J. Vallery Elec., Inc. v. N.L.R.B.

Citation337 F.3d 446
Decision Date01 July 2003
Docket NumberNo. 02-60030.,02-60030.
PartiesJ. VALLERY ELECTRIC, INC.; Vallery Electric, Inc., Petitioners-Cross-Respondents, v. NATIONAL LABOR RELATIONS BOARD, Respondent-Cross-Petitioner.
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

S. Price Barker (argued), Rebecca Lear Castillo, Cook, Yancey, King & Galloway, Shreveport, LA, for J. Vallery Elec. Inc.

Aileen A. Armstrong, Deputy Associate Gen. Counsel, Steven Brian Goldstein (argued), Frederick C. Havard, NLRB, Washington, DC, Rodney D. Johnson, NLRB, New Orleans, LA, Simon-Jon Hiroshi Koike, NLRB, New York City, for NLRB.

Edwin K. Theus, Jr., Theus, Grisham, Davis & Leigh, Monroe, LA, for Vallery Elec. Inc.

Petitions for Review for Enforcement of the Order of the National Labor Relations Board.

Before WIENER, BENAVIDES, and DENNIS, Circuit Judges.

DENNIS, Circuit Judge.

J. Vallery Electric, Inc. and Vallery Electric, Inc. petition for review of the decision and order of the National Labor Relations Board ("Board"). The Board found that the companies are alter egos and/or constitute a single employer and that they violated section 8(a)(1), (5) of the National Labor Relations Act ("NLRA"), 29 U.S.C. § 158(a)(1), (5), by withdrawing recognition of their employees' collective bargaining representative and by failing to abide by the terms of the collective bargaining agreement. The Board cross-petitions for enforcement of its order. We DENY the employers' petitions and GRANT enforcement of the Board's order.

I.

Jimmy Vallery ("Vallery") formed Vallery Electric in 1975 as a sole proprietorship offering residential and commercial electrical contracting services in Monroe, Louisiana. In 1993, he incorporated his business as Vallery Electric, Inc. ("VE"). He and his wife, Bobbie, each owned 50 of VE's 100 shares. Vallery served as VE's president; his father, A.J. Vallery, was its vice president; and Bobbie Vallery its secretary/treasurer. Together, the three constituted VE's board of directors.

On September 1, 1992, VE signed a letter of assent authorizing the Quachita Valley chapter of the National Electrical Contractors Association ("NECA"), a trade association, to serve as VE's representative for current and future collective bargaining agreements ("CBA") with the International Brotherhood of Electrical Workers Local 446, AFL-CIO ("IBEW"). In granting this authority to NECA, VE "agree[d] to comply with, and be bound by, all of the terms and conditions contained" in the CBAs negotiated with the IBEW. VE also

agree[d] that if a majority of its employees authorize[d] the [IBEW] to represent them in collective bargaining, [VE would] recognize the [IBEW] as the NLRA Section 9(a) collective bargaining agent for all employees performing electrical construction work within the jurisdiction of [the IBEW] on all present and future jobsites.1

After VE signed the letter of assent, the IBEW began referring its members to VE for commercial jobs. VE paid these workers according to the union scale. With the knowledge of the IBEW's business manager, Lonnie Shows, however, VE used nonunion labor compensated at nonunion wages for its residential projects. Shows later testified that the long-standing practice among local electrical contractors was to utilize union labor only for commercial jobs.

In July 1995, John Hopkins replaced Shows as the IBEW's business manager. By letter dated October 4, 1995, Hopkins informed local contractors, including VE, that the IBEW and NECA had negotiated a new CBA covering the period of September 1, 1995, through August 31, 1997. Hopkins' letter disavowed any side agreements made by Shows:

Any verbal or written agreements made by the prior administration with [NECA] or any individual contractors will not be honored by this administration. Only signed agreements by this administration will be honored.

Twice in 1996 Hopkins met with Vallery to complain about VE's use of nonunion labor for residential jobs. On June 18, 1996, VE entered into a voluntary recognition agreement with the IBEW, pursuant to § 9(a) of the NLRA, through which it recognized that the IBEW represented a majority of its employees "in the bargaining unit described in the current collective bargaining agreement" and that the IBEW was "the exclusive collective bargaining agent for all employees within ... the bargaining unit."

In January 1997, Hopkins complained to NECA that VE was working a commercial job using nonunion employees. Hopkins' complaint prompted a meeting between Hopkins, Vallery, and the president of NECA, at which Vallery agreed to make appropriate payments to the IBEW's apprenticeship fund to resolve the matter. Following the meeting Vallery told the NECA president that he intended "to separate" from VE because of the high cost of union labor. He further said that he had already discussed the matter with a lawyer and was in the process of developing his strategy.

In February 1997, VE transferred title to a warehouse it owned to Jimmy and Bobbie Vallery without compensation. On March 21, 1997, the Vallerys incorporated a new electrical contracting business, J. Vallery Electric, Inc. (JVE), of which they owned all the stock. Jimmy Vallery served as JVE's president; Bobbie Vallery was secretary/treasurer; and Todd Vallery, their son, its vice president. Together, the three formed JVE's board of directors. On the same day that JVE was incorporated, Vallery resigned as president of VE, and he and his wife transferred their VE stock to A.J. Vallery without compensation.

JVE began doing business in May 1997. It operated out of the same facility that VE had used since 1993. It took title to three of VE's five trucks, as well as other pieces of VE's equipment, without compensation. It employed five of VE's seven employees. And it took over VE's residential work, as well as at least one of VE's commercial jobs. Of JVE's first 68 jobs, 55 were residential and 13 were commercial. JVE's yellow-pages advertisement, which closely resembled VE's, announced that JVE performed both commercial and residential work and had been in business since 1965.

VE moved to a new location, where it was run by A.J. Vallery. It performed only commercial work. After several months, it ceased active operations. By January 1998 VE's two remaining employees sought work through the union hall. At the time of the hearing, VE had no jobs and did not employ any electricians.

By letter dated June 9, 1997, Hopkins complained to Vallery that "[VE was] operating a ... non-union company, known as J. Vallery Electric." He demanded that Vallery "supply [the IBEW] with information concerning VE's relationship with the nonunion company."

On November 18, 1997, the IBEW and NECA reached a new CBA covering the period between September 1, 1997, and August 31, 1999. JVE did not apply the new CBA to any of its employees.

On December 8, 1997, the IBEW charged that VE and JVE were alter egos and/or a single employer and that the company committed unfair labor practices, in violation of § 8(a)(1), (5) of the NLRA, by failing and refusing to bargain with the exclusive collective bargaining representative of its employees.2 By letter to the IBEW dated April 9, 1999, Vallery denied that JVE was the alter ego of VE or that the IBEW represented JVE's employees. On April 21, 1999, the IBEW filed a second charge, stating that the company committed unfair labor practices by failing to apply the terms and conditions of the CBA to its employees and by withdrawing recognition of the IBEW as the exclusive bargaining representative of its employees.

The charges were consolidated and a hearing was held. An administrative law judge ("ALJ") issued a decision and recommended order, finding the violations as alleged. On review, the Board adopted the ALJ's findings and recommended order with minor technical modifications.

The Board's order requires JVE/VE to cease and desist from the unfair labor practices found. It requires JVE/VE to apply the terms and conditions of the 1997-1999 CBA and to recognize the IBEW as the exclusive collective-bargaining representative of the unit consisting of "[a]ll employees performing electrical work." It further requires JVE/VE to make its employees whole for any loss of earnings and other benefits suffered as a result of unfair labor practices; to bargain with the IBEW, upon request, and to embody the terms of any understanding that is reached in a written agreement; and to post a remedial notice.

II.

We will uphold a decision of the Board "if it is reasonable and supported by substantial evidence on the record considered as a whole."3 Substantial evidence is "such relevant evidence as a reasonable mind would accept to support a conclusion."4 "Recognizing the Board's expertise in labor law, we will defer to plausible inferences it draws from the evidence, even if we might reach a contrary result were we deciding the case de novo."5 Our deference extends to our review of both the Board's findings of fact and its application of the law.6 It does not, however, extend to the Board's legal conclusions, including its interpretation of a collective bargaining agreement, which we review de novo.7 Still, we are "mindful of the Board's considerable expertise in interpreting collective bargaining agreements."8

III.

The Board made three key determinations in this case. First, it found that VE and JVE are alter egos and/or together constitute a single employer. It then concluded that the appropriate bargaining unit under the 1997-1999 CBA was "All employees performing electrical work." Based on these determinations, it found that JVE/VE had committed unfair labor practices, in violation of § 8(a)(1), (5) of the NLRA, by failing to apply the terms and conditions of the CBA to its employees beginning on March 21, 1997, the day on which JVE was incorporated, and by withdrawing recognition of the IBEW on April 9, 1999, the date of Vallery's letter denying that the IBEW represented JVE's...

To continue reading

Request your trial
25 cases
  • Air Line Pilots v. Guilford Transp. Industries
    • United States
    • United States Courts of Appeals. United States Court of Appeals (1st Circuit)
    • February 28, 2005
    ...and sale of assets when the transaction is a sham and the owners retained control of the business); J. Vallery Elec., Inc. v. NLRB, 337 F.3d 446, 450-51 (5th Cir.2003) (similar). Indeed, such facts could well give rise not only to a major dispute but also to a minor Still, when an employer ......
  • D.R. Horton, Inc. v. Nat'l Labor Relations Bd.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • December 3, 2013
    ...“Substantial evidence is such relevant evidence as a reasonable mind would accept to support a conclusion.” J. Vallery Elec., Inc. v. NLRB, 337 F.3d 446, 450 (5th Cir.2003) (quotation marks omitted). In light of the Board's expertise in labor law, “we will defer to plausible inferences it d......
  • Kassa v. Kerry, Inc.
    • United States
    • United States District Courts. 8th Circuit. United States District Court of Minnesota
    • May 8, 2007
    ...whether through a. grievance or in negotiations for a CBA, complaining of the employer's conduct. See J. Vallery Elec., Inc. v. Nat'l Labor Relations Bd., 337 F.3d 446 (5th Cir.2003); Broth. of Locomotive Engineers v. Springfield Terminal Rwy., 210 F.3d 18, 33-34 (1st Cir.2000). As a result......
  • Jenkins v. Comm'r
    • United States
    • United States Tax Court
    • May 10, 2021
    ...ego. 1. Federal or State Law Whether a corporation is a taxpayer's alter ego is a question of fact. See, e.g., J. Vallery Elec., Inc. v. NLRB, 337 F.3d 446, 451 (5th Cir. 2003); Duggan v. Hobbs, 99 F.3d 307, 313 (9th Cir. 1996). But different jurisdictions have different standards or tests ......
  • Request a trial to view additional results
1 books & journal articles
  • Tragedy of the Commonality: a Substantive Right to Collective Action in Employment Disputes
    • United States
    • Emory University School of Law Emory Law Journal No. 67-1, 2017
    • Invalid date
    ...NLRB, 437 U.S. 556, 565-66 (1978).36. 29 U.S.C. § 158(a)(1) (2012).37. 29 U.S.C. § 160(a) (2012). 38. See J. Vallery Elec., Inc. v. NLRB, 337 F.3d 446, 450 (5th Cir. 2003) ("Our deference extends to our review of both the Board's findings of fact and its application of the law. It does not ......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT