Opposition Brief — Hospital San Rafael, Inc. v. National Labor Relations Board

Iu the Supreme Count of the United States

OCTOBER TERM, 1995

HoepiTaAL SAN RAFAEL, INC., ET AL., PETITIONERS

Vv.

NATIONAL LABOR RELATIONS BOARD

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

BRIEF FOR THE

NATIONAL LABOR RELATIONS BOARD

_ IN OPPOSITION

: .

Drew S. Days, III

Solicitor General

Department of Justice

FREDERICK L. FEINSTEIN ‘Washington, D.C. 20530

General Counsel (202) 514-2217

QUESTION PRESENTED

Whether, on the record in this case, the petitioner

Centro Medico del Turabo, Inc., was correctly found

to be the alter ego of petitioner Hospital San Rafael,

Inc., regardless of whether Centro Medico was

created for the purpose of evading Hospital San

Rafael’s labor law obligations.

(1)

TABLE OF CONTENTS

Page

EE REE ERS ES SR IC 1

a ssccsirariasenmapwesannncnsstenies 1

OE RS SRD SCL a ee 2

i SEE es 12

RED ERR sea a 26

TABLE OF AUTHORITIES

Cases:

A. Dariano & Sons, Inc. v. District Council of

Painters No. 33, 869 F.2d 514 (9th Cir. 1989).. 23, 24

Alkire v. NLRB, 716 F.2d 1014 (4th Cir. 1983).... 25

Asseo V. Centro Medico Del Turabo, Inc., 900 F.2d

SE SS, Re ee 5

C.E.K. Industrial Mechanical Contractors, Inc. V.

NLRB, 921 F.2d 350 (1st Cir. 1990) -......00000000. 14

Campbell-Harris Electric, Inc., 263 N.L.R.B. 1148,

enforced, 719 F.2d 292 (8th Cir. 1983) —.....00... 14

Carpenters Local 1846 Vv. Pratt-Farnsworth, Inc.,

690 F.2d 489 (5th Cir. 1982), cert. denied, 464

EFI RENE Se, Seal: ae 17

Crest Tankers, Inc. v. National Maritime Union,

796 P24 234 (8th Cir. 1966) ................................ 22

Crest Tankers, Inc. Vv. National Maritime Union,

665 F. Supp. 1431 (E.D. Mo. 1987), appeal dis-

missed, 871 F.2d 1092 (8th Cir. 1988) _.............. 22

E.G. Sprinkler Corp., 268 N.L.R.B. 1241 (1984),

aff'd sub nom. Goodman Piping Products, Inc.

v. NLRB, 741 F.2d 10 (2d Cir. 1984) —...00002000... 14

Esmark, Inc. v. NLRB, 887 F.2d 739 (7th Cir.

ETE SST aed ce eT 20, 21

Fall River Dyeing & Finishing Corp. v. NLRB, 482

i anal ailtsigs Lulnneninratapient 18

Fugazy Continental Corp., 265 N.L.R.B. 13801

(1982), enforced, 725 F.2d 1416 (D.C. Cir.

REST SE SRE ee, 5, 13

IV

Cases—Continued: Page

Fugazy Continental Corp. v. NLRB, 725 F.2d 1416

Cg te. I asec Aairetecomscceinicenipestinsienense 17

Gartner-Harf Co., 308 N.L.R.B. 531 (1992) ........... 15

Golden State Bottling Co. v. NLRB, 414 U.S. 168

| A ORG mene ee aETERAR ot Ot Ory ee 18

Goodman Piping Products, Inc. v. NLRB, 741 F.2d

Re Ry, TI ia tite deeteecnsccndh tectadeciniesenss 17

Haley & Haley, Inc. v. NLRB, 880 F.2d 1147 (9th

i a 0 ahaa 24

Howard Johnson Co. Vv. Detroit Local Joint Execu-

tive Board, 417 U.S. 249 (1974) ................2.--2----. 13, 18

International Union of Operating Engineers, Local

150 v. Centor Contractors, Inc., 831 F.2d 1309

a Bk. oe ee nner ONE SUDO CERT EES Se nna 19

lowa Express Distribution, Inc. v. NLRB, 739 F.2d

1305 (8th Cir.), cert. denied, 469 U.S. 1088

E.'S TER RN Cane ern t nen Nae nF CNN, 6 PaCS = Sano 23

J.M. Tanaka Construction, Inc. v. NLRB, 675 F.2d

1008 1 Ge PON). fo ee, 24, 25

Johnstown Corp., 313 N.L.R.B. 170 (1993), en-

forced sub nom. Stardyne, Inc. v. NLRB, 41

J, 2 2. ge | | Ree mar aonanee 14, 15

Leslie Oldsmobile, Inc., 276 N.L.R.B. 1314 (1985)... 14

NLRB v. Allcoast Transfer, Inc., 780 F.2d 576 (6th

REA cela, Me ene EAL p= EW oe 17

NLRB Vv. Bell Co., 561 F.2d 1264 (7th Cir. 1977).. 21

NLRB v. Burns International Security Services,

Fe SB , Ree ee open 17, 18

NLRB v. Campbell-Harris Electric, Inc., 719 F.2d

OE PN I, I ck seeds stiretnrn cee ocaersdietmirceeatondns 22

NLRB v. Curtin Matheson Scientific, Inc., 494 U.S.

775 (1990) —..... LED LEME ES oe TS Te SAN 16, 21

NLRB v. Dane County Dairy, 795 F.2d 1313 (7th

I aici a sata taseaaiaitenionieaehaetons 21

NLRB v. Lantz, 607 F.2d 290 (9th Cir. 1979)........ 14

NLRB v. McAllister Brothers, Inc., 819 F.2d 439

WD iis coe oevicisesaunsnoensonkaaencisenpeciianbsinedemebeiistiaes 25

NLRB v. O’Neill, 965 F.2d 1522 (9th Cir. 1992),

cert. denied, 113 S. Ct. 2995 (1993) -........00........ 24

NLRB v. Ozark Hardwood Co., 282 F.2d 1 (8th

Ee SI cccictnesevccnchsedbbeinisciicetiinenninannsnanpatiiunlasiaiednans 21, 23

Cases—Continued: Page

NLRB V. Tricor Products, Inc., 686 F.2d 266 (10th

| ROAR SS NEARS SENDCANCEL OAD 17

Radio Union v. Broadcast Service, 380 U.S. 255

I icc aces eect eared 14

Southport Petroleum Co. Vv. NLRB, 315 U.S. 100

FRIED a csacnsccpacaceaaseiles ctieemddcamciauneiermnaaatnaaetseeiomensin 13

South Prairie Construction Co. v. Local 627 Oper-

ating Engineers, 425 U.S. 800 (1976) ................ 14

Stardyne, Inc. Vv. NLRB, 41 F.3d 141 (8d Cir.

WOR sidinsccoiscccteaeaeeceedcabadtecaansnacendlateetieamaness 15, 16, 17

Tricor Products, Inc., 239 N.L.R.B. 65 (1978),

enforced, 636 F.2d 266 (10th Cir. 1980) ........... 14

Trustees of Pension, Welfare & Fringe Vacation

Benefit Funds of IBEW Local 701 Vv. Favia Elec-

tric Co., 995 F.2d 785 (7th Cir. 1993) —.............. 19, 21

UA Local 343 v. Nor-Cal Plumbing, Inc., 48 F.3d

Si Te By I cccccsdicecsdnntinniccesarsintesichcrectons 23, 24

Woodline Motor Freight, Inc. v. NLRB, 843 F.2d

_ BB: Sere ere eee 22

Statutes:

Labor Management Relations Act, § 301, 29 U.S.C.

MERRY Sint Ee NS PRE MRO NEON Ree AEN NaN 21

National Labor Relations Act, 29 U.S.C. 151 et

seq.:

§ 8(a) (1), 29 U.S.C. 158 (a) (1) .........0.222 9,10

§ 8(a) (3), 29 U.S.C. 158 (a) (38) ......................... 9,10

§ 8(a) (5), 29 U.S.C. 158 (a) (5) —....22222 ee. 10

SS a Se Oe ie: TEED vecnneceninccetcecnncenietcnnsneneen 4

Miscellaneous:

S. Befort, Labor Law and the Double-Breasted

Employer: A Critique of the Single Employer

and Alter Ego Doctrines and a Proposed Re-

formulation, 1987 Wisc. L. Rev. 67 ..................... 25

Note, 86 Mich. L. Rev. 1024 (1988) —............0......... 25

Note, 54 N.Y.U. L. Rev. 624 (1979) ............00000002.... 25

F. Slicker, A Reconsideration of the Doctrine of

Employer Successorship—A Step Toward a Ra-

tional Approach, 57 Minn. L. Rev. 105 (1973).... 25-26

Iu the Supreme Court of the United Staten

OCTOBER TERM, 1995

No. 94-1802

HOSPITAL SAN RAFAEL, INC., ET AL., PETITIONERS

v.

NATIONAL LABOR RELATIONS BOARD

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

BRIEF FOR THE

NATIONAL LABOR RELATIONS BOARD

IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. la-

14a) is reported at 42 F.3d 45. The decision and

order of the National Labor Relations Board (Pet.

App. 15a-35a), and the decision of the administrative

law judge (Pet. App. 36a-125a), are reported at 308

N.L.R.B. 605. The Board’s order amending its deci-

sion and order (Pet. App. 126a-132a) is unreported.

JURISDICTION

The judgment of the court of appeals was entered

on December 12, 1994. A petition for rehearing was

denied on February 1, 1995. Pet. App. 133a-134a.

(1)

2

The petition for a writ of certiorari was filed on May

2, 1995. The jurisdiction of this Court is invoked

under 28 U.S.C. 1254(1).

STATEMENT

1. Petitioner Hospital San Rafael, Inc. (HSR)

was established in 1933 as a neighborhood hospital in

Caguas, Puerto Rico. In 1978, doctors Jaime Soler

and Jose Badillo purchased about 80 percent of

HSR’s stock, and hired Joaquin Rodriguez as its

president. Pet. App. 2a, 54a. Soler, Badillo, and

Rodriguez comprised HSR’s board of directors. HSR

was in poor financial condition, and in mid-1978,

local health authorities informed HSR that, unless

problems in the hospital’s physical plant were reme-

died, HSR would lose its eligibility to treat Medicare

patients. Jd. at 2a. Because remedying the deficien-

cies in the hospital’s physical plant would have re-

quired substantial demolition and_ reconstruction,

Soler, Badillo, and Rodriguez decided instead to build

a new hospital. Jd. at 2a, 59a. In August 1978,

petitioner Centro Medico del Turabo, Inc. (CMT)

was created to operate the proposed new facility,

Hospital Interamericano de Medicina Avanzada

(HIMA),' because HSR itself was unable to secure

necessary bank loans, and because HIMA was ex-

pected to serve a larger geographical area. 7d. at

2a-3a, 60a. Soler owned 40 percent of CMT, and

1 Petitioner Turabo Medical Center Limited Partnership

(TMCLP) was established in 1980 to act as CMT’s operat-

ing arm in the planning, financing, and construction of

HIMA. Pet. App. 16a. TMCLP and HIMA are subsidiaries

of CMT (id. at 66a), and, as petitioners note (Pet. 5 n.2),

there is no legally relevant distinction among them for

purposes of this case.

3

Badillo and Rodriguez each owned 20 percent. Rodri-

guez served as CMT’s president, and Soler and

Badillo were on the board of directors. Jd. at 3a, 56a.

In January 1984, the Union* became the certified

collective bargaining representative of HSR’s profes-

sional and technical employees. HSR and the Union

then negotiated a labor contract, effective from Sep-

tember 1, 1984, through August 31, 1987; the agree-

ment explicitly provided that it would remain in ef-

fect until a new contract replaced it. Pet. App. 3a,

17a. In 1985, the chief union steward began to ques-

tion HSR about the effect the planned new hospital,

HIMA, would have upon job security. On August 30,

1985, Rodriguez issued a memorandum to HSR’s

employees, stating “on behalf of [HSR] and [CMT]”

that the employees would be “transferred” to HIMA

with the same salary and benefits. Jd. at 4a.

In May 1987, the Union sought to begin negotia-

tions for a new labor agreement to succeed the con-

tract due to expire on August 31, 1987. The Union’s

proposals included a provision naming both HSR and

CMT as parties to the contract. Pet. App. 4a, 76a.

HSR responded that it regarded the Union’s certifica-

tion as covering HSR employees only, that HSR

would not negotiate on behalf of CMT, and that HSR

would not negotiate at all if the Union continued to

seek CMT’s inclusion in the new agreement. 7d. at

76a.

An unfair labor practice charge was filed by the

Union. The General Counsel of the National Labor

Relations Board (Board) issued a complaint alleging

* Local 1199, Union Nacional de Trabajadores de la Salud,

a/w National Union of Hospital and Health Care Employees,

AFL-CIO.

[

4

that HSR and CMT were a single employer and alter

egos, and that they had unlawfully refused to bargain

with the Union. Pet. App. 4a. In May 1988, the Union

reached separate settlement agreements with HSR

and CMT. HSR agreed to negotiate in good faith

with the Union; CMT agreed to retain 95 percent

of HSR’s employees when HIMA began operations,

but CMT stipulated that it was not thereby agreeing

to recognize the Union. 7d. at 4a, 48a. In light of

the settlements, the General Counsel withdrew the

complaint, but reserved the right to reinstate it in

the event of non-compliance. Jd. at 49a.

HSR and the Union resumed negotiations for a

new contract, but discussions broke down in Septem-

ber 1988 on the issue of the inclusion of CMT as a

party. Pet. App. 49a. In October 1988, the Union

filed a petition with the Board seeking to have the |

settlement agreements set aside and the complaint

reinstated. Jd. at 4a. HSR closed on November 14,

1988, and HIMA opened for business on November

19. Id. at 48a, 82a.

2. In December 1988, the Union filed unfair labor

practice charges alleging that, since the date of the

settlement agreements, HSR and CMT had failed to

bargain in good faith and had unlawfully refused to

hire five union activists at HIMA. Pet. App. 5a, 39a.

In February 1989, the General Counsel issued a new

complaint against HSR and CMT.*

a. After a hearing, an administrative law judge

(ALJ) found that CMT was the alter ego of HSR.

Pet. App. 5a, 70a. The ALJ explained that “[t]he

° The General Counsel also filed a petition in federal dis-

trict court pursuant to Section 10(j) of the National Labor

Relations Act, 29 U.S.C. 160(j), seeking, among other things,

5

Board has generally found alter ego status where the

two enterprises involved are found to have substan-

tially identical management, business purposes, op-

erations, equipment, customers, and supervision, as

well as ownership.” Jd. at 67a. The ALJ added that

“[{a] further, and critical, consideration to the find-

ing of alter ego status, is whether the new company

was created ‘to evade responsibilities under the

Act.’” Id. at 68a (citing Fugazy Continental Corp.,

265 N.L.R.B. 1301 (1982) ).

As to common ownership, the ALJ found that doc-

tors Soler and Badillo, who owned 87 percent of the

stock of HSR, owned about 60 percent of the stock

of CMT. Pet. App. 68a. As to common management,

the ALJ found that “[s]ince 1978 Joaquin Rodriguez

has exercised executive control over both HSR and

CMT.” Ibid. The ALJ observed that Rodriguez was

responsible for the creation of CMT in 1978: that he

served as president and chief executive officer of both

entities at all relevant times; and that “all policy is

determined by him, or by him with his managers.”

Id. at 68a-69a. The ALJ further found that (1)

at the “top” level of management, in addition to

Rodriguez (president and CEO of both entities),

Carlos Pineiro, the executive vice-president of HSR,

became executive vice-president of CMT; (2) the

an injunction requiring CMT, as a legal successor to HSR, to

recognize and bargain with the Union. On August 8, 1989,

the district court issued a preliminary injunction, and the

court of appeals affirmed. Pet. App. 5a; see Asseo v. Centro

Medico del Turabo, Inc., 900 F.2d 445 (1st Cir. 1990). On

December 15, 1989, the General Counsel issued a further

complaint alleging that, despite the injunction, CMT had

continued to refuse to bargain with the Union for a period

of about two months. Pet. App. 42a.

6

managers at “[t]he next level of management” at

HSR assumed similar positions at CMT; and (3) at

the “lower level” of management, roughly 85 of 102

supervisors and department heads at HSR moved to

the new hospital. Jd. at 64a-65a, 69a.

The ALJ further found that HSR and CMT shared

“a common business purpose and customer base.”

Pet. App. 69a. The ALJ noted that both hospitals

were located in the same city and the new hospital

was “built and designed to serve the same, maybe a

somewhat larger[,] area.” Jbid. “The type of serv-

ice and the area in which it is performed remain

basically the same” at CMT, the ALJ explained; that

the new hospital “is larger, more elaborate, more

modern and better equipped,” he observed, “makes

a difference in degree, but not in kind, of the services

offered.” Jd. at 69a & n.28.

The ALJ also found it significant that “Rodriguez,

Soler and Badillo, among themselves, as directors of

both [HSR and CMT], viewed HSR and CMT as a

single entity for purposes of internal dealings.” Pet.

App. 62a. For example, the ALJ found that, in Feb-

ruary 1982, HSR’s board of directors passed a res-

olution that stated that HSR was “taking all steps

regarding the construction of new facilities which

would be the [CMT] project.” Jbid. The resolution

warned that any physician practicing at HSR who

promoted a competing group’s plan to build a new

hospital would be deemed to be engaged in activity

“harmful to the best interests of [HSR],” which

could result in the loss of hospital privileges at HSR.

Ibid. The ALJ observed that, between 1982 and

1987, HSR’s annual financial statements character-

ized CMT as a “related party” of HSR. /bid. More-

over, CMT owed HSR large sums of money through-

5

out that period and thereafter, on which neither in-

terest nor principal was ever paid. /d. at 62a-63a.

The ALJ found that, as of March 30, 1989, CMT

owed HSR a total of more than $41 million, including

$1 million which CMT had agreed to pay HSR for its

operating license, but that “there is no evidence that

any money was actually paid.” Jd. at 63a.‘

Despite all of the foregoing evidence, the ALJ

found that “CMT continuously and adaman ly re-

fused to admit its relationship with HSR to the

Union.” Pet. App. 69a. In the ALJ’s view, “fHSR

and CMT] knew, or reasonably should have known

what the legal effect of that relationship was and is.”

Id. at 70a. “‘To continue to insist that these two

corporations are, in effect, strangers to each other.”

the ALJ stated, “leads me to the conclusion that the

new company, even though it may have been created

initially in order to avoid the credit problems en-

cumbering HSR, became a device to evade responsi-

* The ALJ also found it significant that “Tw]jhen communi-

cating with a local bank an impression was given that HSR

and the new hospital projects were part of the same enter-

prise.” Pet. App. 63a. For example, in an August 1981

letter to the Banco de Ponce, Rodriguez stated that “THSR]

is going through a major expansion of its facilities. It wil]

become [CMT] and it will be housed in a most modern and

sophisticated medical facility to be constructed in Caguas.”

Id. at 64a. Similarly, in February 1982, Rodriguez, in a letter

to the same bank, described a plan to “[t]ransfer [HSR’s]

physical asset[s] to a corporation which is able to develop it

when the Hospital is transferred to [CMT].” Ibid. (emphasis

omitted). The ALJ also noted that, in 1983 and 1984, articles

written by Rodriguez appeared in HSR’s employee newsletter

that “[spoke] of the new hospital in terms of ‘we’ or {‘Jus[’]

and identif [ied] the new construction with the existing struc-

ture and its employees.” Jd. at 63a.

8

bilities under the [National Labor Relations] Act.”

lbid. (footnote and internal quotation marks

omitted).

b. The ALJ also found that HSR and CMT con-

stituted a “single employer” for purposes of the Act.

Pet. App. 70a. The ALJ explained tt.at “[t]he ques-

tion in the ‘single employer’ situation is whether the

two nominally independent enterprises, in reality,

constitute only one integrated enterprise.” Jd. at

67a (citation omitted). In addition to commonal-

ity of ownership and management between HSR and

CMT (see pp. 5-6, supra), the ALJ found that re-

sponsibility for establishing labor-relations policy at

both entities was vested in executive vice-president

Pineiro. Id. at 66a. The ALJ also pointed out that,

while “[t]he operations of the two hospitals were

not interrelated in the sense that they functioned as

a team,” CMT “purchase[d] equipment from HSR,

and * * * equipment was transferred to [CMT]

along with management, administrators, professional,

technical and nonprofessional employees * * * on ac-

count of the discontinuance of operations by [HSR],

and assumption of operations by [CMT].” Jd. at

69a. In that regard, the ALJ noted that “the fact

that these two companies were not actual employers

at the same time does not affect the conclusion that

they are a single employer.” Jd. at 70a n.31.°

c. In light of the ALJ’s alter ego and single em-

ployer findings, the ALJ concluded that the May

1988 settlement agreement between the Union and

HSR had to be set aside. Pet. App. 53a. The ALJ

*The ALJ also found that CMT was a legal successor to

HSR, and therefore was obligated to recognize and bargain

with the Union at the new hospital. Pet. App. 71a-73a. The

Board, however, did not reach that issue. Jd. at 18a-19a.

9

explained that, because HSR and CMT “knew, or

should have known[,] that they constituted a single

employer and alter egos within the meaning of the

Act[,] * * * [i]t follows that an agreement by HSR

to bargain in good faith with the Union would neces-

sarily include a commitment to bargain on behalf of

CMT on the question of the preamble, 1.e., who was

to be named as an employer in the negotiations, and

about the coverage and the term of the collective-

bargaining agreement under consideration.” Jd. at

52a-53a. The ALJ concluded that, “by refusing * * *

to bargain further because of the Union’s insistence

on the inclusion of CMT as a Party Employer, HSR

has shown that it never had any intention of bar-

gaining in good faith on that issue or of complying

with that provision of the settlement agreement.” Jd.

at 58a.°

3. The Board affirmed the ALJ’s findings that

HSR and CMT constituted a single employer and

were alter egos. Pet. App. 18a. In sustaining the

ALJ’s single employer finding, the Board disagreed

with the ALJ’s conclusion that HSR and CMT were

not “actual employers at the same time.” Jd. at 8a

n.2. Rather, the Board observed that “[i]n mid-1988,

CMT began its hiring process for HIMA employees

*The ALJ also found that CMT violated Section 8 (a) (3)

and (1) of the Act, 29 U.S.C. 158(a) (3) and (1), by refus-

ing to rehire four HSR employees at the new hospital because

of their union activities. Pet. App. 84a-102a, 114a-115a. The

Board agreed with the ALJ’s findings as to those four em-

ployees and found, in addition, that CMT had unlawfully

denied a fifth HSR employee employment at the new hos-

pital. Jd. at 2la-26a. The court of appeals sustained those

findings as supported by “ample evidence” (id. at 18a), and

petitioners do not challenge that aspect of the court’s decision

(Pet. 12 n.8).

re

10

by distributing job applications and by interviewing

and screening prospective applicants.” Jbid. There-

fore, the Board concluded, “CMT was in existence

and operating over a significant period of time before

HSR officially closed for business on November 14,

1988.” Ibid.

Like the ALJ, the Board (with one member dissent-

ing) determined that setting aside the settlement

agreement between HSR and the Union was war-

ranted in light of the alter ego and single employer

findings. Pet. App. 18a. The Board concluded, inter

alia, that HSR and CMT violated Section 8(a) (1),

(3), and (5) of the Act, 29 U.S.C. 158(1), (3), and

(5), by unilaterally changing the employees’ terms

and conditions of employment at the new hospital

without bargaining with the Union. Pet. App. 27a.

Accordingly, the Board ordered petitioners to honor

the terms of the 1984 labor agreement pending the

negotiation of a new contract, or until the parties

reach a valid impasse in bargaining for a new con-

tract. Jd. at 128a.

4. The court of appeals enforced the Board’s order.

Pet. App. la-14a.

a. The court explained that, in analyzing whether

one employer is an alter ego of another, “[m]otive

matters “ * * because a corporate transfer or trans-

formation for the purpose of avoiding labor law

obligations is an unsympathetic case for respecting

the formal alteration, and faced with a subterfuge

“ “ * the courts reasonably need give less weight to

the other ‘identity’ criteria.” Pet. App. 8a-9a. How- i

ever, the court rejected the contention that such an

improper motive is always required for a finding of

alter ego status. Jd. at 9a-10a. The court explained

1]

that, “if a company merely changed its corporate

form for legitimate tax or corporate reasons, it is

hard to see why the new entity should be able to

disregard an existing collective bargaining agree-

ment.” Ibid.

On the facts of this case, the court upheld the

Board’s alter ego finding as being “within reasonable

limits,” for “a substantial * * * identity exists be-

tween the two hospitals along every axis: ownership,

senior management, supervisory management, em-

ployee base, geographic location and basic business

function.” Pet. App. lla. Although “the decision

of [HSR’s] owners to establish a new hospital oc-

curred for financial and operational reasons that

have nothing to do with labor relations,” id. at 9a.

that fact was not controlling under the court of

appeals’ analysis.

The court of appeals disagreed with the Board’s

single employer finding, stating that “Tt}he single

employer doctrine * * * seems to have little applica-

tion to this case—which does not involve two ongoing

businesses coordinated by a common master.” Pet.

App. 7a-8a. But “Ti]n all events,” the court con-

cluded, “the Board’s order here in dispute can be

sustained on the alter ego theory.” Jd. at 7a.

b. Although the court sustained the Board’s alter

ego finding, it found “unpersuasive”’ the Board’s

“In the court’s view, “[t]he Board’s claim that [CMT’s]

‘purpose’ was not improper at the outset but became improper

simply because [CMT] declined to bargain makes little sense

in the context of the alter ego doctrine,” for “if the two

companies were not alter egos, [CMT’s] desire to resist

obligations or liabilities of [HSR] weuld be understandable.”

Pet. App. Qa.

i A

—_ - = .-

12

decision to set aside the May 1988 settlement agree-

ment between HSR and the Union and found, fur-

ther, that ‘“‘no other evidence shows that the agree-

ment was entered into in bad faith.” Pet. App. 12a.

However, the court observed that “there is no show-

ing by the hospitals that the setting aside of the

settlement agreement had any effect on the Board’s

other determinations or on any of the provisions of

its remedial order.” Jbid. Accordingly, the court

enforced the Board’s order ‘“‘as written.” Jd. at 14a.

ARGUMENT

In a case on remand from a decision of another

circuit, the Board is currently considering the nature

of the alter ego doctrine and its relation to the

single employer doctrine. Further review of the

question petitioners present would therefore not be

warranted at this time. In any event, the decision

of the court of appeals is correct, and there is no

conflict of decisions among the circuits requiring reso-

lution by this Court. Accordingly, the petition should

be denied.

1. The basic issue in this case is whether the Board

was warranted in treating HSR and CMT as one

entity. Since the only collective bargaining agree-

ment is between the Union and HSR, CMT is required

to respect that agreement only if it is an extension

of HSR. There are two different, but related, labor

law doctrines under which two nominally distinct

entities may be found to be one—the “alter ego” and

the “single employer” doctrines.

As this Court has explained, an alter ego rela-

tionship exists between two nominally different em-

ployers where there has been “a mere technical

eee

|

13

change in the structure and identity of the employ-

ing entity, frequently to avoid the effect of the labor

laws, without any substantial change in its ownership

or management.” Howard Johnson Co. v. Detroit

Local Joint Executive Board, 417 U.S. 249, 259 n.5

(1974). In those circumstances, one employer may

be treated, for purposes of the Act, as a “disguised

continuance” of the other. Ibid. (quoting Southport

Petroleum Co. v. NLRB, 315 U.S. 100, 106 (1942)).

Consistent with the Court’s teaching that an intent

to evade legal obligations is “frequently” (but not

necessarily) a feature of the alter ego relationship,

the Board has explained that, to determine whether

one nominally different employer is the alter ego of

another employer:

[W]e must consider a number of factors, no one

of which, taken alone, is the sine qua non of

alter ego status. Among these factors are: com-

mon management and ownership; common busi-

ness purpose, nature of operations, and super-

vision; common premises and equipment; com-

mon customers, 1.e., whether the employers con-

stitute “the same business in the same market”’:

as well as the nature and extent of the negotia-

tions and formalities surrounding the trans-

action. We must also consider whether the pur-

pose behind the creation of the alleged alter ego

was legitimate or whether, instead, its purpose

was to evade responsibilities under the Act.

Fugazy Continental Corp., 265 N.L.R.B. 1301, 1301-

1302 (1982) (footnotes omitted), enforced, 725 F.2d

1416 (D.C. Cir. 1984). The Board, with court ap-

proval, has found the existence of alter ego relation-

ee

14

ships in the absence of an intent to evade labor law

obligations.°

Under the “single employer” doctrine, which “has

its primary office in the case of two ongoing busi-

nesses” that constitute an integrated operation,

“Tm Jost of the alter ego criteria remain relevant but

motive is normally considered irrelevant.” Pet. App.

7a. Under that doctrine, two businesses, though nom-

inally distinct, are treated as a unitary enterprise

for purposes of the Act where there is interrelation

of operations, common management, centralized con-

trol of labor relations, and common ownership. Radio

Union v. Broadcast Service, 380 U.S. 255, 256 (1965).

If the respective workforces of a unionized firm and

a nonunion firm, when merged, would constitute an

appropriate bargaining unit, then the unionized

firm’s labor contract applies, by operation of law, to

the nonunion firm. See South Prairie Construction

Co. v. Local 627, Operating Engineers, 425 U.S. 800

(1976); C.E.K. Industrial Mechanical Contractors,

Inc. v. NLRB, 921 F.2d 350, 353-354 (1st Cir. 1999) ;

NLRB vy. Lantz, 607 F.2d 290, 295-298 (9th Cir.

1979).

As the court of appeals noted (Pet. App. 7a), the

line of demarcation between the alter ego and single

8 See Johnstown Corp., 313 N.L.R.B. 170, 171 (1993), en-

forced sub nom. Stardyne, Inc. v. NLRB, 41 F.3d 141 (3d

Cir. 1994); Tricor Products, Inc., 239 N.L.R.B. 65, 69 (1978),

enforced, 636 F.2d 266 (10th Cir. 1980); Campbell-Harris

Electric, Inc., 263 N.L.R.B. 1143, 1148-1145, enforced, 719

F.2d 292 (8th Cir. 1983); E.G. Sprinkler Corp., 268 N.L.R.B.

1241, 1243-1244, aff’d sub nom. Goodman Piping Products,

Inc. V. NLRB, 741 F.2d 10 (2d Cir. 1984); Leslie Oldsmobile,

Inc., 276 N.L.R.B. 1314, 1315-1317 (1985).

a a

15

employer doctrines is not neatly drawn in the deci-

sions of the Board and of the courts. That lack of

clarity is exemplified in Stardyne, Inc. v. NLRB, 41

F.3d 141 (3d Cir. 1994). There, the ALJ found

that the entities involved did not constitute a single

employer, but that they were alter egos; the Board,

without disturbing the ALJ’s finding as to lack of

single employer status, affirmed the alter ego finding.

See Johnstown Corp., 313 N.L.R.B. 170 (1993). On

review, the Third Circuit sustained the Board’s posi-

tion that unlawful intent is not a necessary prerequi-

site of alter ego status and, further, affirmed the

Board’s alter ego finding as supported by substantial

evidence. Stardyne, 41 F.3d at 146-152. Never-

theless, the court remanded the case to the Board

for further proceedings. Jd. at 154. The court pointed

out that, in Gartner-Harf Co., 308 N.L.R.B. 531,

533 n.8 (1992), the Board had indicated that the

alter ego doctrine “‘is in effect a subset of the single

employer concept”; however, if that were true, the

court observed, then the entities in Stardyne could

not be alter egos, since the ALJ found they were

not a single employer. 41 F.3d at 153. Although

the court was “unsure why the alter ego [doctrine]

should be regarded as a subset of the single employer

doctrine” (id. at 152), it remanded the proceeding

to the Board “so that it can reconcile the contradic-

tory case law that it has developed” (id. at 153).

The Board has accepted the court’s remand, and the

matter is currently pending before the Board.

Given the present lack of clarity in Board law

as to the relationship between the alter ego and

single employer doctrines, and in light of the fact

that the proper contours of the alter ego doctrine

16

can be better understood in the context of its rela-

tionship to the single employer doctrine, we believe

(contrary to petitioners, see Pet. 12 n.9) that the

Court would be materially assisted, in considering

whether unlawful intent is required for an alter

ego finding, if it had the benefit of the Board’s views

on the questions raised by the court of appeals’ re-

mand in Stardyne. Accordingly, we submit that the

issue that petitioners seek to present is not ripe for

review by this Court.

2. The Board’s position that unlawful intent is

not a prerequisite for an alter ego finding is a rea-

sonable interpretation of the Act, and thus should be

sustained by the courts. See NLRB v. Curtin Mathe-

son Scientific, Inc., 494 U.S. 775, 786-787 (1990).

As the court below explained (Pet. App. 6a), al-

though the “easiest” case for treating two nominally

different employers “interchangeably” under the Act

may be where one employer was created by the other

to evade its obligations under the labor laws, that is

not the only case in which the doctrine applies. Even

“if a company merely changed its corporate form for

legitimate tax or corporate reasons, it is hard to see

why the new entity should be able to disregard an

existing collective bargaining agreement.” Jd. at 9a.

The absence of an unlawful motive is not dispositive

of the alter ego determination. See id. at 10a-1la.

The Third Circuit likewise has upheld the Board’s

position, that intent to evade legal obligations is not

a necessary prerequisite for alter ego status, as “con-

sistent with the purposes and policies of the Act.”

Stardyne, 41 F.8d at 148. As the court noted,

“the Board’s policy, which relies primarily on an

examination of objective criteria, provides for easier

17

and more consistent application of the Act than one

in which intent is an _ essential element,” while

it still permits “changes in ownership of employers

without saddling the successor with collective bargain-

ing agreements to which they did not agree.” Jbid.

(citing NLRB y. Burns International Security Serv-

ices, 406 U.S. 272 (1972) ). “In this way,” the court

concluded, “the Board’s rule can be said to promote

the Act’s goal of encouraging the use of collective

bargaining arrangements as a way to balance eco-

nomic bargaining power.” * /bid.

Petitioners argue (Pet. 24) that, unless an intent

to evade legal obligations is required, a company

that is a mere successor employer under NLRB vy.

Burns International Security Services, supra, will be

* Other courts of appeals have similarly rejected the con-

tention that a finding of improper subjective motive is a

necessary prerequisite for alter ego status. See NLRB vy.

Alleoast Transfer, Ine., 780 F.2d 576, 582 (6th Cir. 1986)

(“If we were to require a finding of employer intent, an

employer who desired to avoid union obligations might be

tempted to circumvent the [alter ego] doctrine by altering

the corporation’s structure based on some legitimate business

reason, retaining essentially the same business”); NLRB vy.

Tricor Products, Inc., 636 F.2d 266, 269-270 (10th Cir. 1980)

(“Whether a second employer is the alter ego of an earlier

employer, or merely a successor employer, requires a consid-

eration of numerous factors and often presents a close

question”; “[t]here is no hard-and-fast rule’); Goodman

Piping Products, Inc. v. NLRB, 741 F.2d 10, 12 (2d Cir.

1984) (“[T]he argument that the Board must find ant.-

union animus or an intent to evade union obligations before

it can impose alter ego status is unpersuasive.”). See also

Fugazy Continental Corp. Vv. NLRB, 725 F.2d 1416, 1419

(D.C. Cir. 1984); Carpenters Local 1846 V. Pratt-Farnsworth,

Inc., 690 F.2d 489, 508 (5th Cir. 1982), cert. denied, 464 U.S.

932 (1983).

18

deemed to be the alter ego of the predecessor em-

ployer and, accordingly, will lose the freedom of a

Burns successor to reject the substantive terms of the

predecessor’s labor contract. It is not necessary, how-

ever, to adopt an unlawful motivation rule in order

to distinguish successor employers from alter egos.

The essential distinction between a successorship and

an alter ego relationship is that, in a successorship,

a new employer takes over another employer’s op-

erations pursuant to a business transaction. See Fall

River Dyeing & Finishing Corp. v. NLRB, 482 U.S.

27, 43 (1987); Golden State Bottling Co. v. NLRB,

414 U.S. 168, 184 (1973); Burns, 406 U.S. at

281. In an alter ego situation, the entity that

exists both before and after the business transaction

“ig in reality the same employer.” Howard Johnson

Co., 417 U.S. at 259 n.5. The Board’s analysis

of whether a second entity is a “new employer,”

or rather “in reality the same employer,” calls for

an objective evaluation. Although the presence of

subjective motivation to evade the labor laws is an

aid to that objective analysis, it is not essential to it.

Indeed, petitioners do not dispute that, under the

“single employer” doctrine, two businesses may be

treated as a unitary enterprise and the labor contract

of one may be applied to the other. There is no valid

reason for requiring a finding of subjective bad faith

in order to hold the second business to the first’s bar-

gaining and labor contract obligations just because

the latter has discontinued operations for economic

reasons where, as here, there was “substantial * * *

identity * * * between the two * * * along every

axis” of the objective factors relevant to an alter

ego determination. Pet. App. ila.

Missi. Rats

19

3. Petitioners’ principal contention (Pet. 16-17)

is that the court of appeals’ holding on alter ego

status is in conflict with decisions of the Seventh,

Eighth, and Ninth Circuits.

a. In Trustees of Pension, Welfare & Vacation

Fringe Benefit Funds of IBEW Local 701 v. Favia

Electric Co., 995 F.2d 785 (1993) (Pet. 16), the

Seventh Circuit addressed claims that two nominally

distinct employers should be found to be either a

single employer or alter egos of one another. The

court first affirmed the district court’s finding that

the single employer doctrine was inapplicable be-

cause, inter alia, “the two [employers] were not

commonly owned.” 995 F.2d at 788. The court

held, however, that that fact did not preclude ap-

plication of the alter ego doctrine, because an alter

ego relationship could be found to exist “even though

no evidence of actual common ownership was pres-

ent.” Jd. at 789. The court then stated that “un-

lawful motive or intent are critica] inquiries in an

alter ego analysis.” Ibid. Finding no such motive

present on the facts of the case, the court held the

alter ego doctrine inapplicable. bid.

In Favia Electric, the Seventh Circuit relied in

part on its prior decision in International Union of

Operating Engineers, Local 150 vy. Centor Contrac-

tors, Inc., 831 F.2d 1309 (7th Cir. 1987). In Centor,

the court reached an alternative holding that, be-

cause of “[p]articularly damning” evidence that the

defendants stated that they were dissolving one firm

and setting up another “to avoid their obligations to

the Union,” the two firms would be treated as alter

egos of one another. Jd. at 1314.

The Seventh Circuit’s decisions do not directly con-

flict with the First Circuit’s decision in this case.

The decision in Centor establishes only that evidence

20

of an improper motive to avoid union obligations may

in some cases be so strong that it compels a finding

that the alter ego doctrine applies. That conclusion

is entirely consistent with the First Circuit’s recogni-

tion in this case that motivation is an “important

factor” in the inquiry. Pet. App. 8a. In Favia Elec-

tric, the Seventh Circuit relied primarily on the ab-

sence of an antiunion motive in concluding that the

alter ego doctrine did not apply. But the court did

so only after finding that the requirements of the

single employer doctrine—in particular, the require-

ment of common ownership—were not satisfied. In

those circumstances, it is possible that alter ego

status could not be found without some form of intent

to avoid union obligations. That principle, however,

even if correct, does not conflict with the First Cir-

cuit’s conclusion in this case that wrongful motive

is not always required and that, where ‘“‘a substantial

* * * identity exists between the two [employers]

along every axis,” Pet. App. 1la—including common

ownership—the alter ego doctrine is applicable.

Our conclusion that the Seventh Circuit has not

definitively resolved the question whether improper

motive is a prerequisite to application of the alter

ego doctrine is reinforced by two further considera-

tions. First, in Esmark, Inc. v. NLRB, 887 F.2d 739

(1989), the Seventh Circuit expressly noted that

“Tt]here is some dispute whether ‘an intent to evade’

statutory obligations through corporate restructuring

is a necessary element of an alter ego finding.” /d.

at 754 n.24. Neither in Esmark nor in any of its

subsequent cases did the Seventh Circuit purport to

take a firm and general position on the issue."

10 The Seventh Circuit in Esmark did discuss what it (mis-

takenly, in our view) believed to be the Board’s doctrine in

21

Second, Favia Electric and Centor each discussed

application of the alter ego doctrine in the context of

a suit under Section 301 of the Labor Management

Relations Act, 29 U.S.C. 185, claiming that a ck-n-e

in corporate form did not excuse an employer from

a breach of its obligations under a labor contract;

consequently, the Board was not a party in either

of those cases. It is therefore unclear what position

the Seventh Circuit would take concerning applica-

tion of the alter ego doctrine in reviewing a Board

determination in a case in which it had the full bene-

fit of the Board’s views on the subject. See NLRB v.

Curtin Matheson Scientific, Inc., 494 U.S. 775, 786-

787 (1990) (Board’s rules entitled to deference).

this area. See 887 F.2d at 754; see also Favia Electric, 995

F.2d at 788 (quoting Esmark). However, the court’s discus-

sion was dicta, because the Board’s theory of liability in that

case was not based on an alter ego theory, but rather on the

theory that the corporate veil between a parent and subsidiary

corporation should be pierced. In cases involving the alter

ego doctrine as applied by the Board, the Seventh Circuit

has appeared to recognize the multi-factor nature of the

analysis and has not suggested that a finding of improper

motivation is necessary. For instance, in NLRB v. Bell

Co., 561 F.2d 1264 (7th Cir. 1977), the court explained

that a finding of alter ego status may be founded upon

“control or ownership of a new business by the prior own-

ers of an old business.” An alternative basis for finding

the existence of a “disguised continuance,” the court ob-

served, exists “where the new business ‘. . . allows itself

to become a substitute * * * serving to * * * evad[e] the

consequences of the unfair labor practices committed.’” Jd.

at 1268 n.4 (quoting NLRB v. Ozark Hardwood Co., 282

F.2d 1, 5 (8th Cir. 1960)). See also NLRB v. Dane County

Dairy, 795 F.2d 1313, 1322 (7th Cir. 1986) (stating that

“{e]ommon control of nominally distinct entities establishes

alter ego status’’).

ae

b. Likewise, the Eighth Circuit has not held that

unlawful motive is a prerequisite to a finding of alter

ego status. In Crest Tankers, Inc. v. National Mari-

time Union, 796 F.2d 234 (8th Cir. 1986) (Pet. 16),

the court discussed the differences between the single

employer and alter ego doctrines, holding that inquiry

into motivation is not necessary to application of the

single employer doctrine, but is “[a] critical part of

the inquiry into alter ego status.” 796 F.2d at 237.

That conclusion is correct, since both the Board and

the courts have recognized that motivation must be

taken into account in determining whether to apply

the alter ego doctrine. The court did not hold, nor did

the district court on remand understand the court to

have held, that unlawful intent is required for a

finding of alter ego status. See Crest Tankers, Inc. v.

National Maritime Union, 665 F. Supp. 1431, 1434-

1435 (E.D. Mo. 1987) (“anti-union animus may be

considered * * * [but] no single factor [is] disposi-

tive’), appeal dismissed, 871 F.2d 1092 (8th Cir.

1988) (Table). Indeed, the Eighth Circuit indicated

in a footnote that it did not disagree with a Sixth

Circuit decision holding that improper intent is “not

essential * * * to imposition of alter ego status.” See

796 F.2d at 238 n.2. And in other decisions the

Eighth Circuit has indicated that unlawful intent is

not a necessary prerequisite to alter ego status. See,

e.g., Woodline Motor Freight, Inc. v. NLRB, 843 F.2d

285, 288 (1988) (‘whether the change in operations

is unlawfully motivated” is a “[f]actor[] to be

considered” )."’

11 Accord NLRB vy. Campbell-Harris Electric, Inc., 719

F.2d 292, 295-296 (8th Cir. 1983) (finding alter ego status

based upon shared business purpose, mode of operation,

23

ec. The Ninth Circuit decisions cited by petitioner

(Pet. 17) also do not conflict with the First Circuit’s

decision in this case. It is true that the Ninth Cir-

cuit has indicated that a finding of improper motiva-

tion accompanies application of the alter ego doc-

trine. In A. Dariano & Sons, Inc. v. District Council

of Painters No. 33, 869 F.2d 514 (9th Cir. 1989),

the court stated that “[i]n all alter ego determina-

tions an element of fraud or misrepresentation also

exists.” Jd. at 519. See also UA Local 343 v. Nor-

Cal Plumbing, Inc., 48 F.8d 1465, 1472 (9th Cir.

1994) (relying on A. Dariano to make the same

point). Neither of those decisions, however, firmly

establishes a conflict in the circuits on the issue.

First, as with the Seventh Circuit’s decisions in

Favia Electric and Centor, the Ninth Circuit’s

statement in A. Dariano was made without the bene-

fit of the Board’s participation in that case and was

based on the mistaken belief that, under Board law,

“'t]he NLRB obviously conceptualizes the alter ego

test on the * * * theory of a trustee ex maleficio to

method of supervision, equipment, customers, and substan-

tial identity of ownership and management); NLRB v. Ozark

Hardwood Co., 282 F.2d 1, 7 (8th Cir. 1960) (alter ego

status may be based upon sufficient “identity of business

structure and interest * * * [fo]r alternatively [where the

new corporation] represent[s] an instrument of cooperation

and evasion as to the labor-wrongs situation” of the old

employer). Nor is Jowa Express Distribution, Inc. v. NLRB,

739 F.2d 1305 (8th Cir.), cert. denied, 469 U.S. 1088 (1984)

(Pet. 17), to the contrary. There, the court found that,

while there was “significant evidence” suggesting that the

two entities involved were not alter egos, other objective

evidence, taken together with evidence of unlawful motive,

supported the General Counsel’s position that the companies

were alter egos. 739 F.2d at 1311-1312.

24

pierce the changed legal title and format of the suc-

cessor.” 869 F.2d at 518. It is unclear whether the

Ninth Circuit would take a similar view if it were

accurately informed of the Board’s views on the

subject. |

Moreover, again as with the allegedly conflicting

Seventh Circuit decisions, the Ninth Circuit’s focus

on unlawful intent in A. Dariano and Nor-Cal

Plumbing may reflect the fact that both cases arose

in a factual context in which evidence of the employ-

er’s motivation may be particularly important. Both

A. Dariano and Nor-Cal Plumbing involved applica-

tion of the doctrine to “double breasted” employer

operations. In that setting, ‘“[the] concern [is] that

some contractors would. use double-breasted opera-

tions to avoid their collective bargaining obligations,”

and the alter ego doctrine serves “to guard against

such abuse.” Nor-Cal Plumbing, 48 F.3d at 1469-

1470 (emphasis added). Even if a finding of im-

proper motivation were a prerequisite to application

of the doctrine in that setting, however, it does not

follow that it is a prerequisite in all possible contexts

or, in particular, in the very different setting in

which this case arose.

Finally, the Ninth Circuit has indicated in other

cases that unlawful intent is not a necessary pre-

requisite of alter ego status. The court has stated

that “the determination that one entity is merely

another’s alter ego will depend to some extent on

whether or not the transfer of assets or the dissolu-

tion of the old entity is motivated by union animus.”

Haley & Haley, Inc. v. NLRB, 880 F.2d 1147, 1150

(1989) (emphasis added); accord NLRB vy. O'Neill,

965 F.2d 1522, 1529 (1992), cert. denied, 113 S. Ct.

2995 (1993). See also J.M. Tanaka Construction,

Se dae Ges ake

Fe

Inc. v. NLRB, 675 F.2d 1029, 1033 (1982). Until

the Ninth Circuit arrives at a firm position on the

issue, it cannot be said that its position conflicts with

that of the First Circuit in this case.

d. Petitioners are also mistaken in suggesting

(Pet. 16) that the decision below is “inconsistent?

with decisions of the Fourth Circuit. In Alkire v.

NLRB, 716 F.2d 1014 (1983) (Pet. 18), the Fourth

Circuit explained that, where “substantially the same

entity controls both the old and new employer,” the

court will then inquire “whether the transfer re-

sulted in an expected or reasonably foreseeable bene-

fit to the old employer related to the elimination of

its labor obligations.” 716 F.2d at 1020. That test,

however, does not establish a requirement that the

alleged alter ego entity must have been created for

the purpose of evading the labor laws. Indeed, as the

Fourth Circuit emphasized in a subsequent decision,

“(t]he imposition of alter-ego status under Alkire

does not hinge on proof that the employer intended

to evade the labor laws.” NLRB vy. McAllister

Brothers, Inc., 819 F.2d 439, 445 n.14 (1987).”

2 Petitioners are also mistaken in suggesting (Pet. 20

n.16) that the commentators are divided into hostile camps

on the issue whether unlawful intent is a necessary prerequi-

site to alter ego status. Two commentators reject that view.

See Note, 86 Mich. L. Rev. 1024, 1054 (1988); S. Befort,

Labor Law and the Double-Breasted Employer: A Critique

of the Single Employer and Alter Ego Doctrines and a

Proposed Reformulation, 1987 Wisc. L. Rev. 67, 108. Neither

of the other writers cited by petitioners appears to

argue for a rule making unlawful intent a necessary pre-

requisite. See Note, 54 N.Y.U. L. Rev. 624, 638 (1979)

(observing that “the employer’s motivation for the business

change is an important element of the alter ego analysis”)

(emphasis added); F. Slicker, A Reconsideration of the Doc-

26

CONCLUSION

The petition for a writ of certiorari should be

denied.

Respectfully submitted.

DREw S. Days, III

Solicitor General

FREDERICK L. FEINSTEIN

General Counsel

LINDA SHER

Acting Associate General Counsel

NORTON J. COME

Deputy Associate General Counsel

JOHN EMAD ARBAB

Attorney

National Labor Relations Board

JULY 1995

trine of Employer Successorship—A Step Toward a Rational!

Approach, 57 Minn. L. Rev. 1051, 1064 (1973) (noting that

alter ego cases “include[] situations in which a technical

change in employer identity is merely incident to * * * that

employer’s union animus or an unlawful motive to avoid the

commands of national labor laws’) (emphasis added).

Zw 6.8, GOVERNMENT PRINTING OFFICE; 1995 387147 20091