either directly for those materials it purchases or indirectly by using Duguid's overage, provides little support, if any, for the claim that C & K is Duguid's alter ego. There is no indication in the record that Duguid has the right to exercise any control over the sources to which C & K looks for the materials of its trade. See Better Building Supply Corp., 259 N.L.R.B. 469, 476 (1981).
7. Same Customers
While acknowledging that C & K acquires residential jobs on its own, the plaintiffs contend that C & K's commercial customers are substantially the same as Duguid's, thus evidencing the alter ego nature of the relationship between the two (Pl. Facts 58-83). According to the plaintiffs, Duguid enters into an agreement with a customer to perform a job, a portion or the whole of which it then assigns to C & K.
Duguid represents to the customer that it will perform the job and ensures that the work is completed to the customer's satisfaction. C & K never bills the customer directly; instead, C & K bills Duguid, which, in turn, bills the customer (Pl. Facts 27, 33, 46-48, 58-83). This arrangement, the plaintiffs assert, enables Duguid and C & K to engage in a "clandestine sharing" of customers.
Review of the summary judgment evidence reveals plaintiffs' theory to be without merit. As set forth earlier in this opinion, the plaintiffs have failed to controvert in substance Duguid's assertion that approximately 60% of C & K's business involves individual residential clients (Def. Ex. 2 at para. 3). See supra note 7. When C & K does perform commercial work, the jobs it obtains are generally small repair and finishing work and are referred to C & K on a regular basis from contractors and businesses besides Duguid (Def. Ex. 2 at para. 20; Def. Ex. 1 at para. 13).
To the extent that C & K works on jobs obtained from Duguid, the plaintiffs' characterization of the Duguid/C & K relationship as a "clandestine sharing of customers" borders on the ridiculous. The structure of the contracting relationship between Duguid, its customers, and C & K, and the fact that both Duguid and C & K stood to profit from their relationship, evidences nothing more sinister than a typical contractor/subcontractor relationship.
8. Common Ownership
The plaintiffs concede that neither the Duguid Company nor any of the Duguids have ever owned any financial interest in C & K. As a trustee of the Local 5 Health and Welfare Fund, they allege, William Duguid was "too smart to directly own a financial interest in C & K," opting instead to become a "silent partner" with his "trusted employee," Borecky (Pl. Mem. at 11). Unsupported by any material facts, these contentions are without merit. In the absence of some evidence of actual common ownership, the plaintiffs have failed to satisfy this factor in the alter ego analysis.
This court has engaged in an exhaustive review of the summary judgment evidence submitted by both sides to this litigation. Although some of the evidence presented by the plaintiffs may, if stretched, be said to support their theory that C & K is Duguid's alter ego, or at least present a genuine issue of fact, much of their own evidence belies their allegations, particularly with regard to intent, the critical element of the inquiry. No rational trier of fact could conclude that C & K is the alter ego of Duguid in light of the overwhelming undisputed evidence offered by Duguid to the contrary. See Central States, 902 F.2d at 598. There being no genuine issue remaining for trial on the plaintiffs' alter ego theory, Duguid is entitled to summary judgment on this ground.
B. Duguid and C & K as a Single Employer
Similar to the alter ego theory, the single-employer doctrine treats two ostensibly unintegrated companies as a single employer where the facts reveal them to "comprise an integrated enterprise." Esmark, Inc. v. NLRB, 887 F.2d 739, 753 (7th Cir. 1989); Emsing's Supermarket, 872 F.2d at 1288-89.
Four basic factors are considered in a single-employer analysis: interrelated operations, common management, centralized control of labor relations, and common ownership. No one factor is dispositive. See Iowa Express Distribution, Inc. v. NLRB, 739 F.2d 1305, 1310 (8th Cir.), cert. denied, 469 U.S. 1088, 83 L. Ed. 2d 704, 105 S. Ct. 595 (1984). Having provided little evidence, if any, regarding common ownership, common management and identity of operations in support of their alter ego claim, the plaintiffs' sole hope here is to demonstrate a genuine issue as to whether Duguid and C & K share centralized control of labor relations.
The plaintiffs contend that the centralization of labor relations between Duguid and C & K can be seen in the fact that most of the plasterers hired by Borecky for C & K jobs are Duguid employees. According to the plaintiffs, Duguid controls all terms and conditions of employment with C & K.
These contentions are without merit. While a number of the plasterers Borecky hires for C & K jobs have worked for Duguid, the plaintiffs themselves admit that they were hired because Borecky had become familiar with their work and their personalities as a result of his job as a Duguid foreman (Def. Ex. 2 at para. 37). Moreover, Duguid presents uncontroverted evidence, see supra note 7, demonstrating that a number of plasterers who have worked for Duguid were hired by Borecky to work for C & K on non-Duguid jobs (Def. Ex. 2 at para. 35), and that a number of individuals who have worked for C & K were never employed by Duguid at all (Pl. Ex. 1 at para. 46; Pl. Ex. 2 at para. 38). Finally, the plaintiffs present no evidence to support their claim that Duguid controls the terms and conditions of plasterers' employment with C & K.
Under the totality of the circumstances, the plaintiffs have failed to demonstrate the existence of any genuine issue as to whether Duguid and C & K are a single employer. See Emsing's Supermarket, Inc., 872 F.2d at 1288-89; Esmark, 887 F.2d at 753. Summary judgment is granted to Duguid on this basis as well.
III. Subcontracting to C & K as a Breach of Duguid's Collective Bargaining Agreement
This court has found no genuine issue of material fact as to whether Duguid and C & K were alter egos or a single employer; the undisputed evidence makes clear, as Duguid has contended, that the relationship between the two entities was one of contractor and subcontractor. Neither ERISA nor federal labor law prohibits subcontracting, even though it avoids overtime obligations to the contractor's employees, unless a collective bargaining contract restricts the practice.
Even in the absence of an alter ego or single-employer finding, the plaintiffs contend that this relationship violated Duguid's collective bargaining agreements with Locals 5 and 56, thus entitling them to compensatory damages in the form of the contributions they lost. See Carpenters and Millwrights Health Ben. Trust Fund v. Gardineer Dry Walling Co., 573 F.2d 1172, 1176 (10th Cir. 1978); Kelly R.R. Contractors, 591 F. Supp. at 892.
The plaintiffs contend that by subcontracting work to C & K Duguid violated a number of provisions in the Local 5 collective agreement. Among these are the requirements that Duguid perform all plastering work through its own company and not through any entity in which it has a financial or proprietary interest (Pl. Ex. 3, Art, VIII (a)),
that Duguid contract only with entities that are "fair" to the union (Pl. Ex. 3, Art. IX(a)), that only plasterers qualified by the Local 5 examining board may work as a contractor in Local 5's jurisdiction (Pl. Ex. 3, Art. XIV), that Duguid notify the union of all employment opportunities (Pl. Ex. 3, Art. II), and that contractors not set up their employees as subcontractors of labor alone (Pl. Ex. 3, Art. XII). The plaintiffs contend that the Local 56 collective agreement contains similar restrictions.
Duguid responds that the only arguable restriction on its right to subcontract may be found in Article VIII of the Local 5 collective agreement, which it contends provides in relevant part that a signatory contractor will be bound by the terms of the agreement if it performs plastering work by or through any other entity in which the contractor has a financial or proprietary interest (Pl. Ex. 3, Art. VIII). Because the undisputed evidence indicates that Duguid has no financial or proprietary interest in C & K, however, Duguid asserts that this provision is inapplicable in the instant case. Barring application of Article VIII, Duguid contends, it is entitled to summary judgment.
Neither the collective bargaining agreements on which the plaintiffs sue nor the trust agreements under which they are authorized to do so require that the plaintiffs first submit their subcontracting claim to arbitration. See Pipe Fitters' Welfare Fund, Local Union 597 v. Mosbeck Industrial Equipment, Inc., 856 F.2d 837 (7th Cir. 1988). Like an arbitrator, however, a court asked to interpret a collective bargaining agreement in the first instance must take care to fill in the interstices of that agreement in light of the bargaining history and past practices of the parties.
Having focused their efforts primarily on the alter ego and single-employer issues, neither the plaintiffs nor Duguid have provided the full analysis and background necessary to enable this court to rule on the subcontracting issue at this time. While Article VIII of the Local 5 agreement arguably could be read in its broadest sense as a subcontracting ban, for example, neither side addresses, and the agreement does not seem to indicate, what Duguid's rights were to be in the event of a shortage of qualified labor -- a situation which Duguid has undisputedly averred existed as of 1986. Moreover, while the Local 56 collective bargaining agreement contains, as the plaintiffs contend, similar provisions, these provisions seem to be less comprehensive than those in the Local 5 agreement. These points of difficulty are not exclusive. Rather, they are indicative of the barriers that prevent this court from granting summary judgment at this time to either the plaintiffs or Duguid as to the validity under the Local 5 and 56 agreements of Duguid's actions in subcontracting its plastering work to C & K.
Duguid's motion for summary judgment is granted with regard to the plaintiffs' claim that Duguid and C & K are alter egos or a single employer, and is denied with regard to the plaintiffs' alternative claim that Duguid subcontracted plastering work to C & K in violation of its collective agreements with Locals 5 and 56. The plaintiffs' motion for partial summary judgment is denied in its entirety.