J & L Painting Contractors, Inc.

National Labor Relations Board - Board Decisions

Dec 18, 1978

239 N.L.R.B. 867 (N.L.R.B. 1978)

J & L PAINTING CONTRACTORS, INC.
J & L Painting Contractors, Inc.' and International
Brotherhood of Painters and Allied Trades, AFL-
CIO, District Council No. 9 of New York City and
The Association of Master Painters and Decorators
of the City of New York, Inc., Party to the Contract.
Case 2-CA-15416
December 18. 1978
DECISION AND ORDER
BY CHAIRMAN FANNING AND MEMBERS JENKINS
AND PENELLO
On September 27, 1978, Administrative Law Judge
Max Rosenberg issued the attached Decision in this
proceeding. Thereafter, counsel for the General
Counsel filed exceptions and a supporting brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the record and the at-
tached Decision in light of the exceptions and brief
and has decided to affirm the rulings, findings. and
conclusions of the Administrative Law Judge and to
adopt his recommended Order as modified herein.2
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Re-
lations Board adopts as its Order the recommended
Order of the Administrative Law Judge as modified
below and hereby orders that the Respondent,
J & L Painting Contractors, Inc., Englewood, New
Jersey, its officers, agents, successors, and assigns,
shall take the action set forth in the said recom-
mended Order, as so modified:
1. Insert the following as paragraph l(b): 3
"(b) In any like or related manner interfering
with, restraining, or coercing employees in the exer-
cise of the rights guaranteed them in Section 7 of the
Act."
2. Insert the following as paragraphs 2(b) and (c)
and reletter the remaining paragraphs accordingly:
"(b) Signify, by whatever means, methods, or pro-
cedure member-employers of the Association cus-
tomarily follow, Respondent's determination to ac-
knowledge, implement, and comply with the
collective-bargaining contract which the Association
and the Union have negotiated.
"(c) Give the above-mentioned contract retroac-
tive effect thom its August 1, 1977, effective date."
3. Substitute the attached notice for that of the
Administrative Law Judge.
F Ihe name of Respondent appears as amended at the hearing
In its exceptions the General Counsel asked that the Board's Order and
notice include a provision requiring Respondent to affirmatively acknowl-
edge and comply with the 1977 80 collective-bargaining agreement negotl-
a.ted bh the Association of Master Painters and Decorators We shall grant
the General ( ounsel's request and modifv the Administratlve Law Judge's
recommended Order accordingls
In par. I of his recommended Order the Administrative Law Judge
nadvertentls ormitted the narrow cease-and-desist language which the
Board traditlonall). prosides In cases involving 8ia)(5) violations Accord-
ing¥l. we shall modifs his recommended Order
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILI NOT refuse to abide by and adhere to
the terms of the contract between The Associa-
tion of Master Painters and Decorators of the
City of Painters and Allied Trades, AFL-CIO,
District Council No. 9 of New York City which
runs from August 1. 1977, to July 31, 1980.
WE WILL. NO1 in any like or related manner
interfere with, restrain, or coerce our employees
in the exercise of the rights guaranteed them in
Section 7 of the Act.
WF WILL signify, by whatever means, meth-
ods, or procedure member-employers of the As-
sociation customarily follow, our determination
to acknowledge, implement, and comply with
the collective-bargaining contract which the
Union and the Association have negotiated.
WE WILL give the above-mentioned contract
retroactive effect from its August 1, 1977, effec-
tive date.
WE WILL pay to the above-mentioned Union
all moneys due and owing on and after January
1, 1978. to the various union funds as required
under the terms of the aforesaid contract.
J & L PAINTING CONTRACTORS, INC.
DECISION
MAx ROSENBERO. Administrative Law Judge: With all
parties represented, this proceeding was heard before me
on August 7 and 8, 1978, in New York, New York, upon an
amended complaint filed by the General Counsel of the
National Labor Relations Board and an answer interposed
thereto by J & L Painting Contractors, Inc.,l herein called
Respondent. 2 At issue is whether Respondent refused to
The name of Respondent appears as amended at the hearing.
The complaint, which issued on March 31. 1978. and was amended on
867
DECISIONS OF NATIONAL. LABOR RELATIONS BOARD
bargain collectively with International Brotherhood of
Painters and Allied Trades, AFL CIO, District Council
No. 9 of New York City, herein called the Union, in viola-
tion of Section 8(a)(5) of the National Labor Relations
Act, as amended, by certain conduct to be detailed herein-
after. Briefs have been received from the General Counsel,
the Union, and the Respondent which have been duly con-
sidered.
Upon the basis of the entire record made in this proceed-
ing, and my observation of the demeanor of each witness
while testifying on the stand, I hereby make the following:
FINDINGS OF FACT AND CONCLiUSIONS
I tHE BUSINESS OF RESPONDENT
At all times material herein, Respondent has maintained
its principal office and place of business in Englewood,
New Jersey, and operates its business at various sites with-
in the State of New York, where it is engaged as a painting
contractor providing painting services for residential con-
struction. During the annual period material to this pro-
ceeding, Respondent derived gross revenues in excess of
$250,000 from the city of New York pursuant to contracts
with the New York City Housing Authority. The complaint
alleges, the answer admits, and I find that Respondent is
an employer engaged in commerce within the meaning of
Section 2(6) and (7) of the Act.
II. THE LABOR ORGANIZATION INVOi VEDF
The Union is a labor organization within the meaning of
Section 2(5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
The complaint alleges that Respondent violated Section
8(a)(5) of the Act when, on or about December 19, 1977,
and continuing to date, it refused to abide by and adhere
to the terms of a collective-bargaining agreement negotiat-
ed with the Union on its behalf by the Association of Mas-
ter Painters and Decorators of the City of New York, Inc.,
herein called the Association. For its part, Respondent pn-
marily contends that it was not privy to that labor compact
and hence was not bound by its provisions. Alternatively,
Respondent argues that, even assuming that it was a party
to the contract, it had timely withdrawn from its legal en-
velopment.
It is undisputed and I find that, in 1972, James Jerome
Lynn established a painting contracting firm known as the
J & L Painting Co., herein called the Company, with of-
fices located at 204 Green Street, Englewood, New Jersey.
Lynn was the sole proprietor of this enterprise, and his
wife, Mattie Lynn, occupied the position of bookkeeper. In
the main, the Company derived its revenues from residen-
tial painting contracts which it obtained from the New
York City Housing Authority. In the course of its opera-
tions, Lynn personally hired and supervised approximately
25 employees in the performance of the work involved.
In mid-1975, the Association, which is a multiemployer
group composed of painting contractors doing business in
New York City and is authorized to negotiate collective-
bargaining agreements with the Union on behalf of its
members, conducted a promotional seminar under the ae-
gis of its executive-secretary, Louis Elkins. Following the
meeting, Elkins dispatched a letter to Lynn on August 6,
1975, in which he explained the obligations and advantages
of membership, and enclosed a blank application form. On
September 9, 1975, Lynn executed the form and returned it
to Elkins. By doing so, Lynn agreed to be bound by the
terms of a collective-bargaining agreement entered into by
the Association and the Union for a term which spanned
from August I, 1974, to July 31, 1977. By letter of October
8., 1975, Elkins advised the Union that the Company had
been elected to membership in the Association. The record
discloses and I find that the Company commenced to pay
dues to the Association and also to make contributions to
the Union's insurance and pension funds pursuant to the
terms of the existing labor contract.
On June 30, 1976, Lynn prepared a certificate of incor-
poration for an enterprise styled as J & L Painting Con-
tractors, Inc., Respondent herein, which was filed in the
office of the New York Secretary of State on July 7, 1976.
James Lynn became the president of Respondent and his
wife, Mattie, the corporate secretary-treasurer and they, to-
gether with their daughter Felicia, were the sole stockhold-
ers. Thereafter, the Company was phased out of existence,
and Respondent undertook to perform its painting and de-
corating jobs utilizing the same complement of employees
and tools, operating from the same physical location in
Englewood, New Jersey, and engaging in the same type of
business functions under contract with the New York City
Housing Authority. James Lynn testified, and I find that,
in July or August 1976, he notified the New York City
Housing Authority that, henceforth, the Company would
cease to operate and that it would be succeeded by Re-
spondent. It is also uncontroverted, and I find that Re-
spondent continued to pay dues to the Association through
December 1976.
In June 1977, the Association and the Union com-
menced negotiations over a new collective-bargaining
agreement to replace the one which was due to expire on
July 31, 1977. It is undenied, and I find that, during those
negotiations, the Association mailed a notice to all of its
members apprising them that a meeting was scheduled for
July 26, 1977, to consider the various options which would
be available in the event that no agreement was reached by
July 31. 1977, and the Union decided to embark upon a
strike. Lynn received this notification and attended the
parley. However, on August 8, 1977, the Association and
the Union came to terms which were embodied in an
agreement extending from August 1, 1977, to July 1, 1980.
On September 6, 1977, Louis Elkins sent a letter to Re-
spondent in which he related that it was in arrears of dues
for the first three quarters of 1977 and called attention to
previous statements and messages which he had conveyed
to Respondent regarding this matter.3 Elkins further re-
ported that:
July 21. 1978. is based upon a charge filed and served on January 30. 1978.
Apparently unaware that the Company had assumed a corporate form
868
J & L PAINTING CONTRACTORS. INC.
I, therefore, regret to inform you that your member-
ship in the Association has been terminated and the
Union and all interested parties will be informed of
the fact without further notice to you.
Inasmuch as it is our desire to retain all of our mem-
bers, I will withhold notice to the Union and other
interested parties until Friday, September 9th in order
to give you an opportunity to retain membership in
the Association.
When Lynn failed to respond to this communication, El-
kins mailed a letter to the Union on September 14, 1977,
advising it that Respondent's membership in the Associa-
tion had been terminated. This letter was followed by an-
other dated September 20, 1977, in which Elkins informed
that labor organization that the terminal date of Respon-
dent's expulsion from membership had been extended to
September 30, 1977.
Upon receiving notification of Respondent's loss of
membership in the Association, James Wolford, a trustee
of the Union, telephoned Lynn on December I. 1977, and
advised the latter that he was bound by the new 1977-80
contract between the parties in view of the fact that his
membership had been terminated after the execution of
that agreement or, alternatively, that Lynn would be obli-
gated to sign an independent agreement with the Union. In
this connection, the terms of the 1974-77 contract provided
that a member who had been expelled from the Associa-
tion "shall . ..continue to be bound" by its terms and
conditions, and the 1977-80 agreement contained a similar
provision. Lynn replied that "he didn't belong to the Asso-
ciation, he wasn't going to sign the Union contract. His
men didn't want to belong to the contract, be part of the
union." In a conciliatory move, Wolford asked Lynn to
meet with the trustee after the Christmas holidays to ex-
plore the situation further, and Lynn agreed to do so.
On December 19, 1977, Wolford sent a letter to Lynn in
which he enclosed copies of the 1977-80 compact between
the Union and the Association and requested that the lat-
ter sign them. Thereafter, on January 5, 1978. Wolford
again telephoned Lynn and arranged for a meeting at the
Union offices on January 25, 1978. At this meeting, Lynn
once more refused to sign either the 1977-80 Associa-
tionwide contract or an independent agreement with the
Union, contending that there were too many nonunion
contractors in the painting industry in the area.
Events abided until February 1978 when Michael Hig-
gins, the administrator of the Union's insurance and annui-
ty funds, placed a call to Respondent and requested that it
submit the delinquent employer-payroll reports from Au-
gust 1977 to date, together with the required payments to
the funds, as required under the collective agreement be-
tween the Association and the Union. MNrs. Lynn respond-
ed that she would make the payments, but stated that she
would prepare only one payroll report covering the period
from August to December 1977. On March 15, 1978. the
Union received a payroll report for this period which was
accompanied by three checks, drawn on the account of
in July 1976. Elkins addressed his correspondence to "J & t Painting (o."
Respondent, payable to the various funds. Since that date,
Respondent has made no further payments to the Union's
funds as required under the contract between the Associa-
tion and the Union.
As chronicled above, Respondent's primary defense to
this action rests on its contention that it was never a party
to the 1974-77 contract which the Association and the
Union had executed and therefore it could not be bound
either by its terms or by the provisions of the succeeding
agreement which ran from 1977 to 1980. In this connec-
tion, Respondent argues that it was the Company, and not
Respondent, which joined the Association on September 9,
1975, and thereby agreed to be bound by the existing col-
lective-bargaining agreement, and that, with the demise of
the Company on July 7, 1976, its membership in the Asso-
ciation and all contractual obligations to the Union came
to an end. I find no merit in this contention for, in my
opinion, the evidence clearly establishes that Respondent
was an alter ego of the Company, on and after July 7, 1976,
and, as such, became a member of the Association and was
therefore bound by the contract negotiated on its behalf.
In Crabsford Door Sales Company, Inc., and Cordes Door
Company, Inc.,4 the Board reiterated that it would find an
alter ego status to exist where two enterprises have substan-
tially identical "management, business purpose, operation,
equipment, customers, and supervision, as well as owner-
ship." In the instant case, it is undisputed and I find that
the management and ownership of both the Company and
Respondent rested in the hands of James and Mattie
Lynn; that the business purpose, operation, and equipment
of the two enterprises remained identical in that the Re-
spondent continued to perform the same painting and de-
corating chores which the Company had previously under-
taken by utilizing the same work complement and tools;
that the painters and decorators employed by both compa-
nies were hired and supervised by James Lynn; and, that
the customer of both entities was the New York City Hous-
ing Authority. In short. I conclude that, on and after July
7. 1976. Respondent became the alter ego of the Company
and was thereafter bound by the terms of the collective-
bargaining agreement which the Association had negotiat-
ed on its behalf with the Union for the period from August
1, 1974, to July 31, 1977. 5
Dipping further into its defensive arsenal, Respondent
claims that, even if it were found to be an alter ego of the
Company and bound by the 1974-77 contract which the
Association had negotiated, it nevertheless was free of any
contractual obligations imposed by the 1977-80 agreement
because Respondent had timely withdrawn from multiem-
ployer bargaining in relation to the latter compact.
In R,'tail Associates Inc.,b The Board set forth the guide-
lines governing the withdrawal of an employer from mul-
tiemployer bargaining. In doing so, it announced that:
We would accordingly refuse to permit the withdrawal
of an employer . . . from a duly established multiem-
ployer bargaining unit, except upon adequate wntten
4226 NI RB 1144 i197hl
itdrqi- Pi'lt"in,, (orp0rttoIt and .!'aual Lah,,Vaprh;h ompanv. 213
NL RB 394 { 1974)
120 NII RB 388 394. 395 1958).
869
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
notice given prior to the date set by the contract for
modification, or to the agreed-upon date to begin the
employer negotiations.7
The Board added:
The decision to withdraw must contemplate a sincere
abandonment, with relative permanency, of the mul-
tiemployer unit and the embracement of a different
course of bargaining on an individual-employer basis.
The element of good faith is a necessary requirement
in any such decision to withdraw, because of the uns-
tabilizing and disrupting effect on multiemployer col-
lective bargaining which would result if such with-
drawal were permitted to be lightly made.f
Moreover, the Board laid down the caution in Goodsell &
Vocke, Inc.,9 that the failure of an employer to afford time-
ly written notice of its intended withdrawal from group
bargaining to his "opposite number," i.e., the Union,
would render the withdrawal nugatory.
In the case at hand, the record establishes and I have
found that, in June 1977, the Union and the Association
instituted negotiations over a new bargaining agreement to
replace the compact which was due to expire on July 31,
1977, and a consensus was ultimately reached on August 8,
1977. It is uncontroverted and I find that at no time prior
to the commencement of negotiations did Respondent no-
tify the Union either in writing or otherwise of its decision
to withdraw from the Association. Indeed, the Union first
learned of Respondent's defection when James Wolford,
the Union's trustee, telephoned Respondent's President
Lynn on December 1, 1977, concerning Respondent's ex-
pulsion from membership in the Association, and was told
by Lynn for the first time that the latter "didn't belong to
the Association, he wasn't going to sign the Union con-
tract." In light of the Board's pronouncements in Retail
Associates, Inc. and Goodsell & Vocke, that an employer
may appropriately withdraw from multiemployer bargain-
ing only if it affords clear and unequivocal written notice
to the contracting union of his intention to do so prior to
the commencement of negotiations, I conclude that Re-
spondent, as the alter ego of the Company, remained
bound by and was required to adhere to the terms of the
newly negotiated agreement between the Association and
the Union.
While not critical to a resolution of the issues presented
herein, I also find and conclude that Respondent further
failed to provide the Association with timely written notice
of its intention to withdraw from that body. When called to
the stand as a witness, Respondent's Secretary-Treasurer
Mattie Lynn claimed that, at the behest of her husband,
she dispatched a letter to the Association's executive-secre-
tary, Louis Elkins, on April 21, 1977, which stated, "Would
you kindly drop me as a member lof the Association], be-
cause the fees are to [sic] costly for my Co." Elkins testi-
monially denied that he had ever received this communica-
tion. I do not credit Mrs. Lynn's testimony for a variety of
reasons. Thus, she averred that, at the time of the hearing,
7 Id. at 395.
s Id at 394
9 223 NLRB 60 (1976), enfd. 559 F.2d 1141 (9th (ir. 1977).
she harbored both the original and a carbon copy of the
letter in her files. When questioned as to whether she kept
the original of all letters which she mailed, she replied that
"I keep the original or either the copy, which ever one I
don't send that's the one I keep." If Mrs. Lynn always
retained either the original or a copy of all letters which
were sent from her office, I deem it implausible that she
would have retained both the original and the carbon of
the April 21, 1977, letter if, in truth and fact, she had
mailed any such letter to the Union at all. Moreover, Mrs.
Lynn testified that Elkins telephoned her "maybe the first
of May, somewhere around there asking for [duesJ money."
In response to Elkins' request for Association dues, she
replied, "Well, Mr. Elkins, I don't know what to say."
Again, if Mrs. Lynn had actually mailed the letter of with-
drawal from the Association on April 21, 1977, I deem it
highly unlikely that she would have been at a loss for
words in replying to this solicitation. Furthermore, I con-
sider it incongruous that James Lynn would have accepted
Elkins' invitation to attend the Association's meeting on
July 26, 1977, to discuss the effects of a possible strike by
the Union upon its members if, in fact, he had already
defected from the Association's ranks. Finally, I am not
convinced that Respondent would have remitted payments
to the Union's insurance and annuity funds on March 15,
1978, if it had in fact withdrawn from the Association in a
timely fashion to escape the burden of these contractual
obligations. In sum, I conclude that Respondent did not
notify the Association either in writing or otherwise of its
unequivocal intention to withdraw from group bargaining
prior to the commencement of negotiations between the
Union and the Association leading to the execution of the
1977-80 contract.
Accordingly, I conclude that, by refusing to abide by
and adhere to the terms of the 1977-80 collective-bargain-
ing agreement which the Association had negotiated with
the Union on Respondent's behalf, and by failing, upon
the Union's request, to pay over to it the monetary sums
due and owing under said contract on and after January 1,
1978, Respondent has violated Section 8(aX5) of the Act.
IV THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON
COMMERCE
The activities of Respondent set forth in section III,
above, occurring in connection with Respondent's opera-
tions described in section 1, above, have a close, intimate,
and substantial relationship to trade, traffic, and com-
merce among the several States and tend to lead to labor
disputes burdening and obstructing commerce and the free
flow thereof.
V. THE REMEDY
Having found that Respondent has engaged in certain
unfair labor practices within the ambit of the statute, I will
order that Respondent cease and desist therefrom and take
certain affirmative action I deem necessary to effectuate
the policies of that legislation.
I have found that Respondent is bound by the terms of
the contract executed by the Union and the Association on
August 8, 1977, effective from August 1, 1977, to July 31,
870
J & L PAINTING CONTRACTORS, INC.
1980, and that, since on and after January 1, 1978, Respon-
dent has failed and refused to abide by and adhere to those
terms. I shall therefore order that Respondent, upon re-
quest of the Union, abide by those terms for the duration
of that agreement, and pay to the Union any monies due
and owing thereunder.
Upon the basis of the foregoing findings of fact and con-
clusions, and upon the entire record made in this proceed-
ing, I hereby make the following:
CONCLUSIONS OF LAW
1. Respondent is an employer engaged in commerce
within the meaning of Section 2(6) and (7) of the Act.
2. The Union is a labor organization within the meaning
of Section 2(5) of the Act.
3. By refusing to adhere to and abide by the terms of the
contract executed on August 8, 1977, by the Association
and the Union, which is effective from August 1, 1977, to
July 31, 1980, and refusing to pay to the Union any mone-
tary sums due and owing to the Union on and after Janu-
ary 1, 1978, Respondent has engaged in and is engaging in
unfair labor practices within the purview of Section 8(a)(5)
of the Act.
4. The aforesaid unfair labor practices are unfair labor
practices within the meaning of Section 2(6) and (7) of the
Act.
Upon the foregoing findings of fact, conclusions of law,
and the entire record, and pursuant to Section 10(c) of the
National Labor Relations Act, as amended, I hereby issue
the following recommended:
ORDER l0
The Respondent, J & L Painting Contractors, Inc., of
Englewood, New Jersey, its officers, agents, successors,
and assigns, shall:
I. Cease and desist from:
(a) Refusing to adhere to and abide by the terms of the
collective-bargaining agreement reached between the Asso-
ciation, of which it is a member, and the Union effective
from August 1, 1977, to July 31, 1980, and refusing to pay
to the Union any monetary sums due and owing the Union
under said contract on and after January 1, 1978.
2. Take the following affirmative action which I deem is
necessary to effectuate the policies of the Act:
(a) Pay to the Union any monetary sums due and owing
on and after January 1, 1978, under the terms of the 1977
80 contract in effect between the Union and the Associa-
tion.
(b) Post at its offices and at other places where notices
to employees are normally posted copies of the attached
notice marked "Appendix." " Copies of said notice, on
forms provided by the Regional Director for Region 2, af-
ter being duly signed by Respondent's representative, shall
be posted by it immediately upon receipt thereof, and be
maintained by it for 60 consecutive days thereafter, in con-
spicuous places, including all places where notices are cus-
tomarily posted. Reasonable steps shall be taken to insure
that said notices are not altered, defaced, or covered by
any other material.
(c) Notify the Regional Director for Region 2, in writ-
ing, within 20 days from the date of this Order, what steps
have been taken to comply herewith.
m In the event no exceptions are filed as provided in Sec. 102.46 of the
Rules and Regulations of the National Labor Relations Board. the findings.
conclusions, and recommended Order herein shall, as provided in Sec.
102.48 of the Rules and Regulations, be adopted by the Board and become
its findings. conclusions. and Order, and all objections thereto shall be
deemed waived for all purposes.
1i In the event that 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 L nted States Court of Appeals Enforcing an Order of the
Natlional L.abhr Relations Board."
871