National Labor Relations Board v. Ace Masonry Inc.
700 F. App'x 19
| 2d Cir. | 2017Background
- Ace Masonry, a construction contractor, had collective bargaining agreements (CBAs) with unions. Principals formed Bella Masonry LLC with substantially the same ownership, management, operations, customers, projects, and equipment.
- The NLRB found Ace and Bella to be alter egos and held them liable for unpaid amounts due under the CBAs. The Second Circuit previously enforced that portion of the Board’s order.
- The Board later pierced the corporate veil and found members of the Bellavigna family personally liable for $140,082.16 in union and employee payments, based on personal appropriation of company funds to evade CBA obligations.
- Lisa Bellavigna made multiple near-$10,000 cash withdrawals from Ace’s accounts, admitted an intent to evade benefit payments, but did not show the funds paid subcontractors or otherwise accounted for.
- Robert Bellavigna was found to have actively participated in company operations and misconduct (not merely passively receiving commingled funds).
- Domenick Bellavigna asserted a due-process challenge to his fraudulent-conveyance-based personal liability but did not raise that argument before the Board.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Board’s order piercing the corporate veil and imposing joint and several liability should be enforced | Board: Ace and Bella are alter egos; Bellavignas personally liable for evading CBA obligations | Respondents: challenge factual and legal bases for veil-piercing and personal liability | Court enforced the Board’s order and granted NLRB’s petition; denied respondents’ cross-petition |
| Lisa’s defense that NY Lien Law (Sect. 71) required withdrawals to pay subcontractors, excusing federal liability | Lisa: Withdrawals were mandated to prioritize subcontractor payments under state lien law | NLRB: No evidence funds went to subcontractors; state lien law does not relieve federal obligation to pay wages/contributions | Court rejected Lisa’s defense: no proof funds paid subcontractors and state-law priority does not negate federal obligations |
| Robert’s claim that he was only passively involved and not subject to veil-piercing | Robert: Any involvement was attributable to Lisa; he was passive and merely received commingled property | NLRB: Evidence showed active participation in operations and misconduct | Court held substantial evidence supported Robert’s active role and personal liability |
| Domenick’s claim that his due-process rights were violated in applying fraudulent-conveyance theory | Domenick: Due-process violation warrants appellate review of his personal liability | NLRB: Issue was not raised before the Board and is forfeited | Court held the due-process claim was unpreserved and rejected it; appellate review requires prior Board objection |
Key Cases Cited
- Interworks Sys. Inc. v. Merchant Fin. Corp., 604 F.3d 692 (2d Cir. 2010) (obligations imposed by state lien law do not conflict with federal tax obligations)
- NLRB v. Consol. Bus. Transit, Inc., 577 F.3d 467 (2d Cir. 2009) (summary enforcement principles for NLRB orders)
- NLRB v. Ferguson Elec. Co., 242 F.3d 426 (2d Cir. 2001) (issues must be raised before the Board to preserve appellate review)
- International Ladies’ Garment Workers’ Union v. Quality Mfg. Co., 420 U.S. 276 (U.S. 1975) (same principle on forfeiture of procedural objections to Board orders)