# NLRB Division of Advice Memorandum, Case No. 02-CA-040028 (Rogan Brothers Sanitation, Inc.): Rogan Brothers Sanitation, Inc. (02-CA-040028)

> Federal · Agency guidance · In force

URL: https://www.frixlaw.com/law-library/statutes/NLRB_ADVICE_02-CA-040028

## Section

- **Citation:** NLRB Division of Advice Memorandum, Case No. 02-CA-040028 (Rogan Brothers Sanitation, Inc.)
- **Heading:** Rogan Brothers Sanitation, Inc. (02-CA-040028)
- **Jurisdiction:** Federal
- **Kind:** Agency guidance
- **Status:** In force
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** NLRB Division of Advice Memoranda (rolling 10-year window) / Rogan Brothers Sanitation, Inc. (02-CA-040028)

## Text

United States Government
National Labor Relations Board
OFFICE OF THE GENERAL COUNSEL
Advice Memorandum

DATE:
May 11, 2017
TO:
Karen P. Fernbach, Regional Director
Region 2
FROM:
Barry J. Kearney, Associate General Counsel
Division of Advice
SUBJECT: Rogan Brothers Sanitation, Inc.
Case 02-CA-040028
177-1667-0100-0000
601-5050-1500-0000
601-7515

625-4412
625-4417-2500-0000
625-4417-2800-0000
750-2533
750-2550
750-2567
750-5025
762-8000
787-6000

This case was submitted for advice as to whether the Region should pursue
proceedings to hold R&S Waste Services, LLC (“R&S”) liable as a Golden State1
successor for the unfair labor practices committed by Rogan Brothers Sanitation, Inc.
(“Rogan Brothers”). We conclude that R&S is a Golden State successor because it was
on notice of the unfair labor practice charge against Rogan Brothers before it
foreclosed on its security interest in Rogan Brothers or, in the alternative, before it
entered into an enforceable security agreement. We further find that R&S can be
held responsible for its predecessor’s violations notwithstanding that it was never
named as a respondent in the unfair labor practice proceeding and an administrative
law judge has already determined that it was not a Burns2 successor.

1 Golden State Bottling Co. v. NLRB, 414 U.S. 168 (1973).

2 NLRB v. Burns Int’l Sec. Servs., Inc., 406 U.S. 272 (1972).
that R&S can be
held responsible for its predecessor’s violations notwithstanding that it was never
named as a respondent in the unfair labor practice proceeding and an administrative
law judge has already determined that it was not a Burns2 successor.

1 Golden State Bottling Co. v. NLRB, 414 U.S. 168 (1973).

2 NLRB v. Burns Int’l Sec. Servs., Inc., 406 U.S. 272 (1972).

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FACTS

Rogan Brothers was engaged in the collection and disposal of residential and
commercial waste in Westchester County, New York and in New York City. As of
early 2011, Teamsters Local 813 (“Union”) represented a bargaining unit of about 25
to 30 truck drivers and helpers. At that time, the parties’ collective-bargaining
agreement was an unenforceable members-only contract and only eight unit
employees who were Union members were paid in accordance with the contract.

First Unfair Labor Practice Proceeding Against Rogan Brothers (Rogan Bros. I)

In January 2011, Rogan Brothers entered into an informal settlement
agreement to resolve a charge alleging that it discriminatorily discharged three
employees in July 2010 and made various unlawful threats and statements.
Although Rogan Brothers reinstated one discriminatee, it subsequently requested
that the settlement agreement be withdrawn and indicated that it would not comply
with its backpay obligations. The Region revoked its approval of the settlement
agreement and issued complaint pursuant to the default provisions of that
agreement. The Board granted summary judgment in favor of the then-Acting
General Counsel and rejected the Employer’s various defenses, including its request
that the matter be deferred to the grievance-arbitration procedures.3 Despite
subsequent enforcement of that Board order by the Second Circuit Court of Appeals,
the Region has been unable to recover any backpay for the discriminatees and has
exhausted efforts to locate assets to satisfy the liability
n-Acting
General Counsel and rejected the Employer’s various defenses, including its request
that the matter be deferred to the grievance-arbitration procedures.3 Despite
subsequent enforcement of that Board order by the Second Circuit Court of Appeals,
the Region has been unable to recover any backpay for the discriminatees and has
exhausted efforts to locate assets to satisfy the liability.

R&S’s Takeover of Rogan Brothers’ Operations4

By early 2011,5 Rogan Brothers was experiencing significant financial
difficulties and sought assistance from Joseph Spiezio, a so-called “vulture capitalist”
who acquires failing companies by making high interest loans with terms providing
for acquisition of the business and its assets if the borrower defaults.6 Spiezio owns

3 Rogan Bros. Sanitation, Inc. (Rogan Bros. I), 357 NLRB 1655, 1656-57 (2011),
enforced mem., No. 12-236 (2d Cir. Mar. 22, 2012).
4 The facts in this section are largely drawn from the Board’s decision in Rogan Bros.
Sanitation, Inc. (Rogan Bros. II), 362 NLRB No. 61 (Apr. 8, 2015), enforced, 651 F.
App’x 34 (2d Cir. 2016).
5 All dates hereinafter are in 2011, unless otherwise noted.
6 Rogan Bros. II, 362 NLRB No. 61, slip op. at 30-31.

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Spiezio Organization, a management firm that operates several of Spiezio’s
businesses, including Pinnacle Equity Group (“Pinnacle”), a business financing
services company. Spiezio agreed to extend Rogan Brothers an $850,000 loan,
financed through Pinnacle, and Rogan Brothers entered into an agreement whereby
Spiezio would serve as its consultant, including for the purpose of retaining counsel
for labor related matters and negotiating with the Union
ral of Spiezio’s
businesses, including Pinnacle Equity Group (“Pinnacle”), a business financing
services company. Spiezio agreed to extend Rogan Brothers an $850,000 loan,
financed through Pinnacle, and Rogan Brothers entered into an agreement whereby
Spiezio would serve as its consultant, including for the purpose of retaining counsel
for labor related matters and negotiating with the Union.

In a letter dated January 1, Spiezio stated that, due to Rogan Brothers’
financial troubles, he would require a security agreement for the loan that would
cover “all of the commercial sanitation customers, contracts and containers,
compactors, accounts receivable and vehicles.” Spiezio also indicated that he
intended to form his own waste company to assume the Westchester operations in the
event Rogan Brothers defaulted on the loan. The security agreement, executed on
January 3, granted Pinnacle a security interest in the collateral set forth in “Exhibit
A,” however no such document has ever been produced by Rogan Brothers or R&S.7
Rather, as discussed more fully below, there exists a document entitled “Schedule A,”
which is a Uniform Commercial Code (“UCC”) financing statement that lists the
loan’s collateral and is dated several months after the security agreement was signed.
Events that would trigger default under the security agreement included, among
other things, nonpayment of any principal or interest due, as well as false statements,
representations, and warranties. Among the debtor representations and warranties
contained in the security agreement, Rogan Brothers declared that it was not in
default on any other instrument and that it was the owner of the collateral free and
clear of any liens or other encumbrances.

In a letter dated February 1, Spiezio stated that it had “not been easy” to
understand how Pinnacle would secure the loan and also informed Rogan Brothers
that the loan would be capped at $800,000
the security agreement, Rogan Brothers declared that it was not in
default on any other instrument and that it was the owner of the collateral free and
clear of any liens or other encumbrances.

In a letter dated February 1, Spiezio stated that it had “not been easy” to
understand how Pinnacle would secure the loan and also informed Rogan Brothers
that the loan would be capped at $800,000. He indicated that Rogan Brothers would
need to execute UCC documentation, which would itemize the trucks, customer lists,
containers, and account receivables. Spiezio indicated that the UCC filing “will list it
all out clearly.”

Pursuant to Spiezio’s consultant role, he was copied on Rogan Brothers’
February 28 request to withdraw the above-mentioned unfair labor practice charge
that had been informally settled in January. That same day, Spiezio forwarded the
withdrawal request to the Union’s business agent via email.8 Over the course of the

7 In addition to the security agreement, Pinnacle and Rogan Brothers also executed
a promissory note and a demand note on January 3. Neither of these documents
describes the collateral for the loan.
8 See GC Exhibit 93 in Rogan Bros. II.

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next few months, Spiezio repeatedly implored the Union to withdraw the charge and
resolve it through the grievance-arbitration process to no avail.

By letter dated March 2, Spiezio informed Rogan Brothers that “some serious
discoveries have been made that would truly force me to take a position for security
and disposition thereof.” He also indicated that he would apply for a waste hauling
license with the Westchester County Solid Waste Commission, which he did around
this time.

On May 25, Pinnacle filed a UCC financing statement listing the collateral for
the loan
ormed Rogan Brothers that “some serious
discoveries have been made that would truly force me to take a position for security
and disposition thereof.” He also indicated that he would apply for a waste hauling
license with the Westchester County Solid Waste Commission, which he did around
this time.

On May 25, Pinnacle filed a UCC financing statement listing the collateral for
the loan. According to this filing, the collateral included: all commercial routes, all
customer lists, 450 roll off dumpsters, 35 compactors, 800 garbage containers,
computers, office furniture, and 19 vehicles listed by VIN numbers. At some point,
someone handwrote “Schedule A” at the top of this UCC financing statement.

By letter dated June 1, Spiezio informed Rogan Brothers of his discovery of
certain outstanding debts and liens, which constituted a breach of Rogan Brothers’
representation and warranty obligations under the security agreement. Spiezio
asserted that such breach triggered default on the Pinnacle loan. He also informed
Rogan Brothers that he had filed the UCC form in May and would assign the debt
over to R&S by July 31, 2011. On June 30, R&S received its waste hauling license,
and the next day Spiezio declared Pinnacle’s loan to Rogan Brothers in default. That
same day, Spiezio contracted with Rogan Brothers to perform waste removal services
on behalf of R&S.

In late July, R&S made final preparations to implement its takeover of the
Westchester operations. Spiezio and Rogan Brothers discussed how to divide up the
assets and assigned customer accounts between the two entities. On July 26, R&S
sent a letter to Rogan Brothers’ customers indicating that R&S would service their
accounts, effective immediately
e removal services
on behalf of R&S.

In late July, R&S made final preparations to implement its takeover of the
Westchester operations. Spiezio and Rogan Brothers discussed how to divide up the
assets and assigned customer accounts between the two entities. On July 26, R&S
sent a letter to Rogan Brothers’ customers indicating that R&S would service their
accounts, effective immediately. On July 31, Pinnacle, R&S, and Rogan Brothers
executed a Surrender of Collateral in Satisfaction of Debt, which stated that Pinnacle
agreed to accept the collateral “as listed on Schedule A of the Security agreement
dated January 3, 2011 and the UCC filed May 25, 2011.” Around this time, Rogan
Brothers laid off most of its workforce, save a few drivers who performed work under
the subcontracting arrangement with R&S and continued to service their same routes
with the same trucks.

On August 1, R&S commenced operations servicing most of Rogan Brothers’
customers and using a work force consisting mainly of former employees of Rogan
Brothers who were not Union members. R&S paid its drivers and helpers the same
wages they earned at Rogan Brothers, and they reported to work at the same truck
yard as they always had. Spiezio relied on Rogan Brother’s former general manager
to help him run R&S’s day-to-day operations, which included assigning work to Rogan

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Brothers’ employees and then discharging them at Spiezio’s direction, and rehiring at
least one driver as an R&S employee.

At the end of September, the Union requested that R&S meet and bargain, but
R&S refused.9 The Union also demanded that Rogan Brothers cease undermining the
collective-bargaining agreement by transferring work to R&S. As a result, Rogan
Brothers decided to stop performing subcontracted work for R&S as of October 4
piezio’s direction, and rehiring at
least one driver as an R&S employee.

At the end of September, the Union requested that R&S meet and bargain, but
R&S refused.9 The Union also demanded that Rogan Brothers cease undermining the
collective-bargaining agreement by transferring work to R&S. As a result, Rogan
Brothers decided to stop performing subcontracted work for R&S as of October 4.
Around this time, three drivers who had been performing R&S work while on Rogan
Brothers’ payroll were pressured to resign their Union membership in order to retain
employment or secure jobs with R&S, and they were discharged or laid off from Rogan
Brothers. One of these drivers was hired by R&S only after agreeing to withdraw
from the Union. Another decided not to apply because he did not wish to resign his
Union membership.10

After the split with R&S, the owner of Rogan Brothers continued to be involved
in the waste business, either through Rogan Brothers or another entity, but on a
reduced scale.

Second Unfair Labor Practice Proceeding Against Rogan Brothers with R&S as Co-
Respondent (Rogan Bros. II)

The Union filed unfair labor practice charges against Rogan Brothers and R&S
challenging, among other things, the October discharges and the imposition of
discriminatory conditions of employment, as well as R&S’s refusal to recognize the
Union. Based on its finding of common ownership and financial control, interrelation
of operations, common control of labor relations, and common management, the Board
determined that Rogan Brothers and R&S operated as a single employer from about
March 1 to October 4, 2011.11 As such, they were jointly liable for the October
discriminatory discharges and refusal to hire. The administrative law judge also
ruled that R&S was not a Burns12 successor because there was no continuity of

9 Shortly thereafter, R&S recognized a different union as the representative of its
drivers
R&S operated as a single employer from about
March 1 to October 4, 2011.11 As such, they were jointly liable for the October
discriminatory discharges and refusal to hire. The administrative law judge also
ruled that R&S was not a Burns12 successor because there was no continuity of

9 Shortly thereafter, R&S recognized a different union as the representative of its
drivers.
10 The third employee chose not to apply for work with R&S based on his
dissatisfactory experience working for Rogan Brothers.
11 Rogan Bros. II, 362 NLRB No. 61, slip op. at 3.
12 Burns, 406 U.S. at 280-81 (holding that a successor employer is obligated to
recognize and bargain with the union representing the predecessor’s bargaining unit

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representation.13 Although a majority of R&S’s drivers and helpers were former
Rogan Brothers employees, only a small minority were actually represented by the
Union and paid wages set forth in the members-only collective-bargaining agreement.
The then-Acting General Counsel did not except to this ruling. The Board adopted
the dismissal of the Section 8(a)(5) allegations on the basis that the collective-
bargaining agreement was unenforceable and did not comment on the judge’s finding
that R&S was not a Burns successor.

ACTION

We conclude that the Region should pursue proceedings to hold R&S jointly
and severally responsible as a Golden State successor for the unremedied liabilities in
Rogan Bros. I because R&S was on notice of the allegations before it foreclosed on its
security interest in Rogan Brothers or, in the alternative, before it entered into an
enforceable security agreement. We further find that neither the failure to name
R&S in the original unfair labor practice proceeding, nor the conclusion that R&S was
not a Burns successor, do not absolve R&S of responsibility for remedying the
violations found in Rogan Bros. I
s before it foreclosed on its
security interest in Rogan Brothers or, in the alternative, before it entered into an
enforceable security agreement. We further find that neither the failure to name
R&S in the original unfair labor practice proceeding, nor the conclusion that R&S was
not a Burns successor, do not absolve R&S of responsibility for remedying the
violations found in Rogan Bros. I.

In Golden State, the Supreme Court approved the Board’s Perma Vinyl Corp.14
holding that an employer that acquires a business in “basically unchanged form”15
with knowledge of the predecessor’s unfair labor practices can be held liable for the
predecessor’s remedial obligations.16 The Court agreed with Perma Vinyl’s rationale
that a purchaser-successor who is on notice is in the best position to redress the
violations without being unduly burdened because it can adjust the purchase price to
reflect its potential liability or arrange other indemnification by the offending seller.17

employees where the bargaining unit remains unchanged and a majority of the
employees hired by the new employer are represented by the union).
13 Rogan Bros. II, 362 NLRB No. 61, slip op. at 31-32.
14 164 NLRB 968 (1967), enforced sub nom. U.S. Pipe & Foundry Co. v. NLRB, 398
F.2d 544 (5th Cir. 1968).
15 Id. at 969.
16 Golden State, 414 U.S. at 171-72 & n.2, 184-85.
17 Id. at 171 n.2, 185.

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To be a Golden State successor, the new employer must first maintain
substantial continuity of the employing enterprise after the transfer of business.18 In
determining whether “substantial continuity” exists, the Board considers factors such
as continuity in business operations, location, work force, jobs and working
conditions, supervisors, equipment and methods of production, product or service, and
customers.19 Second, as stated above, Golden State liability requires evidence that
the successor took over the predecessor’s business with knowledge of the potential
liabil
tial continuity” exists, the Board considers factors such
as continuity in business operations, location, work force, jobs and working
conditions, supervisors, equipment and methods of production, product or service, and
customers.19 Second, as stated above, Golden State liability requires evidence that
the successor took over the predecessor’s business with knowledge of the potential
liability. The burden is on the successor to demonstrate that it lacked actual or
constructive knowledge.20 The Board will draw reasonable inferences from the record
as a whole to support finding notice.21 Knowledge is established if the successor was
aware of the conduct underlying the unfair labor practice; the successor need not be
aware of particular unfair labor practice charges or complaints.22

18 See Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 43 (1987) (focus of
successorship analysis is “on whether the new company has ‘acquired substantial
assets of its predecessor and continued, without interruption or substantial change,
the predecessor’s business operations,’” i.e., “whether there is ‘substantial continuity’
between the enterprises”) (quoting Golden State, 414 U.S. at 184, and Aircraft
Magnesium, 265 NLRB 1344, 1345 (1982), enforced mem., 730 F.2d 767 (9th Cir.
1984)); Commercial Forgings Co., 315 NLRB 162, 166 (1994) (finding continuity of
operations for purpose of Golden State successorship based on conclusion that
continuity in employing enterprise existed under Burns), enforced per curiam sub
nom. Forgings Forever, Inc. v. NLRB, 77 F.3d 482 (6th Cir. 1996).
19 Fall River Dyeing, 482 U.S. at 43 (citing Aircraft Magnesium, 265 NLRB at 1345);
Hot Bagels & Donuts, 244 NLRB 129, 130 (1979), enforced, 622 F.2d 1113 (2d Cir.
1980).
20 S. Bent & Bros., 336 NLRB 788, 790-91 (2001) (“concept of constructive knowledge
incorporates the notion of ‘due diligence’”); Robert G. Andrew, Inc., 300 NLRB 444,
444 (1990).
21 Robert G. Andrew, 300 NLRB at 444
96).
19 Fall River Dyeing, 482 U.S. at 43 (citing Aircraft Magnesium, 265 NLRB at 1345);
Hot Bagels & Donuts, 244 NLRB 129, 130 (1979), enforced, 622 F.2d 1113 (2d Cir.
1980).
20 S. Bent & Bros., 336 NLRB 788, 790-91 (2001) (“concept of constructive knowledge
incorporates the notion of ‘due diligence’”); Robert G. Andrew, Inc., 300 NLRB 444,
444 (1990).
21 Robert G. Andrew, 300 NLRB at 444. See also Wyandanch Engine Rebuilders,
Inc., 328 NLRB 866, 874 (1999) (presumption of knowledge where predecessor’s
president became manager of successor and personally participated in unfair labor
practices); Golden State, 414 U.S. at 173 (evidence supported inference that manager
of predecessor informed his prospective employer of the unfair labor practice
litigation prior to the sale).
22 S. Bent & Bros., 336 NLRB at 790; Robert G. Andrew, 300 NLRB at 444; Signal
Communications, 284 NLRB 423, 429 (1987) (company that took over predecessor’s
business operation before NLRB charge was filed against predecessor, but with
knowledge of predecessor’s unlawful conduct, was Golden State successor).

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Although Golden State and Perma Vinyl involved sales of businesses, the Board
has imposed remedial liability on employers where no purchase of a business or its
assets took place.23 The Board has merely required that there be “some pecuniary or
security interest, or other ‘clearly identifiable and connecting interest’ between the
predecessor and the successor.”24 Where there is such a connection, the Board
examines the nature of that relationship to determine if the successor could have
effectively insulated itself from liability for the predecessor’s unfair labor practices.25
Generally, if the successor lacked the opportunity to shield itself, the Board will not
find Golden State successorship.26

23 See Hot Bagels & Donuts, 244 NLRB at 131 (successor was former predecessor
who returned as lessee after bank foreclosure); Ponn Distributing, Inc., 232 NLRB
e
effectively insulated itself from liability for the predecessor’s unfair labor practices.25
Generally, if the successor lacked the opportunity to shield itself, the Board will not
find Golden State successorship.26

23 See Hot Bagels & Donuts, 244 NLRB at 131 (successor was former predecessor
who returned as lessee after bank foreclosure); Ponn Distributing, Inc., 232 NLRB
312, 313-15 (1977) (successor cancelled its security interest and retook
distributorship), enforcement denied on other grounds sub nom. NLRB v. Cott Corp.,
578 F.2d 892 (1st Cir. 1978); Martin J. Barry Co., 278 NLRB 393, 394 n.4 (1986)
(reduced management fee effectively constituted payment for business); Evans
Plumbing Co., 278 NLRB 67, 67-68 (1986) (successor formed using capital obtained
from creditor’s foreclosure on security interest in predecessor’s assets is Golden State
successor if not alter ego), enforced in relevant part sub nom. Evans Servs., Inc. v.
NLRB, 810 F.2d 1089 (11th Cir. 1987).
24 S. Bent & Bros., 336 NLRB at 792 (quoting Glebe Electric, 307 NLRB 883, 885-86
& n.27 (1992) (subcontractor who completed final phase of electrical project for
general contractor after prior subcontractor decided to go out of business not a
Golden State successor because there was “total absence of any business
relationship” between the two subcontractors)).
25 Id. (Golden State successorship found notwithstanding that banks arranging sale
were purportedly unwilling to negotiate where buyer never requested a lower price
and, in fact, purchased the assets at a discount in excess of the predecessor’s
liabilities)
f business not a
Golden State successor because there was “total absence of any business
relationship” between the two subcontractors)).
25 Id. (Golden State successorship found notwithstanding that banks arranging sale
were purportedly unwilling to negotiate where buyer never requested a lower price
and, in fact, purchased the assets at a discount in excess of the predecessor’s
liabilities). See also Lebanite Corp., 346 NLRB 748, 749-50 (2006) (no Golden State
successorship where lease of operations was terminable on 30 days’ notice and
indemnification clause impractical because predecessor was financially precarious);
Hill Industries, 320 NLRB 1116, 1116-17 (1996) (no Golden State successorship
where purchase of materials was small compared to potential unfair labor practice
liabilities).
26 S. Bent & Bros., 336 NLRB at 792. But see Eldorado, Inc., 335 NLRB 952, 952 n.1
(2001) (unnecessary to find successor had opportunity to indemnify itself or
negotiate a price reduction where successor’s president was on both sides of
transactions between the two companies; president of successor co-owned
predecessor company and retained stock and assets as collateral after sale).

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I.
R&S Knew of Charge in Rogan Bros. I Prior to Foreclosure

This case turns on whether R&S had the requisite knowledge under Golden
State, since the Board’s factual findings in Rogan Bros. II amply demonstrate that
R&S continued Rogan Brothers’ operations in essentially unchanged form.27 We
conclude that R&S had timely notice of the charge in Rogan Bros. I such that
imposition of Golden State liability will not produce an unfair hardship.

In Ponn Distributing,28 the successor employer, essentially a franchisor,
cancelled its predecessor’s distributorship, foreclosed on its security interest, and
continued to operate the business essentially without change
changed form.27 We
conclude that R&S had timely notice of the charge in Rogan Bros. I such that
imposition of Golden State liability will not produce an unfair hardship.

In Ponn Distributing,28 the successor employer, essentially a franchisor,
cancelled its predecessor’s distributorship, foreclosed on its security interest, and
continued to operate the business essentially without change. It was undisputed that
the successor was aware of the unfair labor practices “at the time of its foreclosure on
its security interest.”29 The Board rejected the defense that the successor had no
opportunity to insulate itself from the predecessor’s liabilities since there was no sale
of assets.30 It held that a purchase was not a prerequisite for Golden State
successorship, and it found the security interest to be sufficiently analogous to a
purchase.31 Moreover, the Board found no undue hardship since the successor, as a
franchisor, maintained some control over the predecessor’s manner of operation and it
assumed operations in order to safeguard its own investment; thus, it was not a
“totally disinterested party” when it foreclosed.32

Likewise, in Evans Plumbing,33 the Board found Golden State successorship
following foreclosure on a security interest. There, an official of the predecessor
company made a loan to the company that was secured by a recorded security

27 In this regard, there was no hiatus in operations and R&S’s work force consisted
mostly of former Rogan Brothers employees. Its drivers and helpers earned the
same pay, performed the same work, reported to the same yard, used the same
trucks, worked under the same manager, and serviced mainly the same customers.
28 232 NLRB 312.
29 Id. at 314.
30 Id.
31 Id. at 314-15.
32 Id.
33 278 NLRB 67.
his regard, there was no hiatus in operations and R&S’s work force consisted
mostly of former Rogan Brothers employees. Its drivers and helpers earned the
same pay, performed the same work, reported to the same yard, used the same
trucks, worked under the same manager, and serviced mainly the same customers.
28 232 NLRB 312.
29 Id. at 314.
30 Id.
31 Id. at 314-15.
32 Id.
33 278 NLRB 67.

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agreement.34 After the official foreclosed her security interest, she purchased the
company’s assets at the foreclosure sale and used them to capitalize a new
company.35 The Board adopted the administrative law judge’s conclusion that the
newly-formed company was an alter ego or, alternatively, a Golden State successor.36
On appeal, the Eleventh Circuit enforced the successorship determination on the
Board’s alternative ground.37 Moreover, it rejected the successor’s claim that it
lacked notice under Golden State because the unfair labor practices occurred well
after the secured loan was made to the predecessor company.38 Instead, the Court
determined that notice should be judged at the time the successor company was
formed, since that was when the official could choose how to apply her acquired assets
or the sale’s proceeds.39 At that point, the official could have decided not to continue
the business in basically unchanged form, or she could have taken the cost of the
potential unfair labor practice liability into account when buying the assets at the
foreclosure sale.40

Here, R&S can be held responsible for Rogan Brothers’ outstanding unfair labor
practice liabilities because R&S was on notice of the NLRB charge well before it
foreclosed on the loan and formally took over business operations in July and August.
In his capacity as consultant, Spiezio was well aware of the charge in Rogan Bros. I
during the months leading up to the foreclosure
e sale.40

Here, R&S can be held responsible for Rogan Brothers’ outstanding unfair labor
practice liabilities because R&S was on notice of the NLRB charge well before it
foreclosed on the loan and formally took over business operations in July and August.
In his capacity as consultant, Spiezio was well aware of the charge in Rogan Bros. I
during the months leading up to the foreclosure. The earliest proof of his knowledge
is from February, when Spiezio forwarded to the Union the letter Rogan Brothers
sent to the Region requesting withdrawal from the settlement agreement. Although

34 Id.
35 Id. at 68.
36 Id.
37 Evans Services, 810 F.2d 1089, 1091 n.2.
38 Id. at 1093-94.
39 Id. at 1093.
40 Id. at 1093 n.5. See also Darta, Inc., 36-CA-5578, Advice Memorandum dated Apr.
21, 1988, at 2-3 & n.8 (concluding that regional office should pursue compliance from
successor entity, presuming it had knowledge of predecessor’s unfair labor practices
at the time it foreclosed on its sales contracts, because it could have avoided Golden
State liability by either permitting the predecessor to pay off its debt rather than
foreclosing on its security interest or liquidating the predecessor’s assets after
foreclosure).

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there was no sales price to adjust or indemnity clause to negotiate at the time of
foreclosure, R&S could have avoided Golden State liability by liquidating the
foreclosed assets rather than continuing the business in basically unchanged form.
Moreover, as in Ponn, R&S was not a totally disinterested party when it foreclosed,
since Spiezio essentially managed Rogan Brothers’ operations in the months prior to
the foreclosure and R&S assumed those operations in order to protect Spiezio’s
investment. Thus, imposing liability on R&S does not work an unfair hardship,
especially considering that it reaped the benefits of the unfair labor practices by
taking over a business with fewer Union members earning contract wages.41

II
ezio essentially managed Rogan Brothers’ operations in the months prior to
the foreclosure and R&S assumed those operations in order to protect Spiezio’s
investment. Thus, imposing liability on R&S does not work an unfair hardship,
especially considering that it reaped the benefits of the unfair labor practices by
taking over a business with fewer Union members earning contract wages.41

II.
Alternatively, R&S Knew of Charge in Rogan Bros. I Prior to
Formation of an Enforceable Security Agreement

Even assuming that notice must be established such that a creditor-successor
can adjust its security agreement to account for potential liabilities in the same way a
purchaser-successor adjusts a sales contract, R&S should still be treated as a Golden
State successor. Under New York law, security agreements of the type involved in
this case must describe and reasonably identify the collateral in order to be
enforceable.42 Here, Spiezio failed to adequately identify the collateral for the loan
until May, when he filed the UCC financing statement, and there is no evidence that
Spiezio properly identified the collateral so as to establish an enforceable security
interest prior to that time.43 Indeed, Spiezio effectively acknowledged that the UCC
filing would serve as the collateral description in his February 1 letter.
Furthermore, the security agreement executed in January granted Pinnacle a
security interest in the collateral listed in “Exhibit A,” but no such document
apparently exists. Rather, “Schedule A” is handwritten on the May UCC filing, and
the July Surrender of Collateral in Satisfaction of Debt also referred to “Schedule A”
and the May UCC filing in describing the collateral. Thus, the evidence plainly
establishes that May is the earliest point at which Spiezio might have held an
enforceable security interest in Rogan Brothers’ assets.44

41 See Golden State, 414 U.S
is handwritten on the May UCC filing, and
the July Surrender of Collateral in Satisfaction of Debt also referred to “Schedule A”
and the May UCC filing in describing the collateral. Thus, the evidence plainly
establishes that May is the earliest point at which Spiezio might have held an
enforceable security interest in Rogan Brothers’ assets.44

41 See Golden State, 414 U.S. at 171 n.2, 184 (“[T]he successor may benefit from the
unfair labor practices due to a continuing deterrent effect on union activities.”).
42 N.Y. U.C.C. LAW §§ 9-108(a), 9-203(b)(3)(A) (McKinney, Westlaw through 2017).
43 Normally, a UCC financing statement merely serves to “perfect” a security
interest; it is not necessary to create an enforceable security interest. See N.Y.
U.C.C. LAW § 9-310(a).
44 Whether a security agreement that was executed months before the collateral
description was formalized is, in fact, enforceable under New York law is irrelevant

Case 02-CA-040028

- 12 -

Here there was ample opportunity to adjust the loan terms to account for the
unfair labor practice liability stemming from Rogan Bros. I since R&S had notice of
that liability prior to May, as described above. Thus, Spiezio could have negotiated
with Rogan Brothers to increase the collateral necessary for the loan. Even assuming
Rogan Brothers had no more assets that could be used as collateral, e.g., because
other lenders may have had liens on the assets, Spiezio could have protected R&S by
decreasing the amount of the loan while maintaining the same collateral. Indeed,
Spiezio was well aware of this possible approach for reducing his liability, given that
he capped the loan at $800,000 in February. Thus, even though an indemnification
clause would have probably been futile given Rogan Brothers’ precarious financial
position,45 R&S had other ways to effectively insulate itself from the outstanding
unfair labor practice liabilities but failed to do so
ndeed,
Spiezio was well aware of this possible approach for reducing his liability, given that
he capped the loan at $800,000 in February. Thus, even though an indemnification
clause would have probably been futile given Rogan Brothers’ precarious financial
position,45 R&S had other ways to effectively insulate itself from the outstanding
unfair labor practice liabilities but failed to do so. Accordingly, Golden State liability
would impose no undue hardship on R&S.

III. R&S’s Defenses Lack Merit

In relevant part, R&S argues that it should not be held liable as a Golden State
successor based on the doctrines of laches, res judicata, and collateral estoppel. In
addition, it argues that Golden State is inapplicable because Rogan Brothers
continued to operate after the foreclosure and Rogan Brothers has the resources to
remedy the backpay order. As explained below, none of these defenses absolve R&S
of liability for remedying the unfair labor practices found in Rogan Bros. I.

R&S’s contention that it should not be held accountable for Rogan Brothers’
unfair labor practices because the Region waited six years before prosecuting R&S is
without merit. The General Counsel may choose to litigate successor liability at the
compliance stage rather than naming the successor as a respondent in the underlying
unfair labor practice proceeding.46 Here, Rogan Bros. I was fully briefed to the Board

for purposes of determining R&S’s Golden State liability and beyond the scope of this
memorandum.
45 See Lebanite, 346 NLRB at 750.
46 2 Sisters Food Group, Inc., 361 NLRB No. 152, slip op. at 1 (Dec. 16, 2014) (finding
no deprivation of due process rights notwithstanding the region’s failure to include
the Golden State successor in the underlying unfair labor practice proceeding). See
also Golden State, 414 U.S. at 181 (successor had no due process complaint where it
was named in the compliance specification).
at 750.
46 2 Sisters Food Group, Inc., 361 NLRB No. 152, slip op. at 1 (Dec. 16, 2014) (finding
no deprivation of due process rights notwithstanding the region’s failure to include
the Golden State successor in the underlying unfair labor practice proceeding). See
also Golden State, 414 U.S. at 181 (successor had no due process complaint where it
was named in the compliance specification).

Case 02-CA-040028

- 13 -

prior to R&S’s takeover of Rogan Brothers’ operations.47 Unfortunately, the Region’s
efforts to secure Rogan Brothers’ compliance with the resulting Board order have
been unsuccessful. Thus, the Region reasonably seeks to hold R&S accountable for
the outstanding unfair labor practice liabilities, and the delay in naming R&S does
not preclude such prosecution under the doctrine of laches. Laches generally does not
apply to the Board as a federal government agency enforcing a public right.48 And
even assuming it did apply, R&S cannot show that it has been prejudiced by the
delay.49 In Rogan Bros. II, R&S extensively litigated the circumstances surrounding
its takeover of Rogan Brothers. Therefore it has no claim that its Golden State
defense would suffer from spoliation of evidence or otherwise.

Likewise, the administrative law judge’s conclusion in Rogan Bros. II that R&S
was not a Burns successor does not bar litigation of R&S’s status as a Golden State
successor, even assuming the Board adopted that conclusion. Burns and Golden State
successorship are separate legal determinations whose analytical factors are not
congruent. They share only one element: continuity of operations.50 Here, the judge’s
ruling on R&S’s status as a Burns successor did not turn on this element. Rather, the
judge found no Burns successorship solely due to the fact that a minority of R&S’s
work force consisted of Union-represented employees
tate
successorship are separate legal determinations whose analytical factors are not
congruent. They share only one element: continuity of operations.50 Here, the judge’s
ruling on R&S’s status as a Burns successor did not turn on this element. Rather, the
judge found no Burns successorship solely due to the fact that a minority of R&S’s
work force consisted of Union-represented employees. Since R&S’s status as a Golden
State successor was not “actually litigated,” nor was there an adverse determination
concerning the continuity of operations after R&S’s takeover, collateral estoppel does
not apply here.51

47 In any event, prosecutorial decisions by regional directors and the General
Counsel are not adjudications and have no preclusive effect on future actions.
O’Dovero v. NLRB, 193 F.3d 532, 536 (D.C. Cir. 1999). Thus, the failure to involve
R&S in the unfair labor practice proceeding would not prevent litigation against it at
a later time.
48 See Roofing, Metal & Heating Associates, 304 NLRB 155, 160 (1991), enforced
mem. sub nom. NLRB v. Roofers Local 30, 975 F.2d 1551 (3d Cir. 1992).
49 See United Electrical Contractors Assn., 347 NLRB 1, 2-3 (2006) (complaint not
barred by laches because General Counsel’s inordinate delay did not cause spoliation
of evidence or otherwise hamper respondent’s defense).
50 See, e.g., Commercial Forgings, 315 NLRB at 165-66.
51 See Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326 n.5 (1979) (“Under the
doctrine of collateral estoppel . . . judgment in the prior suit precludes relitigation of
issues actually litigated and necessary to the outcome of the first action.”).

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Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/NLRB_ADVICE_02-CA-040028. Check the current official text before relying on it. Not legal advice.