
USCA1 Opinion

	




                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________          No. 95-1294                                UNION BUILDERS, INC.,                                     Petitioner,                                          v.                           NATIONAL LABOR RELATIONS BOARD,                                     Respondent.                                 ____________________                      DISTRICT COUNCIL 94, UNITED BROTHERHOOD OF                     CARPENTERS AND JOINERS OF AMERICA, AFL-CIO,                                     Intervenor.                                 ____________________                     ON PETITION FOR REVIEW AND CROSS-APPLICATION                            FOR ENFORCEMENT OF AN ORDER OF                          THE NATIONAL LABOR RELATIONS BOARD                                 ____________________                                        Before                               Torruella, Chief Judge,                                          ___________                      Aldrich and Coffin, Senior Circuit Judges.                                          _____________________                                _____________________               Andrew  B.  Prescott, with  whom  Donald  P. Rothschild  and               ____________________              _____________________          Tillinghast Collins & Graham were on brief for petitioner.          ____________________________               Joseph A. Oertel, Senior Litigation Attorney, National Labor               ________________          Relations  Board,  with  whom  Frederick  L.  Feinstein,  General                                         ________________________          Counsel, Linda Sher, Acting  Associate General Counsel, Aileen A.                   __________                                     _________          Armstrong,   Deputy  Associate   General  Counsel,   and  Charles          _________                                                 _______          Donnelly, Supervisory  Attorney, National Labor  Relations Board,          ________          were on brief for respondent.                                 ____________________                                   October 20, 1995                                 ____________________                    TORRUELLA,   Chief  Judge.     The   petitioner,  Union                    TORRUELLA,   Chief  Judge.                                 ____________          Builders,  Inc.  ("UBI") seeks  review  of  the decision  of  the          respondent, the  National Labor  Relations Board ("the  Board" or          "the  NLRB"), ordering  UBI  to supply  requested information  to          District Council 94, United Brotherhood of Carpenters and Joiners          of America, AFL-CIO (the "Union").  The NLRB cross-applies, under             10(e)  of the  National Labor  Relations  Act ("the  Act"), 29          U.S.C.   160(e),  for enforcement of its order against  UBI.  The          Board  has ordered  UBI  to cease  and  desist from  violating             8(a)(5) and (1)  of the Act, 29  U.S.C.    158(a)(1)  and (a)(5),          furnish the  Union with  the information  it requested,  and post          appropriate notices.   For the  following reasons, we  affirm the          Board's Decision and Order.                                    I.  BACKGROUND                                    I.  BACKGROUND                    In  1989, a  Rhode Island  company called O.  Ahlborg &          Sons ("O.  Ahlborg") executed a three-year  collective bargaining          agreement ("CBA")  with the Union.   On or about  March 24, 1992,          O. Ahlborg notified  the Union that  it planned to  terminate the          agreement as of  May 31,  1992, as was  O. Ahlborg's  contractual          right.  As  a result  of collective bargaining  with the  Union's          then business manager (Herbert F. Holmes), O. Ahlborg  reached an          agreement  (the  "Holmes-Ahlborg   Agreement")  with  the   Union          (confirmed by a letter dated May 29, 1992) whereby a new employer          entity,  UBI,   would  be  formed.     Under  the  Holmes-Ahlborg          Agreement, UBI would enter into a collective bargaining agreement          (the  "new  CBA") with  the Union  and  would continue  all union                                         -2-          bargaining unit work  performed at that time by  O. Ahlborg.  The          Board found that the Holmes-Ahlborg Agreement also provided that,          as  between UBI  and  O.  Ahlborg,  UBI  would  be  allotted  all          prevailing rate jobs.                    Additionally, under the  Holmes-Ahlborg Agreement,  UBI          would  assume all employees currently performing union bargaining          unit work for O. Ahlborg,  and there would be no  interruption in          production,  employment or  wages  of union  members despite  the          termination of the O. Ahlborg-Union CBA.  Shortly thereafter, UBI          and the Union entered into the new CBA, which provided that                      [UBI]  will  not  subcontract   any  work                      covered  by the  terms of  this agreement                      which is  to be performed  at the jobsite                      except  to  a  contractor  who  holds  an                      agreement with the United  Brotherhood of                      Carpenters and Joiners of America, or one                      of  its  subordinate   bodies,  or,   who                      agrees,  in writing, prior  to or  at the                      time  of   the  execution  of   the  sub-                      contract,  to be  bound  by the  terms of                      this agreement.          The new CBA covered the period from June 1, 1992 to June 4, 1995.                    On  December 8,  1993,  David F.  Palmisciano, who  had          replaced Holmes  as union business representative,  sent a letter          to UBI's  chief executive  Eric Ahlborg, expressing  concern that          UBI  was "operating  a second  company" as  "an alter ego."   The          letter  also requested that Eric  Ahlborg fill out  and return an          enclosed  questionnaire.  Eric  Ahlborg refused  to reply  to the          questionnaire.                    Subsequently,  the matter came before an administrative          law  judge  ("ALJ")  on  the  NLRB  General  Counsel's  complaint                                         -3-          alleging that UBI  violated    8(a)(5) and 8(a)(1)  of the Act by          refusing  to  furnish  information  that the  Union  alleged  was          necessary  for, and relevant to, the performance of its duties as          the  exclusive  collective-bargaining   representative  of   unit          employees.   Palmisciano  testified  before an  ALJ that,  during          three previous onsite inspections,  he saw evidence that UBI  had          violated his interpretation of the Holmes-Ahlborg Agreement: that          as  between O.  Ahlborg  and UBI,  UBI  would garner  all  state,          Federal  and  other  work  with  high  wage  rates,  particularly          "prevailing  rates," and  that such  work would  all go  to union          carpenters.                     The ALJ  concluded that the  Union reasonably believed          that  UBI  was  operating  O.  Ahlborg  as  an  "alter  ego"  and          subcontracting  in a  manner  that  violated  the  Holmes-Ahlborg          Agreement's  award of prevailing rate  jobs to UBI  and its union          member  employees  only.1    Thus,  the ALJ  concluded  that  the          Union's reasonable belief justified the  request for information,          and ordered UBI to comply.  The Board affirmed the ALJ's rulings,          findings and conclusions, and adopted his recommended Order.  UBI          seeks review of the Board's decision, and the Board cross-applies          for enforcement of its order against UBI.                                        ____________________          1   UBI was organized  as a Rhode  Island corporation on  June 1,          1992, to  engage  in the  business of  building construction  and          related activities.   UBI's officers are related  to, and overlap          substantially with,  those of  O. Ahlborg.    For example,  UBI's          chief executive, Eric Ahlborg,  is the son of O.  Ahlborg's chief          executive; UBI's vice president  is the daughter of  O. Ahlborg's          chief executive; and UBI's chief financial officer, who holds the          same position at O. Ahlborg, is another son of O. Ahlborg's chief          executive.                                         -4-                               II.  STANDARD OF REVIEW                               II.  STANDARD OF REVIEW                    We will  enforce a Board  order if the  Board correctly          applied  the  law  and  if  substantial  evidence  on the  record          supports the Board's  factual findings.  Penntech Papers, Inc. v.                                                   _____________________          NLRB, 706 F.2d 18, 22-23  (1st Cir. 1983), cited in NLRB  v. Acme          ____                                       ________ ____     ____          Tile and  Terrazo, Co., 984  F.2d 555, 556  (1st Cir. 1993).   We          ______________________          uphold the Board's findings of a violation as long as substantial          evidence on the record as a whole supports them, even if we would          have reached a  different conclusion.   29 U.S.C.     160(e)  and          (f);  3-E  Co.,  Inc.  v.  NLRB, 26  F.3d  1,3  (1st  Cir. 1994);                _______________      ____          Cumberland  Farms,  Inc. v.  NLRB, 984  F.2d  556, 559  (1st Cir.          ________________________     ____          1993).                                   III.  DISCUSSION                                   III.  DISCUSSION                    As part of the    8(a)(5) duty to bargain,  an employer          must  furnish all  information  requested  by  a  union  that  is          necessary  to the  union in  order to  fulfill its  obligation as          representative  of  bargaining  unit  employees.   NLRB  v.  Acme                                                             ____      ____          Industrial  Co., 385 U.S. 432, 435-36 (1967); NLRB v. New England          _______________                               ____    ___________          Newspapers, Inc.,  856 F.2d 409, 413  (1st Cir. 1988).   Thus, an          ________________          employer  must  produce information  that  is  "relevant to  [the          bargaining   representative's]  duties,"   including  information          necessary to police the  CBA.  New England Newspapers,  Inc., 856                                         _____________________________          F.2d at 413.  Because the duty to bargain "unquestionably extends          beyond the  period of contract negotiations and applies to labor-          management relations during  the term of  an agreement," NLRB  v.                                                                   ____          Acme  Industrial Co.,  385  U.S. at  436,  the Union  could  have          ____________________                                         -5-          requested the information simply because of its relevance to  its          ongoing agreement with  UBI.   In this regard,  we note that  the          Board  may  determine that  the employer  has  a duty  to provide          information if it  finds even "a probability that the information                                           ___________          is relevant  and that it will be of  use to the union in carrying          out  its statutory duties."  NLRB  v. Pfizer, Inc., 763 F.2d 887,                                       ____     ____________          889  (7th Cir. 1985) (emphasis added).  See also General Electric                                                  ________ ________________          Co. v.  NLRB, 916 F.2d 1163,  1168 (7th Cir. 1990)  (relevance is          ___     ____          most  often viewed  liberally to  allow for  broad disclosure  of          information).                    As an  initial matter,  we reject UBI's  argument that,          via  the   Holmes-Ahlborg  Agreement,  the   Union  approved  the          coexistence of O. Ahlborg  and UBI, and thereby waived  its right          to challenge  O.  Ahlborg as  UBI's  alter ego.   UBI  has  cited          neither legal authority nor requisite factual evidence to support          its waiver argument.   Furthermore, nothing in the Holmes-Ahlborg          Agreement shows an unequivocal  waiver by the Union of  its right          to investigate the alleged diversion  to O. Ahlborg of prevailing          rate jobs.  Communication Workers of America AFL-CIO, Local  1051                      _____________________________________________________          v.  NLRB,  644 F.2d  923,  927 (1st  Cir.  1981) ("the  union may              ____          relinquish  a statutory  right only  by 'clear  and unmistakable'          waiver")  (quoting NLRB v. Perkins Machine Co., 326 F.2d 488, 489                             ____    ___________________          (1st Cir. 1964)).  Finally,  the ALJ specifically rejected  UBI's          waiver argument based on the facts presented.                    The  ALJ correctly distinguished  the issue  of whether          UBI must  supply  the requested  information  from the  issue  of                                         -6-          whether O. Ahlborg and  UBI are in  fact intertwined in an  alter          ego relationship.  We agree that only the information issue bears          on this case.  With respect  to this issue, we are persuaded that          we should apply a "discovery-type" standard so that the Union may          gather  "'a broad range of  potentially useful information  . . .          for the purpose of  effectuating the bargaining process'."   NLRB                                                                       ____          v. Illinois-American Water  Co., 933  F.2d 1368,  1378 (7th  Cir.             ____________________________          1991)  (quoting Procter &  Gamble Manufacturing Co.  v. NLRB, 603                          ___________________________________     ____          F.2d 1310, 1315  (8th Cir.  1979)).  In  particular, the  Supreme          Court has stressed  that the  Board should apply  a more  liberal          standard of relevance  to information requests under  the duty to          bargain in good  faith than would be appropriate  at trial.  NLRB                                                                       ____          v. Acme  Industrial Co., 385 U.S.  432, 437 & n.6  (1967).  Thus,             ____________________          the Union  cannot be required to  prove that UBI is  in breach of          its CBA  or that O. Ahlborg  is UBI's alter ego  before the Union          can receive  information that could help  prove such allegations.          In deciding to  apply such  a standard, the  ALJ correctly  noted          that such information  does not  only benefit unions.   In  fact,          requiring  employers  to  divulge  information  of  even   merely          potential  relevance improves  the efficiency of  the arbitration          system  as a whole, since  otherwise, unions might  be forced "to          take grievances all the way through to arbitration without [] the          opportunity to evaluate the  merits of the  claim."  Id. at  438.                                                               __          As a policy matter,  employers as a whole may also benefit, since          the information they supply may generally aid unions in filtering          out meritless cases.  Id.                                __                                         -7-                    Substantial evidence  on the record supports  the ALJ's          conclusion,  adopted  by  the   NLRB,  that  the  Union  supplied          sufficient  objective  evidence  to   show  that  its  belief  in          requesting the  information was reasonable.   The record supports          the finding that Palmisciano reasonably believed that the purpose          of the Holmes-Ahlborg Agreement  was to permit O. Ahlborg  to bid          nonunion work and  to award  all "prevailing rate"  jobs to  UBI.          Furthermore, the Union  had entered the new CBA with  UBI.  Thus,          the ALJ and the Board correctly concluded that the questionnaire,          with  its  inquiries into  UBI's ownership,  corporate directors,          suppliers  and  relationship  to  an  alleged nonunion  employer,          sought   information   necessary   to  Palmisciano's   collective          bargaining duties.                    The ALJ  heard testimony from Palmisciano regarding the          latter's observations at three  different job sites.  Palmisciano          testified that at the three sites, all with O. Ahlborg as general          contractor  and paying prevailing rates, he had seen Union member          UBI employees supervising nonunion employees doing unit work, and          he  had seen both Union member UBI employees and nonunion workers          doing  unit  work  for  subcontractors.   Additionally,  the  ALJ          questioned  Palmisciano regarding  the  meaning  of  the  Holmes-          Ahlborg Agreement,  especially with  respect to the  allotment of          work between O. Ahlborg and UBI.  Furthermore, the ALJ questioned          Palmisciano  regarding O.  Ahlborg's  responses to  Palmisciano's          demands  that O.  Ahlborg use  union subcontractors  on carpentry          work at the three job sites.                                         -8-                    While UBI takes  offense at the  ALJ's refusal to  hear          Eric Ahlborg's testimony to  show that UBI and  O. Ahlborg had  a          different  understanding  of  the Holmes-Ahlborg  Agreement,  the          issue  before  the  ALJ  was  whether  Palmisciano  could  supply          objective evidence  supporting a reasonable belief  that made his          information request relevant to his collective bargaining duties.          Naturally,  the  ALJ  drew  his conclusions  primarily  from  the          testimony  of Palmisciano, since  the chief issue  was whether or          not Palmisciano's beliefs were reasonable given objective facts.                    UBI also argues that  because objective facts show that          it is not operating an alter ego,  Palmisciano could not have had          a reasonable  belief that would render  the requested information          relevant.  The proposition that a union's information request may          be  denied if  the company  in question  can show  that objective          facts  render the  union's  concerns  untenable appears  logical.          See, e.g., San  Diego Newspaper Guild v. NLRB, 548  F.2d 863, 867          ___  ____  __________________________    ____          (9th Cir. 1977)  ("If the information requested has  no relevance          to any legitimate union collective  bargaining need, a refusal to          furnish it could not be an unfair labor practice.").  However, in          the  instant  case,  the  issue  is  moot,  since  even  if  this          proposition were  settled law applicable  here, UBI has  not made          the required showing.                    In  the course of this argument, UBI relies on the fact          that  the relationship  between  it and  O.  Ahlborg is  not  the          classic alter ego  situation of "a  disguised continuance of  the          old  employer."  Therefore, runs the argument, because O. Ahlborg                                         -9-          is not  UBI's alter ego, the Union  cannot demonstrate reasonable          belief  necessary   to  support  its  request   for  information.          However, this argument must fail for two reasons.                    First, UBI  argues that this Court  has previously used          the  existence of a motive to evade labor law responsibilities in          corporate organization as a  factor in identifying an alter  ego,          NLRB  v. Hospital  San Rafael,  Inc., 42  F.3d  45, 50  (1st Cir.          ____     ___________________________          1994), and that no  "disguise" or motive existed here,  since the          Union knew and  agreed to the  creation of UBI  from O.  Ahlborg.          However, in Hospital San Rafael, the Court also called cases that                      ___________________          involve formation  of new entities with  direct evasionary intent          only "the easiest  example[s]" of  alter egos.   Id.   Presumably                                                           __          there are also harder examples, as the Union may show here.                    Additionally,  even if  the issue  before us  here were          whether  O. Ahlborg  constituted  UBI's   alter  ego,  the  paper          relationship   between  the   two  corporations   would  not   be          dispositive,  since  the  alter  ego doctrine  looks  behind  the          corporate   form   to   determine  whether   nominally   distinct          corporations are "in truth . . . but divisions or departments  of          a 'single enterprise.'"  NLRB v. Deena Artware, Inc., 361 US 398,                                   ____    ___________________          402  (1960).   Note  that this  Court  has previously  upheld the          Board's finding of  an alter  ego "where the  companies were  not          successors but  rather parallel  operations."   C.E.K. Industrial                                                          _________________          Mechanical Contractors, Inc. v.  NLRB, 921 F.2d 350, 354-55  (1st          ____________________________     ____          Cir. 1990) (denying  enforcement of  the Board's  order on  other          grounds).   Thus, the fact  that O. Ahlborg  did not succeed  UBI                                         -10-          does not,  by itself, render the alter  ego doctrine inapplicable          and Palmisciano's belief unreasonable.                    Thus,  the  ALJ correctly  avoided turning  the hearing          into an inquiry into the agreement's ultimate meaning, since such          a decision  was beyond the  scope of  the only issue  before him:          whether or not to compel information disclosure.  With respect to          testimony  directed   at  this  question,  an  ALJ's  credibility          determinations are entitled  to great weight because the  ALJ saw          and heard the  witnesses testify.  Holyoke  Visiting Nurses Ass'n                                             ______________________________          v. NLRB, 11 F.3d 302, 308 (1st Cir. 1993), cited in 3-E Co., Inc.             ____                                    ________ _____________          v.  NLRB,  26 F.3d  1, 3  (1st  Cir. 1994).   We  will  set aside              ____          findings only if  we believe  the ALJ overstepped  the bounds  of          reason.  Id.  Here, we find no such transgression.                   __                                   IV.  CONCLUSION                                   IV.  CONCLUSION                    The ALJ's findings, adopted by the Board, are supported          by  substantial evidence  on  the record  as  a whole  and  stand          without  error.   UBI's  request for  review  is denied,  and the          Board's request for enforcement  of its order is granted.   Costs          to respondent.                                         -11-
