for employment with
AEPS, that we needed to go to the link and follow the link.” When Walker clicked on the email
link it took her directly to the AEPS application process. Walker testified that: The link eventually 15
took her to different policies she needed to sign off on. Walker submitted a resume at the time
she submitted her application. The first email AEPS sent Walker was the link to AEPS
application site. Walker completed her online application on September 25. While she was filling
out the application she also completed her federal and state tax forms and the I-9 form. While
completing the application, Walker also reviewed: a nondisclosure agreement; a sleeping-on-the-20
job policy; and a zero tolerance acknowledgment. Walker filled out or reviewed all this
information while completing her application on line. She testified this was all part of the
application process. Walker testified she had to complete her certification dates for her CPR/first
aid, AED, and things of that nature. She testified she also provided direct deposit information
while filling out her application including her bank routing and account number. Walker testified 25
that while completing the on line application AEPS did not tell her there would be any change in
her working conditions once they took over the contract. However, the application states her
employment was “at will” and she could “be terminated at any time without any previous notice
and without any requirement of cause.”
30
Walker received confirmation by email on September 25 from AEPS that they received
her application. While she found emails from AEPS dated September 25 and October 17, she
could not find the email she received on September 23 containing the link to the application
website. Walker testified she usually saves job related emails, but she no longer had the email
with the application site link because she had received confirmation that she was going to be 35
employed from AEPS via the September 25 email. Walker testified a couple of days after
completing her application she gave her driver’s license and social security card to Lamont Isaac,
the administrative representative for AEPS at the USDA site.
Walker testified there was a government shutdown in 2013. Walker testified her next 40
contact from AEPS was an October 17 email. The email addressed to Timisha Fitzgerald stated
it is from Ortman and Walker was being extended a contingent offer of employment to work for
AEPS as an SPO effective October 28. The email stated the offer was contingent on Walker’s
satisfaction of all federal and state government required licensure, training and suitability
qualifications, including medical and firearms testing and a pre-employment drug screen. The 45
offer included Walker’s hourly wage and fringe benefit rate, and stated the fringe benefit will be
directed towards a company sponsored medical plan, or under certain circumstances, towards a
company-sponsored 401(k) account, pre-tax. It mentions other benefits in terms of holidays, and
vacation. The email states, “Shift schedules will be determined in accordance with the
operational needs of the contract, with consideration given to employee seniority. Breaks will be 50
provided in accordance with Company policy and in compliance with any applicable State and
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Federal law requirements and subject to the operation needs of the contract.” The email states,
“Training will be paid at a rate of $8.25 an hour.” The email states Walker’s employment is at will,
which included the employer’s right to terminate Walker without notice or cause. The email
stated that pursuant to Executive Order 13495, Walker was being given a first right of refusal for
this job opening. The email stated, “If you intend to accept employment with AEPS, please print 5
this letter, sign it, and give the signed letter to Ortman, the project manager by October 28.
Walker testified when she received the October 17 email she went to speak with Ortman
in his office. No one else was present. Walker testified that: She told Ortman she had received
an offer letter from AEPS but she had some concerns regarding the letter in reference to health 10
and welfare issues and the rate for training pay. Walker testified Ortman, “stated that as far as
the health and welfare is concerned, that he was on the phone speaking with the company
currently in reference to this matter.” Walker testified she told Ortman, “if they're going to take
our health and welfare, that I'm not going to be signing this letter.” Walker testified Ortman said,
“this is basically a general letter that we received for employment and not to worry about it. And 15
that as long as we, you know, as we do our part, he'll do his part in reference to that.” Walker
testified Ortman’s statement that “we do our part” was in reference to “we the Union.” Walker
testified Ortman said, “he'll do his part. He'll be talking to the company in reference to it.” Walker
testified upon Ortman’s “reassurance that this was basically a general offer letter and that he also
stated that he didn't think so, as far as them taking our health and welfare and things of that20
nature, I signed the letter.” Walker testified that, after talking to Ortman, she signed the offer
letter accepting employment on October 18 the same day of the conversation and submitted it to
Ortman. Walker testified there were no job fairs by AEPS, and she was never interviewed by
AEPS before receiving the October 17 offer letter.
25
Walker testified in terms of taking their health and welfare that meant the employees
would not be receiving their health and welfare as a cash benefit as they had with the
predecessor employer, but they would receive it in some other form. Walker testified that with
the prior companies when she took the cash she paid for her own health and welfare and she
used portions of the money to put in her own savings account. Walker testified now they are 30
taking the health and welfare and a chunk of that money is going towards the employee’s health
insurance and it is much more expensive than what she was paying for on her own. Walker
testified it was less expensive for her to take the money and buy her own insurance.
Walker testified that after submitting the signed letter of acceptance she was required to 35
give her uniform size, which she provided the following week. Walker testified she received the
uniforms the next week and it was prior to AEPS taking over the contract. Walker testified she
picked up her uniform in the security office where all the uniforms were in bags with the officer’s
name on them. She also picked up her name tag, and there were shoes there for them to pick
out their shoe sizes. Walker testified that when she picked up her uniforms nothing was 40
discussed about the uniform allowance, the shoe allowance, or other working conditions. The
uniforms were the same as the prior uniforms except the color of the shirt changed. Walker
testified that prior to AEPS taking over she supplied her own shoes.
Walker testified that, after picking up the uniforms, there was a memo posted stating there 45
would be a mandatory USDA quarterly meeting, and an orientation on Saturday, October 26.
Walker testified George Devers, Ortman, and Covington attended the October 26 meeting.11
Walker testified that after the quarterly meeting they had orientation which lasted about 30 to 45

11 Respondents admit in their answer to the complaint that Devers has the title of director of
security operations for AEPS and he is a statutory supervisor and agent for Respondents.
JD–55–15
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minutes. Ortman and Devers spoke at the orientation. Walker testified that: Devers stated AEPS
and Paragon would be taking over the contract. Devers did not discuss working conditions or say
anything about: break, uniform allowance, or shoe allowance. Devers spoke for around 10
minutes and then opened the floor to questions. SPO Sherrie Gaines raised some questions
concerning the 401(k) plan. Then another officer asked if they would be taking the employees’5
health and welfare. Devers stated health and welfare would go towards a company sponsored
health insurance plan. Then the question was asked what if they have their own health
insurance, and Devers said then the money would be rolled over to a 401(k) plan. There was
also a question as to whether they would be paid $8.25 an hour for training pay and Devers said
yes. In response to a question, Devers stated they would be receiving $8.25 an hour for the 10
meeting they were attending. Their prior employers had paid their training at their hourly base
rate at $26.76. Walker testified the issues in the offer letter were issues they discussed during
the October 26 meeting. Another issue discussed was whether 32 hours would still be
considered full-time employee status. Walker testified the question was asked because officers’
hours were being cut and they wanted to know if 32 hours would still be considered full-time 15
status. She testified Devers said he was not aware of any hours being cut, but 32 hours is still
considered full-time status. Walker testified officers asked why there was a difference between
the Paragon pay and AEPS pay in reference to how frequently they will be getting paid. Walker
testified Paragon employees were currently being paid bi-weekly and AEPS employees would be
getting paid twice a month. Devers stated it will remain that way because that is how AEPS 20
distributed their payroll. Walker testified breaks, shoe and uniform allowance were not
discussed.
Walker began day working for AEPS on October 28. Walker testified that under the
predecessor employers she did not receive any unpaid breaks. Walker testified that when she 25
started working for AEPS her breaks remained the same, but they eventually changed. Walker
testified that her breaks changed around the end of November or beginning of December 2013.
Walker testified that her breaks or her daily hours were reduced by half an hour. Walker testified
that, when she asked Ortman about it, she was told it was because they were deducting a half an
hour for the lunch break. Walker was aware other employees’ breaks changed immediately30
under AEPS in her capacity as steward. Walker testified that they had issues concerning the 30
minutes that was being deducted from their checks. Walker identified some of her AEPS pay
stubs. As per the pay stubs, on October 29, Walker worked 7 a.m. to 6:15 p.m., and she testified
she was compensated 11.25 hours for that shift. Walker testified she received a paid lunch break
that day as she was compensated for all hours worked for her entire tour. Walker testified her 35
pay records for November 29, 2013 show she worked a shift of 8 a.m. to 3 p.m. Walker testified
she received a paid lunch break that day because she was paid for all hours on her tour which
was 7 hours. Walker testified that after the breaks changed to unpaid she continued to work the
7:00 a.m. to 6:15 p.m. shift but was only compensated for 10.75 hours for that shift.
40
Walker testified the uniform allowance was a line item in her pay stub when she worked
for the predecessor employer. Walker testified that when she received her first paycheck for
AEPS it did not have a line item for uniform allowance. Walker testified that in her capacity as
shop steward she was made aware that AEPS did not offer a shoe allowance. Walker testified
she first learned there would be no shoe allowance in the beginning of 2014. She testified there 45
were officers that had gone to Isaac stating the shoes they had been issued through AEPS were
uncomfortable and they were going to purchase new boots. Walker testified that when they gave
Isaac their receipts he submitted them but was told the company does not offer a shoe
allowance. Walker testified the predecessor employers provided a shoe allowance as employees
were reimbursed for the shoes they purchased. Walker testified the AEPS issued shoes are 50
uncomfortable for her. Walker testified that only about 10% of the guard workforce wears the
JD–55–15
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company shoes, the remainder, including her, wear their own shoes. Walker testified she has not
been disciplined for not wearing company issued shoes.
Walker testified that, after she received the email offer letter from AEPS on October 17,
she was never sent any other online link by AEPS. Walker testified that the last time she 5
completed any hiring related documentation for AEPS was the offer letter on October 18. Walker
testified she never filled out any other documentation after the government shutdown related to
policy acknowledgments. Walker testified concerning an AEPS computer printout with the name
at the top stating Timisha Donnatta Fitzgerald Walker. Walker testified the printout appeared to
be unusual because in 2013 she was not using her married name at work which was Timisha 10
Donnatta Fitzgerald Walker. Walker testified she was only using Timisha Donnatta Fitzgerald at
the time. Walker noted the printout contained employee typed signature acknowledgments dated
November 20, 2013. Walker testified she did not create any employment files in 2013 under the
name to Timisha Walker. Walker testified she changed her name for work purposes to Timisha
Walker in late April or early May 2014. Walker testified that in order to get her SPO, which is her 15
armed commission for D.C., she had to provide them with her name change information. She
had to supply a copy of her driver's license, and that was when she began the process of
changing her name for work purposes. Walker testified she had to provide AEPS a change of
personal information form and a copy of her marriage certificate. Walker was shown a similar
AEPS computer printout where her name appeared as Timisha Donnatta Fitzgerald, which 20
contained typed employee policy signature acknowledgments by her dated October 21, 2013.
Walker testified she never went through the policies and acknowledged them a second time.
Walker testified she submitted one application and, within this application process, she had to
complete these acknowledgements at that time. Walker testified once she completed them she
received her application has been submitted confirmation in September. Walker testified that no 25
AEPS representative ever told her there was a problem with her policy acknowledgement. She
testified she never completed the policy acknowledgments separate from her job application.
The AEPS printout with the employee acknowledgement signature dated October 21, contains a
W-4 tax form with the last name Fitzgerald. The same form with the employee acknowledgement
dated November 20, was introduced and it contains a W-4 tax form with the last name Walker. 30
Walker testified she never changed her tax information with AEPS.
Walker testified she was working 4 days a week in August through October 2013. She
testified she had four guard mounts a week during that time. She testified some of the subjects
were covered at guard mounts prior to Respondents assuming the contract pertaining to a 35
typewritten document she was shown at the hearing which had been identified by other
witnesses as a memo generated by Ortman. However, she testified that concerning health and
welfare they did not say at the guard mounts that the health and welfare would go to insurance.
Walker testified what was said was that they needed proof of insurance. Walker testified after
AEPS came in they were told if they did not have health insurance they were going to be required 40
to take health insurance through AEPS. Walker testified she did not hear this said during pre-
take over guard mounts. Walker testified in the guard mounts before AEPS took over they just
said if you have health insurance you are going to need to provide proof of health insurance. She
testified they were not told that they were going to be required to take health insurance with
AEPS at that time. Walker testified it was discussed at pre-October 28 guard mounts that they 45
would be moving from white to blue shirts and they needed to make sure that they completed a
drug screen. They also talked about getting new radios. They were told to make sure they
provided their social security cards and driver’s license. Walker testified that prior to the
changeover there were no guard mounts in which the employees were told they would be
receiving a 30 minute unpaid lunch break. She testified if they were told that then it would have 50
been an issue raised at the October 26 meeting, but it was not discussed at the meeting. She
JD–55–15
13
testified it was also not stated immediately after the changeover. Walker testified Ortman never
participated in her guard mounts. She testified his time of arrival was not that early. Walker
testified her guard mount was at 7 a.m., and sometimes she attended the 6:45 a.m. guard mount.
5
Sherrie Gaines works as an SPO for AEPS, and was previously employed by
Securiguard. Gaines has served as vice-president of the Union since 2007. Concerning
applying for employment with AEPS, Gaines testified around the middle or end of September
the supervisors asked the officers for an email address to enable AEPS to email a web link so
they could get into the AEPS system. Gaines received an email from AEPS with the link to file10
an application. Gaines testified there was no substance in the email, except for the link. Gaines
used the link to apply for employment. When she followed the link it enabled Gaines to
complete “All the stuff that you would fill out for employment. We had banking information was in
there, W-4s was in there, harassments, that kind of -- everything that you would fill out.” Gaines
testified there were policies and a handbook policy there. Gaines testified you had to 15
acknowledge the policies on line by checking off on them. Gaines testified everything was done
online. Gaines thought she filled out the online application in early October. Gaines completed
the application within a couple of days after she received the email link. Gaines testified that,
after she completed the application, she never used the link again to go back on line and
complete any other information. Gaines was shown a questionnaire which she testified was part 20
of her application to AEPS. She testified that she completed the information on the document.
The date on the application is September 26, and Gaines testified she had no reason to doubt
that date. Gaines was shown another document which contained the heading “acknowledgment
signatures”. She recalled going through a series of pages and having to read different
documents and acknowledge them by clicking an acknowledgement. When Gaines was asked if 25
she had any reason to doubt that she did this on October 19, which was reflected on the
document, Gaines asked why it was a different date from the other document which showed
September 26. Gaines testified she thought she filled out both documents together as part of
one packet. Gaines’ recollection was she completed the policy acknowledgment signatures at
the same time she completed the job application. 30
Gaines testified she received a job offer from AEPS by email, which she signed on
October 17. Gaines testified that, after receiving the job offer, she did not go back on line and
complete additional information for AEPS. Gaines testified she had already completed the
information on line when she received the offer letter. She testified the offer letter had Ortman’s 35
name on it so she phoned Ortman the day she received the letter. Gaines testified her talking to
Ortman was the only reason she signed the letter. Gaines was at home at the time of the
conversation and Ortman was in his office. Gaines told Ortman she was calling about the offer
letter and she said it states they were going to get $8 and some change in training pay and they
were going to take their health and welfare. Gaines asked Ortman what was going on. Gaines 40
testified, “He said don't worry about it, it's a general letter, go ahead and sign it, everything will
be okay.” Gaines testified that after she spoke to Ortman she signed the offer letter, took it to
work and gave it to Ortman.
Gaines testified that in the month leading up to AEPS taking over she worked 3 days a 45
week. Gaines testified she attended a guard mount at the start of every shift. She testified that
at the time Cpt. Brooks did the guard mount. At the hearing, Gaines was shown a copy of type
written document which Respondents claim was used as a guard mount talking point. Gaines
testified she had not seen this document prior to the hearing. She testified the items in the
document were not covered at the guard mounts she attended. Gaines testified she was never 50
JD–55–15
14
told at a guard mount that she would be receiving a 30 minute unpaid lunch break. Gaines
testified she would have recalled hearing this because it would have altered her pay.
Gaines testified she attended the October 26 quarterly meeting at the USDA. Gaines
testified that after the meeting there was an orientation. She testified Devers was present for and 5
took questions during the orientation. Gaines testified that during the meeting employees asked
about health and welfare. She testified they did not ask about a training rate. Gaines testified no
one asked questions about breaks. Gaines testified that no representative of management told
her prior to that orientation that her breaks would be changing.
10
B. Respondent’s Witnesses
Devers works for AEPS as director of operations. He is based in Austin, Texas. Devers
testified that: AEPS is a government and commercial contractor and 80% of its work is done with
the federal government. The scope of AEPS operations is from east to west coast, and AEPS 15
has about 26 federal contracts. Devers was involved in the process of AEPS acquiring the
contract at the USDA buildings. Devers received a copy of the USEC collective-bargaining
agreement (CBA) as the USDA contract had the CBA attached. AEPS used the USEC CBA to
comply with the Service Contract Act (SCA), in lieu of a wage determination. Devers testified he
gave no consideration to adopting the USEC CBA stating AEPS is not required to, and he prefers 20
to negotiate his own CBA.
Devers testified AEPS’ obligation with regard to the incumbent officers under the SCA
was to follow all the financial and fringe benefits of the prior CBA. Devers testified the hourly rate
for the guards would not change. The health and welfare benefit amount cannot change under 25
the SCA, and they would still receive the same number of holidays and same vacation. Devers
testified under the Executive Order when AEPS takes over a federal contract the incumbent
employees have the right of first refusal concerning employment. Devers testified that, “We offer
them employment under the terms and conditions, and it's up to them if they want to accept it or
not.” Devers testified there is no requirement under the SCA as to whether the employer pays on 30
a weekly, bi-weekly, or bi-monthly basis. As to fringe benefits, he testified there is an amount
that has to be paid, and the employer has the right to decide how to pay it. Devers testified under
the SCA there is nothing the employer is restricted from doing in connection with work schedules
which are based on operational need or contract necessity. There is nothing in the SCA
restricting the employer in setting break schedules.35
Devers testified when AEPS is going to take over a site it does not know if the incumbent
employees will accept AEPS’ offer of employment. He testified the incumbent employees might
also not successfully complete the requirements for AEPS’s contract which may be different than
the predecessor contract. Devers testified the qualifications the guards need to meet for the 40
USDA contract include: a seven panel drug test; a physical; a physical agility test administered by
the government; and two weapons clauses. However, Devers testified the employees of the
predecessor are required to maintain qualifications for employment with the predecessor
employer. Devers later testified he did not believe there was a requirement change for AEPS in
this instance in that other than drug testing there was no change for this contract in terms of the 45
employees’ requirements.
Devers testified that: Devers was in contact with the predecessor project manager
Ortman as early as August 9. Devers approached Ortman toward the end of August about
becoming project manager for AEPS and he advised Ortman that Ortman would be AEPS50
transition steward. When Ortman was first employed by AEPS, Ortman was still working for
JD–55–15
15
USEC as their project manager. Ortman became salaried for AEPS at the AEPS contract
startup. Devers testified Ortman was working hourly for AEPS prior to then beginning toward the
end of August, early September. Devers testified Ortman had the title project manager for AEPS
as of August 2013.
5
Devers testified that: During the transition period, Devers provided Ortman with various
instructions for employees, and depended on him to convey AEPS’s position to the employees.
Devers told Ortman initially Devers was not sure of all of the parameters of the USEC working
conditions. However, Devers knew from prior transitions they would only be honoring the fringe
and financial portion of the predecessors’ CBA. He testified the guards hourly rates would be the 10
same, health and welfare would be directed either to a companywide health insurance or a
401(k) in that if someone had insurance and showed proof of it goes to the 401(k). If they do not
have proof of health insurance it goes to the health plan and the remainder goes to 401(k).
Devers told Ortman everyone’s holidays and vacations would be maintained as the status quo.
Devers told Ortman whatever questions he received to contact Devers and they would compile a 15
list of answers and answer everyone’s question at one time. Devers testified it would have been
at the end of August time frame, 60 days prior to the contract, when Devers told Ortman they
would not be following all of the prior CBA. Devers testified that, during the transition period,
Ortman sent him incumbent rosters. Ortman was also charged with making sure employees’
sizing documents were submitted. Devers testified that a minimum of a week or two before 20
AEPS’s start date they had to order employee name tags at AEPS expense. Devers testified
they had to have them when the employee’s picked up the uniforms.
Devers testified Ortman phoned him with several questions from employees Ortman had
received. Devers provided him answers to the questions. Devers testified that as to shoe 25
allowance they were providing shoes so there would not be a shoe allowance. Devers testified in
their work statement there was a particular shoe USDA dictated all the officers needed to wear.
Devers testified he discussed these points with Ortman and these discussions took place by
phone about 60 days prior to the start of the AEPS contract. Devers testified he told Ortman to
answer all the officer’s questions and to let the supervisors know so they could let everyone know30
the answers at guard mounts.
Devers testified for the AEPS’s application process for USDA they had just switched to an
online system employing an IT provider called Kwantek, which they currently use for all jobs.
Devers testified information was relayed to Ortman to have the officers go on the AEPS’ website 35
under employment. They could search by job which would be USDA DC HQ. Devers testified
whenever AEPS is starting a new job site there is a clickable link on the AEPS site which takes
the person to the initial application phase. At that point, they enter their personal information
including name, address, phone number, personal email address and they complete the
application portion of the process. Devers testified they had not used this online process before 40
the USDA contract. Devers testified it was done in stages since they were just starting to use it.
He testified AEPS would supply the documents which Kwantek would load in the system. Devers
testified for the application portion of the process no email with a link was sent to people in
advance asking them to apply because AEPS would not have their email address and it would
not be in the system. He testified the application phase allowed them to enter their email 45
addresses in the system. Devers testified he never asked Ortman to collect peoples’ email
addresses.
Devers testified when someone wanted to apply: The first step would be for them to go
online at the AEPS website and fill out the application. Devers explained an applicant for a 50
USDA job, during this time frame, would go to the AEPS website, then go to careers and
JD–55–15
16
opportunities and there is a search block where the applicant can search all the jobs available in
DC coming up and they click on the one they want to apply for. Devers testified the employees
would know to go to the website because the information was given to them through Ortman for
incumbents or anyone outside because they had inquiries from people outside who were
interested. Devers did not know whether the information was given to the guards as to the 5
website by Ortman verbally or in written form. He did not give Ortman any instructions on how to
distribute the information; stating Ortman was just to make sure people had access to the
company website to start the application process. Devers testified his instruction to Ortman was
to, “Just pass along our website and how to apply.”
10
Devers testified the application process began around mid-September. Devers testified
the Kwantek based software issued a report listing the dates when each person completed the
AEPS application. He testified the report shows the first application was completed on
September 18. Devers testified the report showed Timisha Fitzgerald (Walker) completed the
application on September 25. Devers testified when someone was filling out the application 15
they were not able to fill out W-2 and W-4 forms, policy acknowledgements and things of that
nature. He explained it is a three-step application process. Devers testified the next step in the
process after the applications were received was delayed due to a government shutdown, which
he believed took place from October 1 through 16. He testified offer letters are the next step after
the applications. Devers testified the template for the offer letters is loaded into the Kwantek 20
system and it generates an offer letter with a person’s name, address, and then emails it directly
to their personal email. Devers, upon review of Fitzgerald’s offer letter and its date, testified all
applicants contained on the applicant list received an offer letter on October 17. Devers testified
it is a contingent offer letter and the first line it says, “On behalf of AEPS, I am pleased to extend
you a contingent offer of employment." Devers testified it is a contingent offer letter because, the 25
applicant has not met all of the contract requirements such as passing the drug screen, or
firearms test. Devers testified, under the executive order, AEPS cannot fill any employment
positions until it has offered all of the predecessor’s employees employment.
Devers testified the process of signing off acknowledging the receipt of employer policies, 30
viewing the handbook, W-4 forms completion, things like that could not have been done before
the offer letter was sent out because AEPS had to supply Kwantek with these onboarding
documents to upload in the system, and that was not done until October 16 or 17. Devers
identified what he testified was an internal email dated October 8 stating that new onboarding
with Kwantek will be up by the end of the week. It stated the first new employee for USDA to use 35
the system will be the project manager, and then the other new employees will be starting next
week. Devers testified that Kwantek ran into some problems and it was delayed. He testified
Tara Devers, who sent the October 8 email, is Devers’ wife, but she is also the contract's
administrator for AEPS. Devers testified that no one could have accessed and filled out
information on the system for the onboarding portion prior to October 8. Devers estimated the 40
onboarding would have been available to Ortman around October 12 or 14, and it would have
been available to the field around October 16 or 17.
Devers testified when someone starts using the onboarding process Kwantek sends an
automated response to AEPS. The response is sent to the person who is listed as the manager 45
and who is in charge of the manager called the admin. Devers testified for this job Ortman was
the manager and Devers was the admin. Devers testified the onboarding stage is the third step
to the application process. He testified it is done in three parts, application, offer letter, and then
onboarding. Devers testified Respondent’s Kwantek records reveal Fitzgerald (Walker)
completed the onboarding process on October 21. He testified the onboarding process is that 50
after you complete all the paperwork, you sign stating you have received notification of the
JD–55–15
17
handbook; a drug/background check; sexual harassment, zero tolerance policies; your state and
federal tax forms; and everything in your normal hire packet. Devers testified some of these
Fitzgerald (Walker) would be acknowledging receipt and some she would be filling out online. He
identified a computerized employment document stating the information was filled out by
Fitzgerald (Walker), as per the document, on October 21, when she signed off on all AEPS policy 5
acknowledgments, including ethical value statement, zero tolerance, post-employment safety,
substance abuse, authorization for deductions, and non-disclosure agreement. Devers testified
all of these documents were required to be signed before beginning employment with AEPS.
However, Devers testified that inadvertently the manager was listed as the wrong person on the
document so the document had to be re-executed by some of the employees and the manager 10
who viewed the document. When the documents had to be redone the employee would have to
click on the e-signature each time, and it would show a different date and time.
Devers testified once the documents are signed an employee would have no reason to go
back and redo the documents unless the document was misfiled, or there was a name change, or 15
something of that nature. Devers testified it would only make sense for employees to fill out
these documents prior to being employed. However, Devers testified that in the Kwantek system
once someone entered the system, i.e., to change their state tax form it would show a new date
for acknowledging AEPS policies, although it did not mean that the employee re-acknowledged
the policies at that time. He identified a document pertaining to Fitzgerald (Walker) stating the 20
document shows there was a change to the profile on October 21. Devers testified on the
computer printout containing the October 21, acknowledgments, on the second page the
manager’s signature is blank, and the administrator is signed off as Tara Devers. Devers
testified the manager’s signature should have been Ortman’s, and the administrator should have
been himself. Devers testified this creates a problem for the approval process of being sure that 25
everything was completed correctly. Devers testified the manager's signature is the most
important as it relates to the I-9 form. Devers testified AEPS will be fined for having that
information wrong because the I-9 is not complete and not proper. Devers testified the I-9 was
not properly done because there is no manager's signature listed inside the block, and Tara
Devers is listed as the administrator when she should not have been. Devers testified the I-9 30
was completed on the date shown on Walker’s next record as the signature date.
Devers identified a computer document from the Kwantek system concerning employee
Cynthia Bryant's new hire paperwork. Devers testified it appears she signed on October 21 and
then, for whatever reason, the system listed Tara Devers as the manager and the admin. He 35
testified that on 10/27/2013, it says Tara, pending manager approval. And then on 11/12/2013, it
says Tara, pending admin review. Devers testified this is a problem because there needs to be
two different manager approvals in the process for it to be legitimate, for the system to work
properly. Devers testified the problem was solved, it appears to be that Bryant re-signed the new
hire paperwork and onboarding documents on January 26, 2014. Ortman is listed as the 40
manager on January 27, and Devers is the admin on February 12, 2014.
Ortman works for AEPS as project manager. He had previously been the project
manager for USEC/Securiguard. Ortman testified he was offered a position by Devers to work
for AEPS, and was interacting with Devers as early as August. There was a period prior to 45
October 28 when AEPS was paying Ortman to act as project manager. Ortman estimated this
began around the end of September early October. Ortman met Devers and AEPS Owner
Walker when they came down for the USDA award presentation. Around a week later, Ortman
and Devers began to discuss the transition to AEPS. Ortman testified, at that time, the
discussion included Ortman explaining to Devers how the current contract operated, and Devers 50
explained what AEPS was going to do different. Ortman testified they discussed some of the
JD–55–15
18
initial terms of employment AEPS would set. They talked about the Paragon and AEPS split and
how it would affect the employees who would work for Paragon. It was discussed that AEPS
would maintain the South Building and Paragon would have the Whitten Building. Ortman
testified they talked about how breaks would work and how they would change. Ortman testified
he had many conversations with Devers. 5
Ortman testified that, while working for USEC, he communicated with SPOs at the guard
mount daily briefings. Guard mount presentations to officers are given by Ortman, or one of the
supervisors. Ortman testified they received a lot of questions from the officers relating to pay and
health and welfare and as to what would be changing with the new contractor. The officers 10
wanted to know how it would be determined who worked for which company, what the minimum
hours for work would be for full-time benefits, would the hours change, would the schedule
change, and would post assignments change. Ortman wrote down the questions to go over
some of them with Devers. Ortman identified a document in his handwriting, entitled “Questions
for George.” Ortman testified he wrote the six itemed document in mid to late August. The 15
second item reads, “2. Pay, sick leave, 401(k), insurance, breaks, ???” Ortman testified after he
generated the document he talked to Devers. Ortman testified he made notations concerning his
discussion with Devers, and he identified another document in his handwriting based on those
discussions. The second item on Ortman’s cryptic response sheet relates to pay, H & W, 401(k).
Ortman testified Devers stated the pay will stay the same, health and welfare would go to an 20
insurance benefit or 401(k) plan. It was stated in this sheet in response to Ortman’s list of
employee generated questions the company was setting up an application online which would be
available soon. Ortman testified that his notes continue beyond the six items raised in his initial
question sheet in that on the second page his notes show he discussed shoes, schedules and
tasks with Devers. Ortman testified that at the time it was stated that AEPS was going to provide 25
shoes as part of the uniform. Ortman did not recall if he asked about a shoe allowance for the
officers. Ortman testified his notes concerning his discussions with Devers mention union issues,
training pay, and health and welfare. Ortman testified they talked about the reduced pay for
training and they talked more about health and welfare. He did not recall what the reference to
union issues meant.30
Ortman testified he used the notes he had generated from his discussions with Devers to
put a together a 10 bullet typewritten statement. Ortman testified he discussed with Devers that
Ortman would put the information out at guard mounts. Ortman estimated he prepared the
document at the end of August or about 60 days prior to the October 28 startup because of the 35
language contained in the document supported that time table for its dissemination. Ortman had
no independent recollection of when the document was created. Ortman testified the document
was generated before the application process began because the document states the
application process will be determined soon. The document reads:
40
Sups, pass along the following at each GM. With the contract change we have a lot to do
in the next 60 days. I know we already heard grumblings about pay status and
schedules. Here is what I know so far.
 Pay will stay the same.
 H & W will go to insurance or 401k (Officer has to provide proof of insurance for 45
401k).
 Some schedules will change due to roster split and Company post assignments I
will do my best to make it as minor as possible.
 Lunch breaks will be reduced to 30 minutes unpaid with a 10 minute paid morning
break. Restroom breaks will remain the same.50
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 Uniforms-Officers have blue shirts Supervisors will have white; shoes will be
provided by the company. Lt. Straughter will be getting with the officers for
uniform sizes. We will still be wearing the straw “Trooper” hat. Each Officer and
Supervisor has to complete a physical and drug screen due by date TBD.
 We will be getting new radios.5
 Application process will be determined soon.
 Paperwork, birth certificates, SS card, HS diploma/GED, you going to need to get
this information ready to be turned in for you processing.
 PT test has been pushed back until the next refresher training.
10
Ortman testified the document was placed on a clipboard the supervisors use when they
do a guard mount and they read it directly off the clipboard to the officers. Ortman testified there
were around eight supervisors, and all eight use the same clipboard. Ortman could not recall if he
put the memo on the clipboard or if he gave it to Covington to place there. Ortman testified he did
some of the guard mounts when he read the document. Ortman testified that guard mounts using 15
this document were done for at least a month. He testified there were three or four main guard
mounts a day. When asked if the document was read four times a day for a month, Ortman
responded, “It’s read at each guard mount, correct. The same officers don’t attend the same
guard mounts, yes.” Ortman testified that guards are required to attend a guard mount prior to
their shift so every time they are scheduled there is a guard mount. He testified the guards would 20
have heard the memo read to them at least once a day for the days they worked during this 30
day period. Ortman testified he had a discussion with the supervisors before giving them the
document to place on the clipboard. He told them about the conversation he had with Devers and
some of the changes that were going to be taking place, how to get the information out, and how
to take questions from the officers. Ortman testified the employees worked 5 days a week, some 25
less some more and that on average the document would have been read to them 20 times
during a month period if Ortman’s instructions were followed. Ortman testified it was not sufficient
to read the information two or three times over the course of two or three days because, “We
wanted to keep putting the information out so everybody had it.” Ortman testified the document
was read at the guard mounts starting at the end of August. Ortman later confirmed that his 30
typewritten memo was read for 30 consecutive days at guard mounts, and employees who
worked 5 days a week would have heard the speech 20 times. Ortman testified as follows:
JUDGE FINE: So these guards would have heard this read to them at least
once for 30 days?35
THE WITNESS: Correct.
JUDGE FINE: At least once a day for 30 days that they worked.
THE WITNESS: Correct.
Ortman testified the guard mounts take place in the security office outside Ortman’s office 40
door. He testified he heard or attended guard mounts where the transition memo was discussed.
Ortman testified officers Jones, Gaines, Mozon, Swann, and Coffer complained about the
announcement, and that the majority of the staff complained at the guard mounts. He testified
Jones and Mozon complained about health and welfare, non-paid breaks, the lunch breaks, the
reduced 15 minutes to a 10-minute break. Ortman testified Jones complained about the 45 45
minute lunch break to the 30 minute unpaid lunch break. He testified officers Coffer, Robin,
Tilghman, Petway, Proctor, Timisha Fitzgerald and Swann complained about the same
things. Ortman testified these conversations were prior to the offer letters.
Ortman did not recall the exact date the application process began. Ortman testified he 50
JD–55–15
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spoke with Devers on the phone and determined the best way to do the application process was
to set up a workshop for the officers before and after duty, on their days off, and during their
breaks. He testified they set up workstations in the security office, but they did not have to do the
applications in the security office. They could have done them at home on the computer.
Ortman testified they communicated to officers about doing the application by posting it on the 5
board and verbally at guard mounts. Ortman testified he did not retain copies of what they
posted as USDA changed the computers and Ortman lost all his information when they put the
new computer in.
Ortman testified officers completed applications and the next step after the applications 10
was the offer letter. Ortman testified he did not prepare the offer letters but he printed them out
and had each officer sign them. Ortman testified he signed the letters. Ortman testified the
officers also had to complete I-9’s and he had staff assisting him for everyone to complete the
paperwork. He testified it involved each person coming down and doing the workshop. Ortman
testified the additional paperwork was completed in the security office and on line. He testified 15
they were two computer stations at the security office where the officers were required to
complete the paperwork. He testified they could not complete the second part anywhere else,
and they could not complete the I-9 process at home.
Ortman denied having any phone conversations with Walker about her offer letter. As to 20
the offer letters, Ortman testified the officers came in, read them, and then signed to accept or
not accept. Ortman testified he asked the officers if there were any questions and there were no
questions as to the offer letters. Ortman testified he met Walker with her offer letter in his office.
Ortman testified he met with every AEPS officer about 65 individually about the offer letter and
none of them had a question about the letter. Ortman testified that, when he met with Walker, 25
she did not say anything along the lines of she really did not want to sign this the way it is and
she did not agree with the things in there. Ortman testified there was a place she could have
declined and she did not say anything. He testified she accepted the offer. Ortman denied
saying anything suggesting Walker could ignore what was in the letter. Ortman testified it was
the officer’s option as to whether to accept or decline the position and, “I didn’t encourage her to 30
do it or not to do it.” He denied telling Walker not to worry he was going to work this out with
AEPS and she was not going to have to do any of the things in the letter. Ortman testified he did
not have the authority to do that.
Ortman testified he never had a conversation with Jones over the terms and conditions of 35
employment offered by AEPS. Ortman testified he did not remember any phone conversations
with Jones about his offer letter. He denied having a conversation with Jones in which Jones
said something like he was not sure whether he should sign the offer letter and he was not happy
with the things in it. Ortman denied telling Jones that he did not have to worry about what was in
the offer letter and Ortman would take care of it. Ortman testified he knew he did not have such 40
a conversation because Jones works for Paragon and Ortman had nothing to do with his offer
letter. Ortman testified his communication with Paragon concerning its job fairs and orientations
was done through Rick Waddell, who ran the Paragon satellite office in D.C. Ortman testified
Waddell would send information through an email and Ortman posted it. Ortman testified
Waddell did not ask Ortman to make statements at guard mounts for Paragon. 45
Covington works for Paragon at USDA as a captain and a site supervisor. Prior to
working for Paragon, Covington worked for USEC. Covington had the title of major with USEC
and he was a site supervisor. He testified he went from the position of major to captain with
Paragon as he was informed there was no need for a major with this contract. Covington testified 50
that, as a major at USEC, he did quite a few guard mounts. Covington testified the day Ortman
JD–55–15
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found out Securiguard lost the contract, Ortman called Covington into his office and said
AEPS/Paragon had obtained the contract. Covington estimated this conversation took place
around June or July 2013. Covington testified since the contract was changing hands they did
not know if they would be retained, and they had no idea what Paragon or AEPS would be
offering at the time. Covington testified that, as time went on, Ortman told Covington site 5
changes were coming. Covington estimated Ortman informed him there might be changes
around a couple of weeks after Ortman initially told him that AEPS and Paragon were taking over
the contract. Covington testified, around the middle of August, Ortman told him there was a
possibility they were going to use Covington as a captain. In this regard, Covington testified
Ortman told him there was a possibility Ortman would be project manager for the new contractor, 10
and, if so, Ortman was going to request Covington be retained as captain.
Covington testified the site for Paragon is the Whitten Building which is the administrative
building. Covington testified the Whitten Building is across the street from the South Building
which is the AEPS site. Covington testified the security office and the supervisor’s office is in the 15
South Building which is where he starts his shift. He testified he will eventually go to the Whitten
Building to check on the officers then he returns to the office in the South Building. Covington
testified the Whitten Building has five posts with a total of 18 officers working for Paragon. On
the morning shift, there are six officers on duty three on each side as there are two entry points.
The afternoon shift eventually breaks down to just two officers, one on each side, and the night 20
shift has one officer. Covington testified the South Building is much larger, and there are a lot
more officers with at least 30 posts. Covington estimated there were 35 to 36 officers on the
morning shift, 9 on the afternoon shift, and around 4 on evening shift in the South Building.
Ortman is the project manager for both buildings, as well as for the Carver Center in Maryland.
While one building is run by Paragon and one by AEPS all the officers eventually report up 25
through the ranks to Ortman. Covington testified there are a tunnel as well as a walkway
connecting the Whitten and the South Building and you can go from building to building without
going outside. Covington testified the guard mounts for officers working in both the Whitten and
South buildings are held in the South Building, and the guards from both buildings attend the
same guard mounts.30
Covington testified eventually Ortman told him that because Covington is an hourly
person and receives health and welfare that Covington would not be getting it in his check.
Ortman said you are going to have to select either insurance program or they are going to put it
in a 401(k), but you will not be getting your health and welfare in your paycheck. Covington 35
testified Ortman did not state he was fighting this to Covington. Ortman told Covington that it was
a union issue and they were going to have to let the Union deal with it. When asked if there
came a point in time when Ortman gave Covington more information about the ways in
which AEPS planned to operate in terms of what they were going to provide to incumbents for
wages, benefits, other conditions, Covington testified, “Besides the unpaid lunch breaks, no. I40
don't know any other benefits or any other thing we discussed as far as what's going to
happen during the –“ Covington testified he learned from Ortman as to unpaid lunches that the
breaks would be reduced to 30 minutes unpaid. He testified the morning breaks would be paid
maybe 10 minutes. Covington testified, “I said besides the unpaid lunch breaks and the health
and welfare, no other things that we discussed about benefits.” Covington testified this was 45
later in August getting closer to the time that applications were supposed to start, and it was
getting closer to the contract. Ortman stated that lunches were going to be reduced. Covington
testified the officers were getting 45 minutes and 15 minutes in the morning and Ortman said that
was going to be reduced. Ortman told Covington that he got the information from AEPS.
50
Covington also testified Ortman had a supervisor’s meeting during which they were
JD–55–15
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instructed to get information out to the officers. Covington testified they knew from the meeting
that some officers were going to be with AEPS and some with Paragon. He testified they were
going to have to make selections on who would work for each company. Covington testified they
were going to let them know the pay rate would stay the same, but they were not going to receive
health and welfare. Covington testified Ortman told them to use the guard mounts to pass out 5
this information. Covington testified once they selected, Ortman put names up to let the officers
know which company they were working for and which side they would be on. Concerning
communications at the guard mounts, Covington testified they use a clipboard which contains
daily communications. Covington testified the supervisor who is doing the guard mount goes
over everything on the clipboard. He testified certain information that Ortman wants distributed, 10
Covington leaves on the clip board for 30 days. Covington decides on what stays on the
clipboard, and when he feels everyone has the information he will take the memo off.
Covington identified Ortman’s typewritten memo concerning the transition to AEPS as
being given to him by Ortman to put on the clipboard for the supervisors to pass to the officers. 15
Covington testified Ortman did not give any instructions as to how long it should stay on the
clipboard. Covington did not tell anyone it needed to stay on for 30 days. Covington testified
there is just one clipboard and it is used for each guard mount. He testified officers attending the
guard amounts were people that work for USEC at the Whitten Building and the South Building.
Covington did not recall the date he received the document from Ortman. He estimated it might 20
have been the end of August or the beginning of September. Covington testified that he read the
sentence, "With the contract change, we have a lot to do in the next 60 days", but he did not
verify it with a calendar. Covington testified he did not know if the date was off. However, he did
not have any reason to doubt it was put out 60 days in advance of the operational change.
Covington testified he knew it was done before the application process began because Covington 25
was part of the application process.
Covington testified that at the first guard mount he went over the transition memo by each
bullet. He testified he did not do it every day like this. Covington testified he would not talk about
the uniforms as everyone knew they were getting new colored shirts so there would not be a 30
need to keep going over that. Covington testified in the beginning he would go through it point by
point Monday through Friday and he did that for the first 2 weeks or so. Covington testified that
after 2 weeks he asked if everyone was familiar with the health and welfare and the 30 minute
unpaid lunch breaks and most of them said yes. He testified if they did not he would go into it in
detail. Covington estimated it was on the clipboard 20 to 30 days, he did not know the precise 35
amount, but he did not pull it until he felt comfortable. He testified he was the one to put it on and
who took it off the clipboard. Covington testified he heard the memo discussed when lieutenants
were giving the guard mount.
Covington testified he was present when Ortman talked to officers at guard mounts about 40
what AEPS or Paragon planned to do in terms of operations. Covington testified that when
Ortman was in his office he would hear some complaints and he would step outside and start
participating in the guard mount. Covington testified Ortman said the same thing that Covington
was saying that certain issues were out of their control. Ortman said it was a union issue and
you guys are going to have to work that out. Covington testified that certain things such as if you 45
have a uniform issue possibly we can work on that but certain things they did not control.
Covington testified that Ortman identified the health and welfare, and the 30 minute unpaid lunch
break as things that he could not do anything about. Covington testified Ortman never said in his
presence not to worry about these things and he would take care of it later. He testified he never
heard Ortman say that what they were seeing in the offer letters or other documents were things 50
that they did not have to worry about.
JD–55–15
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Covington testified that he did not have anything to do with the AEPS application process.
Covington testified that he did not do anything in terms of trying to get email addresses from the
officers. Covington testified he never had any conversations with Walker in which he asked her 5
for her email address so he could have it for the application process. Covington testified Paragon
and AEPS employees are on separate payrolls under the name of each company and Covington
handles the payroll for Paragon. Covington testified that Paragon officers were not receiving paid
lunch breaks from day one of the transition. Covington testified he knew because he did the
payroll for Paragon. He did not know whether AEPS employees received paid lunch breaks at 10
the start up.
Yolanda Slaughter works for AEPS as a lieutenant. She previously worked for USEC at
the same location as a lieutenant. Slaughter testified she was one of the supervisors who
disseminated information at guard mounts. Slaughter testified Ortman informed her and the 15
other supervisors AEPS had gotten the contract around the end of July. Ortman stated AEPS
won the contract, they were going in with Paragon and some things were going to change.
Slaughter testified when Ortman had the initial conversation he did not know all the ways things
were going to change. Slaughter testified there was a point when Ortman met the supervisors
and gave them more information about how AEPS planned to operate. Slaughter testified it was 20
over a month before October 28. Slaughter testified Ortman gave instructions about how to
communicate this to the officers stating it had to be at the morning and afternoon guard mount,
which Slaughter she participated in. Slaughter testified there was a clipboard at the guard
mounts which they keep the information on that came from Ortman that was passed to
Covington. She read from the items on the clipboard during the guard mounts. 25
Slaughter identified Ortman’s typewritten memo as one of the pass-ons for the guard
mounts they received prior to AEPS coming aboard. Slaughter testified she used the document
at the guard mounts over a two-week period and it stayed on the clipboard for over a month.
Slaughter testified she starting out reading the document word for word. She testified, “After I 30
done read it for over a week or so, then I know basically verbatim what it's saying. I can look at
one word and know what each line is saying.” Slaughter testified she said the exact words every
time. Slaughter testified she had a guard mount twice a day and she said it twice a day over 2
weeks because there are part-time officers who might not have been at the prior guard mount as
shifts varied. Slaughter testified she works the 6:45 shift and she is there for the 2:45 shift every 35
day. She testified she read the guard mount memo at both shifts every day twice a day 5 days a
week over a 2 week period. She then testified it was over a month because they were waiting on
the new contract to get started. Slaughter then testified, “I'm just going to say over a 2-week
period.” Slaughter testified, “I'm going to say over a 2 week period, but I said it stays on the
clipboard.” She testified she read it twice a day over a 2 week period, but she did not recall 40
the dates she read it. Slaughter testified that she heard Ortman talk about the listings
concerning AEPS on the memo several times at the 2:45 guard mount which was right near his
door. She testified Ortman answered questions at that time. Slaughter testified she heard
Ortman say to the officers that health and welfare was going to go into their 401(k) at the 2:45
guard mount. Slaughter testified that there were six or seven officers there and she heard 45
Ortman say this on around four occasions. Slaughter, upon looking at the document, stated that
it was accurate as to timing that the changeover was 60 days away concerning when the
document was read, and that it was accurate that the application process had not begun yet.
Joyce Henderson works for AEPS as a lieutenant, and she had been a lieutenant with 50
USEC. Henderson testified there came a point when she learned how AEPS planned to operate
JD–55–15
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when they took over the contract. She testified this was shortly after they heard who had
received the contract. Henderson testified when Covington was giving guard mounts he
conveyed this information to her. Henderson testified that Ortman did not have any meetings
with her to talk about how she was going to communicate the different terms and conditions of
employment to the officers, other than when Ortman addressed the guard mount. Henderson 5
testified the initial information she received was AEPS was taking over. Henderson testified that
shortly after that she received a more detailed description at guard mount of what was going to
be different. Henderson was not giving guard mounts at that time but she attended them.
Henderson testified she saw documents on the guard mount clipboard that related to how AEPS
was going to start operations. Henderson recognized Ortman’s typewritten transition memo as 10
being the pass along information they had on the clipboard. Henderson did not recall when it
was put on the clipboard. She testified by reading the document that says 2 months before was
the only way she could determine when it was posted. Henderson then testified she knew it was
posted 2 months before because that was when they initially started talking about what was
going on as far as AEPS coming in. However, Henderson later stated she knew it was before the 15
date AEPS came in and took over, but she did not have independent recollection of whether it
was 6 weeks, 2 months or 3 months. Henderson testified she read the document when she first
saw it and the line, “with the contract change, we have a lot to do in the next 60 days,” was there
at the time she read it. Henderson testified she did not think the line was wrong at the time she
read the document. Henderson testified that, in addition to Covington, she heard Ortman discuss 20
some of the things with the third relief officers concerning issues on the document. She testified
it was in the security office at the guard mount. Henderson testified Ortman would come out of
his office and address the guard mount along with Covington. Henderson testified she heard the
information on the document discussed at the guard mounts for around a couple of weeks,
“because like I said everybody was assuming that AEPS would pick up where USEC left off.” 25
However, Henderson then testified Ortman never said anything suggesting that AEPS would pick
up where USEC left off.
Grady Baker has been employed by Paragon as vice president, operations since January
2008. Baker was involved in the USDA contract award, and has been involved in Paragon taking 30
over federal contracts from a competitor over 50 times. Baker testified Paragon protects federal
buildings, and Paragon is in 42 states and some U.S. territories. Baker testified 90% of
Paragon’s work force is represented by unions, and he estimated Paragon has contracts with the
20 unions. Baker testified he is not aware of any instance where Paragon adopted the
predecessor’s CBA. He testified Paragon uses the predecessor’s CBA to enable them to comply 35
with the SCA to ensure the job their offer to employees meets the required wage and hour
provisions. If there is no CBA in place, they look at the Department of Labor wage determination.
Baker testified, in terms of the wage determination, Paragon needs to comply with wages, health
and welfare, federal holidays, vacation, and depending on the region sometimes a break
provision. Baker testified if there is a union in place, Paragon looks at the same terms in the 40
prior CBA. Baker testified they do not look at other things the prior contractor was providing in
the CBA because they are not relevant. Baker testified, “we are Paragon. Paragon runs their
business the way we run it.” Baker testified with respect to incumbent employees, he
understands Paragon’s obligation is they have a right of first refusal for the positions based on
the Executive Order. He testified Paragon’s obligation is to provide them an opportunity to 45
remain if they meet all requirements for the new contract.
Baker served as the liaison between Paragon and the prime contractor AEPS pertaining
to the USDA contract. Baker was responsible for ensuring they recruit, hire, train and put boots
on the ground for sufficient personnel to carry out the portion of the work assigned to Paragon. 50
Baker testified Paragon’s process of contacting the incumbent employees and giving them a right
JD–55–15
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of first refusal is done by holding a job fair. He testified that is the first step in the process. Baker
testified Paragon follows the same procedure every time they take over for a predecessor
employer. Baker testified the process is Paragon reaches out either through the client or the
incumbent management team to advertise the jobs for both new hires and incumbent employees.
He testified Paragon posts a job fair notice that says please arrive here at this date and time, fill 5
out an application, and that is when they have their initial contact with the employees. Baker
testified they post the job notice on various online formats, and the predecessor employees will
also get it through the client. Baker testified they do not ask the predecessor’s management to
make statements on Paragon’s behalf to applicants about the benefits Paragon will provide.
Rather, Paragon gives the predecessor management a flyer and states please pass this out. 10
Baker testified the predecessor’s management cannot speak on behalf of Paragon as they are
not Paragon’s employees. Baker testified the first point under Paragon’s process at which
Paragon will talk to incumbent employees about terms and conditions is at the job fair.
Baker testified for the USDA contract he posted the jobs on line. He testified they opened 15
up the online application process in their HMS system and they passed out a job fair flyer through
the client, and the incumbent manager. Baker testified the job fair was held for the USDA
location around September 2013. Baker identified Paragon’s job fair announcement for the
USDA headquarters contract, noting it gave the date, time, location and suggested arrival time for
the candidates. Baker attended the job fair. The document includes an asterisked paragraph 20
saying "Paragon Systems is currently accepting applications for incumbent security officers only."
Baker testified for the job fair they try to expedite the process and they hold the job fair primarily
for incumbent officers to come in, apply, go through the process, and move into the pre-contract
training as quickly as possible. Baker testified the job fair was something separate and apart
from what AEPS did. He testified Paragon held its job fair in Greenbelt, Maryland. The job fair 25
posting contains a statement that to be considered for employment, incumbents must complete
all parts of the Paragon application no later than 24 hours before the job fair. Baker testified this
is due to expediency in that they have a lot of people to bring in during a limited amount of time.
Baker testified filling out the application correctly can take an hour to an hour and a half. He
testified they do not have enough time for everyone to fill in the online applications at the job fair 30
because they only have two available computers there. Baker explained there are other reasons
for having people fill out their applications prior to coming to the job fair. One is to know expected
job fair attendance, and whether they need to put in additional effort to hire enough people to
make their commitment on October 28. Another reason is to have the information such as the
applicant’s name and address prior to the job fair to allow Paragon to prepare offer letters and 35
applicant folders in advance. Baker testified then Paragon can get right to the business at the job
fair of the offer, filling out of I-9’s, etc., and then move onto getting them sized for uniforms and
put into training. Baker testified by asking them to fill the application in advance, Paragon is not
making an offer of employment stating it is just an application. Baker initially testified there was
only one job fair at this location, but then identified another document showing there was a 40
second job fair. Baker did not attend the second job fair. Baker testified the holding of the
second job fair meant the first one was not well attended.
Baker testified the procedure at the job fair he attended was when the applicant arrived
they signed in, checked with an HR or operations representative, took the application, a folder, 45
and the offer letter. They have an opportunity to review the offer, sign it, and fill out their I-9’s.
They were also given company benefits documents. Baker testified there is an HR package they
had to fill out. They interview with the HR rep when they are finished completing all the
information. If they signed the offer, then they proceed to getting sized for uniforms and then
assigned to training. Baker testified an applicant could decline the offer at that time. Baker 50
testified Paragon offers the applicant a contingent offer letter, and that is if they pass all the
JD–55–15
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requirements for the new contract this is what they will be paid. Baker testified the applicant can
take the job offer letter home and decide to sign the letter on another date but they cannot move
on with the process until they sign. He testified there is an interview process at the job fair.
During the interview, Paragon brings the offer and the applicant paperwork and the Paragon
representative reviews the documentation with the applicant. Baker testified they are validating 5
the applicant is qualified to continue employment on the new contract. Baker testified he would
not agree that this is just a documentation review but stated it is an interview. Baker testified Lori
Raines and Rick Waddell no longer worked for Paragon at the time of the trial, Raines had
moved to Florida, and Waddell had moved to West Virginia.
10
Baker was shown the offer letter to Jones. He testified the format of the letter was the
same to all the Paragon applicants at the USDA site. In the second to last paragraph it says that
"Shift schedules will be determined in accordance with the operational needs of the contract."
Baker testified they cannot determine schedules until closer to the start date when they know
how many people they will have, and the clients complete scheduling requirements. The next 15
sentence letter says, "Breaks will be provided in accordance with company policy and in
compliance with any applicable state and federal law requirements and subject to the operational
needs of the contract." Baker testified this means in accord with how Paragon provides breaks in
certain locales and areas unless otherwise set forth by the federal contract itself or by the
statement of work. He testified Paragon provides a certain level of breaks during an 8 hour shift 20
or every 4 hours. He testified he is just advising the applicants Paragon will be doing that during
the course of their employment with Paragon. Baker testified these offer letters were circulated
at the September 14 initial job fair, which was 6 weeks in advance of the October 28 start date.
Baker testified that, as of that time, he was not aware of all the things he needed to know to set
breaks and shift schedules. However, Baker testified they would know in advance whether they 25
are going to pay for the employees’ lunch break. He testified if they are going to offer a benefit of
a paid lunch break they would state that in the offer letter. Baker testified they did not say
anything in the offer letter about providing a uniform allowance. He testified they provide wash
and wear uniforms and if they did not provide wash and wear uniforms there would be an
obligation to provide a uniform allowance because there would be an additional cost associated 30
with maintaining uniforms. Baker testified they did not provide a shoe allowance because they
provided shoes.
Baker testified Paragon’s offer letter is a contingent offer because there are many
requirements the applicants have to meet. They have to meet a training standard, they have to 35
maintain the current or new background checks, including local tri-state background checks that
Paragon conducts on personnel, they have to pass a seven panel urinalysis, and they have to
qualify with Paragon’s trainers on weapons, secondary use of force, etc. Baker testified often
when Paragon takes over contracts he hires the predecessor’s supervisors. Baker testified prior
to the supervisors coming on board with Paragon they are not authorized to speak on behalf of 40
Paragon, and Paragon is not bound by anything the supervisors say about what will happen
when Paragon takes over prior Paragon taking over.
AEPS submitted a “Training Management Plan” to USDA shortly after winning
the award for the USDA contract in August 2013. The document states at section 1.1 45
“Strategy for Meeting Training and Certification Requirements” that:
As Team AEPS intends to carry over the incumbent contractor’s guard force
from the previous contract in respect to Executive Order 13495,
“Nondisplacement of Qualified Workers under Service Contracts,” the transition 50
training regimen has been simplified for the incumbent staff, and will be more
JD–55–15
27
manageable within the transition.
AEPS, with the help of major subcontractor Paragon Systems, Inc., has
recently and successfully completed a transition into a large and multi-state
contract for the USMS, as well as the FPS Utah/Wyoming and FPS
Montana/North Dakota/South Dakota contract. The companies are current in 5
their sense on how to best manage all aspects of this transition for USDA,
including the training. Because of this, AEPS foresees no significant difficulties
in delivering a trained and qualified guard force by the October 28, 2013 contract
start date.
10
C. Credibility12
The evidence reveals that AEPS submitted a “Training Management Plan” to USDA
shortly after winning the award for the USDA contract in August 2013. The document states at
section 1.1 “Strategy for Meeting Training and Certification Requirements” that, “As Team AEPS 15
intends to carry over the incumbent contractor’s guard force from the previous contract,” “the
transition training regimen has been simplified for the incumbent staff, and will be more
manageable within the transition.” It was also noted in the memo that “AEPS foresees no
significant difficulties in delivering a trained and qualified guard force by the October 28, 2013
contract start date.” Paragon lead official Baker testified it his responsibility to ensure there were 20
sufficient boots on the ground at the October 28 start date. Covington, who served as a major in
the guard force for the predecessor employers, testified that both he and Project Manager
Ortman had a concern about retaining their jobs with the new contractors. The evidence
revealed that neither AEPS nor Paragon engaged in any detailed recruitment efforts until
September of the predecessor guard force. Given the skill level required of the guard staff, the 25
nature of their training requirements, and exams Respondents’ officials testified they had to pass,
I have concluded there was pressure on Respondents to have as many of the predecessor’s
guards seek employment with the new employers as possible to allow Respondents to effectively
meet the required October 28 start date.
30
Considering the detail and content of their overall testimony, including the fact
that they were current employees testifying in the presence of Respondents’
management officials against the interests of their employers I have found the testimony
of General Counsel witnesses Jones, Walker, and Gaines to be credible to the extent
their memories would allow. In reaching this conclusion, I have considered but rejected 35
Respondents arguments that they were officials of the Union, and their testimony was
motivated by financial gain concerning a positive outcome in this case. First, the parties
had reached a new collective-bargaining agreement so as far as these employees could
see any financial gain was temporal, and I have weighed that against their risk of
angering their employer. Moreover, the bottom line they testified in a credible fashion 40
and what they related had a ring of truth. I have weighed that against the testimony of
the Respondent’s witnesses which was often vague, conclusionary, lacking in specific
recall, and on occasion inconsistent between witnesses.
Walker testified she was working 4 days a week in August through October 2013, and she 45
attended four guard mounts a week during that time. Walker testified Ortman never participated

12
In assessing credibility I have considered such factors as the detail of the testimony, the
specificity of recall, the interests of the witness, the related documentary evidence, the testimony
between witnesses, how what a witness related aligns with established or admitted facts, and the
witnesses’ demeanor.
JD–55–15
28
in her guard mounts as his arrival time was not that early. She testified some of the subjects
listed in Ortman’s typewritten transition memo were covered at guard mounts prior to
Respondents assuming the contract. Walker testified it was discussed that: they would be
changing from white shirts to blue; they needed to make sure they completed a drug screen; they
would be getting new radios; and they had to provide their social security cards and driver’s 5
license. However, she testified that concerning health and welfare they did not say at the guard
mounts that the health and welfare would go to insurance. Walker testified what was said was
they needed proof of insurance. She testified they were not told they were going to be required
to take health insurance with AEPS at that time. She testified they were not told the
consequence of not having outside health insurance during the guard mounts she attended. 10
Walker testified that prior to the changeover there were no guard mounts in which the employees
were told they would be receiving a 30 minute unpaid lunch break. She testified it was also not
stated immediately after the changeover. In this regard, Walker testified when she began
working for AEPS on October 28, she continued to receive paid lunch breaks for a period of time.
Walker identified pay stubs showing she continued to receive a paid lunch break as late as 15
November 29. Walker testified when she asked Ortman about a subsequent loss of 30 minutes
in her pay she was told they were deducting a half an hour for the now unpaid lunch break.
Walker testified the uniform allowance was a line item in her pay stub when she worked for the
predecessor employers. Walker testified she did not learn AEPS was discontinuing her uniform
allowance until she received her first paycheck for AEPS and it did not have a line item for 20
uniform allowance. Walker testified it was not until the beginning of 2014, in her capacity as shop
steward, that she learned AEPS would not offer a shoe allowance.
Gaines testified she attended a guard mount at the start of every shift. At the hearing,
Gaines was shown a copy of Ortman’s type written memo which Respondents claimed was a 25
guard mount talking point. Gaines testified she had not seen this document prior to the hearing.
She testified the items in the document were not covered at the guard amounts she attended.
Gaines testified there was never an instance at a guard mount where the supervisor said she
would be receiving a 30 minute unpaid lunch break. Gaines testified she would have recalled
hearing that because it would have altered her pay. Similarly, Jones testified he never heard a 30
guard mount supervisor talk about the substance of the typewritten Ortman memo. Jones
testified he was never told during the guard mounts he was going to receive a 30 minute unpaid
lunch break when AEPS or Paragon took over. Jones testified during the last 90 days while he
was working for USEC, he was working the 11 to 7 shift. Jones testified Covington and Ortman
never conducted guard mounts Jones attended. Jones testified his breaks first changed to 35
unpaid 30 minute lunch breaks a couple of weeks after Paragon and AEPS took over the
contract. Jones testified his breaks were not changed the first day of his employment. Jones
testified it was after AEPS and Paragon assumed operational control that he learned that he was
no longer receiving an hourly uniform allowance. Jones testified he learned that, “When we got
our first paycheck.” Jones testified that, at that point, no one from the company had told him that40
he would not be receiving a uniform allowance. Jones testified that prior to October 28 he was
never told by a representative of either company that the shoe allowance would be discontinued.
Devers testified, that during the transition period, he provided Ortman with various
instructions to give to employees. Devers testified he told Ortman initially Devers was not sure of 45
all of the parameters of the USEC working conditions. He testified the guards hourly rates would
be the same, health and welfare would be directed either to a companywide health insurance or a
401(k) in that if someone had insurance and showed proof of it goes to the 401(k). If they do not
have proof of health insurance it goes to the health plan and the remainder goes to 401(k).
Devers testified he told Ortman whatever questions he received to contact Devers and they 50
would compile a list and answer everyone’s question at one time. He testified he received a call
JD–55–15
29
from Ortman who had several questions he had received which Devers answered. However, the
only specific item Devers addressed in his testimony as a follow up question by Ortman pertained
to shoe allowance about which Devers testified they were providing shoes so there would not be
a shoe allowance. Devers testified he told Ortman to answer all the officer’s questions and pass
it along to anybody he came in contact with and to let the supervisors know so they could let 5
everyone know at guard mounts.
Ortman testified he was interacting with Devers as early as August. Ortman testified that
about a week after they met, he and Devers began to discuss the transition to AEPS. Ortman
testified they discussed some of the initial terms and conditions of employment that AEPS would 10
set. In terms of terms and conditions of employment of the officers, Ortman testified they talked
about how the breaks would work and how they would change. Thus, Ortman did not confirm
Devers testimony that health and welfare allocations were part of their early discussions.
Ortman testified that, while working for USEC, he communicated with security officers at 15
guard mounts. Ortman testified they received a lot of questions from the officers relating to pay
and health and welfare. Ortman testified the officers also wanted to know how it would be
determined who worked for which company, what the minimum hours for work would be full-time
benefits, would the hours change, would the schedule change, and would post assignments
change. Ortman testified he wrote down questions so he could go over some of them with 20
Devers. Ortman identified a document in his handwriting, entitled “Questions for George.”
Ortman testified he wrote the six itemed document in mid to late August. The second item reads,
“2. Pay, sick leave, 401(k), insurance, breaks, ???” Ortman testified after he generated the
document he talked to Devers. Ortman testified he made notations concerning his discussion
with Devers, and he identified another document he generated based on those discussions. The 25
second item on this cryptic response sheet list relates to pay, H & W, 401(k). Ortman testified
Devers stated the pay will stay the same, health and welfare would go to an insurance benefit or
401(k) plan. Thus, if as Devers contended he discussed health and welfare allocations with
Ortman early on, it is unexplained why Ortman had to ask him again about it. Moreover,
Ortman, the project manager of a large numbers of security guards, failed to date both the 30
handwritten memos upon which he principally relied for his testimony.
Ortman testified his notes continue beyond the six items raised in his initial question sheet
in that on the second page his notes show he discussed shoes, schedules and tasks with
Devers. Ortman testified that at the time it was stated that AEPS was going to provide shoes as 35
part of the uniform. While the only item Devers specifically testified was discussed with Ortman
pursuant to officers’ questions was the discontinuance of the officers’ shoe allowance, Ortman
testified he did not recall if he even asked about a shoe allowance for the officers. While Ortman
testified they talked about the reduced pay for training, the diminution of that benefit did not make
it into the list of items Ortman purportedly typed up to be read at the guard mounts. Nor, did the 40
number of hours required to be a full-time employee. Moreover, Ortman’s notes did not contain a
specific directive from Devers that pay for lunch breaks would be eliminated, although that
statement did make it into his typewritten list.
Ortman testified he took the notes he had generated from his discussions with Devers 45
and Ortman put a together a 10 bullet typewritten statement that the supervisors could read to
the officers at guard mount. Ortman estimated he prepared the document at the end of August or
about 60 days prior to the October 28 startup because of the language contained in the
document supported that time table for its dissemination. Ortman admitted he had no
independent recollection of when the document was created. Again, the document itself was 50
undated. The document contains the statements that: “H & W will go to insurance or 401k”;
JD–55–15
30
“Lunch breaks will be reduced to 30 minutes unpaid with a 10 minute paid morning break,” and
“shoes will be provided by the company.” It does not specifically address the elimination of the
uniform or shoe allowance.
Ortman testified the document was placed on a clipboard that the supervisors use when 5
they do a guard mount to be read to employees at the guard mounts. Ortman could not recall if
he put the memo on the clipboard or if he gave it to Covington to put on the clipboard. Ortman
testified he had a discussion with the supervisors before giving them the document to place on the
clipboard. He told them about the conversation he had with Devers and some of the changes that
were going to be taking place, how to get the information out, and how to take questions from the 10
officers. Ortman testified the employees worked 5 days a week, some less some more and that
on average the document would have been read to them 20 times during a month period if
Ortman’s instructions were followed. He testified the guards would have heard the memo read to
them at least once a day for the days they worked during this 30 day period. Ortman testified the
document was read at the guard mounts starting at the end of August. On cross-examination, 15
Ortman confirmed that his typewritten memo was read for 30 consecutive days at guard mounts,
and employees who worked 5 days a week would have heard it read 20 times. Ortman
repeatedly testified that guard mounts using this document were done for at least a month. When
asked if the document was read four times a day for a month, Ortman responded, “It’s read at
each guard mount, correct. The same officers don’t attend the same guard mounts, yes.” 20
Ortman also testified the guard mounts take place in the security office, and they are
conducted right outside Ortman’s door. He testified he heard or attended guard mounts where
this matter was discussed. Ortman testified officers Jones, Gaines, Mozon, Swann, and Coffer
complained about the announcement, and the majority of the staff complained at the guard 25
mounts. He testified Jones and Mozon complained about health and welfare, non-paid breaks,
the lunch breaks, the reduced 15 minutes to a 10-minute break. He testified officers Coffer,
Mozon, Robin, Tilghman, Petway, Proctor, Timisha Fitzgerald (Walker) and Swann
complained about the same things. Here, Ortman’s testimony appeared to a general listing of
officers names without much substance to any actual complaints. Moreover, while he listed 30
Walker and Jones as some of the protesters to these announced changes, they each credibly
testified that Ortman did not attend any guard mounts they attended because he was not on duty
at the time their guard mounts were given.
Covington testified Ortman had a supervisor’s meeting and when the meeting was over 35
they were instructed to get information out to the officers. Covington testified that Ortman told
them to use the guard mounts to pass out this information. Covington testified Ortman’s
typewritten memo concerning the AEPS transition was given to him by Ortman to put on the
clipboard for the supervisors to pass the information to the officers. However, contrary to
Ortman, Covington testified Ortman did not give any instructions as to how long it should stay on 40
the clipboard. Covington testified he did not tell anyone that it needed to stay on the clipboard for
30 days. Covington did not recall the date he received the transition document from Ortman, but
could only estimate based on the memos content. Covington testified that at the first guard
mount he went over the Ortman memo by each bullet. However, he testified he did not go over it
bullet by bullet each time he reviewed it. Covington testified in the beginning he would go 45
through it point by point Monday through Friday and he did that for the first 2 weeks or so.
Covington testified that after 2 weeks he asked if everyone was familiar with the health and
welfare and the 30 minute unpaid lunch breaks and most of them would say yes. He testified if
they did not he would go into it in detail. Covington estimated it was on the clipboard 20 to 30
days, he did not know the precise amount of time. 50
JD–55–15
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Slaughter works for AEPS as a lieutenant, and had worked for USEC as a lieutenant.
Slaughter testified there was a point when Ortman met with her and the supervisors and gave
them specific information about how AEPS planned to operate. Slaughter testified that Ortman
gave instructions about how to communicate this to the officers stating it had to be at the morning 5
and afternoon guard mount. Slaughter identified Ortman’s typewritten memo as one of the pass-
ons for the guard mounts they received prior to AEPS coming aboard. Slaughter testified she
used the document at the guard mounts over a 2 week period and it stayed on the clipboard for
over a month. Slaughter testified she said it twice a day over 2 weeks because there are part-
time officers who might not have been at the prior guard mount, and the guards shifts varied. 10
She testified that she read it twice a day 5 days a week over a 2 week period. She then testified
it was over a month because they were waiting on the new contract to get started. Slaughter
then testified, “I'm just going to say over a 2-week period.” Slaughter testified, “I'm going to say
over a 2-week period, but I said it stays on the clipboard.”
15
Henderson works for AEPS as a lieutenant, and she had worked for USEC as a
lieutenant. Henderson testified there came a point when she learned things about how AEPS
planned to operate when they took over the contract. She testified this was shortly after they
heard who had received the contract. Henderson testified Covington who was giving guard
mount conveyed this information to her. Henderson testified Ortman did not have any meetings 20
with her to talk about how she was going to communicate the different terms and conditions of
employment to the officers, other than when he addressed the guard mount. Henderson testified
she was not giving guard mounts at that time but attended them. Henderson testified she
recognized Ortman’s typewritten memo. Henderson did not recall when it was put on the
clipboard, except by reading the document itself. Henderson then testified she knew was posted 25
2 months before AEPS took over because that was when they initially started talking about what
was going on as far as AEPS coming in. Henderson testified that she heard the information on
the document discussed at the guard mounts for around a couple of weeks, “because like I said
everybody was assuming that AEPS would pick up where USEC left off.”
30
The testimony of Respondent’s witnesses concerning the discussion of Ortman’s 10 point
memo was inconsistent between witnesses as to the instructions Ortman gave as to the
frequency and length of time the memo was to be discussed. The witnesses’ testimony was
vague and internally inconsistent as to when they first saw the memo, and as to how often it was
discussed at the guard mounts. The memo itself was undated, as were Ortman’s handwritten 35
notes which he claimed he relied on to create the memo. The testimony of the witnesses
vacillated based in their reference to the memo, and had a quality that it was being made up as it
went on in order support Respondent’s position. The testimony also reflects that all guards both
future Paragon and AEPS employees attended the same guard mounts depending on their shift
times. While Ortman maintained he had nothing to do with the Paragon hiring process, and he 40
would not give information to the guards pertaining to it, he made no such disclaimer concerning
Paragon in his typewritten memo which he claimed to have had read at guard mounts, nor did he
or any of the supervisors testify such a disclaimer was made to prospective Paragon employees
concerning the information on the memo when they attended the guard mounts. In fact,
Covington, an eventual Paragon official claimed to have participated in the reading of the memo 45
at the guard mounts, in which pursuant to his testimony all guards participated. Moreover,
Ortman claimed that Jones, a future Paragon employee, protested is contents, a claim which I
have discredited.
Accordingly, I have credited the General Counsel’s witnesses that Ortman’s memo as 50
tendered by Respondent at the hearing was not read at the guard mounts, and that the
JD–55–15
32
predecessor employees were not informed of the elimination of cash payments of health and
welfare funds, the elimination of paid lunch breaks, and the elimination of the shoe and uniform
allowance during the guard mounts. This conclusion is verified by the fact that Walker’s pay
stubs revealed she continued to receive paid lunch breaks for at least a 30 day period after
Respondents October 28 takeover. It is clear someone from management did not get the 5
message despite Ortman’s now discredited claim that this was stated by Respondent’s
supervisors daily four or five times a day for a 30 day period. I have considered Respondent’s
argument that Walker admitted hearing some of the less controversial items contained in
Ortman’s memo stated at guard mounts. I do not find this sufficient to establish that Ortman’s
memo was read as submitted at trial, nor that the items the General Counsel’s witnesses 10
uniformly denied were discussed at guard mounts. I also find the variance in testimony of
Respondents’ witnesses on this issue was more than due to the vagaries of their respected
memories due to the lapse of time as Respondents contends in their brief. Rather, I find their
testimony varied because they never received the instruction to read the memo as Ortman
contended, and the ambiguous nature of the testimony of the supervisors concerning the time 15
period the memo was purportedly read, was an after the fact effort to bolster Ortman’s incredible
testimony that it was read verbatim, every day, at multiple guard mounts each day, for 30 days.
Walker testified she received an offer letter from AEPS on October 17 via email. The
offer had Ortman’s signature and states Walker was being extended a contingent offer of 20
employment to work for AEPS with an effective date of October 28. The offer contained listed
employment information including stating fringe benefits will be directed towards a company
sponsored medical plan, or under certain circumstances, towards a company-sponsored 401(k)
account, pre-tax. The email states, “Training will be paid at a rate of $8.25 an hour.” The email
states Walker’s employment is at will, which included the employer’s right to terminate Walker 25
without notice or cause. The email stated, “If you intend to accept employment with AEPS,
please print this letter, sign it, and give the signed letter to Ortman by October 28. Walker
testified when she received the October 17 email she went to speak with Ortman concerning
issues in the email. The conversation took place in Ortman’s office. Walker testified she told
Ortman she had some concerns regarding the letter in reference to health and welfare issues and 30
the rate for training pay. Walker testified Ortman, “stated that as far as the health and welfare is
concerned, that he was on the phone speaking with the company currently in reference to this
matter.” Walker testified she told Ortman, “if they're going to take our health and welfare, that I'm
not going to be signing this letter.” Walker testified Ortman said, “this is basically a general letter
that we received for employment and not to worry about it. And that as long as we, you know, as 35
we do our part, he'll do his part in reference to that.” Walker testified Ortman’s statement that
“we do our part” was in reference to “we the Union.” Walker testified Ortman said, “he'll do his
part. He'll be talking to the company in reference to it.” Walker testified upon Ortman’s
“reassurance that this was basically a general offer letter and that he also stated that he didn't
think so, as far as them taking our health and welfare and things of that nature, I signed the40
letter.” Walker testified in terms of taking their health and welfare that meant the employees
would not be receiving their health and welfare as a cash benefit, but they would receive it in
some other form.
Similarly, Gaines testified when she received her offer letter from AEPS, she phoned 45
Ortman. Gaines testified she told Ortman she was calling about the offer letter and she said it
states they were going to get $8 and some change in training pay and they were going to take
their health and welfare. Gaines asked Ortman what was going on. Gaines testified, “He said
don't worry about it, it's a general letter, go ahead and sign it, everything will be okay.” Gaines
testified after she spoke to Ortman she signed the offer letter, and gave it to Ortman when she 50
returned to work.
JD–55–15
33
Jones attended the September 14, Paragon job fair when he was given the Paragon offer
letter for employment which set forth certain terms of employment at Paragon which were
different than Jones’ existing benefits. Included in the letter was a statement that Jones would be
offered the company’s sponsored health/dental benefits under the terms of the company’s plan. 5
It stated if Jones chose not to receive health and medical coverage, the health and welfare hourly
rate indicated in the appendix would automatically be contributed into a company sponsored
401(k) retirement plan, pre-tax, for Jones’ benefit. It stated, “You will not have the option of
receiving a cash payment in lieu of health and retirement benefits.” The letter stated that
Paragon considers a full time employee one who works an average of 40 hours per week. Jones 10
signed and accepted the offer letter on September 14, and he turned it in to Paragon, along with
the hiring packet. Jones testified on re-direct exam that the day he received his offer letter from
Paragon, Jones called Ortman and the conversation took place right after Jones had departed
the September 14 job fair. Jones had already submitted his signed offer letter at that time of the
call. Jones told Ortman about the offer letter and Ortman asked him what it said. Jones testified 15
he told Ortman what it said and Ortman stated that “American Eagle was the prime and that
nothing was going to change, everything was going to stay structurally the same, and not to
worry about it.” Jones testified he told Ortman about the offer letter over the phone “because it
was a grave concern of a lot of officers.” Jones testified he told Ortman about Paragon taking
their health and welfare stating that was the main concern. Jones testified Ortman said Paragon20
is the subprime and AEPS is the prime, and they have to do what AEPS does.
Ortman denied having any conversation with Walker about her offer letter. Ortman
testified the offer letters were basic, the officers came in, he had the officers read them, and then
sign to accept or not accept. Ortman testified he asked the officers if there were any questions 25
and there were no questions when it came to the offer letters. Ortman testified he met with every
future AEPS officer about 65 individually about the offer letter and that none of them had a
question about it. Ortman testified that, when he met with Walker she did not say anything along
the lines of she really did not want to sign it and she did not agree with the things that are in
there. He testified she accepted the offer. Ortman denied saying anything suggesting Walker30
could ignore what was in the letter. He denied telling Walker not to worry he was going to work
this out with AEPS and she was not going to have to do any of the things in the letter. Similarly,
Ortman testified he did not remember any phone conversation with Jones about his offer letter or
whether he was willing to sign it. He denied having a conversation with Jones in which Jones
said something like he was not sure whether he should sign the offer letter and he was not happy 35
with the things in it. Ortman denied telling Jones that he did not have to worry about what was in
the letter and Ortman would take care of it. Ortman testified he did not have such a conversation
because Jones works for Paragon and Ortman had nothing to do with his offer letter.
I have credited the testimony of Walker, Gaines, and Jones concerning their 40
conversations with Ortman about their offer letters and the content of those conversations over
Ortman’s denials. Each were employees and union officials, and the Respondents announced
changes to health and welfare and other matters in their offer letters, likely would have created
questions and concerns amongst them, along with their co-workers. Thus, as they credibly
testified, it is likely that they would have raised questions about those letters to Ortman, the 45
project manager, who was working with and for AEPS, and whose name in particular was on the
AEPS offer letters. On the other hand, Ortman’s testimony that he met with 65 officers
individually concerning the AEPS offer letters, asked each if they had any questions, and not one
of them had a question is simply not credible. This is particularly so, given the substance of
those letters. Moreover, the AEPS employees did not receive their offer letters until October 17, 50
just 11 days before Respondent was to take over the operation. AEPS had given assurances to
JD–55–15
34
USDA that they would be staffed and up and running by October 28. Similarly, Baker testified it
was his job with Paragon to make sure there were sufficient boots on the ground. Ortman, who
had a concern at the outset of whether he would have been retained by AEPS was likely feeling
the pressure of ensuring that his new employer was adequately staffed. Thus, the three
employees credibly testified as to the circumstances and the content of their conversations with 5
Ortman, and his denial of those conversations lacked credibility for the reasons stated.
While, Respondent challenges, in its brief, Gaines’ testimony stating she did not give an
affidavit, that she was only first called on rebuttal, and the language she reported in her
conversation was similar to that reported by Walker, I have not found these arguments sufficient 10
to discredit Gaines. First, as stated, Ortman’s claim that he met with 65 employees in his office
concerning these offer letters, which largely impacted in a negative fashion on the terms and
conditions of employees benefits, and not one of them had a question is simply not credible. I
also note that both Jones and Walker gave pre-hearing affidavits, and Respondent’s counsel, on
cross-examination failed to point out the omission of these reported conversations with Ortman in 15
those affidavits. Finally, while Gaines testified to similar remarks to what Ortman provided her in
response her questions as to what had been previously reported by Walker in her testimony, it is
not so unlikely that Ortman would have given both Walker and Gaines a similar response to a
similar question that requires me to discredit Gaines. Rather, I find, in the circumstances here,
given the reported benefit changes, they would have questioned Ortman about them; and I find 20
that Gaines did as she stated.
I have considered the fact that Jones only first brought up his conversation with Ortman
on redirect examination. However, concerning the broad scope of Jones’ testimony, I do not find
this omission sufficient to discredit his otherwise credible testimony concerning the conversation. 25
Moreover, Ortman’s claims that he would not discuss the offer letter with Jones, a future Paragon
employee, because Ortman had nothing to do with Paragon, while at the same time he
maintained he ordered daily discussions about future benefits at guard mounts which were
attended by a mixture of future AEPS and Paragon employees is inconsistent on its face. I also
do not find Respondents argument persuasive that Ortman would not have made statements 30
contrary to the policies AEPS through Devers and Paragon had relayed to him at the time about
employee benefits because to do so would go against his own employment interests. First, what
was actually conveyed to Ortman by Devers and any other management officials during the time
of these events is known only to them, and as supplied at trial at a future date is likely to be self-
serving. See, Shattuck Denn Mining Corp. v. NLRB, 366 F.2d 466, 470 (9th Cir. 1966), holding “it35
is seldom that direct evidence will be available that is not also self-serving. In such cases, the
self-serving declaration is not conclusive; the trier of fact may infer motive from the total
circumstances proved. Otherwise no person accused of unlawful motive who took the stand and
testified to lawful motive could be brought to book.” While this case does not involve allegations
of discrimination Ortman’s motives as to what he portrayed was discussed in his conversations 40
with Respondents’ officials is certainly in play. Second, Respondents at the time they began
their hiring process, particularly in view of the government shut down during this period, were
under admitted pressure to staff by October 28. Thus, as I have found there was pressure on
Respondents’ officials, including Ortman to convince the current guard staff to retain their
positions, as Respondent reported to USDA in its bid, and as Jones, Walker, and Gaines credibly 45
testified.
Walker testified her name has also been Timisha Fitzgerald, and that currently Fitzgerald
is her middle name. Walker testified in mid-September 2013 she saw a posting on the officers’
bulletin board that Paragon and AEPS would be taking over the USDA contract. Walker testified 50
the memo stated the security officers needed to see Ortman in reference to the new contracts to
JD–55–15
35
find out which company the employees were assigned to. Walker spoke to Covington prior to
speaking to Ortman. Covington told Walker to speak with Ortman in reference to which company
she would be assigned to and the officers would probably have to provide their email addresses
so they could be sent to a link as Covington believed everything would be done online. Around 2
days later, Ortman called Walker and told her she should give the company her email address so 5
they could send her the employment link to apply for employment with AEPS. Walker gave her
email address to her supervisor the night of Ortman’s call. Walker testified she received an email
from AEPS on September 23 providing an on line link for employees to begin the AEPS
application process. Walker testified that other than the link there was no substantive writing in
the email. While she described the email as an offer of employment, Walker explained it said, “if 10
you wanted to apply for employment with AEPS, that we needed to go to the link and follow the
link.” Walker clicked on the link from the email and it took her directly to the AEPS application
process. Walker testified that the link eventually took her to different policies she needed to sign
off on. Walker testified she submitted a resume at the time she submitted her application.
Walker testified she completed her online application on September 25. She testified that while 15
she was filling out the application she also completed the federal and state tax forms and the I-9
form. Walker testified that, during that time, she also reviewed: a nondisclosure agreement; a
sleeping-on-the-job policy; and a zero tolerance acknowledgment. Walker testified she filled out
or reviewed all this information while completing her application on line. She testified this was all
part of the application process. Walker testified she had to complete her certification dates for 20
her CPR/first aid, AED, and she also provided direct deposit information while filling out her
application. Walker received confirmation by email on September 25 from AEPS that they
received her application. While she found emails from AEPS dated September 25 and October
17, Walker could not find the email she received on September 23 containing the link to the
application. Walker explained the reason she no longer retained the email with the application 25
site link was because she had received the September 25 confirmation email.
Walker testified that, after she received the email offer letter from AEPS on October 17,
she was never sent any other online link by AEPS. Walker testified that the last time she
completed any hiring related documentation for AEPS was the offer letter on October 18. Walker 30
testified that an AEPS computer printout with the name at the top stating Timisha Donnatta
Fitzgerald Walker appeared to be unusual because in 2013 she was not using her married name
which was Timisha Donnatta Fitzgerald Walker for work purposes. Walker noted the printout
contained employee typed signature acknowledgments dated November 20, 2013. Walker
testified she did not create any employment files in 2013 under the name to Timisha Walker. 35
Walker testified she changed her name for work purposes to Timisha Walker in late April or early
May 2014. Walker was shown a similar AEPS printout where her name appeared as Timisha
Donnatta Fitzgerald, which contained typed employee policy signature acknowledgments by her
dated October 21, 2013. Walker testified she never went through the policies and acknowledged
them a second time. Walker testified she submitted one application, and within this application 40
process, she had to complete these acknowledgements all at the same time. Walker testified
that no AEPS representative ever told her there was a problem with her policy
acknowledgements. She testified she never completed the policy acknowledgments separate
from her job application.
45
Similarly, Gaines testified that around the middle or end of September the supervisors
asked them for an email address to enable AEPS to email a web link so they could get into the
AEPS system. Gaines testified she received an email from AEPS with the link to get into the
system to get an application. Gaines testified there was no substance in the email, except for
the link. Gaines used the link to apply for employment. When she followed the link it enabled 50
Gaines to complete “All the stuff that you would fill out for employment. We had banking
JD–55–15
36
information was in there, W-4s was in there, harassments, that kind of -- everything that you
would fill out.” Gaines testified there were policies and a handbook policy there. Gaines testified
you had to acknowledge the policies on line by checking off on them. Gaines thought she filled
out the online application in early October. Gaines testified she completed the application within
a couple of days after she received the email link. Gaines testified that after she completed the 5
application, she never used the link again to go back on line and complete any other information.
Gaines was shown a questionnaire which she testified was part of her application to AEPS. She
testified that she completed the information on the document. The date on the application is
September 26, and Gaines testified she had no reason to doubt that date. Gaines was shown
another document which contained the heading acknowledgment signatures. She recalled going 10
through a series of pages and having to read different documents and acknowledge them by
clicking an acknowledgement. When Gaines was asked if she had any reason to doubt that she
did this on October 19, which was reflected on the document, Gaines asked why it was a different
date from the other document which showed September 26. Gaines testified that she thought
she filled out both documents together as part of one packet. Gaines recollection was that she 15
completed the policy acknowledgment signatures at the same time she completed the job
application. Gaines testified she received a job offer from AEPS. She did not recall the date she
received the letter, but stated she signed it on October 17. Gaines testified that after receiving
the job offer letter she did not go back on line and complete additional information for AEPS.
20
Ortman did not recall the exact date the application process began. Ortman testified he
spoke with Devers on the phone and determined the best way to do the application process was
to set up a workshop for the officers before and after duty, on their days off, and during their
breaks. He testified they set up workstations in the security office, but they did not have to do the
applications in the security office. They could have done them at home on the computer. 25
Ortman testified they communicated to officers about doing the application by posting it on the
board and verbally at guard mounts. However, Ortman did not retain copies of what they posted
on the board as USDA had changed the computers and Ortman testified he lost all his
information. Ortman testified officers completed applications and the next step after the
applications was the offer letter. Ortman testified the officers got the offer letters by email. 30
Ortman testified the officers also had to complete I-9’s and he had staff assisting him for
everyone to complete the paperwork. He testified it involved each person coming down and
doing the workshop. Ortman testified the additional paperwork was completed in the security
office and on line. He testified they were two computer stations at the security office for the use
of the officers. Ortman testified the officers had to complete the paperwork at the stations in the 35
security office and they could not complete the second part anywhere else. Covington testified
that he did not have anything to do with the AEPS application process. Covington testified that
he did not do anything in terms of trying to get email addresses from the officers. Covington
testified he never had any conversations with Fitzgerald in which he asked her for her email
address so he could have it for the application process. 40
Devers testified that in terms of AEPS’s application process for USDA they had just
switched to an online system employing an IT provider called Kwantek. Devers testified
information was relayed to Ortman to have the officers go on AEPS’ website under employment.
They could then search by job which would be USDA DC HQ. Devers testified whenever AEPS 45
is starting a new job site there is a clickable link on the AEPS site which takes the person to the
initial application phase. At that point, they enter their personal information including name,
address, phone number, personal email address and they complete the application portion of the
process. Devers testified they had not used this online process before the USDA contract.
Devers testified for the application portion of the process no email with a link was sent to people 50
in advance asking people to apply because they would not have peoples’ email address and it
JD–55–15
37
would not be loaded into the system. He testified the purpose of the application phase was to
allow them to enter their email address within the system. Devers testified he never asked
Ortman to collect peoples’ email addresses. Devers explained an applicant for a USDA job,
would go to the AEPS website, then go to careers and opportunities and there is a search block
where the applicant can search all the jobs available in DC coming up and they click on the one 5
they want to apply for. Devers testified the employees would know to go to the website because
the information was given to them by Ortman for incumbents. However, Devers did not know
whether the information was given to the guards as to the website by Ortman verbally or in
written form. He did not give Ortman any instructions on how to distribute the information stating
that he was just to make sure everyone knew to go to the company website to start the 10
application process.
Devers testified the application process began around mid-September. Devers testified
the Kwantek software issued a report listing the dates when each person completed the AEPS
application. Devers testified the report showed Timisha Fitzgerald (Walker) completed the 15
application on September 25. Devers testified when someone is filling out the application they
are not able to fill out W-2 and W-4 forms, policy acknowledgements and things of that nature.
He explained it is a three-step process, and that occurs later in the process. Devers testified the
next step in the process, after the applications were received, was AEPS sending of offer letters,
which Devers testified was delayed due to a government shutdown, which he believed took place 20
from October 1 through 16. Devers testified the template for the offer letters is loaded into
AEPS’s Kwantek system. He testified it then generates its offer letter with a person’s name,
address, and then emails it directly to their personal email. Devers testified all applicants
contained on the applicant list received a contingent offer letter on October 17.
25
Devers testified that the process of signing off acknowledging the receipt of employer
policies, viewing the handbook, W-4 forms completion referred to as the onboarding process
could not have been done before the offer letter was sent out because AEPS had to supply
Kwantek with onboarding documents to upload in the system, and that was not done until
October 16 or 17. Devers identified what he testified was an internal email dated October 8 30
stating new onboarding with Kwantek will be up by the end of the week. Devers testified
Kwantek ran into some problems and it was delayed. He testified that Tara Devers, who sent the
October 8 email, is Devers’ wife, but she is also the contract administrator for AEPS. Devers
testified that no one could have accessed and filled out information on the system for the
onboarding portion prior to October 8. Devers estimated the onboarding would have been 35
available to Ortman around October 12 or 14. He testified then it would have been available
to the field around October 16 or 17.
Devers testified the onboarding stage is the third step to the application process. He
testified it is done in three parts, application, offer letter, and then onboarding. Devers testified 40
when someone starts using the onboarding process Kwantek sends an automated response to
the person who is listed as the manager and to the person in charge of the manager called the
admin. Devers testified for this job Ortman was the manager and Devers was the admin. Devers
testified Respondent’s Kwantek records reveal Walker completed the onboarding process on
October 21. He testified the onboarding process is that after you complete all the paperwork, you 45
sign stating you have received notification of the handbook; a drug/background check; sexual
harassment, zero tolerance policies; your state and federal tax forms; and everything in your
normal hire packet. Devers testified some of these Walker would be acknowledging receipt and
some she would be filling out online.
50
JD–55–15
38
Devers identified a computerized employment document stating the information was filled
out by Walker, as per the document, on October 21, when she signed all AEPS policy
acknowledgments. Devers testified all of these documents were required to be signed before
Walker’s beginning employment with AEPS. However, Devers testified inadvertently the 5
manager was listed as the wrong person on the document so the document had to be re-
executed by some of the employees and the manager who viewed the document. When the
documents had to be redone the employee would have to click on the e-signature each time, and
it would show a different date and time. Devers identified a computerized document pertaining to
Walker, which he testified reflects the time she e-signed the listed company documents. He 10
testified once the documents are signed an employee would have no reason to go back and redo
the documents unless the document was misfiled, or there was a name change, or something of
that nature. While Devers testified it would only make sense for employees to fill out these
documents prior to being employed, he testified in the Kwantek system once someone entered
the system, i.e., to change their state tax form it would show a new date for acknowledging AEPS 15
policies, although it did not mean the employee re-acknowledged the policies at that time.
Devers testified the document pertaining to Walker shows there was a change to her
profile on October 21. Devers testified on the printout containing the October 21,
acknowledgments, on the second page the manager’s signature is blank, and the administrator is 20
signed off as Tara Devers. Devers testified the manager’s signature should have been Ortman’s,
and the administrator should have been himself. Devers testified this creates a problem for the
approval process of being sure everything was completed correctly. Devers testified the
manager's signature is the most important as it relates to the I-9 form. Devers testified AEPS will
be fined for having that information wrong because the I-9 is not complete and not proper. 25
Devers testified the I-9 was not properly done because there is no manager's signature listed
inside the block, and Tara Devers is listed as the administrator when she should not have been.
Devers testified the I-9 was completed on the date shown on Fitzgerald (Walker’s) next record as
the signature date. Thus, the record contains two computer printouts for Walker one showing an
October 21 acknowledgment date for AEPS policies; and another showing a November 20 30
acknowledgment date for those same policies. Similarly, Devers identified a computer document
from the Kwantek system concerning employee Cynthia Bryant's new hire paperwork showing
two different policy acknowledgement dates by Bryant, one on October 21, and the other on
January 26, 2014, which he attributed to a problem with the Kwantek system.
35
Here, both Walker and Gaines credibly testified Ortman and the supervisors solicited their
email addresses so they could be sent an email with a link to begin AEPS application process.
Walker testified that Ortman specifically called her and told her to provide her email address to
her supervisor. While Walker testified she had previously spoken to Covington about the
application process, she never claimed Covington was the one who solicited her email address. 40
Covington did not deny having a conversation with Walker about the matter, he just denied
soliciting her email address, thus I do not find he contradicted her testimony. Ortman’s testimony
about the application process was vague. He never denied requesting the email addresses of
the predecessor employees. He could not recall when the application process began, but
maintained he spoke with Devers about it by phone and they concluded the best way to do it was 45
to set up a work shop with work stations at the security office, but admitted employees could do it
on their home computers. Ortman testified they communicated to officers about doing the
application by posting it on the board and verbally at guard mounts. Ortman conveniently
testified he did not retain copies of what they posted on the board as USDA changed the
computers and Ortman lost all his information. Devers testified as to a somewhat complicated 50
way in which the incumbent employees were supposedly told to access the AEPS website, do a
JD–55–15
39
search on the site and then find a link for which they could apply to the USDA jobs. He testified
he did not tell Ortman how to impart this information to employees, although Ortman claimed
somewhat to the contrary they had discussed formulating workshops to assist employees in the
application process. Regardless, considering the substance of their testimony, I find that Walker
and Gaines credibly testified their email addresses were solicited Ortman, and by the supervisors 5
pursuant to his instructions, and then the employees were sent an email with the link to the AEPS
application process in the email.
Whether AEPS generated the individual emails with the application link, or Ortman and
his staff collected the email addresses and imbedded the link in an email sent to the applicants, I 10
find the employees were sent such an initial email with the application link as Walker and Gaines
testified. First, Walker and Gaines credibly testified this was how it was done. Second they
received these emails in mid to late September which was only about 6 weeks before
Respondents’ start date. Noting there were over 60 incumbents who had to apply in a short
period of time the most efficient way to enable them to do so would be to directly send them the 15
link to the application as Gaines and Walker testified. I do not find AEPS tried to explain to a
large number of employees how to do a somewhat complex search for the link on AEPS’ website
as Devers tried to convey in his testimony. I do not ascribe this credibility finding solely to a
possible lack of efficiency. Rather, I do find Walker and Gaines credibly testified they were
requested to provide their email addresses by the supervisory staff at Ortman’s behest, and 20
thereafter were directly emailed a link to AEPS application process. While Walker failed to
maintain a copy of the initial email with the link, which she described as an offer of employment,
she went on to explain that it was an offer to apply for employment. Noting that Ortman failed to
keep a hard copy of some of the postings to employees during this time period, I do not find it
sufficient to discredit either Walker or Gaines over Walker’s failure to keep a copy of this initial 25
email, particularly when, as she explained, AEPS shortly thereafter sent her a confirmation email
of the receipt of her application.
Finally, both Walker and Gaines testified they completed much of their employment
related materials, including tax information, I-9’s, and signing off on policies at the same time they 30
filled out their application in September. Devers, on the other hand, testified Respondent’s
process and records reveal that employees would not have filled out this of this material until
after they signed off on Respondent’s contingent offer of employment in mid-October. Yet, here
again Respondent’s position is somewhat flawed. Devers admitted that Respondent only first
started using the Kwantek software for the USDA contract. Moreover, his testimony revealed 35
there were flaws in the system at that time, including the fact that his wife was listed as manager
and admin on some of the computer generated employment documents when she should not
have been listed as either. This required, in Devers’ point of view that some of the documents
had to be redone. Thus, Walker and employee Bryant, according to AEPS computer documents
had two different sets of dates as to when they signed off on the same policy acknowledgements40
in terms of the employment process. For example, AEPS records showed that Walker signed off
on AEPS policies both at the end of October and at the end of November, although she began
employment with Respondent on October 28. Devers admitted that an employee would have no
reason to sign off on the policies twice, and that it should have done prior to Walker’s starting
employment. It appears the Kwantek software, at least during this time period, was generating 45
new dates about certain events each time an employee’s computer file was entered. These
changes to the dates could have been made regardless of whether the employee or someone
else opened the file. Thus, the dates presented by AEPS based on these documents were not
reliable. I also do not view the October 8 document identified as an internal email that the
onboarding process was going start the following week to require a different result. In this 50
regard, the person who formulated the email did not testify, and I do not find this document alone
is sufficient to overcome the credible testimony of Walker and Gaines as to how they received
JD–55–15
40
their employment applications and when and how they filled out their related employment
materials.
D. Analysis5
The General Counsel asserts in essence a two prong approach in support of its
complaint. First, it is asserted the Board’s decision in Spruce Up Corp., 209 NLRB 194, 195
(1974), enfd. 529 F.2d 516 (4th Cir. 1975), should be overturned as it is inconsistent with the
language in the Court’s decision in NLRB v. Burns Security Services, 406 U.S. 272, 294-29510
(1972). The General Counsel requests the Board to overturn Spruce Up and that Respondents
should be found to be “perfectly clear” successors as contemplated by Burns because the
evidence establishes Respondents unquestionably intended to retain the predecessors’ work
force. It is asserted this is all that is required by the Burns Court.
15
The General Counsel argues, in the alternative, Respondents are “perfectly clear”
successors under the Board’s current Spruce Up test. It is contended Respondents never
announced an intent to establish new terms and conditions of employment before informing
employees which company they would be working for, issuing job fair memoranda and
application packets with no indication of changes to employees working conditions, as well as 20
having approximately 75% of unit employees – those who would be hired by AEPS complete
new hire documentation contemporaneously with their application. It is contended by failing to
announce their intention to establish new terms until its respective offer letters, AEPS became
the “perfectly clear” successor well before it announced changes to initial terms and conditions
and violated Section 8(a)(5) and (1) of the Act by subsequently changing employees’ terms and 25
conditions of employment. The General Counsel raises a similar argument concerning Paragon
citing the specific circumstances pertaining to that employer. The General Counsel also
contends that additionally Project Manager Ortman misled employees with several statements
suggesting there would be no changes in benefits when the Respondents took over, which the
General Counsel argues warrants a finding that Respondents are “perfectly clear” successors 30
with a bargaining obligation prior to setting the initial terms and conditions of employment.13
The General Counsel also contends in its brief that even if Respondents are not found to
be perfectly clear successors under Burns or Spruce Up prior to October 28, Respondents
violated Section 8(a)(5) and (1) of the Act by unilaterally changing employees’ benefits after a 35
bargaining obligation attached as traditional Burns successors. It is contended a bargaining
obligation attached to Respondents no later than October 28, and thereafter Respondents were

13 Respondents assert in their brief the General Counsel made no mention of alleged
misleading statements by Ortman in the complaint and argue to do so at the hearing constitutes
a denial of due process. However, Respondents concede the General Counsel announced its
position concerning the alleged misleading statements in its opening statement, and
Respondents have been able to brief the issue. I do not find Respondents late due process
claim first appearing in their post-hearing brief to be persuasive. As stated by Respondents, the
General Counsel asserted its position at the outset of the trial, and Respondents called
witnesses who testified in response to the General Counsel’s claim. The General Counsel’s
position was fully litigated and briefed to me. There was no claim at the trial of prejudice, and if
there had been, I could have entertained requests for additional time by Respondents for the
gathering of witnesses and evidence. I can only conclude Respondents made no such request
because they were fully prepared to present evidence on this issue and a reading of the record
reveals they did so. I therefore find no merit to Respondents’ due process argument.
JD–55–15
41
required to notify and bargain with the Union concerning any further changes to employee
working conditions, including changes not specifically announced prior to Respondents’
assumption of operations. The General Counsel argues Respondents violated the act by
unilaterally eliminating the predecessors’ uniform and shoe allowance and by altering the
employee break structure, including the elimination of the 30 minute paid lunch break. It is 5
argued Respondents failed to notify the employees and the Union of their intention to make these
changes prior to commencing operations on October 28. I do not find merit to this third theory.
First, it was not sufficiently articulated in the complaint, or in the General Counsel’s opening
statement for Respondent to be apprised of, respond to, or brief the argument. Second, the
parties’ stipulation, as set forth above, noting in particular paragraphs 15, 17 and 18 appears to 10
undercut the factual premise of the argument. Taken singularly, and together, I reject this
argument on due process grounds, noting in particular Respondent did not address such a
contention in their brief supports my conclusion to hold otherwise would be inappropriate here.
1. The Respondents are Perfectly Clear Successors15
Under the Board’s Spruce Up Rationale
Since the decision to reverse Spruce Up is one left to the Board, I am required to
determine whether Respondents violated the Act under Board’s current guidelines for which
Spruce Up is the seminal case relating to the “perfectly clear” successor analysis. The Court in 20
Burns stated, “A statutory successor is not bound by the substantive terms of the predecessor's
collective bargaining agreement and is ordinarily free to set initial terms and conditions of
employment. NLRB v. Burns Services Inc., supra at 281-282, 294-295. However, the Court went
on to state, “Although a successor employer is ordinarily free to set initial terms on which it will
hire the employees of a predecessor, there will be instances in which it is perfectly clear that the 25
new employer plans to retain all of the employees in the unit and in which it will be appropriate to
have him initially consult with the employees' bargaining representative before he fixes terms.”
In Spruce Up Corporation, supra at 195, the Board majority stated as follows:
30
When an employer who has not yet commenced operations announces new terms prior to
or simultaneously with his invitation to the previous work force to accept employment under
those terms, we do not think it can fairly be said that the new employer “plans to retain all
of the employees in the unit,” as that phrase was intended by the Supreme Court. The
possibility that the old employees may not enter into an employment relationship with the 35
new employer is a real one, as illustrated by the present facts. Many of the former
employees here did not desire to be employed by the new employer under the terms set by
him-a fact which will often be operative, and which any new employer must realistically
anticipate. Since that is so, it is surely not “perfectly clear” to either the employer or to us
that he can “plan to retain all of the employees in the unit” under such a set of facts.40
***
We believe the caveat in Burns, therefore, should be restricted to circumstances in which
the new employer has either actively or, by tacit inference, misled employees into believing
they would all be retained without change in their wages, hours, or conditions of
employment,[FN7] or at least to circumstances where the new employer, unlike the 45
Respondent here, has failed to clearly announce its intent to establish a new set of
conditions prior to inviting former employees to accept employment.
In International Ass'n of Machinists and Aerospace Workers, AFL-CIO v. NLRB, 595 F.2d
664, 674-676 (D.C. Cir. 1978), the court stated pertaining to the Board’s Spruce Up decision that: 50
JD–55–15
42
Even when Burns is read, as the Board does, to limit compulsory initial-terms
bargaining to situations wherein the successor has indicated that incumbents will be
retained and has not concurrently announced downward changes in employment terms,
predecessor-employees are afforded an important measure of protection. Once the duty
to bargain has thus attached, the successor is obliged to consult the incumbent union 5
before institution of less satisfactory terms. That is significant because unconditional
retention-announcements engender expectations, oft times critical to employees, that
prevailing employment arrangements will remain essentially unaltered. Even when
incumbents are not affirmatively led to believe that existing terms will be continued,[FN48]
unless they are apprised promptly of impending reductions in wages or benefits, they may 10
well forego the reshaping of personal affairs that necessarily would have occurred but for
anticipation that successor conditions will be comparable to those in force.
The Board was hardly at liberty to ignore these concerns, and its construction of Burns
is responsive to them. On the one hand, incumbents informed of the availability of
employment with the successor entity but contemporaneously notified of substantial 15
changes in the conditions thereof are not lulled into a false sense of security. When, on
the other hand, the announcement of job-availability is unaccompanied by any such
warning, incumbents may resolve to cast their lot with the successor, secure in the
knowledge that they can invoke the aegis of collective bargaining should alterations in the
terms of the employment be proposed. [FN49]20
FN49. When the employment offer and a subsequent announcement of changed terms
both occur prior to actual hiring, the announcement could deter some employees from
accepting, notwithstanding that it is made some time after the successor first makes
known his plan to retain incumbents. If, for example, the successor indicates that he
intends to reemploy his predecessor's workforce a month hence, and when employees 25
arrive to submit applications two weeks later he informs them that substantially
different terms will be instituted, some incumbents may decide to look for work
elsewhere. Nevertheless, a duty to bargain with respect to the proposed changes
could possibly be properly imposed on either of two grounds. For lack of sufficient
time to rearrange their affairs, incumbents might be forced to continue in the jobs they 30
held under the successor employer, notwithstanding notice of diminished terms, and
perpetuation of the workforce and as well the representational status of the incumbent
union may be assured. Even were that less plain, a bargaining obligation may be
essential to protect the employees from imposition resulting from lack of prompt notice.
Thus a prospective employment relationship may be presumed when a successor has 35
boldly declared an intention to retain incumbents but has not concurrently proposed
substantially reduced benefits. And such an inference may be left undisturbed by
revelation of employment terms after the employer's initial announcement but before
actual hiring commences. The successor would have no legitimate complaint about
mandatory bargaining in such circumstances because its necessity is a product of his 40
own misleading conduct.
In Hilton's Environmental, Inc., 320 NLRB 437, 438 (1995), the Board in applying the
“perfectly clear” caveat articulated in Burns as explained in Spruce Up stated:
45
Applying these principles to the facts of this case, we find that the “perfectly clear”
caveat is applicable in this case. Thus, as discussed above, the Respondent had
solicited applications from the employees on September 8, and had assured them the
following day that all would be hired unless some problem arose as a result of information
disclosed on their applications or in the interview process. Contrary to the Respondent, 50
there was no clear announcement at this time that it intended to establish new terms and
conditions of employment. See Fremont Ford, 289 NLRB 1290 (1988) (employer told
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43
union it had doubts about retention of only a few unit employees; employer's stated desire
to change seniority and institute a flat rate insufficient to indicate intent to establish new
employment conditions).
To the contrary, the Respondent's entire course of dealing with the employees,
including accepting the December 1991 letters of intent that stated that the employees 5
would work for the Respondent at the contractual wage rate, and the Army's having
advised the Union, prior to the September 8 solicitation of applications, that the
Respondent's contract with the Army was subject to the Service Contract Act and that the
Son's collective-bargaining agreement would therefore be incorporated into the contract,
all indicated that the Respondent did not intend to establish new terms and conditions of 10
employment. See Canteen Co., above; Weco Cleaning, above; Fremont Ford, above.
Accordingly, we find that the Respondent violated Section 8(a)(5) by unilaterally changing
existing terms and conditions of employment. [FN10]
In Canteen Co., 317 NLRB 1052 (1995), enfd. 103 F.3d 1355 (7th Cir. 1997), the new 15
company, prior to assuming control of operations on July 1, 1992, personally contacted the
predecessor employees to say it wanted them to apply for employment. It was noted the
respondent also had several discussions with the union representing the predecessor's
employees in June concerning its desire to establish a new job classification. The parties
discussed the sample contract they would use to begin negotiations for a new collective-20
bargaining agreement. On June 22, the respondent told the union that it wanted the
predecessor's employees to serve a probationary period and the union agreed. On that date, the
parties agreed to meet on June 30 to negotiate a collective-bargaining agreement. In its
discussions with the union, the respondent did not mention anything about making any changes
in the initial terms and conditions and the Board, stated:25
We agree with the judge that the Respondent violated Section 8(a)(5) of the Act when,
on or after June 23, the Respondent told three of the four predecessor employees that
they could continue working the food services operation, but at significantly reduced
wages. Specifically, we find that by June 22, when the Respondent expressed to the 30
Union its desire to have the predecessor employees serve a probationary period, the
Respondent had effectively and clearly communicated to the Union its plan to retain the
predecessor employees. Therefore, as it was “perfectly clear” on June 22 that the
Respondent planned to retain the predecessor employees, the Respondent was not
entitled to unilaterally implement new wage rates thereafter.35
Our colleagues in dissent contend that the “perfectly clear” caveat in Burns, as
interpreted in Spruce Up, should apply only when the new employer has failed to
announce initial employment terms prior to, or simultaneously with, the extension of
unconditional offers of hire to the predecessor employees. None of the cases cited in the
dissent, including Burns and Spruce Up, expressly limit the caveat to such a late point in 40
the transition from one employer to another. To the contrary, the judge correctly cited
Roman Catholic Diocese of Brooklyn, 222 NLRB 1052 (1976), enf. denied in relevant part
sub nom. Nazareth Regional High School v. NLRB, 549 F.2d 873 (2d Cir. 1977), as a
controlling example of the imposition of an obligation to bargain about initial terms of
employment prior to the new employer's extension of formal offers of employment to the 45
predecessor's employees.
The facts and the Board's findings in Hilton Environmental, supra, and Canteen Co.,
supra, demonstrate that an actual offer of employment is not required to establish the “perfectly
JD–55–15
44
clear” successor's obligation to bargain.14 Rather, it has an obligation to bargain over initial terms
of employment when it displays an intent to employ the predecessor's employees without making
it clear to those employees their employment will be on terms different from those in place with
the predecessor employer. See also, Elf Atochem North America, Inc., 339 NLRB 796, 808
(2003); DuPont Dow Elastomers, LLC, 332 NLRB 1071, 1073-1074, 1074 fn. 7 (2000), enfd. 296 5
F.3d 495 (6th Cir. 2002) (perfectly clear successor found where the unions were informed that
although the successor employer would not honor the predecessors CBA’s it would maintain
employees’ wages and benefits under those contracts); Helnick Corp, 301 NLRB 128, 134
(1991); Turnbull Enterprises, 259 NLRB 934, 938-940 (1982); and CME, Inc., 225 NLRB 514
(1976).1510
Similarly, in Cadillac Asphalt Paving, 349 NLRB 6, 10-11 (2007) the Board stated:
The record clearly establishes that Respondent LLC is a “perfectly clear” successor to
Respondent Paving. On July 1, LLC assumed control of Paving's operations. On July 7, 15
LLC President Rickard announced the joint venture in a meeting with Paving's entire work
force. After Rickard spoke, MPMC Safety Director Marlene Van Patton asked all the
employees to complete job applications and W-4 forms to update LLC's records. The
employees, including the drivers, completed and submitted their applications that day.
After completing his paper-work, driver Steve Pierce asked LLC General Manager 20
Sandell, who was also present at the meeting, about LLC's 401(k) plan. Sandell
responded that LLC did not have a 401(k) plan for hourly employees. Aside from the 401
(k) remark, LLC did not announce any changes to the employees' terms and conditions of
employment at this meeting. The following day, July 8, the employees returned to work
without any changes in operations or duties.25
Although not mentioned by the judge in his decision, LLC's hiring process entailed no
further measures. Unit driver Pierce testified that LLC did not conduct job interviews.
There is no evidence that LLC sought additional applicants from any source other than
Paving's work force.
As noted above, at no time before or during the July 7 meeting did LLC mention 30
changes to the employees' negotiated wages, benefits, or other terms and conditions of
employment. In fact, prior to this meeting, when employee and Teamsters steward
Pierce asked LLC agent Fred Aiken about the Respondents' plans for the Teamsters,
Aiken assured Pierce that everything would remain the same. As a result, the drivers
reasonably assumed that their terms and conditions of employment would remain the 35
same when LLC took over Paving's operations. Nothing said at the July 7 meeting
dispelled their assumption.[FN31]

14 In enforcing the Board’s order in Canteen, the court stated, “In this case, Canteen instituted
unilateral changes in the initial terms of employment by offering drastically reduced rates of pay
to the predecessor's experienced employees without prior negotiation. The employees' refusal to
accept employment was found by the ALJ and the Board to be a constructive denial of
employment. We agree that Canteen's conduct was “inherently destructive” of the rights of those
employees. As a result, Canteen had the burden of justifying its actions. See, Canteen Corp. v.
NLRB, 103 F.3d 1355, 1366 (7th Cir. 1997).
15 In C.M.E., Inc., at 514-515, the Board held the respondent made it “perfectly clear” that it
planned to retain all or substantially all of the employees in the unit as of February 25, and the
obligation to bargain, including the setting or altering of initial terms of employment, commenced
on that date rather than May 6, when the union subsequently made a formal request for
recognition and bargaining.
JD–55–15
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Thus, by offering job applications and W-4 forms to Paving's employees on July 7, LLC
invited the employees to accept employment without announcing its intention to set initial
terms and conditions of employment. In these circumstances, we find, in agreement with
the judge, that Respondent LLC is a “perfectly clear” successor to Respondent Paving
and that Respondent LLC violated Section 8(a)(5) and (1) of the Act by refusing to 5
recognize and bargain with the Teamsters and by failing to continue the terms and
conditions maintained by Paving at the time of succession, i.e., the health and welfare
and pension fund contributions in accord with terms of the expired 1998-2003 MRBA
labor agreement.[FN32]
FN32. See Elf Atochem North America, Inc., 339 NLRB 796 (2003); Helnick Corp., 10
301 NLRB 128 fn. 1 (1991). We do not adopt the judge's finding that LLC violated
Sec. 8(d), which provides, in relevant part, that “where there is in effect a
collective-bargaining contract … no party to such contract shall terminate or
modify such contract.” Because LLC, as a successor, has no prior agreement with
the Teamsters, it could not violate Sec. 8(d) by implementing terms and conditions 15
of employment that varied from the predecessor's collective-bargaining
agreement. See U.S. Generating Co., 341 NLRB 1127, 1135(2004).
In the current case, in August 2013, the USDA awarded AEPS a federal contract to
provide guard services at the USDA Headquarters facility, which includes the South Building and 20
the Whitten Building, with an effective date of October 28. AEPS director of operations Devers
received a copy of the predecessors CBA with the Union as the USDA contract had the CBA
attached. AEPS used the CBA to comply with the Service Contract Act (SCA), in lieu of the
wage determination. Devers testified he was in contact with the predecessor project manager
Ortman as early as August 9. He testified he approached Ortman toward the end of August 25
about Ortman becoming project manager for AEPS. Devers testified Ortman had the title project
manager for AEPS as of August 2013, while Ortman continued to also work in that capacity for
the predecessor employers. Ortman testified he met Devers and AEPS Owner Walker when
they came down for the contract award presentation with USDA. Ortman testified, about a week
after they met, he and Devers began to discuss the transition to AEPS. Ortman testified that, at 30
that time, the discussion included Ortman explaining to Devers how the current contract
operated. Ortman testified Devers explained this is what we are going to do different from what
you are doing now, and they discussed some of the initial terms and conditions of employment
AEPS would set. Ortman testified they talked initially about the Paragon and AEPS split and how
it would affect the employees who would work for Paragon.35
AEPS awarded Paragon a subcontract in August 2013 where Paragon was to provide
guard services at the Whitten Building while AEPS was responsible for providing guard services
at the South Building. Baker, Paragon’s vice president, operations testified 90% of the time
Paragon takes over a contract the security officers of the predecessor are represented by a 40
union. Baker testified Paragon uses the predecessor’s CBA to comply with the SCA to ensure
the jobs they are offering for the new contract meet the requisite wage and hour provisions.
The Union had a CBA in effect with the predecessor contractors covering bargaining unit
employees working in both named buildings with an expiration date in September 2014. As 45
federal contractors on a service contract, Respondents were required under Executive Order
13495 and under the SCA, to match wages and fringe benefits of the predecessor employers’
CBA, and to offer the predecessors employees a right of first refusal for employment in positions
for which they were qualified.16 Thus, outstanding legal requirements circumscribed permissible

16 I make no finding whether Respondents complied with the SCA or the Executive Order.
JD–55–15
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deviations from the employees existing wages and fringe benefits, and Respondents were
required to offer the predecessor employees employment for positions for which they were
qualified, which in essence was the positions in which they were already working as the record
reveals Respondents hired all but one of the incumbent employees, the latter is said to have
failed a drug test.5
Along these lines, AEPS submitted a “Training Management Plan” to USDA
shortly after winning the award for the USDA contract in August 2013. The document
states that “Team AEPS intends to carry over the incumbent contractor’s guard force
from the previous contract in respect to Executive Order 13495, ‘Nondisplacement of 10
Qualified Workers under Service Contracts,’ the transition training regimen has been
simplified for the incumbent staff, and will be more manageable within the transition.”
Citing Paragon’s experience, AEPS went on to state in the plan, “The companies are
current in their sense on how to best manage all aspects of this transition for USDA,
including the training. Because of this, AEPS foresees no significant difficulties in 15
delivering a trained and qualified guard force by the October 28, 2013 contract start
date.” Thus, AEPS stated to USDA that AEPS intended to carry over the incumbent
guard staff. AEPS statement went further than stating AEPS and Paragon were merely
following the Executive Order. Rather, they stated they benefited from doing so by
allowing for expedited training of an already experienced qualified staff. The touting of20
this plan along with expedited training of an experienced staff as a selling point to USDA
reveals that neither USDA nor AEPS had problems with the prior staff.
Covington, who was employed as a major for the predecessor employers, was working as
a captain for Paragon at the time of his testimony. He testified that, during the transition period,25
Ortman held a supervisor’s meeting and informed the supervisors that some of the SPO’s were
going to work for Paragon and some for AEPS. He testified they were going to have to make
selections on who would work for each company. Union Treasurer and Shop Steward Jones
worked for the predecessor employers as a security guard (SPO), and he was employed as such
by Paragon at the time of his testimony. Jones’ credited testimony reveals that on September 3, 30
he was instructed by his supervisor, along with the co-workers on his shift, to look at the bulletin
board to see if their names were listed for Paragon. Jones estimated there were about 10 or 15
names on the memo. Jones testified the instructions on the posted memo were to report to a job
fair on September 14. Jones’ testimony reveals the supervisor stated if someone’s name was
not on the list, they would be working for AEPS and would receive information later. 35
Similarly, Walker, a shop steward, who was hired by AEPS credibly testified that: In mid-
September, Walker saw a posting on the officers’ bulletin board that Paragon and AEPS would
be taking over the USDA contract, and the memo stated the security officers needed to see
Ortman in reference to the new contracts to find out which company the employees were 40
assigned to. Walker spoke to Covington, who told Walker to speak with Ortman in reference to
her company assignment, and that the officers would probably have to provide their email
addresses so they could be sent a link. Covington told Walker it was more than likely she would
be working for AEPS since she was currently assigned to the South Building. Around about 2
days later, Ortman called Walker and stated she needed to give the company her email address 45
so they could send her the employment link to apply for employment with AEPS. Ortman told
Walker she needed to make sure she had her dates of certification to fully complete the process.
Walker gave her email address to her supervisor that evening. Gaines works for AEPS and has
served as vice-president of the Union since 2007. Gaines’ credited testimony also reveals
around the middle or end of September the supervisors asked the officers for an email address 50
to enable AEPS to email a web link to them so they could get into the AEPS system.
JD–55–15
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Walker’s credited testimony reveals that: Following Ortman’s solicitation of her email
address, Walker received an email from AEPS on September 23. Walker testified there was no
substantive writing contained in the email other than a clickable link for her to begin the
application process for AEPS. Walker clicked on the email link and it took her directly to the 5
application process. Walker credibly testified the link eventually took Walker to different policies
she needed to sign off on. Walker submitted a resume at the time she submitted her application.
Walker’s credited testimony reveals she completed her online application on September 25. She
testified that while she was filling out the application she also completed the federal and state tax
forms and the I-9 form. Walker testified that, during that time, she also reviewed: a 10
nondisclosure agreement; a sleeping-on-the-job policy; and a zero tolerance acknowledgment.
Walker testified she filled out or reviewed all this information while completing her application on
line. Walker testified she had to complete her certification dates for her CPR/first aid, AED, and
things of that nature. She testified she also provided direct deposit information while filling out
her application. Walker testified that while completing the on line application AEPS did not tell 15
her there would be any change in her working conditions once they took over the contract.
Walker received an email confirmation on September 25 from AEPS that they received her
application. Walker testified that around 2 days after completing her application, she provided
other documents to AEPS personnel including her driver’s license and social security card.
Similarly, Gaines credibly testified that after she provided a supervisor with her email address, 20
Gaines received an email from AEPS with the link to allow her to apply for employment. When
she followed the link it enabled Gaines to complete “All the stuff that you would fill out for
employment. We had banking information was in there, W-4s was in there, harassments, that
kind of -- everything that you would fill out.” Gaines testified there were policies and a handbook
policy there.17 Gaines testified she had to acknowledge the policies on line by checking off on 25
them. Gaines testified everything was done online. Gaines testified she completed the
application within a couple of days after she received the email link. Gaines testified that, after
she completed the application, she never used the link again to go back on line and complete
any other information.
30
Walker’s online AEPS application was submitted under the name of Fitzgerald and is
dated September 25. The application was entered into evidence as a generic application for all
AEPS applicants and it contains the following statements under item 12, which are in essence
repeated just above the online signature line for the application:
35
Furthermore, I understand and agree that my employment is for no definite period and
may, regardless of the date of payment of my wages or salary, be terminated at any time
without any previous notice and without any requirement of cause.
* * *
I further understand and agree that no employee or official of the company has any 40
authority to alter the terms of my at-will employment through oral statements or promises.
In order to be binding on the Company, and any agreement that or promise that alters this

17 There appears to be a clickable link to the AEPS Employee Handbook as part of the
application materials to which Gaines and Walker testified as it is included as one of the policies
the employees’ had to click off on. The handbook placed in evidence is 57 pages. There is a
heading in the index for dress and personal appearance. It states at page 44 of the handbook
that the company will furnish uniforms as required by the contract and if the uniform is of wash
and wear materials, the employee will be responsible for cleaning and maintaining the uniforms.
There is no reference to the company provision of shoes under this heading. There is no claim
that the AEPS applicants received a hard copy of this handbook.
JD–55–15
48
policy must be in writing and signed by the President of the company.
The application also states, “this application for employment is not a contract of employment and
in no way constitutes a commitment by the Company to hire any applicant for employment.”
5
Concerning, Paragon, Jones identified two other memos containing the name “Paragon
Systems.” It states in the first memo that Paragon would be holding a “Job Fair” on September
14, and in the second memo that Paragon would be holding a job fair on September 29. Jones
testified these memos were distributed at work, and were additional memos to the one he had
previously seen posted on September 3. Jones testified that he had to complete a job application 10
on line prior to attending the Paragon job fair announced in the referenced memos. Jones
testified the requirement of completing an application online was presented to the officers by the
supervisors, and from the job fair announcement memos. The memo announcing the September
14 Paragon job fair stated it would take place at the Greenbelt Marriott, and gave time frames for
the guard’s arrivals based on an alphabetized listing of their last name. The memo stated 15
“Paragon Systems is currently accepting applications from incumbent Security Officers only. To
be considered for employment, incumbents MUST complete all parts of the Paragon application
process no later than 24 hours before the job fair.” The memo directed applicants to two
websites as to where to complete an online application. The memo stated the applicants must
bring an original and copy of the following documents to the job fair: driver’s licenses or state ID; 20
social security card; birth certificate, passport or naturalization; high school diploma, transcript or
GED certificate; DD-214, if applicable; void check or bank letter signed by a bank representative.
The memo stated, “Offers of employment are contingent upon successfully passing all pre-
employment requirements, attending all scheduled training and passing all contract-required
performance standards. A medical exam and a drug screen are also required. 25
Jones applied online to Paragon as directed in the described memos. Jones testified that
when he filled out the application there was nothing that indicated his terms of employment that
existed at USEC would change with Paragon. Jones testified the only thing it said was they
would be “at will” employees. Jones testified the on line application did not mention anything 30
about the following: shoe allowance, training pay, a change in how they would receive their
health and welfare benefit, break structure, or threshold for full-time employment. However, the
signature page of the Paragon’s sample application submitted into evidence contains the
following:
35
If hired, I agree and understand that I will conform with the policies, practices and
procedures of Paragon. I further agree that my employment is “at-will.” This means that
either Paragon or I may terminate the employment relationship at any time, with or without
notice, and with or without cause. I understand that Paragon retains the right to establish
compensation, benefits and working conditions for all of its employees. Accordingly, I 40
understand and agree that Paragon retains the sole right to modify my compensation and
benefits, position, duties, and other terms and conditions of employment, including the
right to impose disciplinary action that Paragon, at its sole discretion, determines to be
appropriate. No employee or representative of Paragon, other than the President of
Paragon, Inc. has the authority to alter the at will nature of my employment relationship, or 45
make any agreement inconsistent to the foregoing.
I acknowledge that I have been given the opportunity to ask questions regarding
Paragon’s policies and procedures, and my potential status as an employee “at-will,” and
no Paragon representative has promised or implied to me that if I am hired, I will be
employed under any terms other that stated above. I agree that this constitutes an 50
JD–55–15
49
integrated, binding agreement with respect to the “at-will” nature of my employment
relationship.”
I find Respondents are “perfectly clear” successors under the Board’s Spruce Up
requirements in that they announced their intention to retain the predecessor employees and 5
invited them to accept employment while failing at the same time to announce their intention to
change their terms and conditions of employment. See, Cadillac Asphalt Paving, 349 NLRB 6,
10-11 (2007); Elf Atochem North America, Inc., 339 NLRB 796, 808 (2003); Elastomers, LLC,
332 NLRB 1071, 1073-1074, 1074 fn. 7 (2000), enfd. 296 F.3d 495 (6th Cir. 2002); Hilton's
Environmental, Inc., 320 NLRB 437, 438 (1995); Canteen Co., 317 NLRB 1052-1053 (1995), 10
enfd. 103 F.3d 1355 (7th Cir. 1997); Helnick Corp, 301 NLRB 128, 134 (1991); Turnbull
Enterprises, 259 NLRB 934, 938-940 (1982); and CME, Inc., 225 NLRB 514 (1976). The
General Counsel maintains in its brief that AEPS became a perfectly clear successor under
Spruce Up no earlier than the date on which it distributed the memo for employees to see
Ortman concerning which company they would be working for, and no later than the date on 15
which the employees completed their AEPS application. Similarly, the General Counsel argues
that Paragon became a perfectly clear successor by failing to announce its intention to establish
new terms and conditions of employment prior to or contemporaneously with the issuance of its
job fair and application announcement. I find the General Counsel has been persuasive with
these contentions.20
In this regard, in August AEPS announced its intent to USDA to employ the prior
experienced work force with the idea of streamlining training as a means of meeting the October
28 contract startup date. AEPS referenced Paragon as part of its plan to timely start the
contract clearly establishing that Respondents intended to hire the predecessors’ employees. 25
Soon thereafter, AEPS contacted the Ortman, the predecessors’ project manager and enlisted
him as the point person for the contract transition and then employed him as AEPS project
manager for the USDA site sometime in August. Ortman informed then Major Covington that he
would also be retained, and Covington was eventually employed by Paragon. They met with the
existing supervisors and divided up which of the predecessors’ employees would be working for 30
AEPS, which was to be the majority employer concerning the bargaining unit; and which were to
work for Paragon. On September 3, a memo was posted at the jobsite announcing a job fair
and stating which employees were to apply to Paragon. Jones, a predecessor employee and a
union official, credibly testified the employees on his shift were directed to the memo; and the
ones not listed were told that they would be hearing from AEPS with instructions as to how to 35
apply to that employer. Thus, the announcement of Paragon’s recruiting efforts was made to all
future employees of Paragon and of AEPS signaling the Respondents had plans to hire all of
the predecessors employees and had gone so far as to pick which employer would hire which
employees. Shortly, thereafter, Paragon posted and distributed its September 14 job fair
memos inviting designated employees to attend the off worksite September 14 job fair, telling 40
them to fill out an online application, prior to attending, and that it was necessary to bring an
original and copy of the following documents to the job fair: driver’s licenses or state ID; social
security card; birth certificate, passport or naturalization; high school diploma, transcript or GED
certificate; DD-214, if applicable; void check or bank letter signed by a bank representative.
These are the type of documents customarily presented to an employer for new employees. 45
Paragon’s job fair announcements, along with the directive of which employees were to apply;
constituted an invitation for employment; with no concomitant announcement that there would be
a change i.e., a reduction in benefits. Thus, employees had to make a commitment in travel and
time in traveling to the job fair, locating and copying employment documents, as well as locating
and filling out an online application without being told Paragon’s offer included a reduction in 50
benefits. Paragon official Baker also identified a second Paragon job fair memo for a job fair to
JD–55–15
50
be held on September 29, with similar announced requirements concerning the need to fill out an
application; and bring the described employment related documents. Therefore, employees
attending the second job fair would have only received a later announcement in terms of
Paragon’s offer letter about Paragon’s intent to change benefits, and likely would have read
Paragon’s application at a later date then those attending the initial job fair. 5
Thus, although Paragon had received the predecessor’s CBA in August as part of the
award process to allow it to meet its SCA requirements for the predecessor’s employees those
employees were solicited to attend a job fair in early September by Paragon, but were not
informed until September 14; and/or September 29 that Paragon intended to alter benefits to 10
their disadvantage. See, International Ass'n of Machinists and Aerospace Workers, AFL-CIO v.
NLRB, 595 F.2d 664, 674-675 fn. 49 (D.C. Cir. 1978), where the court stated “Even when Burns
is read, as the Board does, to limit compulsory initial-terms bargaining to situations wherein the
successor has indicated that incumbents will be retained and has not concurrently announced
downward changes in employment terms, predecessor-employees are afforded an important 15
measure of protection. Once the duty to bargain has thus attached, the successor is obliged to
consult the incumbent union before institution of less satisfactory terms. That is significant
because unconditional retention-announcements engender expectations, oft times critical to
employees, that prevailing employment arrangements will remain essentially unaltered. Even
when incumbents are not affirmatively led to believe that existing terms will be continued,[FN48]20
unless they are apprised promptly of impending reductions in wages or benefits, they may well
forego the reshaping of personal affairs that necessarily would have occurred but for anticipation
that successor conditions will be comparable to those in force.” There the court noted that even
when the employment offer and subsequent announcement of changed terms both occur before
the actual hiring, a duty to bargain with respect to the proposed changes could possibly be 25
imposed on either of two grounds; for lack of sufficient time to rearrange their affairs, incumbents
might be forced to continue in the jobs they held under the successor employer, notwithstanding
notice of diminished terms, and even were that less plain, a bargaining obligation may be
essential to protect the employees from imposition resulting from lack of prompt notice. “Thus a
prospective employment relationship may be presumed when a successor has boldly declared 30
an intention to retain incumbents but has not concurrently proposed substantially reduced
benefits. And such an inference may be left undisturbed by revelation of employment terms after
the employer's initial announcement but before actual hiring commences. The successor would
have no legitimate complaint about mandatory bargaining in such circumstances because its
necessity is a product of his own misleading conduct.”35
I find the then prospective employees of AEPS were similarly disadvantaged by
Respondents’ conduct. First, as early as September 3, these employees were informed that
certain employees had been designated to work for Paragon; and that the remainder employees
would be contacted by AEPS with instructions on how to apply. Similarly, Walker’s testimony 40
reveals that in mid-September a memo was posted stating the security officers needed to see
Ortman to find out which company the employees were assigned to. Walker spoke to Covington,
who told her to speak with Ortman in reference to her company assignment, and that it was more
than likely that she would be working for AEPS since she was currently assigned to the South
Building. Around about 2 days later, Ortman called Walker and stated she needed to give the 45
company her email address so they could send her the employment link to apply for employment
with AEPS. Ortman told Walker she needed to make sure she had her dates of certification so
she could fully complete the process. Walker gave her email address to her supervisor that
evening. Similarly, Gaines’ credited testimony reveals that around the middle or end of
September the supervisors asked the officers for an email address to enable AEPS to email a 50
web link to them so they could get into the AEPS system. Both Walker and Gaines testified that
JD–55–15
51
after providing their email addresses, they were sent emails by AEPS with clickable links to an
online application. The totality of Paragon and AEPS conduct here could only be viewed by the
AEPS prospective employees as an invitation to employment.
I also find that while, as set forth above, Respondents bargaining obligation accrued 5
when they solicited the predecessor employees to apply, that under Board law statements in the
Respondents’ respective employment applications that they would be hired as at will employees
concerning AEPS; and the additional statements in Paragon’s application wherein it reserved
unto itself the right to change benefits, but did not state it would do so, or list any specific benefit
changes also amounted to a failure to give the applicants sufficient information to alter 10
Respondents status as perfectly clear successors.18 See, Windsor Convalescent Center of North
Long Beach, 351 NLRB 975, 980-981 (2007), enf. denied in relevant part, 570 F.3d 354 (D.C.
Cir. 2009),19 where the Board majority found that even assuming the respondent informed
applicants that they would only be employed on a temporary basis, that as a result they were not
eligible for certain benefits, and that other terms and conditions would be set forth in personnel 15
policies in a subsequently issued handbook the Board found the respondent was nevertheless a
perfectly clear successor because the respondent failed announce its intent to establish a new
set of conditions prior to inviting the employees to accept employment. In Windsor Convalescent
Center of North Long Beach, at 981, the Board majority stated, “there is no evidence that the
Respondent, prior to the takeover, informed Candlewood employees that those who were 20
retained would be working under different core terms and conditions of employment. On this
record, we find that the Respondent ‘failed to clearly announce its intent to establish a new set of
conditions prior to inviting former [Candlewood] employees to accept employment.’” See also,
Canteen Co., 317 NLRB 1052 (1995), enfd. 103 F.3d 1355 (7th Cir. 1997), where the Board
found an employer to be a perfectly clear successor, although it had informed the union that it 25
wanted the predecessor’s employees to serve a probationary period. It is commonly known that
employees serving a probationary period are considered to be akin to employees at will during
that period.
The court in S & F Market Street Healthcare LLC v. NLRB, 570 F.3d 354, 359-362 (D.C. 30
Cir. 2009),20 in reversing the Board in Windsor Convalescent, supra and concluding that the
respondent employer was not a perfectly clear successor, stated as follows:

18 I make this finding only should a reviewing authority disagree with my prior analysis,
because I have previously found that Respondents bargaining obligation affixed when it solicited
the employees to apply, and for the reasons stated subsequent conduct would not alter that
obligation.
19 The Board majority Paragon Systems, Inc., 362 NLRB No. 166 slip op. at 3 fns. 6, 7 (2015),
distinguished but did not overrule Windsor Convalescent Center of North Long Beach, supra. In
Paragon, supra, the Board pointed out that in Windsor the Board had found the respondent to be
a “perfectly clear” successor, which as pointed out by the ALJ in Paragon was not being alleged
against Paragon in that litigation. See, Paragon at pages 6 to 7. Since the General Counsel has
taken the position that Paragon and AEPS are perfectly clear successors in the current case a
separate set of issues and parameters are raised here.
20 While the court in S & F Market Street Healthcare LLC reversed the Board’s perfectly clear
successor finding in Windsor Convalescent Center of North Long Beach, and in doing so
disagreed with the Board’s “core terms and conditions” requirement, I am constrained to follow
Board precedent, not reversed by the Supreme Court. See, Waco, Inc., 273 NLRB 746, 749 fn.
14 (1984).
JD–55–15
52
On the undisputed facts of this case, no employee could have failed to understand that
significant changes were afoot. The cover letter attached to each job application foretold
“significant operational changes,” identified various pre-employment checks and tests to
be passed, and explained that any employment offered would be both temporary and at
will. The Board discounted the cover letter on the ground that it “lacked any mention of 5
intended changes to employees' terms and conditions of employment.” Id. at 981. Yet
under Candlewood's collective-bargaining agreements with the Union, as any employee
would know, each employee with 90 days on the job had vested “seniority rights” and
could not be terminated except for cause, which the Union could contest through the
negotiated grievance and arbitration procedure. By announcing that any employment 10
with S & F would be at will, therefore, S & F was announcing a very significant change in
the terms and conditions of employment-both for those who had been employed by
Candlewood for 90 days or more and for those who expected to be. In addition, by
requiring its new employees to agree to its own alternative dispute resolution policy, S &
F made it clear the grievance mechanism the Union had negotiated with Candlewood 15
would not be available.
***
Nevertheless, the Board concluded “there is no evidence that [S & F], prior to the
takeover, informed Candlewood employees that those who were retained would be
working under different core terms and conditions of employment.” 351 N.L.R.B. at 981. 20
We see two errors of law in this restatement of the “perfectly clear” standard.
First, the focus upon “core” terms and conditions misstates the rule, which is that the
successor employer must simply convey its intention to set its own terms and conditions
rather than adopt those of the previous employer. Granting that a trivial change in
employment conditions may not suffice, there is no requirement in Burns or Spruce Up25
that the intended change(s) involve “core” terms. Whatever that term may mean,
however, it surely includes instituting at-will employment and eliminating the negotiated
grievance and arbitration procedure.
Second, the Board's holding achieves precisely what Burns and Spruce Up sought to
avoid. In those cases the Supreme Court and the Board respectively started from the 30
presumption that a successor employer may set its own terms and conditions of
employment and reserved the “perfectly clear” exception for cases in which employees
had been misled into believing their terms and conditions would continue unchanged. See
Burns, 406 U.S. at 294-95, 92 S.Ct. 1571; Spruce Up, 209 N.L.R.B. at 19. In this case,
the Board presumed the predecessor's terms and conditions must remain in effect unless 35
the successor employer specifically announces it will change “core” terms and conditions.
Thus does the exception in Burns swallow the rule in Burns. Under the proper standard,
S & F clearly comes within the protection of the rule rather than the straightjacket of the
exception: It was never “perfectly clear that the new employer plan[ned] to retain all of the
employees in the unit,” Burns, 406 U.S. at 294-95, 92 S.Ct. 1571, let alone that it did so 40
“with no notice that they would be expected to work under new and different terms,”
Spruce Up, 209 N.L.R.B. at 195 n. 7. On the contrary, the Company announced it would
retain only those who met certain preemployment tests and stated its intent to set new
initial terms and conditions of employment.
45
Since I find that AEPS and Paragon’s bargaining obligation with the Union attached at the
time they each solicited the predecessor employees to apply; which predate the time of the
employees’ actual applications and any statements contained therein, this case is distinguishable
from the court’s decision in S & F Market Street Healthcare LLC v. NLRB, 570 F.3d 354 (D.C.
Cir. 2009). However, this case is also distinguishable from S & F Market in other significant 50
ways. There, as reported by the court, the respondent employer purchased the predecessor,
JD–55–15
53
and prior to assuming control concluded it would need to increase the level of care and replace
the staff. It then decided closer to its July 1 takeover that it could not replace the entire staff
because doing so would be too disruptive to the residents. Rather, it decided to hire some of the
predecessor’s employees for up to 90 days, while it continued to recruit new employees. When
in June it had applications distributed to existing staff it included a cover sheet stating that it 5
intended to implement significant operational changes and current employees must submit the
attached application for employment. It advised that only employees who meet the company’s
operational needs will be interviewed and any offer of employment will be contingent on your
passing a pre-employment physical, drug test and acceptable reference and background checks.
The court noted the job application itself required the applicant to affirm their understanding that 10
passing the tests and checks was a condition of employment, that any employment would be at
will, and that S & F could change benefits, policies at any time. During subsequent interviews at
the end of June, each employee who submitted an application was interviewed; and each
applicant was informed their employment would be temporary and would last no more than 90
days. The employees who were accepted were sent a letter dated June 30, stating it was an 15
offer of temporary employment; that as a temporary employee they were not eligible for company
benefits, and that other terms of your employment will be set forth in the respondents’ personnel
policies and its employee handbook. It stated their employment was at will and would end no
later than the expiration of the 90 day period, unless they were selected for regular employment.
Those hired also had to sign an agreement to be bound by an alternative dispute resolution 20
policy. Within the first 3 months of operation the successor had replaced a majority of those
hired from the predecessor’s staff with new employees.
In the current case it was the Respondents intent to retain the predecessor employees,
acknowledging their skill and training, and AEPS so informed USDA of such in August, before it 25
had any contact with those employees. Moreover, Respondents were required to offer
employment to those employees under the existing executive order. There is no claim that this
was done on a temporary basis, or that the employees were informed of such. In fact, seniority
lists submitted at the hearing in February 2015, reveal that prior incumbent employees hired by
Paragon in October 2013 still constituted 16 of 17 of Paragon’s unit employees. Moreover, 30
Paragon retained incumbent employees on the seniority list using the seniority dates the
employees began working for a USDA contractor, rather than the October 2013 date they began
working for Paragon. All but one of those dates, were 2010 or earlier, dating as far back as
1996. Additionally, the employees here were used to meeting certification and testing
requirements when there was a change in contractors, so those requirements mentioned by 35
Paragon in its September posting to attend its job fairs would not have signified to the incumbent
employees that Respondents were going to change their working conditions. Rather,
Respondents were following the same pattern of the predecessor employers, for which these
employees were accustomed and had survived in the prior transition period between
contractors. Devers testified the employees of the predecessor were required to maintain most 40
of the requisite qualifications for employment with the predecessor employers, and he did not
believe there was a requirement change for AEPS in this instance other than in the nature of type
of drug testing. Thus, there was little change in their existing requirements for the incumbent
employees to transition to the Respondents. In fact, only one of the predecessors’ employees
who applied to Respondents failed to meet the testing requirements. This point is somewhat 45
conceded by Respondents in their brief because they contend they did not offer the incumbent
PSOs employment until Respondents gave them their offer letters. However, those offer letters
were contingent on the enumerated testing requirements. Thus, unlike S & F Market, I have
concluded based on the cases cited and for the reasons mentioned that Respondents bargaining
obligation with the Union attached when Respondents solicited the predecessor employees to 50
apply, which predated their applications. Moreover, I find the terms set forth in the applications
JD–55–15
54
when subsequently reviewed did not signal to these employees that Respondents intended to
change their wages, hours, and benefits.
The court noted in S & F Market that the Board did not explain its “core terms and
conditions of employment” reference in Windsor Convalescent Center and for the reasons stated 5
by the court drew a different result than that reached by the Board. While I cannot speak for the
Board, I note that in Litton Financial Printing Div., a Div. of Litton Business Systems, Inc. v.
NLRB, 501 U.S. 190, 198-201 (1991), the Court held that a post contract layoff dispute not
arising under the terms of the contract was not arbitrable, under the expired arbitration clause. In
this regard, the Court stated that: 10
The Board has determined, with our acceptance, that an employer commits an unfair labor
practice if, without bargaining to impasse, it effects a unilateral change of an existing term
or condition of employment. See NLRB v. Katz, 369 U.S. 736, 82 S.Ct. 1107, 8 L.Ed.2d
230 (1962). In Katz the union was newly certified and the parties had yet to reach an initial 15
agreement. The Katz doctrine has been extended as well to cases where, as here, an
existing agreement has expired and negotiations on a new one have yet to be completed.
See, e.g., Laborers Health and Welfare Trust Fund v. Advanced Lightweight Concrete Co.,
484 U.S. 539, 544, n. 6, 108 S.Ct. 830, 833, n. 6, 98 L.Ed.2d 936 (1988).
Numerous terms and conditions of employment have been held to be the subject of 20
mandatory bargaining under the NLRA. See generally 1 C. Morris, The Developing Labor
Law 772–844 (2d ed. 1983).
***
In Hilton–Davis Chemical Co., 185 N.L.R.B. 241 (1970), the Board determined that
arbitration clauses are excluded from the prohibition on unilateral changes, reasoning that 25
the commitment to arbitrate is a “voluntary surrender of the right of final decision which
Congress ... reserved to [the] parties.... [A]rbitration is, at bottom, a consensual surrender
of the economic power which the parties are otherwise free to utilize.” Id., at 242. The
Board further relied upon our statements acknowledging the basic federal labor policy that
“arbitration is a matter of contract and a party cannot be required to submit to arbitration 30
any dispute which he has not agreed so to submit.” Steelworkers v. Warrior & Gulf
Navigation Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 1353, 4 L.Ed.2d 1409 (1960). See also
29 U.S.C. § 173(d) (phrased in terms of parties' agreed-upon method of dispute resolution
under an existing bargaining agreement). Since Hilton–Davis, the Board has adhered to
the view that an arbitration clause does not, by operation of the NLRA as interpreted in 35
Katz, continue in effect after expiration of a collective-bargaining agreement.
***
We think the Board's decision in Hilton–Davis Chemical Co. is both rational and
consistent with the Act. The rule is grounded in the strong statutory principle, found in both
the language of the NLRA and its drafting history, of consensual rather than compulsory 40
arbitration. See Indiana & Michigan, supra, at 57–58; Hilton–Davis Chemical Co., supra.
The rule conforms with our statement that “[n]o obligation to arbitrate a labor dispute arises
solely by operation of law. The law compels a party to submit his grievance to arbitration
only if he has contracted to do so.” Gateway Coal Co. v. Mine Workers, 414 U.S. 368,
374, 94 S.Ct. 629, 635, 38 L.Ed.2d 583 (1974). We reaffirm today that under the NLRA 45
arbitration is a matter of consent, and that it will not be imposed upon parties beyond the
scope of their agreement.
50
JD–55–15
55
In Finley Hospital, 359 NLRB No. 9, slip op. at 2-3 (2012), the Board majority stated:
The declared policy of the Act, as stated in Section 1, is to “encourage [e] the practice
and procedure of collective bargaining” and to protect the “full freedom” of workers in the
selection of bargaining representatives of their own choice. Section 8(a)(5) makes it an 5
unfair labor practice for an employer “to refuse to bargain collectively with the
representatives of his employees.” Because it is critically important that collective
bargaining be meaningful, it has long been established that an employer violates Section
8(a)(5) when it unilaterally changes represented employees' wages, hours, and other
terms and conditions of employment without providing their bargaining representative 10
prior notice and a meaningful opportunity to bargain about the changes. NLRB v. Katz,
369 U.S. 736, 742-743 (1962). Under this rule, an employer's obligation to refrain from
unilaterally changing these mandatory subjects of bargaining applies both where a union
is newly certified and the parties have yet to reach an initial agreement, as in Katz, and
where the parties' existing agreement has expired and negotiations have yet to result in a 15
subsequent agreement, as in this case. Litton Financial Printing Division v. NLRB, 501
U.S. 190, 198 (1991). In the latter circumstances, an employer must continue in effect
contractually established terms and conditions of employment that are mandatory
subjects of bargaining, until the parties either negotiate a new agreement or bargain to a
lawful impasse. Id . at 198-199. 20
The Supreme Court's decision in NLRB v. Noel Canning, 134 S.Ct. 2550 (2014), rendered the
Board's decision in Finley Hospital, 359 NLRB No. 9, slip op. at 2-3 (2012) invalid. However, in
Finley Hospital, 362 NLRB No. 102 (2015), a Board majority subsequently affirmed the ruling
finding an unlawful unilateral change concerning the discontinuance of a contractually 25
established wage increase following the expiration of the collective-bargaining agreement. The
Board stated, “even without a contractual obligation, the employer still has a duty to bargain
under Section 8(a)(5). That duty requires that the employer not make changes to existing terms
and conditions of employment without satisfying its statutory bargaining obligation. Changes
may be made if the employer notifies the union and bargains new terms--or if the parties bargain 30
and reach a lawful impasse. See, e.g., Des Moines Register & Tribune Co., 339 NLRB 1035,
1036-1038 fn. 6 (2003), review denied 381 F.3d 767 (8th Cir. 2004). When the employer ignores
its statutory duty to bargain and makes changes unilaterally, it is bypassing the union and
depriving its employees of their right to be represented in bargaining over their terms and
conditions of employment.” 35
As noted from the above discourse, unless certain circumstances exist from an expired
CBA, or the dispute arose under the prior contract, arbitration does not survive the expired CBA
during contractual hiatus periods. Ergo discipline taking place following the expiration of a CBA
would not ordinarily be arbitrable, bringing that type of discipline more akin to termination at will; 40
and differentiating it from the core conditions of employment such as wages, hours, and fringe
benefits for which it is commonly known must be bargained to impasse with a newly certified
union or following the expiration of a CBA before an employer can make changes to those
aspects of employees working conditions. Given this differentiation by the Court and the Board,
the average employee might not so readily conclude that a successor employer by merely stating 45
their employment would be at will standing alone would signify to that employee that the
successor employer was planning to make changes to their wages, hours or working conditions
when they were hired.21 In fact, to accept such a stance would allow every “perfectly clear”

21 Of course, it is even an open question as to whether an employer with an obligation to
recognize and bargain with a union, even absent a collective-bargaining agreement, could
terminate an employee “at will” that is without prior consultation with the employee’s collective-
JD–55–15
56
successor to eviscerate its bargaining obligation set forth by the Court in Burns by the use of two
words, “at will.” The Board in Sahara Las Vegas Corp., 284 NLRB 337, 343 (1987), enfd. 886
F.2d 1320 (9th Cir. 1989), rejected a similar attempt by a successor employer when it attempted
to label the predecessor workforce it hired as probationary employees in an effort to delay its
bargaining obligation. There, the ALJ stated, with Board approval, that:5
the Respondent has shown no special circumstances here warranting the
postponement of that obligation. The probationary period imposed by the Respondent
comes across on this record as little other than a meaningless device having no
discernible impact on employee tenure or the Respondent's staffing plans which, for all 10
that's shown here, were complete as of August 20. For this reason, I am at a complete
loss to comprehend what policy under the Act would be served to accord the sweeping
effect the Respondent desires here to the probationary period. Indeed, the Respondent's
argument on this point is so lacking in merit when weighed against the existing case law
that I am compelled to look elsewhere for an explanation of its refusal to adhere to its 15
legal obligations. That explanation is, in my judgment, fully explained in Lewis' testimony,
noted above, the essence of which is that the Respondent intended to retain complete
unilateral control over its casino employees consistent with the historical pattern of this
industry in Las Vegas.
20
While the Respondents here labeled the employees as “at will” in their employment
applications, I find from the beginning they informed the USDA that it intended to hire these
skilled and trained employees, did hire them, and as the record shows retained the vast majority
of them up until the time of the trial. I find that the use of “at will” and similar terminology in
Respondents’ employment applications as was the case in Sahara Las Vegas Corp, would be 25
little more than a device to enable sophisticated employers to terminate their initial bargaining
obligation as “perfectly clear” successor employers, as had been Respondents’ practice when
they had taken over other prior government contracts.22
Moreover, the Court stated in NLRB v. Burns Services Inc., 406 US 272, 280, 281 (1972), 30
that “It does not follow, however, from Burns' duty to bargain that it was bound to observe the
substantive terms of the collective-bargaining contract the union had negotiated with Wackenhut
and to which Burns had in no way agreed.” However, the Court went on to state, “there will be
instances in which it is perfectly clear that the new employer plans to retain all of the employees
in the unit and in which it will be appropriate to have him initially consult with the employees' 35
bargaining representative before he fixes terms.” The reduction in wages and benefits was
impliedly viewed differently by the Court then the requirement that a successor be strictly bound
by the predecessor’s CBA, or the grievance-arbitration procedure contained therein. See also,
DuPont Dow Elastomers, LLC, 332 NLRB 1071, 1073-1074, 1074 fn. 7 (2000), enfd. 296 F.3d
495 (6th Cir. 2002), where a perfectly clear successor was found where the unions there were 40
informed that although the successor employer would not honor the predecessors CBA’s it would
maintain employees’ wages and benefits under those contracts. In Bellingham Frozen Foods,

bargaining representative. See, Alan Richey, Inc., 359 NLRB No. 40 (2012), rendered invalid by
the Court’s decision in NLRB v. Noel Canning, 134 S.C. 2550 (2014).
22 For example, Paragon’s reference in its employment application that “No employee or
representative of Paragon, other than the President of Paragon, Inc. has the authority to alter the
at will nature of my employment relationship, or make any agreement inconsistent to the
foregoing,” can be construed as a response to offset a possible fact pattern as set forth by the
court in S & F Market Street Healthcare LLC v. NLRB, supra., where there were alleged
statements by supervisors offsetting the successor employer’s employment related documents.
JD–55–15
57
Inc., 626 F.2d 674, 678-679, fn.1 (9th Cir. 1980), the court stated “When it is ‘perfectly clear’ that
the employer intends to hire a majority of his workforce in a unit represented by a union from the
ranks of his predecessor, his duty to bargain commences immediately.” However, citing Burns,
the court stated the obligation is to recognize and bargain with the union, but it is not bound to
the substantive terms of the predecessor’s CBA not agreed to or assumed by it. Similarly, in 5
Cadillac Asphalt Paving, 349 NLRB 6, 10-11 fn. 32 (2007), the Board found the respondent was
a perfectly clear successor that violated Section 8(a)(5) and (1) of the Act by refusing to
recognize and bargain with the union and by failing to continue the terms and conditions
maintained by the predecessor at the time of succession, i.e., the health and welfare and pension
fund contributions in accord with terms of the expired 1998-2003 MRBA labor agreement, but 10
that the respondent did not violate Section 8(d) of the Act by implementing terms and conditions
of employment that varied from the predecessor's collective-bargaining agreement. In this
regard, the Board has found a successor employer to be a perfectly clear successor, although it
had informed the union there that it wanted the predecessor’s employees to serve a probationary
period. See, Canteen Co., supra. Thus, it would not seem informing employees their 15
employment would be at will would necessarily constitute a signal to those employees that an
employer intended to change their wages, hours, and fringe benefits.
While I find AEPS and Paragon’s bargaining obligation with the Union attached at the
time they each solicited the predecessor employees to apply; which predates the time of the 20
employees’ actual applications, I also find the applications themselves further confirmed the
Respondents intent to hire and did not specifically apprise the employees that there would be a
change or reduction in wages or benefits. In reaching this conclusion, I have considered the fact
that the AEPS application stated the applicants employment would be “at-will” as did the Paragon
application which went even further by stating that Paragon retains the right to establish 25
compensation, benefits and working conditions for all of its employees; and the right to modify
my compensation and benefits, position, duties, and other terms and conditions of employment,
including the right to impose disciplinary action that Paragon, at its sole discretion, determines to
be appropriate. It also stated that “No employee or representative of Paragon, other than the
President of Paragon, Inc. has the authority to alter the at will nature of my employment 30
relationship, or make any agreement inconsistent to the foregoing.” While the Paragon
application stated that Paragon retained the right to establish compensation and benefits, it did
not state Paragon planned to exercise that right, nor apprise employees of what changes, if any,
Paragon intended to make.23

23 While in Paragon Systems, Inc., 362 NLRB No. 166 (2015), the Board majority accepted
language similar to the language in the Paragon’s application there are differences here. First,
Paragon Systems, Inc., did not involve the issue of whether Paragon was a perfectly clear
successor, as is raised in the current case. Moreover, the majority of the employees here were
AEPS applicants, and their applications mentioned nothing but the at will terminology. Moreover,
although I have found Respondents perfectly clear successor status was perfected prior to the
predecessor employees receiving their offer letters, the AEP October 17 offer letters stated,
“Shift schedules will be determined in accordance with the operation need of the contract with
consideration given to employee seniority. Breaks will be provided in accordance with Company
policy and in compliance with any applicable State and Federal law requirements and subject to
the operational needs of the contract.” While, some may say the employees should have been
be able to predict in advance from this ambiguous language that Respondents were going to
cease paying the employees for their theretofore compensated 30 minute lunch break as the
Board majority found with respect to guard mount breaks in Paragon Systems, the facts are
different here because not all of Respondents’ supervisory staff had same ability to divine such a
policy change. In this regard, Walker’s payroll records and her testimony reveal that she
JD–55–15
58
In this regard, Walker testified that while completing the on line application AEPS did not
tell her that there would be any change in her working conditions once they took over the
contract. She testified there was nothing in the application suggesting there would be a change
to the following: how she received her health and welfare; changing the rate of training pay; the 5
threshold for determining full-time status; a change to the uniform allowance; a change to the
shoe allowance; a change in how frequently she would be paid; or a change in lunch breaks.
Similarly, Jones testified he applied online to Paragon and that when he filled out the application
there was nothing that indicated his terms of employment that existed at USEC would change
with Paragon. Jones testified that the only thing it said was that they would be “at will”10
employees. Thus, neither Walker nor Jones, who had both been long term contractor employees
at the USDA and who were active union stewards equated the “at will” reference in the
employment applications with an announcement that the Respondent’s intended to alter the
benefits used by the predecessor.
15
Walker and Jones testimony is supported by the fact, that there is no claim by either the
employees or the Respondents’ witnesses that the “at will” reference drew any questions by any
employees to Respondent’s officials. Yet, when the same employees received the Respondents’
offer letters which directly reflected there would be changes in specified benefits, this prompted
Jones, Walker, and Gaines to confront Ortman about those changes. Moreover, there was 20
testimony that employees raised questions with Respondents officials about these changes
during the orientation meetings held by Respondents. There is no contention that any questions
were ever raised at these meetings or at any time about Respondents employment application
statements that they would be hired as “at will” employees. This serves to buttress my
conclusion in crediting Walker and Jones that they did not view Respondents “at will” notification 25
as a prelude to there being a change in wages, hours, and benefits. If they did, their conduct in
general suggests they would have raised questions about it. It seems that it may help to look to
how reasonable employees perceived and reacted to information, as a guide to how information
would actually be viewed by reasonable employees.
30
The record reveals that during its September 14 and 29 job fairs Paragon passed out of
letters to incumbent employees stating employees were being extended a contingent offer of
employment with an effective date of October 28. There was an appendix attached setting forth
base pay and other benefits. It stated the employee would be offered the company’s sponsored
health/dental benefits under the terms of the company’s plan. It stated if the employee chose not 35
to receive health and medical coverage, the health and welfare hourly rate indicated in the
appendix would automatically be contributed into a company sponsored 401(k) retirement plan,
pre-tax, for their benefit. It stated, “You will not have the option of receiving a cash payment in
lieu of health and retirement benefits.” The letter stated, “Shift schedules will be determined in
accordance with the operational needs of the contract. Breaks will be provided in accordance 40
with Company policy and in compliance with any applicable State and Federal law requirements

continued to be paid for her 30 minute lunch break for a period of time after she started working
for AEPS, actually through the end of November, as did Jones testimony reveal that he had been
paid for a period of time while working for Paragon. While Covington testified to the contrary to
Jones claim on this point, these payroll records were in Respondent’s control and they chose not
to introduce them. Thus, the Board has more information here that not only did the employees
credibly testify that they did not expect benefit changes from Respondent’s statements,
Respondents actions in continuing to pay some of the employees for these breaks reveal some
of its supervisory staff drew the same conclusions as did the employees.
JD–55–15
59
and subject to the operational needs of the contract.” The letter stated that Paragon considers a
full time employee one who works an average of 40 hours per week. It stated employment is
contingent on successfully passing all pre-employment requirements, with certain requirements
listed. It was stated that employment would be at will, with a description of what that meant. It
stated that in compliance with Executive Order 13495, “you are hereby given a first right of 5
refusal for this job opening.” It stated the offer of employment must be accepted by October 1.
Similarly, AEPS applicants were emailed a contingent offer letter on October 17. Their
offer letter was signed by Ortman. The offer included the employee’s hourly wage and fringe
benefit rate, and stated the fringe benefit will be directed towards a company sponsored medical 10
plan, or under certain circumstances, towards a company-sponsored 401(k) account, pre-tax. It
mentions other benefits in terms of holidays, and vacation. The email states, “Shift schedules will
be determined in accordance with the operational needs of the contract, with consideration given
to employee seniority. Breaks will be provided in accordance with Company policy and in
compliance with any applicable State and Federal law requirements and subject to the operation 15
needs of the contract.” The email states, “Training will be paid at a rate of $8.25 an hour.” The
email states employment is at will, which included the employer’s right to terminate the employee
without notice or cause. The email stated pursuant to Executive Order 13495, the employee was
being given a first right of refusal for this job opening. The email stated, “If you intend to accept
employment with AEPS, please print this letter, sign it, and give the signed letter to Ortman, the 20
project manager by October 28.
When Walker received the October 17 offer she went to speak with Ortman and told him
she had some concerns regarding the letter in reference to health and welfare issues and the
rate for training pay. Ortman responded that he was on the phone speaking the company 25
concerning health and welfare. Walker told Ortman, “if they're going to take our health and
welfare, that I'm not going to be signing this letter.” Walker testified Ortman responded this was a
general letter they received for employment and not to worry about it. Ortman stated in reference
to the Union that as long as they do their part he will do his part in reference to that in that he
would be talking to the company about it. Walker testified upon Ortman’s “reassurance that this 30
was basically a general offer letter and that he also stated that he didn't think so, as far as them
taking our health and welfare and things of that nature, I signed the letter.” Similarly, Gaines
testified when she received her offer letter, she called Ortman and stated the offer letter specified
a change in training pay, and they were going to take the employees’ health and welfare. Gaines
testified, “He said don't worry about it, it's a general letter, go ahead and sign it, everything will35
be okay.” Gaines testified after she spoke to Ortman she signed the offer letter. Jones received
his Paragon offer letter at the September 14 job fair. He testified that following the job fair on
September 14, he called Ortman and told him what the offer letter said. Jones testified Ortman
stated “American Eagle was the prime and that nothing was going to change, everything was
going to stay structurally the same, and not to worry about it.” Jones testified he told Ortman40
about the offer letter “because it was a grave concern of a lot of officers.” Jones testified he told
Ortman about Paragon taking their health and welfare stating that was the main concern. Jones
testified Ortman said Paragon is the subprime and AEPS is the prime, and they have to do
what AEPS does.
45
Ortman denied these conversat ions but test i f ied he met with al l of the
AEPS appl icants on an individual basis and claimed that not one of them had a
quest ion about their offer letter, which contained changes to their pr ior
employment condit ions. I found Ortman’s test imony to be not credible, and
have credited the test imony of Walker, Gaines, and Jones as to their50
conversat ions with Ortman. I note that Jones test i f ied he raised the offer letter
JD–55–15
60
to Ortman because the announced changes in health and welfare were of
concern to a lot of off icers. I have concluded that Ortman could predict that
these three union off ic ia ls would have discussed his response with other
off icers; and that in fact i t is l ikely Ortman gave similar responses to off icers in
his one on one meetings with employees. See, Fremont Ford, 289 NLRB 1290, 1296 5
(1988), when the Board took into account a misinformation campaign by the respondent’s
supervisors to employees as to what to expect concerning working conditions when the
respondent took control in concluding the respondent there failed to clearly announce its intent to
establish a new set of conditions prior to inviting former employees to accept employment.
10
Jones attended a mandatory new hire orientation conducted by Paragon on October
19, at which time the Paragon employee handbook was distributed. During the meeting, in
response to a question, the employees were told they had to wear company issued boots
unless it was okayed by the government. Jones testified that, after the presentation was
complete, the officers were told they could go to the parking lot and get their uniforms. The 15
Paragon Handbook is 54 pages, and largely single spaced. There is no heading in the index
relating to uniforms, although there is a section in the handbook at pages 24 to 26 under the
heading “UNIFORMS AND APPEARANCE”, which states that “You will be issued either
‘wash-and-were’ or ‘dry clean-only’ uniforms, at no cost to you.” It later states, “If you are
issued a uniform that requires dry cleaning, the local contract office will make arrangements 20
to either provide clean uniforms to you, or reimburse you for dry cleaning expenses.” As to
AEPS employees they only had the opportunity to view their company handbook on line when
they filled out their applications at the end of September. They did not receive their uniforms
until about a month later. The handbook states at page 44 of 57 pages that the company will
furnish uniforms as required by the contract and if the uniform is of wash and wear materials, 25
the employee will be responsible for cleaning and maintaining the uniforms. Thus, the
employees would have to piece together this isolated statement in an online handbook with
any cleaning directions they received with their uniforms around a month later to come to the
conclusion that their uniform allowance would be terminated.
30
Jones testified it was after AEPS and Paragon assumed operational control that he
learned that he was no longer receiving an hourly uniform allowance. Jones testified he
learned that, “When we got our first paycheck.” Jones testified no one from the company had
previously told him that he would not be receiving an hourly uniform allowance. Jones
testified that AEPS had sent shoes to the site so Jones thought this would be taking the place 35
of the prior shoe allowance. However, he testified that Paragon never sent shoes. Jones
testified that prior to October 28 he was never told by a representative of either company that
the shoe allowance would be discontinued but he was told this at a later date. Jones testified
the typical length of their shift was 8 hours when he worked for USEC. Jones testified for that
company when he was scheduled for 8 hours he was paid for 8 hours. Jones testified that 40
when he worked for Paragon, prior to the parties agreeing to a new collective-bargaining
agreement, when he worked 8 hours he was paid for 7 ½ hours. He testified the change was
he was receiving an unpaid 30 minute lunch break, while he was paid for his lunch break by
the prior employer. Jones testified that his lunch break first changed to being unpaid a couple
of weeks after Paragon and AEPS took over the contract. Jones testified his breaks were not 45
changed the first day of his employment.
Walker’s first day working for AEPS was October 28. Walker testified that under the
predecessor employers she did not receive any unpaid breaks. Walker testified that when she
started working for AEPS her breaks remained the same, but they changed around the end of 50
November or beginning of December 2013. Walker testified that, at that time, her breaks or her
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61
daily hours were reduced by half an hour. Walker was aware other employees’ breaks changed
immediately under AEPS in her capacity as shop steward. Walker identified some of her AEPS
pay stubs showing she was paid for her 30 minute lunch break through the end of November.
Walker testified the uniform allowance was a line item in her pay stub when she worked for the
predecessor employer. Walker testified that when she received her first paycheck for AEPS it did 5
not have a line item for uniform allowance. Walker testified that in her capacity as shop steward
she was made aware in 2014 that AEPS did not offer a shoe allowance.
The predecessor contract revealed as of January 2013, an SPO was receiving $26.76 per
hour; a $.40 hourly uniform allowance; and $4.15 per hour for health and welfare, which they 10
could opt to receive as directly paid to them as part of their paycheck. Based on 40 hours total
their gross pay came to $1070.40 pay; $16 uniform allowance; $166 health and welfare for a total
of $1252 for a 40 hour week. Following Respondent’s takeover this same employee on a 40 hour
week had the option of receiving only $1003.5. Thus, Respondent’s had effectively reduced their
option of gross weekly pay by $248.50 per week, close to a 20% cut. The Respondent’s did this 15
by bypassing the Union; and dribbling out information to the employees in an ambiguous and
incomplete fashion. The employees also lost their $100 annual shoe allowance, and while the
Respondent’s provided shoes the testimony revealed those shoes were uncomfortable to the
vast majority of the guards who were required to stand for substantial amounts of time, requiring
them to purchase their own shoes. While Respondent’s were required to contribute the health 20
and welfare money to their health insurance plan, and the remainder or total amount placed in a
designated 401(k) depending if the employee had outside health coverage, there is no showing if
there was any vesting requirement for the 401(k) contributions; or what penalties the employees
would have to overcome to get access to the money. Moreover, this was an immediate hit to the
employees available gross income.25
It can be argued that the employee no longer had to accrue dry cleaning expenses for
wash and wear uniforms. On the other hand, this assumes the employees had free access to a
washer/dryer on their premises. Rather, they may still have had cleaning costs for which they
were no longer compensated as well as time for cleaning the uniforms. They could have also 30
have found ways to dry clean the uniforms without spending the whole prior allowance.
Regardless, their disposable gross income was substantially reduced when Respondents took
over based on ambiguous and piece meal information given to the employees. I also note that
Respondents took over the contract using basically the same supervision and staff; and it
therefore appears the main efficiencies over the prior contractor were achieved by Respondent’s 35
ability to manipulate the employees’ prior negotiated benefits. This does not appear to be the
type of timely notice of a reduction in wages and benefits to employees for informed choices that
the court was contemplating in International Ass'n of Machinists and Aerospace Workers, AFL-
CIO v. NLRB, 595 F.2d 664, 674-676 (D.C. Cir. 1978).
40
In sum, I find Respondents became perfectly clear successors under Spruce Up, through
their described course of conduct beginning on September 3, and through their September 14
memo to Paragon applicants requesting that they apply, and through their continued conduct with
respect to AEPS applicants, as described above in soliciting their applications in September,
while failing to clearly inform both sets of applicants that their benefits would change. In this 45
regard, by thereafter failing to reach out and consult with the Union as to the proposed changes
in wages benefits, and thereafter providing piecemeal information directly to the employees about
those changes the Respondents have engaged in unilateral changes and bypassed and
undermined the Union in violation of Section 8(a)(5) and (1) of the Act.
50
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2.The General Counsel’s Request that the Board Reverse Spruce Up
The General Counsel contends the Board’s decision in Spruce Up Corp., 209 NLRB 194,
195 (1974), enfd. 529 F.2d 516 (4th Cir. 1975), should be overturned as it is inconsistent with the
language in the Court’s decision in NLRB v. Burns Security Services, 406 U.S. 272, 294-2955
(1972). The General Counsel requests that I issue an order urging the Board to revisit and
overturn Spruce Up, and that Respondents be found to be “perfectly clear” successors as
contemplated by Burns because the evidence establishes Respondents unquestionably intended
to retain the predecessors’ work force. The General Counsel argues that if Spruce Up is
overturned the fact Respondents indicated at least some changed terms and conditions of 10
employment in their offer letters preceding their assumption of operations at the USDA buildings
becomes irrelevant. It is argued Respondents planned to retain the predecessors’ work force
and thus they should be found to be “perfectly clear” successors as defined by the Court in
Burns. It is contended Respondents’ bargaining obligation attached upon determining they
would enter the service contract and rely predominantly on their predecessors’ work force to 15
meet their staffing needs, due to their obligation to offer incumbent employees a right of first
refusal under Executive Order 13495. It is contended that, at that point, Respondents were
obligated to notify the Union of their intention to change working conditions, and thereafter give
the Union an opportunity to bargain. It is asserted that because Respondents intended to hire
predecessors’ work force in compliance with the Executive Order they were “perfectly clear” 20
successors under Burns and violated section 8(a)(5) and (1) of the Act by failing to consult with
the Union before fixing initial terms.
The General Counsel has as early as 2003 recommended the Board reverse its Spruce
Up holding as reflected in Elf Atochem North America, Inc., 339 NLRB 796, 803 (2003). The 25
Board elected not to address the arguments made at that time. It appears the Board may now
want to address the General Counsel’s arguments because the disagreement between the two
branches of the Agency, as it did here, helped to foster this litigation because the parties did not
have clear guidelines with which to reach a resolution of their dispute. In Elf Atochem North
America, Inc., it was noted at 803 that the General Counsel asserted the Board should reverse 30
Spruce Up and find an obligation to bargain exists over initial terms of employment whenever a
successor plans to retain the existing workforce without regard to whether changes in
employment conditions are contemplated or when they are announced. The General Counsel
there cited NLRB v. Advanced Stretchforming, Inc., 208 F.3d 801, 807-811 (9th Cir. 2000);
Chairman Gould's concurring opinion in Canteen Co., 317 NLRB 1052, 1054-1055 (1995), enfd. 35
103 F.3d 1355 (7th Cir. 1997), and the dissenting opinions of Board Members Fanning and
Penello in the Spruce Up decision as support for the position that the case be reversed.
I find it unnecessary to recommend to the Board that Spruce Up be reversed as the
General Counsel requests. This is a policy matter reserved to the Board. I will, however, provide 40
the Board with an analysis of existing case law to the extent it might prove useful.24 Some 13
years after the Board’s Spruce Up decision, in Fall River Dyeing & Finishing Corp. v. NLRB, 482
U.S. 27, 39-40 (1987), the Court stated:
During a transition between employers, a union is in a peculiarly vulnerable position. It has 45
no formal and established bargaining relationship with the new employer, is uncertain
about the new employer's plans, and cannot be sure if or when the new employer must

24 I am aware that recently in GVS Properties, LLC, 362 NLRB No. 194 (2015), the Board
cited the Spruce Up decision with approval. However, that case does not appear to include, as
here, a contention by the General Counsel that Spruce Up be reversed.
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63
bargain with it. While being concerned with the future of its members with the new
employer, the union also must protect whatever rights still exist for its members under the
collective-bargaining agreement with the predecessor employer.FN6 Accordingly, during this
unsettling transition period, the union needs the presumptions of majority status to which it
is entitled to safeguard its members' rights and to develop a relationship with the 5
successor.
The position of the employees also supports the application of the presumptions in the
successorship situation. If the employees find themselves in a new enterprise that
substantially resembles the old, but without their chosen bargaining representative, they
may well feel that their choice of a union is subject to the vagaries of an enterprise's 10
transformation. This feeling is not conducive to industrial peace. In addition, after being
hired by a new company following a layoff from the old, employees initially will be
concerned primarily with maintaining their new jobs. In fact, they might be inclined to shun
support for their former union, especially if they believe that such support will jeopardize
their jobs with the successor or if they are inclined to blame the union for their layoff and 15
problems associated with it.FN7 Without the presumptions of majority support and with the
wide variety of corporate transformations possible, an employer could use a successor
enterprise as a way of getting rid of a labor contract and of exploiting the employees'
hesitant attitude towards the union to eliminate its continuing presence.
20
The Board and courts have also long held that by dealing directly with bargaining unit
employees an employer unlawfully bypasses a union and in doing so undermines its
representation status in the bargaining unit. See Medo Photo Supply Co. v NLRB, 321 U.S. 678,
683 (1944); Georgia Power Co., 342 NLRB 199 (2004), enfd. 427 F.3d 1354 (11th Cir. 2005);
and Ken's Building Supplies, 142 NLRB 235 (1963), enfd. 333 F.2d 84 (6th Cir. 1964). In Medo25
Photo Supply Co. v. NLRB, supra, at 683-685, the Court stated:
The National Labor Relations Act makes it the duty of the employer to bargain
collectively with the chosen representatives of his employees. The obligation being
exclusive, see s 9(a) of the Act, 29 U.S.C. s 159(a), 29 U.S.C.A. s 159(a), it exacts ‘the 30
negative duty to treat with no other.’ National Labor Relations Board v. Jones & Laughlin,
301 U.S. 1, 44, 57 S.Ct. 615, 628, 81 L.Ed. 893, 108 A.L.R. 1352; and see Virginian
Railway Co. v. System Federation, 300 U.S. 515, 548, 549, 57 S.Ct. 592, 599, 600, 81
L.Ed. 789. Petitioner, by ignoring the union as the employees' exclusive bargaining
representative, by negotiating with its employees concerning wages at a time when wage 35
negotiations with the union were pending, and by inducing its employees to abandon the
union by promising them higher wages, violated s 8(1) of the Act, which forbids
interference with the right of employees to bargain collectively through representatives of
their own choice.
That it is a violation of the essential principle of collective bargaining and an 40
infringement of the Act for the employer to disregard the bargaining representative by
negotiating with individual employees, whether a majority or a majority, with respect to
wages, hours and working conditions was recognized by this Court in J.I. Case Co. v.
Labor Board, 321 U.S. 332, 64 S.Ct. 576; cf. Order of Railroad Telegraphers v. Railway
Express Agency, Inc., 321 U.S. 342, 64 S.Ct. 582; see also National Licorice Co. v. Labor 45
Board, 309 U.S. 350, 359-361, 60 S.Ct. 569, 575, 576, 84 L.Ed. 799. The statute
guarantees to all employees the right to bargain collectively through their chosen
representatives. Bargaining carried on by the employer directly with the employees,
whether a minority or majority, who have not revoked their designation of a bargaining
agent, would be subversive of the mode of collective bargaining which the statute has 50
ordained, as the Board, the expert body in this field, has found. Such conduct is therefore
an interference with the rights guaranteed by s 7 and a violation of s 8(1) of the Act.FN2
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There is no necessity for us to determine the extent to which or the periods for which the
employees, having designated a bargaining representative, may be foreclosed from
revoking their designation, if at all, or the formalities, if any, necessary for such a
revocation. Compare National Labor Relations Board v. Century Oxford Mfg. Co., 2 Cir.,
140 F.2d 541. But orderly collective bargaining requires that the employer be not 5
permitted to go behind the designated representatives, in order to bargain with the
employees themselves, prior to such a revocation.
In Fall River Dyeing & Finishing Corp. v. NLRB, supra at 42, the Court stated the following
pertaining to Board action in successorship cases: 10
We turn now to the three rules, as well as to their application to the facts of this case,
that the Board has adopted for the successorship situation. The Board, of course, is given
considerable authority to interpret the provisions of the NLRA. See NLRB v. Financial
Institution Employees, 475 U.S. 192, 202, 106 S.Ct. 1007, 1012, 89 L.Ed.2d 151 (1986). If 15
the Board adopts a rule that is rational and consistent with the Act, see ibid., then the rule
is entitled to deference from the courts. Moreover, if the Board's application of such a
rational rule is supported by substantial evidence on the record, courts should enforce the
Board's order. See Beth Israel Hospital v. NLRB, 437 U.S. 483, 501, 98 S.Ct. 2463, 2473,
57 L.Ed.2d 370 (1978); Universal Camera Corp. v. NLRB, 340 U.S. 474, 488, 71 S.Ct. 456, 20
464, 95 L.Ed. 456 (1951). These principles also guide our review of the Board's action in a
successorship case. See, e.g., Golden State Bottling Co. v. NLRB, 414 U.S., at 181, 94
S.Ct., at 423.
As well documented in this decision, and in many others, in NLRB v. Burns Services Inc., 25
406 US 272, 281-282 (1972), the Court stated “Although a successor employer is ordinarily free
to set initial terms on which it will hire the employees of a predecessor, there will be instances in
which it is perfectly clear that the new employer plans to retain all of the employees in the unit
and in which it will be appropriate to have him initially consult with the employees' bargaining
representative before he fixes terms.” 30
In Spruce Up Corporation, supra at 195, the Board majority stated:
Although, at the February meeting, Fowler expressed a general willingness to hire the
barbers employed by the former employer, he at the same time indicated that he was 35
going to be paying different commission rates. Fowler thereby made it clear from the
outset that he intended to set his own initial terms, and that whether or not he would in fact
retain the incumbent barbers would depend upon their willingness to accept those terms.
When an employer who has not yet commenced operations announces new terms prior to
or simultaneously with his invitation to the previous work force to accept employment under 40
those terms, we do not think it can fairly be said that the new employer “plans to retain all
of the employees in the unit,” as that phrase was intended by the Supreme Court. The
possibility that the old employees may not enter into an employment relationship with the
new employer is a real one, as illustrated by the present facts. Many of the former
employees here did not desire to be employed by the new employer under the terms set by 45
him-a fact which will often be operative, and which any new employer must realistically
anticipate. Since that is so, it is surely not “perfectly clear” to either the employer or to us
that he can “plan to retain all of the employees in the unit” under such a set of facts.
We concede that the precise meaning and application of the Court's caveat is not easy
to discern. But any interpretation contrary to that which we are adopting here would be 50
subject to abuse, and would, we believe, encourage employer action contrary to the
purposes of this Act and lead to results which we feel sure the Court did not intend to flow
JD–55–15
65
from its decision in Burns. For an employer desirous of availing himself of the Burns right
to set initial terms would, under any contrary interpretation, have to refrain from
commenting favorably at all upon employment prospects of old employees for fear he
would thereby forfeit his right to unilaterally set initial terms, a right to which the Supreme
Court attaches great importance in Burns. And indeed, the more cautious employer would 5
probably be well advised not to offer employment to at least some of the old work force
under such a decisional precedent. We do not wish-nor do we believe the Court wished-to
discourage continuity in employment relationships for such legalistic and artificial
considerations. We believe the caveat in Burns, therefore, should be restricted to
circumstances in which the new employer has either actively or, by tacit inference, misled 10
employees into believing they would all be retained without change in their wages, hours,
or conditions of employment,[FN7] or at least to circumstances where the new employer,
unlike the Respondent here, has failed to clearly announce its intent to establish a new set
of conditions prior to inviting former employees to accept employment.
15
The principles set forth by the majority in Spruce Up do not translate easily to the
circumstances here, which could not have been foreseen by the majority at the time Spruce Up
issued. First, the respondent in Spruce Up informed the union there on February 6, that “all the
barbers who are working will work.” However, the union was also informed at that time what the
respondent planned to pay the barbers. The new commission rates were unsatisfactory to the 20
many of the barbers leading to a strike. Thus, during the first meeting the employer clearly
indicated it was altering a core term of employment; and it let the union know the new rate. It did
not make the type of ambiguous statement the progeny of Spruce Up has morphed into as
sufficient to deprive employees bargaining rights such as “at will”; or the statements put forth
here such as we reserve the right to change working conditions without specifying the change, or 25
even that there definitely would be a change.
Secondly, the Board majority’s concern that to retain the right to set initial conditions an
employer would have to “refrain from commenting favorably at all upon employment prospects of
old employees for fear he would thereby forfeit his right to unilaterally set initial terms,” is 30
inapplicable to the current category of employees, because the Executive Order gives them the
right of first refusal to their current positions so whether the Respondent comments favorably
about their retention or not has nothing to do with the continuity of their employment relationship.
Thus, the underpinning of the majority of the Spruce Up rationale is not applicable here. It
surely, cannot outweigh the fact as enunciated by the Court that failure to recognize a union 35
during a successorship transition serves to undermine the union; which is further compounded
when while stripping the employees of representation during this transition period, the successor
employer is encouraged to engage in direct dealing with those employees, although it plans to
hire, or is required to hire those employees thereby subsequently being required to recognize
and bargain with the union. See the Courts pronouncements in Fall River Dyeing & Finishing 40
Corp. v. NLRB, 482 U.S. 27, 39-40, (1987); Medo Photo Supply Co. v. NLRB, supra, at 683-685;
and Burns itself stating, “there will be instances in which it is perfectly clear that the new
employer plans to retain all of the employees in the unit and in which it will be appropriate to
have him initially consult with the employees' bargaining representative before he fixes terms.”
The Court added no qualification to that requirement, and even in circumstances when a 45
successor employer is forthright in detailing early on its plans to alter the predecessor’s benefits,
its discussing those planned changes with the union in place with a give and take may in fact
help it to maintain its plans to keep the predecessors staff through the ameliorative effects of
collective bargaining. As detailed by the dissent in Spruce Up such a process does not prevent
an employer from bargaining to a lawful impasse to place its initial terms in effect, but the 50
employees will be given a fair option of knowing the specifics of the employer’s offer in advance,
JD–55–15
66
and be more secure in the fact that they have not been stripped of union representation in the
process.
With respect to this class of government contract employers they are required to set
wages and benefits in part based on the predecessor’s CBA under the SCA; and give a right of 5
first refusal to those employees under the executive order. As set forth above, the main concern
of the Spruce Up majority that requiring successors to bargain during the transition period when
their plans entail hiring a majority of the predecessor’s, may make them not comment favorably
about those employees hiring prospects is not relevant as the employees here are already
assured a job offer. Moreover, the current Spruce Up standard potentially strips away bargaining 10
rights for large groups of employees during a sensitive period for a union as well as those
employees, as the evidence reveals that AEPS is a nationwide employer with 26 federal
contracts. In this instance, the single contract with USDA involved guards employed at multiple
buildings two of which involved a fairly significant number of bargaining unit employees.
Similarly, Baker’s testimony revealed that since 2008, Paragon has taken over more than 50 15
federal contracts from competitors; that Paragon is in 42 states and in some U.S. territories; and
that 90% of Paragon’s work force is represented by unions, encompassing around 20 unions.
For the reasons set forth above, the underpinnings of the majority’s rationale in Spruce Up does
not appear to apply to this group of employers; and there appears no basis to undermine the
Union here; and in similar circumstances to strip employees of their right representation when the 20
successor is required proffer them an offer of employment.
However, the Spruce Up majority’s concerns also can be questioned concerning
employers in general. The Board majority surmised that employers who might want to preserve
their Burns right to set initial terms would “have to refrain from commenting favorably at all upon 25
employment prospects of old employees for fear he would thereby forfeit his right to unilaterally
set initial terms.” This conclusion seems to be somewhat undermined by the fact if it is in the
employer’s interest to keep predecessors work force in tact due to their skills, training, expertise,
knowledge of the operation, client goodwill, lack of availability of adequate substitutes, time
targets in resuming or maintaining operations, or any number of a variety of factors that would 30
come into play in such a decision it would appear the employer would have to let the employees
know about it sooner than later to retain their services. The Spruce Up majority also went on to
state, “And indeed, the more cautious employer would probably be well advised not to offer
employment to at least some of the old work force under such a decisional precedent.” However,
the failure to offer predecessor employees employment to avoid a statutory bargaining obligation 35
is a violation of Section 8(a)(3) and (1) of the Act. It seems to be a slender reed to eviscerate
employees important representation rights because an employer may be tempted to violate the
Act in another fashion. This can be construed as giving an employer a pass on its obligations
under Section 8(a)(5); so it will not be tempted to violate Section 8(a)(3) of the Act. The Board is
capable of upholding the rights of both sections of the Act; does not have to sacrifice one at the 40
expense of the other; and it is likely that the vast majority of employers will voluntarily comply if
those rights are clearly delineated in cases of this context.
Member Fanning took the view in his dissent in Spruce Up that, “The fact that some
employees may refuse the offer of employment has nothing to do with the ‘plans’ or intent of the 45
offering employer.” It was stated, “Nor can there be any economic injury to the successor in
bargaining in good faith prior to the commencement of operations, for, assuming good-faith
bargaining on his part, if the union cannot persuade him that other terms are more equitable, he
is perfectly free to impose those terms as the opening terms and conditions of employment upon
the commencement of operations.” It was pointed out, “The majority's contrary construction of 50
this aspect of the Burns decision leads to the anomalous, if not absurd, result that a bargaining
JD–55–15
67
obligation over the establishment of the successor's initial terms and conditions of employment
arises when the successor plans to retain the former employees at the terms their union had
already established through collective bargaining with the predecessor employer but not when he
plans to retain them at terms different from those previously established. The majority would
bring to bear ‘the mediatory influence of negotiation’[FN38] where there is no controversy, but deny 5
its appropriate use where there is controversy. They thus turn the Act on its head, and to no
useful end.” Spruce Up, supra at 205-206.
Similarly, Member Penello pointed out that in Burns “The Court there said nothing about a
conditional intent to hire.” In agreement with Member Fanning, he stated, “The majority are 10
attempting to revise substantially what the Court said, for their view would, in effect, abrogate the
exception, as the only case when a violation would occur under their test would be the unlikely
situation where a successor says he will continue the employees under the exact terms and
conditions as existed before the takeover. If he says that he ‘plans’ to alter the status quo in any
way, while at the same time indicating a desire to retain the old employees, they would find this 15
amounts to a conditional intent to hire. I cannot accept that the Supreme Court would announce
a rule of law that is so restrictive as to amount to a nullity.” It was stated as to the successor’s
obligation to consult with the employees bargaining representative before he fixes terms “I regard
this duty as merely an obligation to refrain from dealing with the unit employees individually
concerning their future working conditions until it has notified the union and bargained to an 20
impasse. Having thus negotiated with the union, the successor is then free to fix his terms
whether the union agrees or not. In my view this is not too heavy a burden to put on any
employer in order to protect the employees' Section 7 rights ‘to bargain collectively through
representatives of their own choosing’ with respect to matters affecting the employees' interests.”
Id. 207-208.25
In Canteen Co. supra at 1054-1055, Chairman Gould stated, in a concurring opinion that
“I write separately, however, to express my opinion that the Spruce Up standard represents an
unduly restrictive reading of the Supreme Court's definition of circumstances in which a
successor employer must bargain about initial terms and conditions of employment.” The 30
chairman stated, “I question the validity of Spruce Up and believe that it grafts on an additional
requirement for finding a ‘perfectly clear’ successor which is neither warranted nor intended by
the Supreme Court in Burns. The Supreme Court stated that the test was only whether ‘the new
employer plans to retain all of the employees in the unit’ for the new employer to be a ‘perfectly
clear’ successor.” The Chairman agreed with Member Fanning and Penello’s prior dissents,35
stating:
The fact is that in many, if not most, business rearrangements, the successor employer
perceives a need for change or greater flexibility in the employment relationship. This is
the essential dynamic involved in the instant case as well as countless others. To 40
eliminate instances where employers express an intent to provide changed employment
conditions from the obligation to negotiate under the “perfectly clear” standard announced
in Burns would both render the holding on this point meaningless and also disregard the
careful balance between competing interests articulated by the Court in both Burns and
Fall River Dyeing.45
In International Ass'n of Machinists and Aerospace Workers, AFL-CIO v. NLRB, 595 F.2d
664, 674-675 (D.C. Cir. 1978), the court similarly stated pertaining to the effect of the Board
majority’s Spruce Up doctrine that “To be sure, in view of the substantial harmony existent in the
parties' positions, only minor adjustments in initial terms may then remain to be negotiated, and it 50
must be acknowledged that compulsory bargaining usually yields greater returns when labor-
management differences are of more appreciable magnitude.” Thus, the court acknowledged the
JD–55–15
68
limited nature of the bargaining remaining under Spruce Up decision as pointed out by Members
Fanning, Penello; and Chairman Gould. The court, however, went on to state in affirming the
Board majority’s Spruce Up analysis that in basic fairness to employees that unless incumbent
employees “are apprised promptly of impending reductions in wages or benefits, they may well
forego the reshaping of personal affairs that necessarily would have occurred but for anticipation 5
that successor conditions will be comparable to those in force.”
Here, the executive order required Respondents to accord incumbents first refusal for
their positions; the SCA required that the Respondents be presented with the predecessor’s CBA
and for Respondent’s to analyze that CBA to make sure they complied with the SCA in according 10
the incumbent employees lawfully required wages and benefits. As early as September 3, a
notice was posted announcing certain named employees would be requested to attend
Paragon’s job fair. At that time, employees whose names were not listed were told they would
be contacted by AEPS for them to apply with that employer. A clear signal to employees that
Respondents had made a decision as to which employees were to work for each employer, 15
which given the executive order could only lead the employees to believe they would be offered
job opportunities. The Paragon employees who elected to attend the September 14 job fair were
required to fill out an application, which stated they were to be hired as employees at will, and
that Paragon retained the right to change existing terms and conditions of employment. They
were not told that Paragon actually intended to make changes to core terms of employment, or if 20
so, what those changes would be. They were told to bring a substantial amount of
documentation with them to the job fair in the job fair announcement, and that they would have to
meet certain employment related requirements, most of which they had met to be hired and
retain employment with the predecessor contractor. For those who attended the September 14,
job fair, they were given a contingent offer letter, which indicated they would lose the ability to 25
retain health and welfare contributions as a form of wages; but they were not told specifically that
they would no longer be paid for their 30 minute lunch break, or that they would lose their uniform
or shoe allowance. The AEPS applicants, who it turned out to be the vast majority of employees
here, were not told anything about their new employment conditions until after September 23,
when they were required to provide their email addresses; and then were emailed a link to apply. 30
The application only stated they would be employees at will, but did not state anything about
changes in wages or fringe benefits. Thus, while the Respondents had the predecessors CBA
early on, the AEPS applicants were not told anything specific about substantive changes in core
benefits until October 17, when they received their offer letters, less than 2 weeks before they
were to start employment with their new employer. As I have found above, information continued 35
to be presented to them thereafter in a piecemeal fashion concerning substantive wage and
benefit changes some of it being gleaned after they started their new jobs.
It is likely, that anyone reading this decision, if they are changing jobs, would want to
have a clear presentation from their prospective employer specifically what their new wages and 40
fringe benefits would be, to make a reasoned decision with their families and in a timely enough
fashion to preserve their options of seeking alternative employment if the new wage and benefit
package proved unsatisfactory. Here, the employees were instead presented with legal
constructs, for which legal minds debate the significance, and then siphoned out information in a
manner in which the Respondents determined would arguably meet the Board’s standards in 45
order to dilute the effect of Respondents’ planned changes and undercut the ability of the
employees to seek alternate employment. At the same time the employees were stripped of
union representation during this transition period.
I would note that in Burns, the Court stated, “there will be instances in which it is perfectly 50
clear that the new employer plans to retain all of the employees in the unit and in which it will be
appropriate to have him initially consult with the employees' bargaining representative before he
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69
fixes terms.” The affirmative duty to consult was placed on the employer, for it is the employer
that knows its plans as to employee retention and changes of benefits. Here, there was no
demand by the Union to bargain over the initial terms of employment prior to Respondents
beginning operations. However, the Respondents have not raised lack of such a demand as a
defense in their answer, at the trial, or in their post-hearing brief. Had it been raised, I would 5
have recommended its rejection, because the Court’s pronouncement places an affirmative duty
on the employer to consult with the union. Along these lines, this is similar to direct dealing when
an employer unlawfully by passes a union concerning changes to terms of employment and
deals directly with employees. It appears, under the Court’s intent under Burns a perfectly clear
successor would be required to inform the union specifically what changes in the current benefits 10
it intends to make, in a timely fashion, and then bargain with the union to impasse before
implementing those changes. Under the current Spruce Up rationale when employers intend or
are required to hire the predecessor’s work force, employees can be both denied union
representation at a vulnerable period, and as well of the specifics of their new employment
arrangement so they cannot make informed judgments as to their future. It would seem that both 15
of these ends would serve to undermine a sitting union in the eyes of employees, and the
bargaining process in general.
CONCLUSIONS OF LAW
20
1. Respondents, Paragon Systems, Inc. (Paragon) and American Eagle Protective
Services Corp. (AEPS) are jo in t employers each individually engaged in commerce within
the meaning of Section 2(2), (6), and (7) of the Act.
2. United Government Security Officers of America, Local 034, (the Union) is a labor
organization within the meaning of Section 2(5) of the Act.25
3. At all material times, the following described unit has been an appropriate unit for
the purposes of collective-bargaining within the meaning of Section 9(b) of the Act:
All full-time and regular part-time security officers employed at the
United States Department of Agriculture Headquarters Complex located 30
at 1400 Independence Ave., SW, Washington, DC; excluding all other
employees, including corporals, sergeants, lieutenants, captains,
managers, and supervisors as defined in the Act.
4. At all material times, the Union has been, and is now, the exclusive representative for 35
the employees in the bargaining unit described above in paragraph 3 (the unit employees) for
the purposes of collective-bargaining within the meaning of Section 9(a) of the Act.
5. Respondents, joint employers and perfectly clear successor employers, violated
Section 8(a)(5) and (1) of the Act by failing to follow certain terms and conditions of
employment and related past practices set forth in the collective-bargaining agreement40
between USEC Inc. and Securiguard, Inc., joint employers, and the Union for the unit
employees, the effective dates of which were October 1, 2011 through September 30, 2014,
by unilaterally changing the following terms and conditions of employment without providing
the Union with notice and an opportunity to bargain over: (a) eliminating a paid 30-minute
employee lunch break, thereby causing a reduction in employee work hours; (b) eliminating45
the hourly uniform allowance; (c) eliminating the shoe reimbursement allowance; (d) redefining
the threshold for full-time employment status from 32 hours per week to 40 hours per week;
(e) discontinuing the employee option to receive the hourly health and welfare benefit as a
wage in the employee paycheck; (f) changing pay dates from biweekly to twice monthly; and
(g) reducing the pay rate earned by employees while in training.50
JD–55–15
70
6. The unfair labor practices described above constitute unfair labor practices having an
effect on commerce within the meaning of Section 2(6) and (7) of the Act.
The Remedy
5
Having found that Respondents, as joint employers, have engaged in conduct violating
Section 8(a)(5) and (1) of the Act, they are ordered to cease and desist therefrom, and to take
the following affirmative action deemed necessary to effectuate the policies of the Act. I shall
also recommend that Respondents be held jointly and severally liable for all claims resulting
from the unfair labor practices found here.10
Respondents are ordered to recognize and, on request, bargain with the Union as the
exclusive collective-bargaining representative of their employees in the unit found here to be
appropriate. The parties voluntarily reached a new collective-bargaining agreement effective
October 16, 2014. Thus, I find Respondents liable to employees and employees should be made 15
whole for losses resulting from the unilateral changes found here for the period October 28, 2013
to October 16, 2014, the effective date of the new CBA. See Elf Atochem, Inc., 339 NLRB 796,
796 fn. 4 (2003). I do not find it necessary to parse out any of the specific changes that may not
have been mentioned in the new collective-bargaining agreement as the General Counsel urges,
for the Union should have been aware of those changes at the time it entered its agreement with 20
Respondent, yet voluntarily entered into that contract. Thus, employees affected by
Respondents’ unilateral changes, should be made whole for losses incurred during the period of
October 28, 2013 through and including October 16, 2014 as a result of those unlawful changes,
and Respondents should be ordered to make unit employees whole for such losses plus interest
at the rate prescribed in New Horizons for the Retarded, 283 NLRB 1173 (1987), compounded 25
daily as prescribed in Kentucky River Medical Center, 356 NLRB No. 8 (2010).25 Respondents
shall then, for each affected employee, file a report with the Social Security Administration
allocating backpay to the appropriate calendar quarter, and shall compensate each affected
employee for the adverse tax consequences, if any, of receiving one or more lump-sum backpay
award covering periods for longer than one year. Don Chavas, LLC d/b/a Tortillas Don Chavas,30
361 NLRB No. 10 (2014). Included in this recommended remedy is the requirement that, upon
request of the Union on behalf of any particular affected employees, employees may receive, as
a lump-sum payment, the total amount of health and welfare contributions made on the
employees’ behalf by Respondents to each employee’s 401(k) account between October 28,
2013 and October 16 2014. Respondent shall bear all costs, fees, and tax consequences for 35
withdrawal of said monies from employees’ 401(k) accounts.
On these findings of fact and conclusions of law and on the entire record, I issue the
following recommended26
40

25 The recommended remedy shall also include Respondents reimbursing employees at their
regular rate of pay for all training taking place at Respondents October 19 and October 26, 2013
orientation sessions to the extent employees were compensated by Respondents for attending
those sessions, and, if so, if Respondents compensated employees for attending those sessions
at less than their regular hourly rate of pay.
26 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.
JD–55–15
71
ORDER
It is hereby ordered that Respondents American Eagle Protective Services Corp. and
Paragon Systems, Inc., their officers, agents, successors, and assigns, shall
5
1. Cease and desist from
a. Refusing to bargain in good faith with United Government Security
Officers of America, Local 034, concerning the rates of pay, wages, hours, and working
conditions of employees in the following appropriate unit:
10
All full-time and regular part-time security officers employed at the United States
Department of Agriculture Headquarters Complex located at 1400 Independence
Ave., SW, Washington, DC; excluding all other employees, including corporals,
sergeants, lieutenants, captains, managers, and supervisors as defined in the
Act.15
b. Unilaterally changing terms and conditions of employment established by
the p redecesso r emp loye rs ’ collective-bargaining agreement and practices related
thereto in effect during the period of October 1, 2011 through September 30, 2014.
c. In any like or related manner interfering with, restraining, or coercing20
employees in the exercise of the rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to effectuate the policies of the Act.
a. On request, bargain collectively and in good faith concerning wages,
hours, and other terms and conditions of employment with the Union as the exclusive25
representative of employees in the above-described unit.
b. On the request of the Union on behalf of any or all affected employees,
pay the employees, as a lump-sum payment, the total amount of health and welfare
contributions made on the employees’ behalf by Respondents to the employee’s 401(k)
account between October 28, 2013 and October 16, 2014. Respondents shall pay all30
costs, fees, and tax consequences associated with the withdrawal of these monies from
employees’ 401(k) accounts.
c. Make employees, in the above-described unit, whole for any losses they
may have suffered as a result of the unilateral changes in their terms and conditions of
employment during the period from October 28, 2013 through and including October 16,35
2014, in the manner set forth in the remedy section of this decision.
d. 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
and reports, and all other records, including an electronic copy of such records if stored in 40
electronic form, necessary to analyze the amount of backpay due under the terms of this
Order.
e. Within 14 days after service by the Region, post at their operations at 1400
Independence Ave., SW copies of the attached notice marked “Appendix.”27 Copies of the
notice, on forms provided by the Regional Director for Region 5, after being signed by the 45
Respondents’ authorized representatives, shall be posted by the Respondents immediately

27 If this Order is enforced by a Judgment of the United States Court of Appeals, the words in
the notice reading “POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD”
shall read “POSTED PURSUANT TO A JUDGMENT OF THE UNITED STATES COURT OF
APPEALS ENFORCING AN ORDER OF THE NATIONAL LABOR RELATIONS BOARD.”
JD–55–15
72
upon receipt 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 Respondents to ensure that the notices are not altered, defaced, or covered by
any other material. In addition to physical posting of paper notices, notices shall be
distributed electronically, such as by email, posting on an intranet or an internet site, and/or 5
other electronic means, if the Respondent customarily communicates with its employees by
such means. In the event that, during the pendency of these proceedings, either of the
Respondents goes out of business or is displaced as the security guard contractor or
subcontractor at the facilities involved in this proceeding, the Respondents shall duplicate
and mail, at their own expense, a copy of the notice to all current employees and former10
b a r g a i n i n g u n i t employees employed by the Respondents at any time since October
28, 2013.
f. Notify the Regional Director, in writing, within 20 days from the date of this
Order what steps Respondents have taken to comply.
15
Dated, Washington, D.C. September 22, 2015.
20
Eric M. Fine
Administrative Law Judge
JD–55–15
APPENDIX
NOTICE TO EMPLOYEES
Posted by Order of the
National Labor Relations Board
An Agency of the United States Government
FEDERAL LAW GIVES YOU THE RIGHT TO:
 Form, join, or assist a union;
 Choose a representative 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.
The National Labor Relations Board has found that we violated the National Labor Relations Act
and has ordered us to post and abide by this notice.
WE WILL NOT refuse to bargain collectively with United Government Security Officers of
America, Local 034 as the exclusive bargaining representatives of employees in the following
unit:
All full-time and regular part-time security officers employed at the United States
Department of Agriculture Headquarters Complex located at 1400 Independence
Ave., SW, Washington, DC; excluding all other employees, including corporals,
sergeants, lieutenants, captains, managers, and supervisors as defined in the Act.
WE WILL NOT unilaterally change terms and conditions of employment established by
collective-bargaining agreements and practices in effect related to those agreements between
the Union and our predecessors.
WE WILL, on request, bargain with the Union as the exclusive bargaining representative of the
above-described bargaining unit.
WE WILL, jointly and severally, make whole employees in the above-described unit for any
losses suffered between October 28, 2013 through October 16, 2014, as a result of our
unilateral changes in their terms and conditions of employment, plus interest, as required in the
remedy section of the Board’s decision, including our during this time period: (a) eliminating a
paid 30-minute employee lunch break; (b) eliminating the hourly uniform allowance; (c)
eliminating the shoe reimbursement allowance; (d) redefining the threshold for full-time
employment status from 32 hours per week to 40 hours per week for Paragon employees; (e)
discontinuing the employee option to receive the hourly health and welfare benefit as a wage in
the employee paycheck; (f) changing pay dates from biweekly to twice monthly for AEPS
employees; (g) and reducing the pay rate earned by employees while in training.
JD–55–15
WE WILL NOT in any like or related manner interfere with, restrain, or coerce our employees
in the exercise of their rights guaranteed in Section 7 of the Act.
AMERICAN EAGLE PROTECTIVE SERVICES CORP. AND
PARAGON SYSTEMS, INC., SINGLE AND JOINT EMPLOYERS
(Employer)
Dated ____________________ By ________________________________________________
(Representative American Eagle Protective Services Corp.) (Title)
Dated ____________________ By ________________________________________________
(Representative Paragon Systems, Inc.,) (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.
Bank of America Center, Tower II, 100 S. Charles Street, Ste 600, Baltimore, MD 21201-2700
(410) 962-2822, Hours: 8:15 a.m. to 4:45 p.m.
The Administrative Law Judge’s decision can be found at www.nlrb.gov/case/05-CA-126739 or by using the
QR code below. Alternatively, you can obtain a copy of the decision from the Executive Secretary, National
Labor Relations Board, 1099 14th Street, N.W., Washington, D.C. 20570, or by calling (202) 273-1940.
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, (410) 962-2880.