Trustees of the Mosaic and Terrazzo Welfare, Pension, Annuity and Vacation Funds et al v. High Performance Floors, Inc. et al
FINDINGS OF FACT AND CONCLUSIONS OF LAW for bench trial that was held October 5, 6, and 18, 2016. For the reasons described more fully in the attached Memorandum & Order the Court concludes as a matter of law that plaintiffs have established that Hig h Performance and HPF were, at all times relevant to this case, alter egos, and that they constituted a single employer. TELEPHONE CONFERENCE will be held on FEBRUARY 22, 2017 at 11:00 AM to discuss remaining aspects of the case. Plaintiffs shall arrange the conference call and dial into chambers at 718-613-2560 when all parties are on the line. Ordered by Magistrate Judge Steven M. Gold on 2/9/2017. (Pronley, Alyssa)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
TRUSTEES OF THE MOSAIC AND
TERRAZZO WELFARE, PENSION,
ANNUITY AND VACATION FUNDS, and
TRUSTEES OF THE BRICKLAYERS &
TROWEL TRADES INTERNATIONAL
- against :
HIGH PERFORMANCE FLOORS, INC., a
New York Corporation, HIGH
PERFORMANCE FLOORS, INC., a New
Jersey Corporation, HPF, INC., 2 MAIN
STREET, L.L.C, and 40 PARK PLACE LLC, :
GOLD, STEVEN M., U.S.M.J.:
Plaintiffs, Trustees of the Mosaic and Terrazzo Welfare, Pension, Annuity and Vacation
Funds and Trustees of the Bricklayers & Trowel Trades International Pension Fund (the
“Funds”), bring this action pursuant to Section 502(a)(3) of the Employee Retirement Income
Security Act of 1974 (“ERISA”), as amended 29 U.S.C. § 1132(a)(3), and Section 3401 of the
Labor Management Relations Act of 1947 (“LMRA”), as amended 29 U.S.C. § 185. Plaintiffs
seek to collect employer contributions they contend are owed to a group of employee benefit
funds for covered work performed by employees of defendant HPF, Inc. (“HPF”).
Defendants High Performance Floors, Inc., a New Jersey corporation, and High
Performance Floors, Inc., a New York corporation (collectively “High Performance”), are
signatories to a collective bargaining agreement (the “CBA”) that requires contributions to the
plaintiff Funds. Plaintiffs contend that HPF is an alter ego of, or single employer with, High
Performance, that the labor performed by HPF is as a result governed by the CBA, and that
contributions to the Funds are therefore due and owing for the covered work performed by HPF
The parties consented to the assignment of this case to a magistrate judge for all purposes
pursuant to 28 U.S.C. § 636(c) and Federal Rule of Civil Procedure 73. Docket Entry 34. A
non-jury trial limited to the question of liability was held over the course of three days in
October 2016. The Court’s findings of fact and conclusions of law pursuant to Federal Rule of
Civil Procedure 52 are set forth in narrative form below. See 9 Moore’s Federal Practice
Plaintiffs are trustees of the Mosaic and Terrazzo Welfare, Pension, Annuity and
Vacation Funds and the Bricklayers and Trowel Trades International Pension Fund. Compl.
¶¶ 4-5, Docket Entry 1. These funds were established pursuant to the terms of collective
bargaining agreements entered into between the Mosaic, Terrazzo and Chemical Product
Decorative Finisher Masons Workers Association Local No. 7 of New York, New Jersey &
Vicinity (“Local 7”) and various employers. Compl. ¶ 14. Local 7 is a union whose members
are tile, marble, and terrazzo workers. Tr. 34:14-16.1
Guy Balzano, the principal of High Performance, founded the company in December
1991. Tr. 361:5-9. High Performance is in the business of floor installation, and its primary
contract is with Stonhard, Inc. (“Stonhard”), a resinous floor vendor that engages companies like
“Tr.” refers to the transcript of the bench trial held on October 5, 6, and 18, 2016. Docket Entries 51-53.
High Performance to install its products. Tr. 361:10-362:9. High Performance is a signatory to
the CBA that requires contributions to the plaintiff Funds for covered work.
The CBA defines covered work as, among other things, various types of tile, ceramic,
and resinous flooring installation performed in specified counties of New York and New Jersey.
Pls.’ Trial Ex. V, at Arts. II and IV. A schedule attached to the CBA provides that, at least from
2009-2010, employers who are signatories were required to contribute $28.06 per hour of
covered work to the plaintiff Funds.2 Pls.’ Trial Ex. V, at 31-32. Balzano testified that he
understood the CBA to require benefit fund contributions for all covered work performed by
High Performance, regardless of whether the owner or general contractor for a particular job
required that the work be performed with union labor. Tr. 383:6-384:9.
The principal of defendant HPF, at least in name, is Harold Sofield, who opened the
company in May of 2012. Tr. 233:8-16. HPF is not a signatory to the CBA. Plaintiffs, though,
contend that HPF was in fact formed by Balzano as a vehicle for performing covered work for
owners or general contractors who did not require union labor, without making the benefit fund
contributions that would otherwise be required by the CBA. Plaintiffs further argue that High
Performance and HPF are alter egos and constitute a single employer, and that they are as a
result jointly and severally liable to pay contributions for covered work, even if that work was
performed through HPF.
The CBA received in evidence covers July 1, 2009 through June 30, 2013, but an attached schedule
provides hourly rate information only through 2010. As noted above, the issue at trial was limited to
whether defendants are liable for covered work performed by HPF, with the amount of any contributions
due for that work, if any, to be determined in a separate proceeding.
Alter Ego Liability
The alter ego doctrine “is designed to defeat attempts to avoid a company’s union
obligations through a sham transaction or technical change in operations.” Local One,
Amalgamated Lithographers of Am. v. Stearns & Beale, Inc., 812 F.2d 763, 772 (2d Cir. 1987).
If entities are determined to be alter egos of each other, “‘then each is bound by the collective
bargaining agreements signed by the other,’ and ‘thereby obligated to honor the pension [and
welfare benefit] contributions terms’ of the agreement.” Plumbers, Pipefitters and Apprentices
Local Union No. 112 Pension, Health and Educational and Apprenticeship Plans v. Mauro’s
Plumbing, Heating and Fire Suppression, Inc. (“Mauro’s Plumbing”), 84 F. Supp. 2d 344, 349
(N.D.N.Y. 2000) (quoting Lihli Fashions Corp., Inc. v. N.L.R.B., 80 F.3d 743, 748 (2d Cir.
1996)). To determine whether two companies are alter egos, courts “focus on commonality of
(i) management, (ii) business purpose, (iii) operations, (iv) equipment, (v) customers, and (vi)
supervision and ownership” between the subject entities. N.Y. State Teamsters Conference Pens.
& Ret. Fund v. Express Servs., Inc., 426 F.3d 640, 649 (2d Cir. 2005), (quoting Newspaper Guild
of N.Y. v. N.L.R.B., 261 F.3d 291, 294 (2d Cir. 2001)); see also Local One Amalgamated
Lithographers of Am., 812 F.2d at 772.
Single Employer Liability
A. Single Employer
The N.L.R.B. developed the single employer doctrine, “which treats two nominally
independent enterprises as a single employer, in order to protect the collective bargaining rights
of employees.” Murray v. Miner, 74 F.3d 402, 404 (2d Cir. 1996). An entity that has signed a
CBA and one that has not will be held jointly and severally liable for the signatory’s obligations
under the CBA if the single employer test is satisfied and the two entities “together  represent
an appropriate employee bargaining unit.” Lihli Fashions Corp., 80 F.3d at 747.
The alter ego and single employer doctrines “are ‘conceptually distinct.’ The focus of the
alter ego doctrine, unlike that of the single employer doctrine, is on ‘the existence of a disguised
continuance or an attempt to avoid the obligations of a collective bargaining agreement through a
sham transaction or technical change in operations.’” Lihli Fashions Corp., 80 F.3d at 748. The
single employer doctrine, in contrast, focuses on determining if the entities “are part of a single
integrated enterprise,” and is “characterized by absence of an arm’s length relationship found
among unintegrated companies.” Id. at 747 (internal quotation marks omitted).
Whether two entities constitute a “single employer” is determined by four factors
enumerated by the Supreme Court: (1) interrelation of operations, (2) common management, (3)
centralized control of labor relations, and (4) common ownership. United Union of Roofers,
Waterproofers, Allied Workers, Local No. 210, AFL-CIO v. A.W. Farrell & Son, Inc. (“United
Union of Roofers”), 2012 WL 4092598, at *9 (W.D.N.Y. Sept. 10, 2012) (citing Radio &
Television Broad. Technicians Local Union 1264 v. Broad. Serv. of Mobile, Inc., 380 U.S. 255,
256 (1965) (per curiam)). See also South Prairie Constr. v. Local No. 627, Intern. Union of
Operating Eng’rs, AFL-CIO, 425 U.S. 800, 802-803 (1976) (per curiam)). The Second Circuit
has held that two additional factors are properly considered as well: (5) use of common office
facilities and equipment and (6) family connections between or among the various enterprises.
United Union of Roofers, Waterproofers, and Allied Workers Local No. 210, AFL-CIO v. A.W.
Farrell & Son, Inc. (“A.W. Farrell & Son, Inc.”), 547 Fed. Appx. 17, 19 (2d Cir. 2013) (quoting
Lihli Fashions Corp., 80 F.3d at 747).
“Ultimately, single employer status depends on all the circumstances of the case;” no one
factor is dispositive and not all factors must be present. Lihli Fashions Corp., 80 F.3d at 747
(quoting N.L.R.B. v. Al Bryant, Inc., 711 F.2d 543, 551 (3d Cir. 1983)). Control of labor
relations, however, is “central.” A.W. Farrell & Son, Inc., 547 Fed. Appx. at 19 (quoting
Murray, 74 F.3d at 404). See also Trs. of Empire State Carpenters v. Dykeman Carpentry, Inc.,
2014 WL 976822, at *3 (E.D.N.Y. Mar. 12, 2014).
B. Single Bargaining Unit
A finding that two entities constitute a single employer is a necessary but not a sufficient
condition for imposing joint and several liability. In addition, the employees of the two entities
must constitute a single bargaining unit. See Brown v. Sandimo Materials, 250 F.3d 120, 128 n.2
(2d Cir. 2001); Lihli Fashions Corp., 80 F.3d at 747-748; Local One Amalgamated
Lithographers of Am., 812 F.2d at 769.
When analyzing whether the employees of two different entities constitute a single
bargaining unit, consideration “shifts from the control, structure and ownership of the
employer to the community of interests of the employees.” Ferrara v. Oakfield Leasing Inc.,
904 F. Supp. 2d 249, 264 (E.D.N.Y. 2012) (quoting Cuyahoga Wrecking Corp. v. Laborers Int’l
Union of North Am., Local Union # 210, 644 F. Supp. 878, 882 (W.D.N.Y. 1986)). Courts “look
for a ‘community of interests’ among the relevant employees, and ‘factors such as bargaining
history, operational integration, geographic proximity, common supervision, similarity in job
function and degree of employee interchange.’” Sandimo Materials, 250 F.3d at 128 n.2
Courts in this district have found that employees comprise a single bargaining unit where
the “contributions sought [were] for the same job classification . . . and for the same type of
work,” Bourgal v. Robco Contracting Enterprises, Ltd., 969 F. Supp. 854, 863 (E.D.N.Y. 1997),
and where that same type of work is performed in the same geographical area, Ferrara, 904 F.
Supp. 2d at 264. A single appropriate bargaining unit may also be found where “the companies
exchanged employees, the working conditions were the same at both companies, and the
employees performed the same job” at both companies. LaBarbera v. C. Volante Corp., 164 F.
Supp. 2d 321, 326 (E.D.N.Y. 2001).
Burden of Proof
Defendants argue that plaintiffs must prove the elements of alter ego and single employer
status by clear and convincing evidence, because each in essence involves an allegation of fraud.
Defendants’ Pretrial Memorandum (“Defs.’ Mem.”) at 7-9, Docket Entry 42. While defendants
concede they have uncovered no Second Circuit case law on the issue, they rely upon a decision
of the Third Circuit holding that because “alter ego is akin to and has elements of fraud,” it
“must be shown by clear and convincing evidence.” See Kaplan v. First Options, 19 F.3d 1503,
1522 (3d Cir. 1994). See also Trustees of Nat. Elevator Industry Pension, Health Benefit and
Educational Funds v. Lutyk, 332 F.3d 188, 194 (3d Cir. 2003) (quoting Kaplan, 19 F.3d at
The precedents on which defendants rely are at least arguably distinguishable, because
each involves the more commonplace question of whether a court should “pierce the corporate
veil” and hold an individual accountable for the debts of a corporation. Although similar, the
alter ego doctrine invoked by plaintiffs here differs from traditional “veil-piercing” analysis in
The parties rely on precedent primarily from New York and New Jersey state and federal courts. While
the CBA does not contain a choice of law provision, it covers work performed in New York and New
Jersey. As is apparent from the analysis set forth in the text below, there is no material difference on the
facts of this case in the precedents from the various jurisdictions invoked by the parties.
that it revolves around the avoidance of obligations imposed by a CBA. See Ret. Plan of the
UNITE HERE Nat’l Ret. Fund v. Kombassan Holdings A.S., 629 F.3d 282, 288 (2d Cir. 2010).
Moreover, precedent from within the Second Circuit suggests that only a preponderance
of the evidence is required to establish alter ego or single employer status. In one case involving
defendants alleged to be both alter egos and a single employer for the purposes of evading union
obligations, a bench trial was held and the court, in rejecting single employer liability, noted that
“plaintiffs have failed to establish by a preponderance of the evidence that RCS is the alter ego
of AWF, or that AWF and RCS constitute a single employer.” United Union of Roofers, 2012
WL 4092598, at *16 (emphasis added). The Second Circuit affirmed, noting in dicta that,
“plaintiffs do not dispute that they bore the [preponderance of the evidence] burden of proof at
trial.” A.W. Farrell & Son, Inc., 547 Fed. App’x. at n.2.
Were I required to decide, I would conclude that plaintiffs may establish alter ego or
single employer status by a preponderance of the evidence. I reach this conclusion because the
public policy concerns underlying ERISA are substantial, leading courts to adopt a “test of alter
ego status [that] is flexible, allowing courts to weigh the circumstances of the individual case.”
Gesualdi v. Juda Constr., Ltd., 2011 WL 5075438, at *8, (S.D.N.Y. Oct. 25, 2011) (quoting
Kombassan Holding A.S., 629 F.3d at 288). This flexibility is available so that courts may
“observe a general federal policy of piercing the corporate veil when necessary” to protect
employee benefits. Kombassan Holding A.S., 629 F.3d at 288 (quotation marks and citations
omitted). Thus, “[c]ourts have without difficulty disregarded form for substance where ERISA’s
effectiveness would otherwise be undermined.” Lowen v. Tower Management, Inc., 829 F.2d
1209, 1220 (2d Cir. 1987). Moreover, when determining either alter ego or single employer
status, no one factor is dispositive, and not all factors must be present. See Brown v. Daikin Am.
Inc., 756 F.3d 219, 227 (2d Cir. 2014) (citing Murray, 74 F.3d at 404 with respect to single
employer); Mauro’s Plumbing, 84 F. Supp. 2d at 351 (citing Lihli Fashions Corp., 80 F.3d at
746 with respect to alter ego).
These precedents suggest that is proper to consider all of the relevant circumstances in a
particular case and that strict application of a clear and convincing standard of proof would be
inconsistent with the flexibility afforded to courts to ensure that obligation imposed by ERISA
are not evaded. However, the burden of proof question need not be resolved here because, as
discussed below, plaintiffs have met their burden under either standard.
Having heard and considered the evidence at trial, I now set forth my findings of fact
with respect to whether High Performance and HPF are properly considered alter egos of each
other and a single employer. Although alter ego and single employer status are often analyzed
separately, the evidence at trial regarding the relevant factors overlaps, and I accordingly discuss
them together below. See Bourgal, 969 F. Supp. at 863 (analyzing alter ego and single employer
As a preliminary matter, I note that I found Cesar Albuquerque, a witness called by
plaintiffs and a former High Performance and HPF employee who now works for an unrelated
company, to be particularly credible. I found Albuquerque credible based upon his demeanor,
his lack of interest in the outcome of the litigation, and the consistency between his testimony
and other reliable evidence in the case. In contrast, I found much of the testimony of Balzano
and Sofield not to be credible. I reach this conclusion in large part because some of their
testimony was illogical and some was internally inconsistent or contradicted by other more
persuasive evidence. Moreover, although some of the most sharply disputed testimony offered
by Sofield and Balzano could easily have been corroborated with other evidence were it true, no
corroborating evidence was presented by defendants at trial.4
Formation of HPF
Although not explicitly enumerated by courts as an element of alter ego or single
employer status, the circumstances under which HPF was formed are highly relevant. Those
circumstances support plaintiffs’ alter ego and single employer claims.
It is undisputed that both High Performance and HPF were Stonhard subcontractors.
While some contracts for the installation of Stonhard flooring products require union labor,
others do not. Defs.’ Mem. at 4-5 and 12. The gist of plaintiffs’ argument in this case is that
Balzano formed HPF to perform non-union Stonhard work without meeting the requirements of
Plaintiffs claim that, even before HPF was formed, Balzano attempted to flout his
obligations to the Funds by performing covered work through an alter ego called Metro Floors,
Inc. (“Metro Floors”). Indeed, plaintiffs commenced a prior action against High Performance
and Metro Floors that was discontinued after the parties reached a settlement. Trustees of the
Mosaic and Terrazzo Welfare, Pension, Annuity, and Vacation Funds v. High Performance
Floors, Inc., No. 11-CV-4897 (SLT) (SMG). HPF opened and was incorporated in May 2012,
not long after the time that Metro Floors closed. Tr. 106:16-107:2; 233:15-16; 253:6-10. From
that point forward, Stonhard jobs for owners or general contractors who did not require union
labor were performed by HPF, and the workers – often, as discussed below, individuals who
were also employed by High Performance – were paid through HPF. Tr. 106:20-22. HPF closed
in 2015 at about the time this action was commenced. Tr. 252:15-253:8.
The testimony of the other witnesses cited in the text was largely undisputed.
HPF was founded by Harold Sofield. Balzano and Sofield grew up together and have
been friends for more than thirty years. Tr. 231:7-11. Nevertheless, and despite the fact that
Sofield’s company would proceed to become a Stonhard subcontractor, Sofield testified that he
did not consult Balzano before opening the company, and Balzano testified that he did not know
that HPF would be performing Stonhard work until sometime after it began doing so. Tr. 242:310; 394:20-395:6.
It is difficult to credit Sofield’s testimony that he and Balzano did not discuss forming
HPF before the firm was opened for several reasons. First, of course, is that the two had a close
relationship, and Sofield was apparently planning to have HPF do precisely the sort of work
Balzano had been performing through High Performance for some time. Moreover, it is
undisputed that HPF was incorporated by an accountant named Steven Meglio, who was the
accountant for High Performance. Tr. 398:13-22. While Balzano knew Meglio, Sofield did not.
Tr. 249:13-25. Indeed, although Sofield used a different accountant for his other company –
someone known to him for more than 20 years – it was Balzano’s accountant who incorporated
HPF. Tr. 246:24-247:10.
The similar names of the two companies is another indication that Balzano was involved
when HPF was formed. Balzano testified that, as the principal of High Performance, he often
answers his cell phone “HPF” and has been referring to High Performance by that name since
1992. Tr. 396:3-397:14. Balzano also acknowledged that at least one of his customers confused
HPF and High Performance when issuing checks for payment. Tr. 413:23-415:7. When Sofield
was asked how he came to name his company HPF, he offered a confusing explanation that
lacked credibility. Tr. 238:2-242:2. Moreover, and despite the confusion caused when Sofield
named his company with an acronym regularly used by Balzano, Balzano apparently never asked
his childhood friend to change the name of his newly formed business.
Based upon the evidence described above, I find that Balzano was involved in the
formation of HPF and that HPF’s name was selected purposefully so that the company would be
perceived as connected to High Performance by Stonhard and customers seeking to have its
resinous flooring products installed. This evidence supports a finding that HPF and High
Performance were alter egos and functioned as a single employer.
Two entities may be found to have a common business purpose when, for example, the
principal work they perform is the same, particularly when that work is performed in the same
geographic area. See Bd. of Trs. of the Heat & Frost Insulators Local No. 33 Pension Fund v.
D&N Insulation Co., 2015 WL 5121458, at *3 (D. Conn. Aug. 31, 2015); Castaldi v. River Ave.
Contracting Corp., 2015 WL 3929691, at *5 (S.D.N.Y. June 20, 2015); Jacobson v. Metro.
Switchboard Co., 2007 WL 1774911, at *6 (E.D.N.Y. June 18, 2007); Mauro’s Plumbing, 84 F.
Supp. 2d at 351. Minor distinctions in the work performed are not dispositive; thus,
differentiating among entities by pointing out that one performs union work and the other does
not will not defeat a finding of common business purpose. See Mauro’s Plumbing, 84 F. Supp.
2d at 350. That one entity performs a type of job or project that its alleged alter ego does not is
likewise insufficient to uncouple companies with an otherwise common business purpose. See
D&N Insulation Co., 2015 WL 5121458, at *3, *7.
Here, High Performance and HPF installed chemical floor coverings, typically with
products produced and distributed by the same commercial vendor, Stonhard. Defendants
attempt to argue that HPF did mostly “construction” or “demolition” work, and that its Stonhard
work was not its primary business. Tr. 233:24-234:24. However, it is clear from the evidence
presented at trial that HPF did the same Stonhard work as High Performance a large percentage
of the time, even if not exclusively. Sofield testified that HPF prepared concrete floors, installed
resinous flooring, and used products made by Stonhard––just as High Performance did. Tr.
236:22-237:8. HPF reported on its income tax return that its primary business was construction
and that its principal product was resinous floors. Tr. 236:14-18. Defendants did not call a
single HPF employee to testify that the company’s work primarily involved other types of work;
presumably, if that were so, employees who performed these other types of work would have
been readily available as trial witnesses. In contrast, Cesar Albuquerque, a former HPF
employee, testified that the jobs he did for High Performance and HPF involved the same type of
work and that he never performed demolition work while working for HPF. Tr. 111:6-25.
Based upon the evidence described above, I find that HPF and High Performance shared
a common business purpose. Any demolition or construction work HPF may have performed
was irregular and insufficient to support a contrary finding. See D&N Insulation Co., 2015 WL
5121458, at *3, *7.
Management, Supervision, and Ownership
Two companies may be found to be alter egos for purposes of ERISA or a single
employer under the LMRA when the same individuals are involved in the ownership,
management, and supervision of the entities. See Castaldi, 2015 WL 3929691, at *3; Mauro’s
Plumbing, 84 F. Supp. 2d at 349-350. Alter ego or single employer status may also be found
where distinct entities share employees. See N.Y. Dist. Council of Carpenters Pension Fund v.
Perimeter Interiors, Inc., 657 F. Supp. 2d 410, 421 (S.D.N.Y. 2009); Mauro’s Plumbing, 84 F.
Supp. 2d at 349-350.
According to Sofield, HPF was located at 2 Main Street, Ridgefield Park, New Jersey
07660. Tr. 245:2-3; Defs.’ Trial Ex. HPF 2, Certificate of Dissolution of HPF, Inc., at 1.
Balzano testified that High Performance was located at 40 Park Place in Lodi, New Jersey. Tr.
365:20-22. Albuquerque, the former employee called by plaintiffs, testified that employees of
both HPF and High Performance worked out of the same location at 40 Park Place. Tr. 103:212. Defendants did not call any employees to testify that they worked for HPF out of the Main
The ownership of 2 Main Street is further evidence of the interlocking relationship
between High Performance and HPF, and between Balzano and Sofield. The building is owned
by 2 Main Street LLC, which is in turn owned in equal thirds by Sofield, Balzano, and Jeffrey
Castaldo, Balzano’s brother-in-law. Tr. 230:5-24; 336:7-15. Although every other commercial
tenant at the 2 Main Street building, including another company owned by Sofield called Sofield
Manufacturing, paid rent to the LLC, HPF did not. Tr. 245:2-11; 393:15-25. This undisputed
fact is some corroboration of Albuquerque’s testimony that HPF did not actually operate there.
Payrolls from the defendant companies demonstrate that the same individuals worked for
both HPF and High Performance simultaneously, including long-time High Performance
supervisors and foremen. A payroll audit of High Performance and HPF conducted on plaintiffs’
behalf for the periods of January 1, 2012 through December 31, 2014 and July 1, 2012 through
June 30, 2015, respectively, revealed that some employees worked for both companies at the
same time.5 Pls.’ Trial Ex. A, High Performance Floors Audit Report; Pls.’ Trial Ex. B, HPF
Audit Report. For example, individuals such as Albuquerque, Claueis Alves, Vinnicius
Andrade, and Frederico Cabral, as well as several others, worked for both High Performance and
The reports were entered into evidence at trial for the limited purpose of identifying defendants’
employees and not to prove the amount of any contributions owed. Tr. 50:17-22.
HPF during the same general time frame during 2012 and 2013. Tr. 57:6-15; Pls.’ Trial Ex. A, at
0029; Pls.’ Trial Ex. B, at 0057. The auditor called as a witness by plaintiffs estimated that HPF
and High Performance shared approximately twelve employees during 2013. Tr. 57:16-18.
Some employees worked for both High Performance and HPF during a single week. For
example, hours are recorded for Albuquerque, Adan Gomez, Diego DaSilva, and Jorge Zamora
in the payroll records of both High Performance and HPF for the pay period of August 31, 2012
to September 6, 2012. Pls.’ Trial Ex. C, Payroll, at 00098-00101 (showing employees of High
Performance Floors); Pls.’ Trial Ex. D, Payroll, at 01009-01012 (showing employees of HPF).
As another example, Zamora worked 39 hours for High Performance and 10.5 hours for HPF
during the week of March 27, 2015. Pls.’ Trial Ex. U, HPF, Inc. Payroll Summary, at 00980;
Pls.’ Trial Ex. Q, High Performance Floors Payroll Summary, at 00160. During that same week,
Amancio Souza worked 39 hours for High Performance and 40 hours for HPF. Pls.’ Trial Ex. U,
at 00980; Pls.’ Trial Ex. Q, at 00160. Claueis Alves worked 43.5 hours for High Performance
and 53.5 hours for HPF during the pay period from April 10 through April 16, 2015, and Elton
Neto worked 40.5 hours for High Performance and 17.5 hours for HPF that same week. Pls.’
Trial Ex. U, at 00965; Pls.’ Trial Ex. Q, at 00182. Interestingly, during that very same week,
Frederico Carvalho Martins, Josafa Souza, Alves, and Amancio Souza each worked a total of
precisely 97 hours at High Performance and HPF, or just HPF. Pls.’ Trial Ex. U, at 00965; Pls.’
Trial Ex. Q, at 00182; Tr. 423:14-424:13. This week fell during the month that, according to
Balzano, HPF subcontracted work to High Performance for the “Route 17 Bergen Mall” job. Tr.
422:1-3; 415:13-416:21. The similarity in hours worked suggests that all of the employees were
working on the same project and reporting their hours to and getting paid by both High
Performance and HPF at the same time, thus indicating centralized control over a common
Defendants attempt to explain away the significance of these shared employees by
suggesting that workers involved in flooring installation and construction work do not generally
work consistently for one company but instead move from employer to employer to obtain
steady work. Defs.’ Mem. at 13. This explanation might be somewhat persuasive if the workers
employed by High Performance and HPF also worked for other construction companies at the
same time. The evidence, however, is to the contrary.
Albuquerque testified that, while employed by High Performance, Metro Floors, and
HPF, he worked only for these entities and did not perform work for any other flooring
companies. Tr. 104:22-105:1; 150:4-15. Albuquerque also said that there was no such thing as
“leaving or coming back” to High Performance or HPF. Tr. 176:23-24. Albuquerque further
stated that, while working for both High Performance and HPF, to him they were “all the same
business,” except that he was paid through High Performance for work on union jobs and
through HPF when the job did not require union labor. Tr. 111:3-10; 176:15-177:9. Adan
Gomez, another former High Performance employee, also testified at trial. Gomez stated that
during the 20 years he worked for Metro Floors, High Performance, and HPF, he never received
a flooring job from a company run by anyone other than Balzano. Tr. 196:5-7. A third former
High Performance employee, Florivaldo Groberio, was called by defendants. Groberio
acknowledged that during the 13 years he worked for High Performance, the only other company
Because the payroll records reflect hours worked on a weekly basis, they do not conclusively prove that
an employee worked for HPF and High Performance on the same day. Given the number of hours
worked, though, it seems highly likely that at least some did. Even arranging for employees to work long
hours for two companies during the same week undoubtedly required close coordination among
supervisors assigning hours.
to give him work was Metro Floors. Tr. 483:11-17; 492:2-15. Defendants did not call anyone
who testified to employment by Metro Floors, High Performance, HPF, and any other companies
during the same period of time. Accordingly, I reject defendants’ suggestion that the overlap in
employees is insignificant because workers seek employment from large numbers of installers
simultaneously, and instead conclude that the substantial overlap in employees strongly supports
a finding of alter ego or single employer status.
Sofield’s lack of involvement, or even familiarity, with the employees of HPF is further
evidence that management and control were centralized in Balzano’s hands. Albuquerque and
Gomez, who worked for Metro Floors, High Performance Floors, and HPF, testified that they
never saw Sofield at a job site, and did not even know anyone by that name. Tr. 125:17-126:1;
203:23-204:7. Albuquerque further testified that, while working for HPF, he reported to
Balzano. Tr. 102:23-103:1. While he never heard of Sofield, Albuquerque saw Balzano on
many job sites, including those for HPF jobs. Tr. 117:12-16; 160:8-18. According to
Albuquerque, he received his paychecks at the same location and in the same manner whether he
was being paid by High Performance or HPF. Tr. 120:5-19. Gomez similarly testified that he
was paid in the same manner regardless of whether he worked for HPF or High Performance,
and indicated that he understood HPF to be Balzano’s company and believed it was located at the
same premises as High Performance. Tr. 195:4-196:17. Albuquerque further testified that one
person – Jacqueline Robertson – handled employment and tax information and other similar
personnel matters for High Performance, HPF, and Metro Floors. Tr. 103:19-104:16. Balzano
acknowledged during his testimony at trial that Robertson works as his office employee at High
Performance and that he has known her for 19 years. Tr. 397:21-398:4.
Strikingly, Sofield testified similarly to Albuquerque and Gomez. Although he claimed
to own HPF, Sofield was not familiar with the company’s payroll records when they were shown
to him during the trial. Tr. 281:4-7. Sofield also acknowledged in his testimony that he never
met many of the employees listed on HPF’s payrolls, did not hand out checks himself, thought
the checks were sometimes mailed and sometimes picked up, and testified that the only reason he
knew employees were paid by HPF was because they were on the payroll list shown to him
during the trial. Tr. 283:8-284:6. Finally, defendants did not call a single employee who
testified to working for HPF under Sofield’s supervision, or being hired, fired, or otherwise
interacting with Sofield as an employee of HPF. Nor did defendants present testimony from a
single owner, contractor, or other HPF customer who had ever worked with or even heard of
Sofield. Even the Stonhard vendor representative called to testify by defendants stated that,
while he was familiar with Balzano, he did not know Sofield. Tr. 508:15-18.
Based upon the evidence described above, I find that High Performance and HPF were
operated and managed by Balzano, and that Balzano supervised the employees of both
companies. I further find that High Performance and HPF shared a substantial number of
employees, and that those employees performed the same type of work for both companies. This
evidence strongly supports a finding of alter ego and single employer status.
Shared assets or finances and shared offices and telephone numbers are standard
indications that companies have common operations. See, e.g., D&N Insulation Co., 2015 WL
5121458, at *8; Castaldi, 2015 WL 3929691, at *1; Mauro’s Plumbing, 84 F. Supp. 2d at 347,
350. Bank records will frequently be relevant, particularly when the entities have made
payments to each other and on each other’s behalf. See Mauro’s Plumbing, 84 F. Supp. 2d at
The evidence demonstrates that High Performance and HPF both operated out of the
same location at 40 Park Place. As discussed above, the two employees who testified in
plaintiffs’ case stated that they worked out of the same location at 40 Park Place whether
performing jobs for High Performance or HPF. Also as discussed above, although Sofield
claimed that HPF was located at 2 Main Street, it – unlike every other tenant on the premises –
paid no rent to operate there. Albuquerque testified that he had never even been to the 2 Main
Street location. Tr. 125:11-13.
In addition, High Performance and HPF’s payroll practices were closely linked.
Employees received their paychecks, whether from High Performance or HPF, on the same
payday, typically in the same location. Furthermore, employees reported their hours worked for
either company to Robertson every Monday on the same timesheets. Tr. 123:3-11; 125:6-7.
The evidence also suggests that Balzano had at least some control over HPF’s bank
account. Although Sofield testified that Balzano did not have access to HPF’s bank account or
checkbook, he also acknowledged that Balzano signed at least two checks from that account. Tr.
256:3-22. One was a paycheck for $1,041.29 from HPF made payable to Caique Silva and
signed by Balzano. Pls.’ Trial Ex. J, HPF, Inc. Checks, at 00085. Another was a check made
payable to Total Wines for $673.65, said by Sofield to be for liquor that he asked Balzano to pick
up for him at a time when Balzano just happened to have an unsigned HPF check in his
possession. Pls.’ Trial Ex. J, at 00390; Tr. 343:22-344:6. Sofield did not explain how Balzano
came to have a blank HPF check with him, but suggested it was possible Robertson, the office
employee at High Performance, had access to the HPF checkbook because she “helped [him]
sometimes.” Tr. 256:23-257:1.
The evidence indicates that, at least on occasion, checks from customers made out to
High Performance or HPF were deposited into the other’s account. For example, checks from
Ironbo Inc. on July 2, 2012 for $1,800, from Hackensack University Medical Center on July 3,
2012 for $1,845, and from Chelsea Doggie Day Care on July 11, 2012 for $600 were all made
out to High Performance Floors, but were deposited into HPF’s bank account. Pls.’ Trial Ex. I,
HPF, Inc. Deposits, at 00785-00787; Tr. 264:12-267:13. These checks made out to High
Performance were the first and only deposits made into HPF’s bank account during the month in
which it opened. Tr. 267:15-25. Furthermore, the address that was included on two of these
checks was 40 Park Place, where High Performance is located. Pls.’ Trial Ex. I at 00785, 00786;
Likewise, checks from Maadava Sugar Maple LLC on October 5, 2012 for $6,350 and
from Stonhard on June 3, 2013 for $12,852.50, one indicating HPF’s address as 40 Park Place
and the other indicating HPF’s address as 2 Main Street, were both made out to HPF but
deposited into High Performance’s bank account. Pls.’ Trial Ex. N, High Performance Floors
Deposits, at 000856, 000876. Also, four checks from Shawmut Woodworking and Supply, two
that were made out to HPF at 2 Main Street on May 19 and May 30, 2015 for $44,539.87 and
$41,150.25, respectively, one that was made out to High Performance at 40 Park Place on
September 8, 2015 for $4,500, and a fourth check made out to HPF, again at the 2 Main Street
address, on December 1, 2015 for $10,755 and this time endorsed “HPF,” were all deposited into
High Performance’s bank account. Pls.’ Trial Ex. N, at 001033, 001051, 0001063, 001095001096.
Balzano testified that he would have deposited checks made out to HPF into a High
Performance account only after checking his records to make certain that the payment was
related to a High Performance invoice. Tr. 433:25-434:12. While that may be so, the payments
described above demonstrate common control over payments made to HPF and High
Performance, and suggest that customers either confused the two companies or believed they
should send checks to Balzano whether they were invoiced by High Performance or HPF.
Indeed, as discussed above, had the confusion reflected by these payments come as a surprise to
Balzano, it seems likely he would have asked his long-time friend Sofield to change the newer
company’s similar name. However, there is no evidence any such request was made or that the
topic was even discussed.
Payments were also made from HPF to High Performance floors for “outside services”
on two occasions, once for $19,000 on March 30, 2015, and once for $10,000 on April 27, 2015.
Pls.’ Trial Ex. K, HPF, Inc. General Ledger, at 01888; Tr. 279:15-280:15. Sofield testified that
these payments were probably for union jobs where High Performance served as a subcontractor
for HPF because HPF did not do any union work. Tr. 288:9-17. Balzano similarly testified that
these payments were made in connection with a subcontract High Performance entered into with
HPF on the “Route 17 Bergen Mall” job. Tr. 421:8-422:20. Assuming there was a subcontract,
the circumstances under which it was made underscore the close relationship of the two
companies. Balzano, an experienced businessman, testified that there was no written contract
between High Performance and HPF for subcontracted work, and that he simply trusted that HPF
would pay High Performance whatever it was owed. Tr. 478:3-12. Sofield testified that he
could not remember what obligations, if any, HPF had in connection with any subcontract with
High Performance. Tr. 289:1-9. Even apart from this lack of formality and detail in the dealings
between HPF and High Performance, the fact that one company took over a contract originally
awarded to the other is itself an indication of alter ego status. See Castaldi, 2015 WL 3929691,
Based upon the evidence described above, I find that High Performance and HPF
operated out of the same location and that their finances were at least to some degree
intermingled. This evidence supports a finding of alter ego and single employer status.
Companies may also be found to be alter egos when they share equipment, tools,
supplies, or other resources in connection with their operations. See, e.g., D&N Insulation Co.,
2015 WL 5121458, at *3, *9 (finding alter ego status because, among other things, both
companies used the same vehicles in connection with their operations); Castaldi, 2015 WL
3929691, at *4-5 (finding alter ego status where entities used same suppliers and leased
equipment from the same source); Jacobson, 2007 WL 1774911, at *4, *6 (finding alter ego
status based, among other things, on use of same vehicles used to make deliveries); Bourgal, 969
F. Supp. at 857, 863 (finding alter ego status because, among other things, entities used the same
trucks bearing different names depending on the job being performed).
The evidence at trial demonstrated that High Performance and HPF employees shared
equipment, tools, supplies, and resources. Albuquerque testified that for any project, whether
performed under the name Metro Floors, High Performance, or HPF, the employees would use
the same machines and equipment taken from the same warehouse. Tr. 110:3-20. Albuquerque
also said that at least some of the vans workers used said “HPF,” most of them said “Concrete
Surface Prep,” and others said “High Performance Floors” and “Stonhard”; furthermore, the vans
and trucks were used interchangeably, without regard to whether High Performance or HPF was
performing the job. Tr. 126:5-23; 146:19-21; 147:6-8. Gomez testified that the van he used for
jobs was given to him for that purpose by Balzano. Tr. 194:2-15. Employees also received
separate shirts for the separate companies – some that said “HPF” and some that said “High
Performance” or “Stonhard” – but it did not matter which jobs they wore these shirts to. Tr.
128:18-19. Furthermore, employees received these shirts only from Balzano, and they also
received personal protection equipment only from him. Tr. 128:18-129:6. Defendants did not
call any employee to testify that High Performance and HPF each had its own vans, tools, or
other equipment, nor did they call any HPF employee who described obtaining vehicles,
equipment or clothing from Sofield.
Further evidence that Sofield was not involved in managing HPF was developed in this
context as well. Sofield acknowledged in his testimony that he did not know whether the HPF
workers had vans themselves, that he assumed workers used their own cars to travel and carry
tools and equipment to jobs, and that he did not know much about some of the large equipment
required to install resinous floors. Tr. 300:6-301:17. Sofield further stated that, although HPF at
one time employed more than 20 workers, it did not own or provide any vehicles for them to get
to and from job locations with heavy equipment. Tr. 299:22-300:5. Albuquerque testified,
however, that the flooring jobs frequently required workers to use a scarifier, which weighs
about 300 pounds, or a shot blaster, which weighs approximately 1,000 pounds. Tr. 108:2-109:5.
It is difficult to imagine that Sofield could have managed a floor installation company without
knowing about the equipment required to do the work or having any idea how his employees
transported such heavy equipment to and from job sites.
Sofield’s testimony about how HPF acquired equipment to perform jobs was similarly
lacking in credibility. Apparently in an effort to rebut the evidence presented earlier by plaintiffs
that HPF shared equipment with High Performance, Sofield claimed that he leased equipment for
HPF and met other expenses with his own funds, paying either in cash or by credit card, but did
not keep track of those expenses so they could be deducted from HPF’s income for tax purposes
or otherwise recorded. Tr. 292:19-293:8. Yet defendants provided no receipts, or even a single
credit card statement, to corroborate this claim, despite knowing it was sharply disputed. Sofield
also testified that he never took a salary and did not gain anything financially from HPF during
the three years it was operating. Tr. 253:14-19. It is difficult to imagine that Sofield took no
salary, yet incurred substantial expenses without seeking reimbursement.
Based on the evidence described above, I find that employees acquired vans, tools, and
equipment from Balzano at High Performance’s warehouse and used it without regard to whether
the job was being performed by High Performance or HPF. This evidence further supports a
finding of alter ego and single employer status.
Sharing of clients and customers is also indicative of an alter ego relationship. Castaldi,
2015 WL 3929691, at *4 (finding alter ego status based in part on common vendors and at least
one long-time customer in common); Jacobson, 2007 WL 1774911, at *6 (finding alter ego
status based, in part, on the two companies servicing substantially the same customers); Mauro’s
Plumbing, 84 F. Supp. 2d at 348 (finding alter ego status based in part on companies sharing
20% of the same customers); Bourgal, 969 F. Supp. at 863 (finding alter ego status based in part
on sharing of “at least some of the same customers”).
There is little evidence indicating that High Performance and HPF regularly shared
customers, although, as discussed above, it seems they worked on the same job at least on
occasion. The evidence is undisputed, though, that both worked for the same vendor, Stonhard.
High Performance worked almost exclusively for Stonhard, and installed other types of floors
only in the rare circumstance that Stonhard could not do the job. Tr. 387:2-9. HPF did Stonhard
installations as well. The evidence suggests that HPF’s Stonhard installation work was the result
of Balzano’s relationship with Stonhard and was performed under Balzano’s supervision with the
same equipment and employees used by High Performance. Sofield testified that HPF had an
installer agreement with Stonhard. Tr. 299:5-7. As noted above, though, the Stonhard vendor
representative called to testify by defendants stated that, while he was familiar with Balzano, he
did not know Sofield. Tr. 508:15-18. Sofield also acknowledged that he had no experience
installing Stonhard’s products, he was never trained in how to install Stonhard’s products, and he
did not even know exactly what kind of work installing Stonhard products involved. Tr. 298:120. The evidence at trial demonstrated that HPF was able to perform Stonhard installation work
only because it hired High Performance employees who had experience with it. Tr. 298:21299:4; 341:5-10. This evidence, too, supports a finding of alter ego and single employer status.
Intent to Evade Union Obligations
Anti-union animus is relevant to determining alter ego status and may even provide a
sufficient basis for concluding that two entities are alter egos; nevertheless, a showing of antiunion animus is not required. D&N Insulation Co., 2015 WL 5121458, at *6; Goodman Piping
Prods., Inc. v. N.L.R.B., 741 F.2d 10, 12 (2d Cir. 1984). Thus, even when a second company is
formed with innocent intentions, overlapping management, supervision, and ownership may
support a finding that two entities are alter egos. Bricklayers and Allied Craftworkers Local 2 v.
C.G. Yantuch, Inc., 316 F. Supp. 2d 130, 144 n.10 (N.D.N.Y. 2003).
Here, though, there is compelling evidence of anti-union animus. Balzano would have
had little reason to arrange for his friend Sofield to form HPF unless he sought a vehicle through
which he could perform Stonhard jobs that did not require union labor without satisfying the
requirements of the CBA. Accordingly, and based upon the evidence discussed above, I find that
High Performance and HPF worked together to evade High Performance’s obligation to remit
contributions to the plaintiff Funds.
VIII. Remaining Single Employer Factors
The cases setting forth the standard for determining whether two entities are a single
employer identify two factors not explicitly enumerated in the alter ego case law: centralized
control of labor relations and family connections between or among the various enterprises.
Although these factors are not discussed above in these specific terms, the evidence already set
forth supports a finding in plaintiffs’ favor with respect to them.
Although no factor determines single employer status, centralized control of labor
relations “is the central concern.” Daikin Am. Inc., 756 F.3d at 227 (citing Murray, 74 F.3d at
404). As discussed above, the evidence demonstrated that High Performance and HPF had at
least some employees in common, and that these employees did not work for any other company
while employed by High Performance and HPF. The employees worked out of the same
location, used the same vans and equipment, reported their hours on the same timesheets, and
knew only Balzano as the owner and manager of both companies. Albuquerque testified that
Balzano was his boss at High Performance and at HPF. Tr. 102:23-24. Gomez similarly
testified that he received instructions about HPF jobs from Balzano. Tr. 196:14-17. Other than
some self-serving testimony of Sofield that I do not credit, defendants presented no evidence that
Sofield ever supervised HPF employees, provided them with equipment or instruction, arranged
to pay them, or even knew who they were.
Although Balzano and Sofield are not related, they have known each other since
childhood and have shared a friendship lasting more than 30 years. They owned a building
together through their company, 2 Main Street LLC, demonstrating that they had a close business
relationship as well. In short, it is clear from the evidence at trial that the entities did not
function at arm’s length, and that they constituted a single employer.
Single Bargaining Unit
As discussed above, employees comprise a single bargaining unit when they perform the
same work, under the same conditions, in the same geographic area. Here, as the evidence
discussed above demonstrates, the employees of HPF and High Performance overlapped, and the
nature of their work was similar, if not identical. I accordingly find that the employees of HPF
and High Performance comprise a single bargaining unit.
The evidence recounted above demonstrates that High Performance and HPF shared
management, employees, operations, and equipment, and that they had a common business
purpose. The control of labor relations of both High Performance and HPF was centralized, the
owner of High Performance had a close personal connection to the owner of HPF, and their
employees constituted a single bargaining unit.
For all these reasons, I conclude as a matter of law that plaintiffs have established that
High Performance and HPF were, at all times relevant to this case, alter egos, and that they
constituted a single employer. Even if clear and convincing evidence were required, I would
reach the same conclusion. Defendants are therefore jointly and severally liable for contributions
due and owing for covered work performed by HPF.
STEVEN M. GOLD
United States Magistrate Judge
Brooklyn, New York
February 9, 2017
U:\#AMP 2016-2017\Trustees of the Mosaic and Terrazzo ... v. High Performance\Findings of Fact and Conclusions of Law
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