Extract
SRC Painting LLC, 707 (2006)
SRC Painting, LLC, PBN, LLC, and Liquid Systems, and James Wierzbicki, Karen Wierzbicki, Edmund Wierzbicki, Eric Wierzbicki, Constance Wierzbicki, and Erin Wierzbicki, Individually and International Union of Painters and Allied Trades, District Council No. 7, AFL–CIO.  Cases 30–CA–16577–1 and 30–CA–16813–1
March 31, 2006DECISION AND ORDERBy Chairman Battista and Members Liebman and SchaumberOn September 14, 2005, Administrative Law Judge Joseph Gontram issued the attached decision. The General Counsel filed limited exceptions and a supporting brief. Exceptions were also filed by Respondents Edmund Wierzbicki and Liquid Systems, LLC, by Respondent Erin Wierzbicki, and by Respondents James, Karen, Eric, and Constance Wierzbicki. The General Counsel filed an answering brief, and answering briefs were also filed by Respondents Edmund Wierzbicki and Liquid Systems, LLC and by Respondents James, Karen, Eric, and Constance Wierzbicki.The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel.The Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge’s rulings, findings,1 and conclusions as modified and to adopt his recommended Order as modified and set forth in full below.2The judge found that the three corporate respondents—SRC Painting, LLC (SRC Painting), PBN, LLC (PBN), and Liquid Systems, LLC (Liquid Systems)—were alter egos of each other3 and that the corporate respondents violated Section 8(a)(1), (3), and (5) of the Act.4 The judge further found that each of the six individual respondents is individually liable for the unfair labor practices.5We agree with the judge, for the reasons set forth in his decision, that Liquid Systems is an alter ego of SRC Painting and PBN.6 We further agree with the judge that Erin Wierzbicki is individually liable for Liquid Systems’ unfair labor practices.7 We further agree with the judge, for the reasons set forth in his decision, that Edmund Wierzbicki is individually liable for the unfair labor practices.8 However, as explained below, we reverse the judge’s findings that Karen and Constance Wierzbicki are individually liable for the unfair labor practices.The Individual Liability of Respondents Karen and Constance WierzbickiWhether the Board will pierce the corporate veil to hold an individual liable for corporate unfair labor practices is governed by the analysis set forth in White Oak Coal Co., 318 NLRB 732 (1995), enfd. mem. 81 F.3d 150 (4th Cir. 1996). Under White Oak, the General Counsel must prove both parts of a two-prong test. Id. at 734. Under the first prong, the Board analyzes whether the corporation and the individual have failed to maintain their separate identities. Id. at 735. Under the second prong, the Board analyzes whether third parties may be damaged by this failure—that is, whether “adherence to the corporate form would sanction a fraud, promote injustice, or lead to an evasion of legal obligations.” Id. This potential damage to third parties includes “the diminished ability of the [corporation] to satisfy [its] statutory remedial obligations.” Id. “The showing of inequity necessary to warrant the equitable remedy of piercing the corporate veil must flow from misuse of the corporate form.” Id. In order to satisfy the second prong, however, the individual alleged to be individually liable must have “participated in the fraud, injustice, or inequity.” Id.In the instant case, the judge found that the identities of the three corporations were commingled with the identities of the Wierzbicki family members. The judge also found that corporate assets were distributed for noncorporate purposes, thereby diminishing the corporations’ ability to satisfy their obligations, including their obligations to remedy their unfair labor practices.With regard to the requirement that the individual must have “participated in the fraud, injustice, or inequity,” the judge found that Respondents James, Eric, Erin, and Edmund Wierzbicki each actively participated in the operations of the corporate respondents, including the distribution of corporate assets for non-corporate purposes. The judge did not address the issue of whether Respondents Karen or Constance Wierzbicki likewise actively participated in the operations of the corporate respondents. Instead, the judge noted evidence showing that the corporate respondents distributed corporate assets to and on behalf of Karen and Constance for noncorporate purposes—that is, the corporate respondents paid cash to Karen totaling over $5000, paid Karen’s car payments, m...See the full content of this document
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