Blattner

ONTARIO LABOUR RELATIONS BOARD
OLRB Case No: 2155-13-R
Labourers' International Union of North America, Ontario Provincial
District Council, Applicant v Pomerleau Ontario Inc., Borea
Construction, and D.H. Blattner & Sons Inc./Blattner Energy Inc.,
Responding Parties
BEFORE: David A. McKee, Vice-Chair
APPEARANCES: L.A. Richmond and B. MacKinnon appearing for the
applicant; James McKeown and Erich Schafer appearing for the
responding party Pomerleau Ontario Inc.; Greg McGinnis and Mehdi
Hassan appearing for the responding party Borea Construction; Jeremy
Schwartz appearing for the responding party D.H. Blattner & Sons
Inc./Blattner Energy Inc.
DECISION OF THE BOARD: May 1, 2015
1. This is an application brought pursuant to the provisions of
subsection 1(4) and section 69 of the Labour Relations Act, 1995, S.O.
1995, c.1, as amended (the “Act”). The Labourers' International Union
of North America, Ontario Provincial District Council (the “Union”)
seeks an order or declaration that the responding parties are one
employer for the purposes of the Act or that there has been a sale of a
business that binds Borea Construction to the Union’s collective
agreements.
2. Borea is a company whose sole business is the construction of
wind farms in Canada. It was originally created by D. H. Blattner &
Sons Inc. (“Blattner”) and Genivar Construction Inc. (“Genivar”). In
2007 Genivar sold its interest in Borea to Pomerleau Eolian Inc.
(“Pomerleau”). Neither Genivar nor Blattner is bound to any collective
agreement in Ontario. Pomerleau (operating as Pomerleau Ontario
Inc.) is bound to collective agreements with the Union in Ontario. The
Union seeks an order or declaration that binds Borea (but not Genivar
or, ultimately, Blattner) to the same collective agreements.
2015CanLII23978(ONLRB)

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3. All of these businesses use more than one corporate entity to
carry on their business, and each group of companies has some similar
elements in its names. The parties treated each group of corporations
as a conglomerate entity, and so I have not distinguished among
them, nor tried to recite the precise corporate entity involved in
certain transactions.
Blattner
4. Blattner is a 107-year-old company based in Avon, Minnesota.
It has a history of shifting its business entirely from one field to
another as opportunities present themselves. According to Doug
Fredrickson, Vice-President and Director of Operations for Blattner, it
constructed many interstate highways in the 1950s, moved to dams
and heavy civil projects in the 1960s, then to bridges and concrete
structural work in the 1970s, and added mining to its portfolio in the
1980s. It also operates one regional railway. In the 1990s it turned
to the construction of wind farms. It built its first wind farm, a 100
MW farm, for Enron in Minnesota. After that project, it steadily
withdrew from its other construction activities and concentrated
exclusively on wind farm construction, although Blattner also performs
work on solar farms, and high voltage transformers and substations
not connected with wind or solar farms.
5. Blattner constructs wind farms. It does not develop them. The
public incentive program for wind energy in the United States is based
on a generous tax credit on the profits from wind energy projects.
These credits cannot be carried forward beyond the year in which they
are earned. Hence the developer needs to have a relatively robust
cash flow each year from its other operations to be able to take
advantage of the credits in the year in which the wind farm shows a
profit. That is the only way a wind farm is profitable. A construction
company is not a good vehicle to develop and own the wind farm given
its more volatile profit and cash flow from year to year. Blattner has
cultivated relationships with a number of developer clients in the
United States, in particular one called Next Era, and works closely with
those developers in creating Blattner’s bid for its work.
6. Wind farms are a specialized area of construction. On the
evidence there are only a few companies (all of them from the United
States except for Borea) who perform the work. The work is not
unique: it applies engineering and construction principles that are
common to all construction, particularly electrical work. However, it is
sufficiently specialized that some degree of familiarity with the work

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beyond general construction is a significant competitive advantage.
One feature of Blattner’s business model is that it does not rely on
subcontractors. It performs all of the work associated with the
construction of a wind farm with its own forces. It believes that, when
it is performing similar work on a regular and repetitive basis, greater
efficiencies and economies are achieved in that way.
7. In 2004, Blattner was looking for ways to expand beyond the
U.S. market. Congressional approval for the tax credits that made the
industry viable, suffered at least one hiatus and might suffer another.
The total freeze of a company’s business for one or more years can be
very difficult to survive. Mr. Fredrickson heard of a 200 MW project for
the construction of a wind farm in the Gaspe Region of Quebec. The
developer was named Skypower. Blattner’s interest was engaged.
However, Blattner concluded that it could not function on its own in
the Quebec market. For “cultural and linguistic reasons” it was
necessary to carry on business in conjunction with a local construction
company. In 2004, Mr. Fredrickson and others were attending an
industry conference (American Wind Energy Association) in Quebec
City and entered into discussions with representatives of the developer
Skypower. They in turn introduced Mr. Fredrickson to representatives
of Genivar, a Quebec-based engineering and construction company,
both at the conference and afterwards.
Genivar
8. Genivar was a large Quebec-based construction company that
operated primarily in the province of Quebec. It was a large company
and operated in two divisions: the Building division and the
Engineering division. The Building division accounted for two thirds of
the volume of its work in 2000; a year in which the Engineering
division earned a total of 150 million dollars in revenue. The
Engineering division had no experience in constructing a wind farm,
but it was hoping to expand into that area of work. It had worked on
a few Co-Gen projects and other more conventional construction for
Hydro Quebec.
9. Genivar had received an RFP from Skypower with respect to
the project in Gaspe, and submitted a bid. It did not succeed in that
bid, according to Marc Richard, because the proposed price was too
high. Genivar then concluded that it needed to link up with another
business that had the expertise it was missing. To that end, Marc
Richard, as Vice-President of Construction, met with three American
companies that had expressed an interest in working in Quebec:

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Blattner, TIC and Mortenson. He chose Blattner as the business that
Genivar wished to work with.
10. According to Mr. Fredrickson, the first discussions were with
respect to an arrangement whereby Blattner would supply its expertise
in engineering and bidding to Genivar in exchange for a percentage of
the profits. Blattner was not very interested in that sort of
arrangement, not the least because it involved handing over its own
expertise to a potential competitor. Eventually the two agreed on a
straightforward partnership or Joint Venture between the two
companies. Borea was the ultimate corporate vehicle selected for this
business.
Borea under Blattner and Genivar
11. The first agreement between Blattner and Genivar was signed
in May of 2004 and finalized in a document dated October 5, 2004.
The first agreement focused on specific projects. The concept of the
Joint Venture was not that Genivar and Blattner would join their
separate forces to work on these projects. The “vision” of
Mr. Fredrickson (expressed in an email to Blattner executives on
September 8, 2004, was that “Genivar/Blattner will develop a
profitable company that lead[s] in the development of the wind farm
market in Eastern Canada”. That company was ultimately Borea. The
October 5, 2004 Joint Venture agreement identified eight projects in
Quebec on which Borea would bid at first. Pursuant to that
agreement, bids were submitted, and were successful in four of the
eight. It also submitted bids to Boralex and the Northland, both
developers, for projects on wind farms at Jardin d’Ete Ouest and Mont
Laurier, and another in November to Epcor (G E West Energy) for the
Kingsbridge project in Ontario. The latter bid was rejected as too high,
but the first two proceeded.
12. The strengths that the two parties brought to the enterprise
were different. Blattner had expertise in bidding and the experience of
having built a large number of these projects in the United States.
One of the skills that Blattner possessed was the formulation of the bid
itself. According to Jeremy Waker, Director of Wind and President of
Blattner, Next Era, and to a lesser extent other developers, have
particular ways in which they wish to see a bid structured and it is
virtually impossible to submit a coherent and successful bid without
training on that system. That particular bit of knowledge, along with
the general ability to properly assess and price any wind farm project
was a key part of the expertise that Blattner provided. Genivar
brought the expertise of an engineering and construction company

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that was able to marshal the work forces in Quebec and some other
less specific bidding and construction experience.
13. Mr. Fredrickson said that Blattner did not intend to do all of
the work for 50% of the profits. Indeed, the idea from the beginning
was to create a “self-supporting entity” separate from Blattner’s U.S.
operations. This was initially not achieved and not clearly achievable.
On April 20, 2005, Mr. Fredrickson threatened to dissolve the Joint
Venture unless things changed. There were amendments to the Joint
Venture agreement dated May 27, 2005 and June 8, 2005 that, in
Mr. Fredrickson’s view, reduced Blattner’s participation to a
satisfactory level. As will be seen, it still invested a great deal of time
and personnel resources in establishing Borea as a viable commercial
entity.
14. Genivar’s initial participation in the company was to provide,
from its Engineering division, the two Chief Operating Officers of
Borea: Daniel Laflamme and Marc Richard as General Manager
(replacing Lester Belanger who had been recruited from outside both
companies). However, these individuals required considerable
assistance from Blattner. Mr. Fredrickson said that Blattner taught
Daniel Laflamme the entire business of wind construction. Eric de
Gagne, another early executive of Borea, spent time working in
Blattner’s head office in the U.S. to learn the business better. There
have been other Borea staff who have spent time at Blattner’s
headquarters since 2004. Mehdi Hassan, currently Director of Wind
(West) for Borea, Ebrahim Apour and Nina Faro (both recruited from
outside).
15. Borea focused its energies for the next two years on
developing its business as a wind farm contractor. It bid the projects
in Ontario, of which it received two: the construction of wind farms at
Conestogo. It also bid successfully on four projects in Quebec,
although all of them were delayed for periods of time due to hesitancy
on the part of the ultimate customers and regulatory approval. In
respect of one project Borea had purchased $18,000,000 worth of
transformers and substation equipment that was not installed in any
way. It was also the successful bidder on a project in Alberta, Ghost
Wind Farm, on which construction did not commence until 2010.
16. Marc Richard said that they were not more successful in those
years for a variety of reasons: bidding is always unsuccessful some of
the time; the market was, and is, new; and projects were uncertain
and sometimes did not proceed. Nonetheless, by 2007 Borea was
able, with some support from Blattner, to bid successfully on a number

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of wind farm projects and was in a position to commence construction
on any of them.
Genivar’s sale to Pomerleau
17. In 2007, Genivar was undergoing some redefinition of its
business at the instance of its principal, Pierre Shoiry. He decided to
take the Building division public in a way that freed up a large amount
of capital. Because the Building division would operate as a separate
company, it no longer fit Genivar’s business model to have a privately
owned Engineering division, so it looked for a buyer. Genivar found
one in Pomerleau and sold the Engineering division to it. Included in
the assets of that division was Genivar’s interest in Borea. The sale
was concluded on July 3, 2007. After it was concluded, Pierre Shoiry,
the President of Genivar, advised Scott Blattner, chief officer of
Blattner, who was surprised to learn of the sale.
Pomerleau
18. Pomerleau is a very large general construction company based
in Quebec. According to Martin Laroche, Vice-President of the Civil
Construction division of Pomerleau, it has about 1000 non-trades
employees and is the biggest contractor in Quebec. Its Building
division has recently commenced construction work in Ontario. The
Civil division (either directly or through its subsidiary, Nielsen) builds
bridges, marine installations, hydro dams and substations, tunnels,
pipelines and infrastructure works. Its specialty, he said, is foundation
work and piling work. Like Blattner, it is a family owned, privately
held company and it has been in business for 50 years.
19. In 2007, Pomerleau had no active plans to become involved in
the wind farm business. It had submitted a bid to Skypower for a
project at Riviere de Loup in 2005 to build a wind farm. That bid was
not accepted and Pomerleau did not actively pursue the business after
that. In 2007, Pomerleau had no expertise in bidding or building the
wind farms, and had no plans in becoming involved in that aspect of
the industry.
20. What Genivar offered to Pomerleau was its entire Civil
division. The deal included much more than the shares of Borea.
Pomerleau was offered the entire civil work of Genivar. According to
Mr. LaRoche, Pomerleau saw the offer as a good opportunity because
Genivar was a source of good people. In his view the only way to
build a company as a business is to acquire good people. It is harder
and slower to recruit them individually from outside the company. The

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group from Genivar was a particular advantage as they were all
familiar with working with one another as a group. He repeatedly
referred to the “assets” of Genivar when referring to the people that
Pomerleau might and did acquire from Genivar. He specifically denied
that Pomerleau had much interest in the construction contracts of
Genivar ongoing at the time of the sale. He stated repeatedly that,
either generally or specifically in relation to Borea, Pomerleau was not
looking to acquire a stake in a wind farm business, but that it simply
saw the offer as a good business opportunity that was worth acquiring.
He said that Pomerleau wished to continue to grow and that this was
an opportunity to grow quickly by incorporating a group of good
people. According to Marc Richard, 80% of the employees of Genivar
were offered positions with Pomerleau and about 60 to 65% of them
accepted. Five employees of Genivar went to Borea, 20 went to
Pomerleau’s Civil division.
21. With respect to Borea, the corporation retained the entire
senior staff of the business: Mr. Richard (general manager), Daniel
Laflamme (chief estimator), Francis Houle (who had a vaguely
described position with respect to cash flow management), Mehdi
Hassan (head of the construction division in Ontario and West) and, I
conclude, Sebastien Simard (manager of Quebec and East).
Mr. Richard, who had a dual position with Genivar and Borea, believed
he had a choice of transferring to the Civil division of Pomerleau or
staying with Borea, but not both. He chose to work with Borea. The
evidence with respect to Sebastien Simard was a bit unclear.
Mr. Fredrickson said that Borea was first introduced to him on the Port
Cartier project, and that his previous experience was with Pomerleau.
He is currently the manager of construction (Quebec and East) for
Borea and has no position in Pomerleau. He was not clear whether he
was transferred to Borea from Pomerleau or was simply hired by the
joint venture or Borea on the Port Cartier project because of his
experience with Pomerleau. However, Martin Laroche from Pomerleau
testified that Mr. Simard was one of the employees he interviewed
when Pomerleau purchased Genivar’s Engineering Division, which he
would only have done with persons not employed by Pomerleau.
22. Genivar, pursuant to the terms of the Joint Venture and
Shareholders Agreement in Borea, could not transfer its shares in
Borea to Pomerleau without Blattner’s consent. Accordingly a meeting
was arranged between Pomerleau and Blattner executives. After
meeting with one another, each decided that the other was a partner it
was prepared to work with. Although Blattner was surprised by the
sale to Pomerleau, it had already invested considerable time and
money in the creation of Borea and was not anxious to abandon it. It

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concluded that it could continue the same business with Pomerleau.
And, as Jeremy Waker said, Blattner had no “plan B”.
23. The transfer to Pomerleau took some time in fact. The sale
agreement between Pomerleau and Genivar is dated July 3, 2007.
Most of the employees and hard assets were transferred over the two
summer months but Genivar continued to hold the shares of Borea.
This caused Blattner and Pomerleau some difficulties, as they were not
prepared to submit a bid for two upcoming projects on behalf of an
unsettled corporate entity. Accordingly on September 11, 2007,
Blattner and Pomerleau, in their own names, entered into an “Interim
Services Agreement” along with Airtricity Canada Limited (a
developer) for the completion of four projects: Victoriaville, St. Paul,
Vauban and Port Cartier. Only the last of these projects went ahead.
Borea after the sale to Pomerleau
24. On August 29, 2007, Pomerleau and Blattner entered into a
formal Joint Venture agreement to perform the work for Cartier Energy
at the Carlton Wind Farm in Quebec. The work was in fact completed
under that Joint Venture. Mr. Fredrickson said that the opportunity
came up quickly and a joint venture agreement was necessary to
proceed with it. He felt, correctly as it turned out, that Pomerleau had
good general construction experience in Quebec and Blattner had a
good reputation in the United States. Those two names together on
the joint venture were sufficient to secure the project.
25. The existing work continued to be done by Borea, but no other
bids or projects were commenced under the Joint Venture. There was
some delay caused by the time it took to inform Blattner of the
surprise sale, for Blattner to decide what to do, and for Pomerleau to
interview the staff of Genivar and decide what to offer to whom. It is
true, as the Labourers argued, that Pomerleau was in a hurry to get
things moving with this company. That is hardly surprising. It paid an
undisclosed sum for this business, which was a healthy ongoing
business being sold as part of a corporate reorganization, and no
doubt wished to see some return on its investment as soon as
possible. No business can be allowed to drift in a state of uncertainty
in any event.
26. The shares of Borea were finally transferred from Genivar to
Pomerleau (through Blattner for liability reasons) in January 2008 and
the corporate vehicle for the wind farm business after that time was
Borea. The business of Borea had been developing for three years and
it was ready to continue to bid on work that was becoming increasingly

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available and to commence construction on the two or three projects
that were finally proceeding. As Mr. Richardson said with respect to
the Joint Venture, “we had to capture an opportunity in Quebec. We
could not stay in limbo”.
27. The relationship of Blattner and Pomerleau mirrored that of
Blattner and Genivar. Each held an equal numbers of shares in the
primary corporation. The territory of the agreement with Genivar
applied only to Ontario, Quebec and Eastern Canada. Pomerleau
insisted on renegotiating this to cover the entire country. Neither
party was permitted to conduct independent construction of wind
farms in Canada, but all work was to be done through Borea. Included
in the agreement was a provision that, upon termination of the
partnership, neither party would solicit or employ any of the
employees of Borea for one year. No witness said it, but it seems to
me that the clauses were designed to keep both parties in the
partnership, and prevent them from appropriating what the other had
contributed to the business in the event of its dissolution.
28. Borea has continued to pursue the construction of wind farms
in Canada. As of the date of the application, it had bid on or
completed work on 20 wind farm projects in Alberta, Ontario and
Quebec. The management officers of Borea come largely from
Genivar, Blattner or were recruited from outside any of these parties.
Many of them had been transferred from Borea and to Blattner in the
United States for training. There is no doubt that Blattner continues to
supply the training and expertise required to operate the business to
Borea. Mehdi Hassan and Ebrahim Apour were transferred to
Blattner’s U.S. operations for two years or so for periods of training.
During his time there, Mr. Hassan was an employee of Blattner. Seven
of the eight projects secured or constructed in Ontario before the
application were developed by Next Era, with which Blattner has a
close relationship. Next Era required a Blattner employee, Jason
Wideman, to spend at least 50% of his time on six length projects
referred to by witnesses as the “six-pack” projects.
29. On one project at Le Plateau in Quebec, Blattner provided the
general and trades superintendents for the project at certain “critical
junctions” of the project. Mr. Fredrickson said that this was because
Borea still did not have within its ranks sufficient personnel to manage
the project properly. Indeed the Blattner employees’ time was
determined by the maximum limits permitted by Immigration Canada.
Blattner also supplied personnel at the Ghost Wind Farm project in
Alberta in 2010 at the insistence of Next Era, again the developer. On
that project, Blattner had designed the entire bid in its offices in

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Minnesota rather than having the work done by Borea. Martin Laroche,
Senior Vice-President of the Civil Division of Pomerleau, testified that
Pomerleau did not have the contacts within the industry that Blattner
had, and clearly did not have the necessary expertise that it would
have been able to inject into the company.
30. Both parents were from time to time required to provide
guarantees of performance to Borea to get a bond for bidding
purposes. Neither supplied operating cash. Neither company helps
Borea to become pre-qualified for projects in Ontario or Quebec.
31. Both Pomerleau and Blattner had the same governance role
and control of Borea that Blattner and Genivar did (except for the
question of the boundaries of its territory). The Board of Directors is
composed in equal numbers of persons from both Pomerleau and
Blattner, with some officers from Borea as well. It meets four times a
year. The Management Committee, again with equal representation
from both parties, meets twice per month, sometimes by conference
call, to discuss bids and other business. The discussion, according to
Martin LaRoche, focuses exclusively on items such as risk exposure,
risk management and financing, rather than the substantive details of
any one bid or the construction issues arising from any one project.
32. The Labourers put great emphasis on the contribution of
Martin Laroche, the one person from Pomerleau who represents any
sort of contribution from Pomerleau to Borea as the Pomerleau
representative at the Borea Management Committee. I do not accept
their characterization of his significance to the business. He holds the
position of Vice-President of the Civil Division of Pomerleau. He
testified that he deals with issues of corporate management and
negotiations with Blattner when the two parent corporations are
required to act on major issues. He does not, however, participate in
the day-to-day running of Borea. Mr. Laroche himself is an
exceedingly experienced and skilled person. His work before
Pomerleau included the management of extremely large construction
projects around the world including dams, bridges, marine work and
other heavy civil projects throughout Asia from Beirut to Hong Kong.
No doubt he has the ability to manage any engineering company of
any size at the highest level of management. He has, however, no
specific experience or expertise in the running of the specifics of Borea
or any wind farm business in general, and does not play a role in the
day-to-day operation of the business. The overall management and
governance of the corporation is an important role for any business,
but as is evident from the sale of half of Borea from Genivar to
Pomerleau, a role that is easily transferred from one person to

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another, even one with no particular expertise in running that
business, and without affecting the operation of the business itself.
33. Pomerleau performs some functions for Borea. All its record
keeping and administrative processes are handled in the offices of
Pomerleau in its head office at St. Georges in Quebec. On one
occasion Pomerleau was a subcontractor to Borea for the performance
of foundation work. That bid was tendered to Borea when it was still
owned by Genivar and Blattner. The offices of Pomerleau and Borea
are very close together in Mississauga, Ontario, but there is no contact
between them. Other than these matters, Pomerleau supplies no
assistance to the daily operations of Borea.
Analysis
34. The question to be answered in this case is a fairly narrow
one. Borea concedes that the minimum requirements of subsection
1(4) have been met in this case, that is Pomerleau and Borea carry on
associated or related businesses or activities and that they do so under
common control and direction. Borea argues only that the Board
ought not to exercise its discretion under the subsection. It argues
that the purpose of the subsection is to protect and preserve
bargaining rights in the face of a corporate organization that would
otherwise defeat or diffuse the bargaining rights that the Union holds
in respect of employees of one business. In this case, Borea argues,
the effect of an order would be to expand rather than protect the
bargaining rights.
35. The Union accepts that the Board has such a discretion and
that in some cases the Board will not issue an order if it is persuaded
that the effect of doing so would be to expand bargaining rights.
However, it argues that in this case, the order would simply protect
the Union’s bargaining rights for employees of Pomerleau, and to
refuse to issue such a declaration will lead to an erosion of the Union’s
bargaining rights.
36. The purpose of subsection 1(4) is the protection of bargaining
rights. The right of a union to represent employees and the right of
employees to be represented by their chosen bargaining agent should
not be defeated by the effect of corporate or business organization. As
the Board said in an often quoted portion of Brant Erecting and
Hoisting, [1980] OLRB Rep. July 945 at paragraph 12:
Section 1(4) was enacted in 1971 and deals with
situations where the economic activity giving rise to

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employment or collective bargaining relationships
regulated by the Act, is carried out by, or through more
than one legal entity. Where such legal entities carry
on related business activities under common control or
direction, the Board is empowered to pierce the
corporate veil. Section 1(4) ensures that the
institutional rights of a trade union, and the contractual
rights of its members, will attach to a definable
commercial activity, rather than the legal vehicle(s)
through which that activity is carried on. Legal form is
not permitted to dictate or fragment a collective
bargaining structure; nor will alterations in legal form
undermine established bargaining rights. In this
respect the purpose of section 1(4) is similar to that of
section 55 which preserves the established bargaining
rights and collective agreement when a "business" is
transferred from one employer to another. Section 55
[now section 69] has been part of the scheme of the
Act since the mid 1960's. Neither remedial provision
requires a finding of anti-union animus; their primary
application is to bonafide business transactions which
incidentally undermine or frustrate established
statutory rights. Since the two sections are
complementary, it is not unusual, as in the present
case, for an applicant to rely on both.
37. Counsel relied on the following passage from City of Toronto,
[2000] O.L.R.D. No. 1687 at paragraph 19:
At its most basic, section 1(4) is in place to ensure
there will be no erosion of bargaining rights caused by
a unionized entity spinning off a new company, moving
work or opportunities for growth from the old company,
and operating the new company without regard to the
collective agreement obligations of the old. The
mischief in such an arrangement is obvious and this
labour relations “sleight of hand” is remedied by the
Board’s discretion to make both companies a single
employer for the purposes of the Act.
38. The most common fact situation that the Board sees in such
cases are those where the owner of a company that is bound to a
collective agreement creates, purchases or obtains control of a second
corporation which begins to perform work that has been performed
before by the first business, or might reasonably have been
anticipated to be performed by the first business. Since the
businesses are under common control and direction, the Board
concludes that the union’s work has been “eroded” and being shifted

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to the new business. As the Board stated in RLP Machine & Steel
Fabrication Inc., [2004] OLRB Rep. July/Aug. 784 (a decision I wrote)
at paragraph 91:
91. It is at this point that the order in which the
businesses came into existence, or under common
control and direction, becomes important. If a business
bound to a collective agreement creates a new
company not bound to the agreement, the Board will
require very little proof of a potential erosion of
bargaining rights. Indeed, the performance of any
work, no matter how slight by the second company,
that is covered by the collective agreement binding on
the first company, will be proof of an erosion of
bargaining rights: see Acme Plumbing & Heating,
[1992] OLRB Rep. Jan. 1; Steebil Limited, [1989] OLRB
Rep. April 304.
39. The Union further argues, correctly, that the Board does not
need to see identical types of work performed in the new business as
were performed by the old business. Businesses can change and grow
as the marketplace and as technologies change. In Brink’s Canada
Limited, [1987] OLRB Rep. May 647, Brink’s was bound to a collective
agreement with the Teamsters Union. Employees performed the work,
among other things, of delivering currency and picking up currency to
and from banks and trust companies. It created a new company that
took on work that Brink’s had never done before (filling and recharging
ATM’s). The Board concluded that, absent the new second company,
Brink’s itself would have performed the work by using bargaining unit
members. The Board saw the work of servicing the ATM Machines as a
logical outgrowth of the business in which Brink’s was engaged. The
work was seen to be an accretion to the work done by employees
represented by the Union and the Board concluded that neither they
nor the Union ought to be deprived of that increase of work
opportunities or to be deprived of collective representation simply
because of a choice of corporate organization made by the employer.
At paragraph 35 the Board said:
Brink’s claims that there has been no erosion of the
applicant’s bargaining rights respecting the Toronto
Armoured Division employees because none of them
have been laid off as a result of ATM’s business. The
Board has held that there can be an erosion of
bargaining rights without the loss of business and
employment by the unionized employer. See the
Board’s decision in Kustom Insulation Ltd., [1979]
OLRB Rep. June 531. As the Board stated in that

- 14 -
decision, the union’s bargaining rights attach to the
business; if the business expands and employees are
added, the union’s bargaining rights would encompass
the new employees. In the Kustom Insulation decision,
the Board found that the creation of a new, non-union
employer, even though not competing for the same
business as the unionized employer, was effectively
carving out work which the unionized business might
otherwise try and get. That was sufficient erosion of
the union’s bargaining rights to cause the Board to
declare that the two employers be treated as one for
purposes of the Act. In the instant application, the
facts are that some of the work previously done by
employees of the Toronto Armoured Division is now
done by employees of ATM. Had the work remained
with the Toronto Armoured Division, it is reasonable to
expect that there would have been an accretion to the
applicant’s bargaining unit. Therefore there has been
an erosion of the applicant’s bargaining rights which is
directly attributable to the existence of ATM and the
transfer to it of part of the work of the classification
falling within the bargaining unit of the Toronto Truck
Agreement.
40. In Vaunclair Meats Limited, [1981] OLRB Rep. May 581, the
Board said:
If, in making a section 55 [69] determination, the
Board were to give overriding significance to the
reduction in the scale of operations, the term “part of a
business” could be robbed of all meaning, and virtually
written out of the Statute. Likewise, we do not think
that we should lightly conclude that there has been a
change in the “character” of the business simply
because the transferred “part” operates in a new
environment, in a somewhat different manner from the
way it operated when it was part of the larger
organization. This is to be expected of any severed
“part”, and it would be an unusual entrepreneur who
did not initiate any new initiatives, or try to put his own
imprint upon his recent acquisition. If a change in
circumstances, or scale were sufficient to trigger
section 55(5) [69(5)], there would be few sales of “part
of a business” which could survive its application, and
cases such as Canac, Alcan, More Groceteria and
Automatic Fuels would have little significance.

- 15 -
41. These decisions or the principle on which they rest was
approved and applied numerous times since then: Milton Hydro
Electric Commission, [2002] OLRB Rep. July/Aug. 701; Ontario Hydro
Services Company and Hydro One Inc., [2003] OLRB Rep. May/June
428; Ontario Hydro Services Company and Hydro One Inc., [2003]
OLRB Rep. Sept./Oct. 872; Hydro One Inc. 2007 CanLII 680; and
Kinetrics Inc. 2009 CanLII 24173.
42. There are, however, decisions in which the Board concluded
that there was only a theoretical potential for the erosion of bargaining
rights, and refused to issue a declaration under subsection 1(4) on the
facts of the case before it. In Mirtren Contractors Limited 2010 CanLII
56212, the Board concluded at paragraph 49:
49. We accept there is a theoretical potential for
the erosion of bargaining rights. That potential exists
any time two entities engaging in related activities or
business are under common control or direction. It
seems to us there must be more than a theoretical
potential for the erosion of bargaining rights to warrant
the Board exercising its discretion to issue a single
employer declaration. The risk of erosion must be real
and be more than mere speculation about what might
possibly occur. See, for example Dobben Group Inc.,
[1996] OLRB Rep. Feb. 57 at 61. In Hydro One Inc.,
[2003] OLRB Rep. Sept./Oct. 872 the Board made the
following comment about the potential erosion of
bargaining rights at pages 881-82:
The purpose of section 1(4) is to preserve the
meaningful nature of bargaining rights. It
serves to protect them from being deliberately
subverted, or from being eroded by commercial
decisions entirely divorced from labour relations
considerations. It is therefore necessary for an
applicant to demonstrate that there is either
actual or potential erosion of those bargaining
rights. … The erosion need only be minor or be
only reasonably likely to happen.
See also Environmental Management Solutions Inc.,
[2005] OLRB Rep. May/June 405 at 410.
43. Finally, the Union relies on decisions of the Board where the
Board has concluded that “the union must demonstrate some actual
erosion or some reasonably foreseeable erosion of its bargaining
rights” (see Hydro One Inc., above, at paragraph 65). Often that is

- 16 -
demonstrated by identifying work that the second company is
performing or is likely to perform, work that was done by the company
with which the Union has bargaining rights, or appears to be an
accretion to the work of that company. See also Georgian Construction
Company Limited, [1995] OLRB Rep. Mar. 354; Penny Lane Food
Markets Limited, [1993] OLRB Rep. Mar. 230.
44. This statement of the Board’s case law is true in many
circumstances, but is too broadly stated and subject to a number of
other variables. The most significant one and for the purposes of this
application arises when companies existed either before the Union
acquired bargaining rights or before the two businesses came under
common control and direction. The cases referred to all dealt with fact
situations where the second company was created after the Union
acquired bargaining rights for employees of the first company. To
return to RLP Machine & Steel Fabrication Inc., above:
92. However, it is not possible to draw the same
presumptive conclusion about an erosion of bargaining
rights (which as indicated, is often synonymous with
the erosion of work opportunities for persons in the
bargaining unit), where the “non-union” company pre-
dates the date on which the company bound to a
collective agreement was created or came under
common control and direction. The existence of the
prior company cannot, in and of itself, be evidence of
an erosion of bargaining rights. That evidence must
come from an examination of what happened to the
company bound to the collective agreement. In this
case, there is simply no evidence of an erosion of
bargaining rights. While RLP Machine has not
recognized the existence of bargaining rights, it has
performed very little work that I can identify covered
by any of the collective agreements. And certainly
there is no evidence of any change in the amount of
construction done by RLP. Mr. Symes could not “drain”
construction work from RLP Machine to CCE without
attracting a remedy under subsection 1(4), but that
section does not require him to direct construction
work from CCE to RLP Machine, or to expand the
amount of construction work done by RLP Machine
relative to its previous level of activity.
45. In this case, Borea’s existence predated the date on which
Pomerleau obtained partial control of it. In many cases, the Board did
not grant a declaration where the business bound to a collective
agreement is created after the other business under common control

- 17 -
and direction with it: Aecon Buildings 2006 CanLII 14393; Carwood
Store Fixtures Limited 2008 CanLII 26532. The Board has often, but
not always, treated that fact situation as an expansion of bargaining
rights. The same result may be obtained, depending on the facts,
when both of the companies involved in the litigation came into
existence before the acquisition of bargaining rights or the
development of common control and direction: see Landmark
Contracting Ltd, [1990] OLRB Rep. June 660 and City of Toronto and
Toronto Parking Authority 2000 CanLII 7860.
46. However, there are no hard and fast rules. What the Board
will conclude depends to a great extent on the facts of each case. It is
to those facts we return.
Pomerleau’s plans and intentions
47. The Union asserts that Pomerleau was looking to expand into
the field of wind farms and Borea simply represented an opportunity to
pursue that interest with a separate corporation. As a factual matter I
do not accept that proposition. The most that could be said was that
Pomerleau was not opposed to the possibility of doing that sort of
work. It had made one bid on a project, after all. But it made no
effort after failing to obtain that contract to pursue that type of work.
It is obvious from the experience of Genivar, a company much more
interested in pursuing this sort of work, that it was necessary to
acquire at least some expertise and experience in that area not to be
found in other types of civil construction, no matter how large those
other projects were. Pomerleau did not seek to pursue any
opportunities to develop expertise within its staff (as Blattner did in
the 1990’s), or to require skilled people from other businesses or to
partner with a company with the expertise and experience (as Genivar
did in 2004). It simply never bid another project.
48. Further, it should be remembered that Pomerleau did not
simply buy Borea. It bought the Engineering division of Genivar and
added 80% of the staff that it retained from Genivar to its own
operations. Borea was a single asset that constituted part of the
purchase.
Pomerleau’s potential to do the work
49. The Union and Borea argue the extreme opposite positions
with respect to whether or not Pomerleau could or would have ever
performed the work undertaken by Borea. Relying on the evidence of
the witnesses from Blattner (Messrs. Fredrickson and Waker), Borea

- 18 -
argued that the business was so specialized that it was not possible for
any new entrant to acquire the necessary expertise and reputation and
to be able to obtain a contract for the work, much less perform it.
Borea argued that the developer will be motivated by an extreme need
to have the project completed on time. Since the amounts of money
needed to construct a wind farm are very large, although this is truer
in the United States, the developer cannot afford to pay interest
without a corresponding cash flow for longer than anticipated. Hence
the developer will be very reluctant to deal with someone that does
not have a proven track record of being able to complete a project on
time.
50. Frankly, aside from the fact that the numbers may be larger,
the need to complete a project on time to satisfy the owner is a fairly
common element in the construction industry.
51. On the other hand, the Union argues, with complete faith in
the entrepreneurial energy and determination of contractors in the
construction industry, that successful construction companies move to
where the work is and that any good company will find a way into the
business.
52. Blattner’s entrance into the business was precisely what the
Union suggested Pomerleau’s might have been. It had some
engineering expertise, it performed a project well, it developed its
expertise and its contacts with developers and became one of the
dominant players in the industry. However I do not accept the fact
that Blattner, and other large American firms, make it impossible for
anyone else ever to get into the business. It is no doubt more difficult
to compete with businesses that have an established reputation than it
is when the business is being developed for the first time. However,
the infinite number of possible scenarios that might occur means that
it is impossible to rule out the prospect that someone might find the
right opportunities, the right times, and the right contacts to do so.
Genivar certainly tried and, had it been able to hire the right people
with the right expertise and relying on the favorable position that local
contractors have in the province of Quebec, might well have gained a
foothold in the business through projects in Quebec. However, the
fact still remains that Pomerleau had taken no steps to do any such
thing. On its own behalf, it simply never pursued the business at all.
The opportunity to purchase Borea was simply a part of a larger
opportunity that Pomerleau was offered by a former competitor.
53. I conclude that there was no reasonable chance that
Pomerleau was likely to have performed the work of a wind farm

- 19 -
constructor before it purchased the Engineering division of Genivar. It
is at best a theoretical and speculative possibility.
Was Borea a functioning business?
54. The Union argues that Borea was not a fully operational
business, and that it was only after Pomerleau entered the picture that
it was able to function as a fully operational construction business. It
had only been incorporated recently and in the Union’s argument was
not yet functioning as a wind farm builder. Indeed, the Union points
to the conflict between Genivar and Blattner to speculate that the
business was not functioning and had no chance of success until
Pomerleau replaced Genivar as one of the partners.
55. Once again, I do not accept that factual conclusion. Borea
was not as active in its first year as it was in its seventh year. That is
hardly surprising. In its early days, Borea was staffed by persons from
Genivar who required considerable training from Blattner in the United
States for the work they were doing. At that time, Borea relied heavily
on Blattner for its bidding and its pre-construction work. It was that
heavy reliance, although perhaps necessary, that caused Blattner to
push back and demand more participation from Genivar. That sort of
conflict between partners should not be surprising in the early days of
a partnership.
56. I do not accept the proposition that Blattner was only “happy”,
in a business sense, with Borea when Pomerleau became the partner.
There is no evidence of that and the relative absence of conflict with
Pomerleau as compared to some instances with Genivar was, I
conclude, simply due to the fact that Borea was running more
smoothly by 2007. Pomerleau was not a “better” corporate fit than
Genivar, simply a different one.
Human Resources of Borea
57. The Union argued that Pomerleau appointed the management
staff from among its own ranks to take positions in Borea. However,
except for Martin Laroche, that is simply not the case. Daniel
Laflamme, Marc Richard, Mehdi Hassan and Sebastien Simard were
Genivar employees who were transferred to Borea in whole or in part
before the sale to Pomerleau. Eric de Gagne, Ebrahim Apour and Nina
Faro were hired from the outside, and in fact mostly during the time
that Genivar was the partner. The origin of Francis Houle was not put
into evidence but he was working for Borea at the time of the sale to
Pomerleau. Some employees, such as Marc Richard, were paid by

- 20 -
Genivar rather than Borea, although he served as general manager of
Borea. There is no evidence as to whether he ever received a
paycheque from Pomerleau, but if he did it was only during the
transitional phase before he moved exclusively to Borea. The fact is
that Pomerleau contributed none of the human resources necessary to
make Borea run.
58. Further, the desire expressed by Pomerleau to get Borea
moving is simply good business practice rather than evidence of a
burning desire to jump head first into the wind farm business. Any
investor expects the investment to produce a revenue stream. A
company that is simply standing still wondering what the future is,
arising out of a corporate reorganization is not going to generate a
great deal of income. In addition, rightly or wrongly, Mr. Fredrickson
of Blattner believed that the market in Quebec was ripe for growth
and, as he put it, “we had to capture an opportunity in Quebec; we
couldn’t stay in limbo”. No doubt that view was shared by those at
Borea. It is not surprising that Pomerleau should feel the same way.
Conclusion
59. I conclude therefore, that to grant the declaration under
subsection 1(4) would represent an expansion of the Union’s
bargaining rights for employees of Pomerleau. Borea was an existing
and functioning business that had all the necessary components of its
operations to constitute a discrete and complete economic
organization. The business it operated, that of a wind farm
constructor, was a kind of business in which Pomerleau had never
engaged. As purchaser it added oversight and general direction to the
company, but it did not possess any skills, expertise, experience,
reputation, contacts or customers to add to Borea’s business. It
simply became an owner.
60. Further, Pomerleau did not transfer or direct any business that
might have been done by its own employees to Borea. Nor does it
refrain from performing work in order to leave the field clear for Borea
to obtain it. There is no reasonable prospect that Pomerleau would
ever have entered this field. The Union has lost nothing from this
transaction. Accordingly any action by the Board would be an
expansion of bargaining rights which goes beyond the purpose and
appropriate application of subsection 1(4).
61. The application under subsection 1(4) is dismissed.

- 21 -
The Sale of Business application
62. The sale of business application can be dealt with relatively
briefly. This section does not provide the Board with any discretion in
making an order. It must simply examine the facts and determine
whether a sale of a business has taken place. However, informing that
analysis of whether a sale has taken place, the Board has regard to
the purpose of the section. Like subsection 1(4), it is to be applied to
preserve bargaining rights from erosion caused by a sale or transfer of
all or part of a unionized business to another entity with which the
union has no bargaining rights.
63. That is not what happened here. The Union’s bargaining
rights with Pomerleau remain intact. No portion of the business,
indeed none of the work performed by Pomerleau was transferred in
any way to Borea. The Union asserts that what was transferred was
the opportunity for work to accrete to the work of the employees for
whom it has bargaining rights. As set out above, this assertion is
simply not factually sustainable. No such loss of opportunity occurred.
64. In the end, what occurred was not a sale of a business, but a
purchase of a business by Pomerleau. Pomerleau acquired (among
other things) a pre-existing business. The Union’s bargaining rights
were in no way diminished or undermined by that purchase.
Accordingly, the application under section 69 is also dismissed.
“David A. McKee”
for the Board

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