American Elevator Corp. , alter ego of BBQL, LLC

National Labor Relations Board - Administrative Judge Opinions

Sep 25, 2014

19-CA-117057 (N.L.R.B. Sep. 25, 2014)

JD(SF)–47–14
Bellevue, Washington
UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD
DIVISION OF JUDGES, SAN FRANCISCO BRANCH OFFICE
AMERICAN ELEVATOR CORP., a wholly
owned subsidiary of MARLA ELECTRIC,
INC., AND BBQL, LLC, ALTER EGOS
and Cases 19-CA-117057
19-CA-121522
INTERNATIONAL UNION OF ELEVATOR
CONSTRUCTORS, LOCAL 19
Rachel Cherem, Esq., for the General Counsel.
Larry D. Bentley, pro se, for the Respondent.
David L. Tuttle, Esq., for the Charging Party.
DECISION
GERALD M. ETCHINGHAM, Administrative Law Judge. I heard this case in Seattle,
Washington, on July 15, 2014. On November 14, 2013,1 the Charging Party International
Union of Elevator Constructors, Local 19 (the Union) filed an unfair labor practice charge
in Case 19–CA–117057 alleging that American Elevator Corp., a wholly owned subsidiary
of Marla Electric, Inc. (AEC), and BBQL, Inc. (BBQL, and jointly, the Respondent)2
violated Section 8(a)(5) and (1) of the National Labor Relations Act3 (the Act). On January
29, 2014, the Union filed a second unfair labor practice charge alleging further violations
of Section 8(a)(5) and (1) of the Act.
On March 28, 2014, the Regional Director for Region 19 of the National Labor
Relations Board issued a consolidated complaint against Respondent alleging that
Respondent violated Section 8(a)(5) and (1) of the Act. Respondent filed a timely answer
on April 11, 2014, admitting and denying various of the allegations of the consolidated
complaint.
The parties have been afforded full opportunity to appear, to introduce relevant
evidence, to examine and cross-examine witnesses, and to file briefs. On the entire record,

1 All dates are in 2013 unless otherwise referenced.
2 Respondent’s name appears as amended at hearing.
3 29 U.S.C. Secs. 157 and 158(a)(5) and (1).
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from my observation of the demeanor of the witnesses,4 and having considered the post
hearing briefs5 of the parties, I make the following
FINDINGS OF FACT
I. JURISDICTION
Respondent AEC and Respondent BBQL are Washington state entities which
provide or have provided residential and commercial sales and service of elevators, stair
lifts, and vertical platforms. Respondent stipulated at hearing that it satisfies the Board’s
retail and nonretail jurisdictional standards. Thus I find that Respondent is an employer
engaged in commerce within the meaning of Sec. 2(2), (6), and (7) of the Act. Further,
Respondent admits and I find that the Union is a labor organization within the meaning of
Section 2(5) of the Act. Accordingly, this dispute affects commerce and the Board has
jurisdiction of this case pursuant to Section 10(a) of the Act.
II. COLLECTIVE-BARGAINING RELATIONSHIP
Larry and Marilyn Bentley own 100 percent of Marla Electric, Inc. (Marla), an
Oregon corporation, which owns AEC. Larry Bentley (Bentley) was president and CEO of
AEC from the time it was purchased from former owner Mark Vendetti (Vendetti) by
Marla on April 1, 2009. AEC maintained offices including a warehouse and storage facility
in Bellevue, Washington, at 2110 116th Avenue Northwest, Suite 5.
At the time of purchase, the employees of AEC were represented by the Union
pursuant to a short form agreement signed by prior owner Vendetti agreeing to be bound to
the Thyssen Krupp Elevator contract with the Union effective July 9, 2007, and
terminating at midnight on July 8, 2012 (here, the TK contract), as well as any successor
agreements. The TK agreement was succeeded by an agreement between the National
Elevator Bargaining Association and the Union in effect from July 9, 2012, to July 8, 2017
(the NEBA contract).
The bargaining unit set forth in both contracts recognizes the Union pursuant to Section
9(a) of the Act and includes all of AEC’s elevator constructor mechanics, helpers,

4 There are few disputes of fact. To the extent necessary, credibility resolutions have been derived
from a review of the entire testimonial record and exhibits, with due regard for the logic of probability,
the demeanor of the witnesses, and the teachings of NLRB v. Walton Mfg. Co., 369 U.S. 404, 408 (1962).
As to those witnesses testifying in contradiction to the findings here, their testimony has been discredited,
either as having been in conflict with credited documentary or testimonial evidence, or because it was in
and of itself incredible and untrustworthy.
5 The General Counsel’s motion to strike portions of Respondent’s posthearing brief is granted to the
extent that any arguments not supported by facts in the record have been disregarded.
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and apprentices. No evidence was offered to show inappropriateness of this historical unit.6
Thus, I find this is an appropriate bargaining unit within the meaning of Section 9(b) of the
Act.
Initially AEC honored the terms of the TK contract and retained the 17–18
employees who worked for AEC under its prior owner. Moreover, AEC admits that it
continued the same operations, i.e., residential and commercial elevator, stair lift, and
vertical platform sales and service, with many of the same major clients, and the same
equipment. Given this substantial continuity, there is no dispute and I find that AEC
succeeded to the bargaining obligation of the seller as a Burns successor7 and since the
purchase, the Union has been the exclusive collective-bargaining representative of unit
employees.
III.JULY 2012 CESSATION OF BENEFIT CONTRIBUTIONS
Both the TK and NEBA contracts require that employers make contributions to
employee benefit plans including a pension plan (Art. XVIII), a health and welfare plan
(Art. XVII), an annuity plan (Art. XVIII(A)), an education fund (Art. XIX), and a work
preservation fund (Art.XX). AEC honored these obligations until May 2012. At that time,
due to financial difficulties, AEC missed payments to the trust. Although AEC signed a
settled agreement with the Trusts, ultimately it was unable to comply. In July 2012, AEC
quit making contributions to the benefits plan as required by the TK and NEBA contracts.
Specifically, AEC did not make payments to the National Elevator Industry Pension Plan,
the health benefit plan, the education program fund, the elevator industry work
preservation fund, and the elevator constructors annuity. Bentley explained that he was
unable to make these contributions due to lack of funds. He did not contact the Union or
request bargaining. However, AEC continued to file monthly reports with the trust funds.
IV. JANUARY 2013 CESSATION OF VACATION PAY
The TK and NEBA contracts contain identical requirements that employers pay
vacation pay to employees in a lump sum on January 15 and July 15 (Art. XII). The lump-
sum amount is based on years of service and hours worked. The complaint alleges that
Respondent violated Section 8(a)(5) and (1) of the Act by failure to make these payments
since January 15, 2013. Although this allegation was denied in AEC’s answer, at hearing
Bentley agreed that the lump sums were not paid at the time they were due. He stated that
over the next few months employees received pay when taking time off. It is undisputed
that AEC did not contact the Union about this issue.

6 Change in ownership does not destroy bargaining units that have an established history of collective
bargaining unless the units no longer conform to other standards of appropriateness. Banknote Corp. of
America, 315 NLRB 1041, 1043 (1994) (citing Indianapolis Mack Sales & Service, 288 NLRB 1123 fn. 5
(1988), enfd. 84 F.3d 637 (2d Cir. 1996).
7 In NLRB v. Burns International Security Services, 406 U.S. 272, 281 (1972), the Court held that
where there is a substantial continuity between the enterprises, an employer succeeds to the bargaining
obligation of its predecessor if it retains a majority of the employees in an appropriate bargaining unit
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V. FORMATION AND OPERATION OF BBQL
In April 2013, Marla began efforts to start BBQL in order to handle the residential
clients of AEC. On July 17, 2013, Marla obtained the certificate of formation of BBQL.
On July 16 or 17, 2013, the Union pulled its 4 remaining employees from AEC pursuant to
paragraph 10 of the short form agreement.8 In order to perform further work, AEC
subcontracted the work to three different firms.
Due to arrearages on payment of the excise tax, on November 15, 2013, the Washington
State Department of Revenue rescinded AEC’s license to operate. On the following day,
employees of AEC were transferred to BBQL. Bentley became the manager of BBQL. His wife
Marilyn became vice-president and handled accounts payable and their son William Bentley who
handled inventory and residential sales at AEC transferred to sales for BBQL for a time. AEC’s
bookkeeper Karla Lynch and dispatcher Nedra Mecham both transferred from AEC to BBQL,
retaining their former duties. BBQL performed the same work for many AEC clients.
Initially BBQL used the AEC facility, office supplies, and equipment. No payment
was made by BBQL to AEC for these assets.
By letter of December 3, 2013, on AEC letterhead, Bentley wrote to an AEC client
that AEC was transferring its service and maintenance requirements to BBQL and that
BBQL would assume all AEC assets and maintenance and service contracts. He noted that
the management team at BBQL would remain the same as the management team at AEC.
Similar letters were sent to other AEC clients. Most of BBQL’s clients had been AEC
clients.
In hiring mechanics for BBQL in September, Bentley told applicants that it was a
nonunion shop. These new employees were not paid pursuant to the NEBA contract rates.
The employees were not paid any benefits.
VI. ANALYSIS
There is no dispute that AEC ceased all benefit payments since July 2012. I have further
found that lump-sum vacation payments have not been made since January 2014. There was no
prior notice to the Union or opportunity to bargain before discontinuance of the payments. Thus,
Respondent altered mandatory terms and conditions of its unit employees in violation of Section
8(a)(5) and (1) of the Act. Merryweather Optical Co., 240 NLRB 1213, 1215 (1979) (refusal to
make required fringe-benefit payments established by a collective-bargaining agreement

8 Par. 10 provides, “It is understood and agreed that notwithstanding the no-strike obligation in
Article XIV of [the TK contract] in the event the Employer fails to pay wages or vacation pay when due
or the Employer is over fifteen (15) days delinquent in making contributions to the fringe benefit funds,
the Union shall have a right to engage in a strike against the Employer until such time as the wages or
vacation pay is paid or the Employer has paid all amounts due to the fringe benefits funds, including
interest and liquidated damages, if any.”
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constitutes a unilateral change in terms and conditions of employment); Schmidt-Tiago
Construction Co., 286 NLRB 342, 343 (1987) (cessation of payments to vacation trust fund
unlawful even though employees were paid directly by employer).
In July 2013, after the Union withdrew unit employees from employment, AEC
operations ceased and all further operation was transferred to BBQL, a nonunion entity. The
collective-bargaining agreement was fully repudiated at this time. Contract wages, benefits, and
terms and conditions of employment were ignored. Unit work was initially subcontracted. Later,
employees were hired at noncontract wage rates with no benefits.
Respondent’s sole defense is that it was unable to meet these obligations due to financial
trouble. Respondent provided evidence of its financial status which included a decline in sales
revenues as well as net losses. However, financial inability does not relieve an employer from its
obligation to bargain with the Union. See, e.g., RBE Electronics of S.D., 320 NLRB 80, 81–82
(1995) (economic exigency shown if proposed changes were ‘‘compelled’’ and exigency caused
by external events beyond the employer’s control or not reasonably foreseeable). Respondent
has not satisfied this burden.
Both AEC and BBQL, as alter egos, are responsible for these unfair labor practices. A
change in corporate form that involves no more than a “technical change in the structure or
identity of the employing entity, frequently to avoid the effect of the labor laws, without any
substantial change in its ownership or management” may be disregarded and the alter ego “is
subject to all of the legal and contractual obligations of the predecessor.” Howard Johnson Co. v.
Hotel & Restaurant Employees Detroit Local Joint Executive Board, 417 U.S. 249, 259 fn. 5
(1974). The determination of alter ego status is a question of fact based on all attendant
circumstances. Southport Petroleum v. NLRB, 315 U.S. 100, 106 (1942).
Ownership, management and supervision, business purpose, operations, equipment, and
customers are the typical factors determinative of whether alter ego status exists. Crawford Door
Sales Co., 226 NLRB 1144, 1144 (1976). If these factors are substantially identical, an alter ego
relationship will ordinarily be found. Id. A further consideration is whether the purpose behind
creation of an alleged alter ego was legitimate or was to evade responsibilities under the Act,9
that is, if the second company was created in order to allow the first company to evade its
responsibilities under the Act.10 Not all factors are necessary to an alter ego finding and no single
factor is determinative,11
Here, AEC and BBQL had the same managers, supervision, and owners; substantially
identical clients, and the same operations. Equipment and assets were transferred from AEC to
BBQL without any payment. All nonunit employees remained the same. Initially, the unit work
was subcontracted. Although BBQL may have been created, as Respondent asserts, to take over
the residential clients of AEC, when the Union work force left, BBQL was quickly relegated to

9 U.S. Reinforcing, 350 NLRB 404 (2007) (citing Liberty Source W, 344 NLRB 1127, 1136 (2005).
10 Cadillac Asphalt Paving Co., 349 NLRB 6, 8 (2007).
11 U.S Reinforcing, supra, 350 NLRB at 404, citing Liberty Source W, 344 NLRB 1127, 1136 (2005);
Standard Commercial Cartage, 330 NLRB 11, 13 (1999); MIS, Inc., 289 NLRB 491, 492 (1988).
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taking over all of AEC’s business in a nonunion context. Thus, BBQL was quickly usurped to
evade responsibilities under the Act. There can be no doubt that AEC and BBQL constitute alter
egos and I so find.
CONCLUSIONS OF LAW
1. The Respondent is an employer engaged in commerce within the meaning of
Section 2(2), (6), and (7) of the Act. The Union is a labor organization within the
meaning of Section 2(5) of the Act.
2. By ceasing payments to the trust funds and ceasing payment of lump-sum vacation pay
without providing the Union with prior notice and an opportunity to bargain over
proposed changes, the Respondent has violated Section 8(a)(5) and (1) of the Act.
3. By repudiating its collective-bargaining agreement with the Union, Respondent has
violated Section 8(a)(5) and (1) of the Act.
4. The above unfair labor practice affects commerce within the meaning of Section 2(6) and
(7) of the Act.
REMEDY
Having found that the Respondent has engaged in certain unfair labor practices, I shall
order it to cease and desist there from and to take certain affirmative action designed to
effectuate the policies of the Act. The Respondent shall be required to rescind the unilateral
change in payment to the trust funds and payment of lump-sum vacation pay. It shall further be
required to make employees whole for losses incurred during the period of time the Respondent
did not honor these obligations but only as to lump-sum vacation pay. The General Counsel does
not seek reimbursement to the trusts because these funds are being recouped through a separate
lawsuit filed by the Union’s trusts. The lump-sum vacation payments are not part of the lawsuit
and the General Counsel seeks a remedy for this violation.
Backpay shall be computed in accordance with Ogle Protection Service, 183 NLRB 682
(1970), enfd. 444 F.2d 502 (6th Cir. 1971), with interest at the rate prescribed in New Horizons
for the Retarded, 283 NLRB 1173 (1987), compounded daily as prescribed in Kentucky River
Medical Center, 356 NLRB No. 8 (2010). The Respondent shall file a report with the Social
Security Administration allocating backpay to the appropriate calendar quarters. The Respondent
shall also compensate the affected employees for any adverse tax consequences of receiving
lump-sum backpay awards covering more than 1 calendar year. Don Chavas, LLC, d/b/a
Tortillas Don Chavas, 361 NLRB No. 10 (2014).
On these findings of fact and conclusions of law and on the entire record, I issue the
following recommended.12

12 If no exceptions are filed as provided by Sec. 102.46 of the Board’s Rules and Regulations, the
findings, conclusions, and recommended Order shall, as provided in Sec. 102.48 of the Rules, be adopted
by the Board and all objections to them shall be deemed waived for all purposes.
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ORDER
The Respondent, American Elevator Corp., a wholly owned subsidiary of Marla Electric,
and BBQL, LLC, alter egos, located in Bellevue, Washington, its officers, agents, successors,
and assigns, shall
1. Cease and desist from
a) Failure to make required payments to employee benefit plans including the pension
plan, the health and welfare plan, the annuity plan, the education fund, and the work
preservation fund, failure to make required lump-sum vacation payments, and failure
to honor the collective-bargaining agreement with the Union.
b) In any like or related manner interfering with, restraining, or coercing 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) Restore the status quo ante by rescinding the unilateral changes to benefit payments
and lump-sum vacation payments.
b) Recognize and on request, bargain with the Union as the exclusive representative of
its elevator constructor mechanics, helpers, and apprentices concerning terms and
conditions of employment.
c) Abide by the agreement between the National Elevator Bargaining Association and
the Union in effect from July 9, 2012, to July 8, 2017.
d) Make employees whole for loss of lump-sum vacation pay as set forth in the remedy
section of this decision.
e) Preserve and, within 14 days of a request, or such additional time as the Regional
Director may allow for good cause shown, provide at a reasonable place designated
by the Board or its agents, all payroll records, social security payment records,
timecards, personnel records and reports, and all other records, including an
electronic copy of such records if stored in electronic form, necessary to analyze the
amount of backpay due under the terms of this Order.
f) Within 14 days after service by the Region, post at its facility in Bellevue,
Washington, copies of the attached notice marked “Appendix.”13 Copies of the
notice, on forms provided by the Regional Director for Region 4, after being signed
by the Respondent’s authorized representative, shall be posted by the Respondent and

13 If this Order is enforced by a judgment of a 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.”
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maintained for 60 consecutive days in conspicuous places including all places where
notices to employees are customarily posted. In addition to physical posting of paper
notices, the notices shall be distributed electronically, such as by email, posting on an
intranet or an internet site, and/or other electronic means, if the Respondent
customarily communicates with its employees by such means. Reasonable steps shall
be taken by the Respondent to ensure that the notices are not altered, defaced, or
covered by any other material. In the event that, during the pendency of these
proceedings, the Respondent has gone out of business or closed the facility involved
in these proceedings, the Respondent shall duplicate and mail, at its own expense, a
copy of the notice to all current employees and former employees employed by the
Respondent at any time since October 25, 2013.
g) Within 21 days after service by the Region, file with the Regional Director a sworn
certification of a responsible official on a form provided by the Region attesting to the
steps that the Respondent has taken to comply.
Dated, Washington, D.C. September 25, 2014
_______________________________
Gerald M. Etchingham
Administrative Law Judge
APPENDIX
NOTICE TO EMPLOYEES
Posted by Order of the
National Labor Relations Board
An Agency of the United States Government
The National Labor Relations Board has found that we violated Federal labor law and has
ordered us to post and obey this notice.
FEDERAL LAW GIVES YOU THE RIGHT TO
Form, join, or assist a union
Choose representatives to bargain with us on your behalf
Act together with other employees for your benefit and protection
Choose not to engage in any of these protected activities.
WE WILL NOT make any changes to the terms in our contract without providing International
Union of Elevator Constructors, Local 19 prior notice and an opportunity to bargain over
proposed changes, as the sole and exclusive bargaining representative of our employees.
WE WILL NOT repudiate the contract between the Union and the National Elevator Bargaining
Association effective from July 9, 2012, to July 8, 2017.
WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the
exercise of the rights guaranteed you by Section 7 of the Act.
WE WILL rescind the unilateral change to contributions to the fringe-benefit funds and the
lump sum payment of vacation pay.
WE WILL abide by the National Elevator Bargaining Association contract.
WE WILL make employees whole for any losses due to our failure to pay lump-sum vacation
payments
.
WE WILL file a report with the Social Security Administration allocating backpay to the
appropriate calendar quarters.
WE WILL compensate employees for the adverse tax consequences, if any, of receiving one or
more lump-sum backpay awards covering periods longer than 1 year.
AMERICAN ELEVATOR CORP., a wholly
owned subsidiary of Marla Electric, Inc.
and BBQL, LLC, alter egos
(Employer)
Dated By
(Representative) (Title)
The National Labor Relations Board is an independent Federal agency created in 1935 to enforce the
National Labor Relations Act. It conducts secret-ballot elections to determine whether employees want
union representation and it investigates and remedies unfair labor practices by employers and unions. To
find out more about your rights under the Act and how to file a charge or election petition, you may speak
confidentially to any agent with the Board’s Regional Office set forth below. You may also obtain
information from the Board’s website: www.nlrb.gov.
915 2nd Avenue, Federal Building, Room 2948
Seattle, Washington 98174-1078
Hours: 8:15 a.m. to 4:45 p.m.
206-220-6300
.
The Administrative Law Judge’s decision can be found at www.nlrb.gov/case/19-CA-117057 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, 206-220-6284.