Operations In Fiscal Year 1988 - National Labor Relations Board

Special and Miscellaneous Litigation 169discharged the backpay obligations of E.G. Sprinkler Corp. Thebankruptcy court additionally decided that, for the purposes oflabor law, there was no alter ego relationship between GASCand the other companies. On appeal, the District Court for theWestern District of New York agreed that the bankruptcy courthad no jurisdiction to hear the claims of GASC. The districtcourt further held that the bankruptcy court had erred in concludingthat GASC was the after-acquired property of Goodmanand, accordingly, the district court ruled that GASC was notprotected by Goodman's discharge. The court relied on NLRB v.Better Building Supply Corp." and NLRB v. Edward CooperPainting," to conclude that a discharged Chapter 7 debtor's interestin an entity found to be an alter ego of a company guiltyof an unfair labor practice does not shield the alter ego from liability.The district court affirmed the lower court's assertion ofjurisdiction to determine whether GASC was the alter ego of theother corporations, finding that issue collateral to the questionraised concerning the scope of Goodman's personal discharge.The district court concluded, however, that the record beforethe court was inadequate, and remanded for additional evidenceconcerning the alter ego issue. Finally, the district court affirmedthe bankruptcy court's fmding that the prepetition recognitionand bargaining obligations ordered by the Board in E G. SprinklerCorp. were dischargeable obligations as to Goodman, butheld that Goodman could nonetheless be liable to bargain withthe union for a new contract and for any postpetition monetaryobligations if he is found to be an alter ego of the predecessorcompany.17D. Litigation Involving the Freedom of Information ActThree notable decisions were issued applying the Freedom ofInformation Act (FOIA) this year. In Electrical Workers IBEWLocal 3 v. NLRB," the union filed a number of representationpetitions under Section 9(c) of the Act, all of which were dismissedby the Board's Regional Director. Subsequently, theUnion filed a FOIA request for all documents relating to the investigationand decision by the Regional Director. The Board refusedto turn over many of the requested materials and the unionfiled suit in district court. The district court observed that Exemption5 protected documents "routinely" or "normally" privilegedin the civil discovery context and that courts recognizethree types of privilege: deliberative process, attorney workproduct, and attorney-client confidences. For the deliberative"Supra, fn. 13."804 F.2d 934 (6th dr. 1986).17 This decision has been appealed and reversed in part by the Second Circuit in NLRB v. Goodman,131 LRAM 2129 (1989).18 126 LRAM 2743 (S.D.N.Y.), affd. 845 F.2d 1177 (2d dr.).