Lebanite Corp.

National Labor Relations Board - Board Decisions

Mar 31, 2006

346 N.L.R.B. 748 (N.L.R.B. 2006)

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
346 NLRB No. 72
748
Lebanite Corporation and/or R.E. Service Company
and Western Council of Industrial Workers, Lo-
cal 2554, affiliated with United Brotherhood of
Carpenters & Joiners of America and Oregon
Panel Products, LLC. Case 36–CA–9463-1
March 31, 2006
DECISION AND ORDER
BY CHAIRMAN BATTISTA AND MEMBERS LIEBMAN
AND SCHAUMBER
On April 28, 2005, Administrative Law Judge Clifford
H. Anderson issued the attached decision. Respondent
R. E. Service Co. filed exceptions and a supporting brief,
and Oregon Panel Products, LLC, filed exceptions.1 The
General Counsel filed an answering brief to R. E. Service
Co.’s exceptions and an answering brief to Oregon Panel
Products’ exceptions.
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the decision and the record
in light of the exceptions and briefs and has decided to
affirm the judge’s rulings, findings, and conclusions only
to the extent consistent with this Decision and Order and
to adopt the recommended Order as modified.2
The judge granted the General Counsel’s motion for
default judgment, which was unopposed, and found that
Respondent Lebanite Corp. violated Section 8(a)(5) and
(1) of the Act in several respects and ordered it, among
other things, to pay backpay to 54 employees.3 There are
no exceptions to these findings. The judge further found
that Respondent R. E. Service Co. was a single employer
with Lebanite Corp. and was jointly and severally liable
for the latter’s unfair labor practices. Additionally, the
judge found that Oregon Panel Products, LLC, was a
Golden State4 successor to Lebanite Corp. and was
jointly and severally liable for Lebanite Corp.’s unfair
labor practices.

1 Oregon Panel Products, LLC, was named in the amended com-
plaint as “Party-in-Interest Successor.”
2 As indicated below, we are modifying the recommended Order to
exclude Oregon Panel Products, LLC, from its provisions.
3 The judge found that Lebanite Corp. violated Sec. 8(a)(5) and (1)
by failing to provide requested information to the Union since April 30,
2003, by repudiating the contract—including failing and/or refusing to
pay vacation, holiday, and bonus pay, and a July 1, 2003 wage increase,
and failing to make pension contributions and medical insurance pay-
ments—and by ceasing operations and laying off all employees in
August 2003, and leasing its facility in October 2003, without notice to
the Union or providing an opportunity to engage in effects bargaining.
The judge ordered the Respondents to pay backpay totaling
$231,440.27 to 54 employees, as provided in the compliance specifica-
tion.
4 Golden State Bottling Co. v. NLRB, 414 U.S. 168 (1973).
For the reasons stated by the judge (except as modified
below in fn. 5), we agree with his finding that R. E. Ser-
vice Co. was a single employer with Lebanite Corp.5
Contrary to the judge, however, we find that Oregon
Panel Products, LLC, was not a Golden State successor
to Lebanite Corp.
Lebanite Corp. made a composite hardboard product
called Lebanite at its plant in Lebanon, Oregon. Lebanite
was used in furniture and as transformer board, exit drill
board, and saw board in the electronics industry. In
January 2000, R. E. Service, a Lodi, California corpora-
tion, that manufactures materials used in making circuit
boards, purchased the Lebanite facility as an ongoing
operation, holding Lebanite Corp. as a wholly-owned
corporation. Mark Frater was the founder, president,
chief executive officer, and 90-percent owner of R. E.
Service. The Union, which had long represented the
production, maintenance, and transportation employees
at the facility, entered into a collective-bargaining
agreement with Lebanite Corp., effective October 21,
2000, to September 30, 2004. In 2002, Robert Walker, a
longtime Lebanite Corp. employee, became Lebanite
Corp.’s general manager.

5 In determining whether two entities constitute a single employer,
the Board considers four factors: (1) interrelation of operations, (2)
common management, (3) centralized control of labor relations, and (4)
common ownership. See, e.g., RBE Electronics of S.D., 320 NLRB 80
(1995). Viewing the single employer analysis more globally, the Board
has also said that “[s]ingle employer status is characterized by the ab-
sence of an arm’s-length relationship found among unintegrated com-
panies.” Id. In other words, the Board sometimes treats single em-
ployer status and absence of an arm’s-length relationship as essentially
synonymous. In some cases, however, the Board has treated absence of
arm’s-length relationship within the traditional four-factor test as bear-
ing on the factor of interrelation of operations. See, e.g., Iron Workers
California District Council (Madison Industries), 307 NLRB 405, 408
(1992) (finding no interrelation of operations where prices of purchases
made between the two companies were set in arm’s-length negotia-
tions).
In his single-employer analysis, the judge treated absence of an
arm’s-length relationship between Lebanite Corp. and R. E. Service Co.
as neither synonymous with his single-employer finding nor as an
aspect of interrelation of operations within the four-factor analysis, but
as an independent, fifth factor in establishing that the two companies
constituted a single employer. As explained above, however, evidence
probative of an absence of arm’s-length relationship bears on the factor
of interrelation of operations. See Madison Industries, supra. Thus,
contrary to the judge’s finding, in sec. III,C,1 of his decision, of “essen-
tially no interrelationship of operations” between Lebanite Corp. and R.
E. Service Co. “save for [R. E. Service Co.’s] use of Lebanite [hard-
board] as saw and drill board,” we find that evidence demonstrating
that R. E. Service Co. obtained products from Lebanite Corp. in non-
arm’s-length transactions at reduced prices or without payment entirely
is additionally probative of interrelation of operations. We need not
decide, however, whether the instances of reduced price (or no price)
transactions here are sufficient by themselves to show interrelation of
operations because even if they are not, other factors establish a single-
employer relationship.
LEBANITE CORP. 749
Lebanite Corp.’s sales began falling sharply after R. E.
Service’s acquisition of Lebanite Corp. In response,
Lebanite Corp. instituted cost-reduction measures, in-
cluding laying off employees, and undertook the actions
alleged in the complaint as unfair labor practices (i.e.,
failing to pay various items of employee compensation,
failing to make pension contributions or medical insur-
ance payments, withholding a wage increase, and refus-
ing to provide requested information). Despite these
efforts, the operation became uneconomic and, in August
2003, the plant closed.
After the Lebanite Corp. facility closed in August
2003, Walker, Clay Donne, who had been Lebanite
Corp.’s distribution sales manager, and Terry Butler,
who had been one of Lebanite Corp.’s customers, formed
Oregon Panel Products, LLC, to resume Lebanite Corp.’s
operations. On October 24, 2003, Oregon Panel entered
into agreements with Lebanite Corp., its creditors, and
Frater to lease from Lebanite Corp. the Lebanite opera-
tion, including the plant and equipment. The lease, al-
though for a term of 1 year and renewable for four 1-year
terms, was terminable by either party on 30 days’ notice.
It provided for $38,000 in monthly rental payments—
$18,500 to Lebanite Corp. and $19,500 to Lebanite
Corp.’s bank (which held notes on the property)—and
granted Oregon Panel an option to purchase.
Oregon Panel took possession of the Lebanite Corp.
site and, in November 2003, commenced hiring and initi-
ated cleanup and inspection. Walker was Oregon Panel’s
general manager and Donne was its general sales man-
ager. By December 2003, production began, and over 2
or 3 months, staffing and production increased. The
original employee complement of about a 12 grew to a
maximum of 52, of whom 21 were former Lebanite
Corp. employees. Applicants and employees were told
that Oregon Panel was not Lebanite Corp. but was an
independent entity, not bound by Lebanite Corp.’s rec-
ognition of the Union or its collective-bargaining agree-
ment.
The resumption of operations soon proved not to be
economically viable. In April 2004, Oregon Panel laid
off the employees and closed the plant.
The judge found that Oregon Panel was a Golden State
successor to Lebanite Corp., and therefore liable for
Lebanite Corp.’s prior unfair labor practices, because he
found that there was substantial continuity between
Lebanite Corp. and Oregon Panel and that, at the time of
its acquisition of the Lebanite facility, Oregon Panel was
aware of Lebanite Corp.’s conduct that was the basis for
the unfair labor practice findings. He also found that
Oregon Panel could have negotiated, or tried to negoti-
ate, an indemnification agreement under which Lebanite
Corp. would indemnify Oregon Panel for any liability for
Lebanite Corp.’s unfair labor practices.
Contrary to the judge, we find that, under the circum-
stances of this case, the Golden State successorship doc-
trine is not appropriately applied to Oregon Panel.
In Golden State, the Court upheld the Board’s ruling
that a purchaser who had acquired an enterprise with
knowledge of the seller’s unremedied unfair labor prac-
tices could be held jointly and severally liable for the
seller’s wrongdoing. Finding that the Board had appro-
priately balanced the parties’ legitimate interests, the
Court relied, in part, on the fact that “protection for the
victimized employee” was “achieved at a relatively
minimal cost to the bona fide successor” because the
successor’s “‘potential liability for remedying the unfair
labor practices . . . [could] be reflected in the price he
[paid] for the business, or . . . an indemnity clause in the
sales contract which [would] indemnify him for liability
arising from the sellers unfair labor practices.’”6
Mindful of the Court’s rationale, the Board, subse-
quent to Golden State, has declined to find putative suc-
cessors liable for their predecessors’ unfair labor prac-
tices in cases where it has found that the successor’s po-
tential liability could not have been reflected in the trans-
action price or appropriately addressed by an indemnity
clause. Thus, in Glebe Electric, 307 NLRB 883 (1992),
the Board rejected the General Counsel’s contention that
Aneco Co., an electrical contractor, was a Golden State
successor to Glebe Electric, even though Aneco had
taken over a contract abandoned by Glebe and had used
some of the facilities formerly used by Aneco. The
Board noted that the rationale stated in Golden State and
Perma Vinyl Corp., 164 NLRB 968 (1967), for imposing
liability on a purchaser for the unfair labor practices of
the seller was that the purchaser could reflect its potential
liability in the negotiated purchase price or through in-
demnification by the seller. The Board found that there
was no business relationship between Glebe and Aneco
and that Aneco had not acquired anything of value from
Glebe. The Board thus concluded that Aneco had no
opportunity to insulate itself from liability for Glebe’s
violations.
Subsequently, in Hill Industries, 320 NLRB 1116
(1996), the Board applied the rationale of Glebe Electric
and found BTS New York (BTS) not to be a Golden
State successor to Hill Precision (Precision). BTS took
over Precision’s lease of the facilities and much of the
equipment formerly used by Precision. In addition, BTS
purchased $3500 worth of materials from Precision and

6 414 U.S. at 185, quoting, in part, Perma Vinyl Corp., 164 NLRB
968, 969 (1967).
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD750
entered into an agreement with Precision granting BTS
the use of certain other Precision equipment in exchange
for Precision’s being allowed to store the equipment at
the BTS facility. This agreement was terminable on 30-
days’ notice.
The Board found that Precision’s unfair labor practice
liability far exceeded the $3500 BTS paid Precision, so
“[i]t would have been impossible for BTS to offset [its]
potential liability . . . by negotiating over the purchase
price of the materials.” 320 NLRB at 1117. The Board
further found that the agreement, by which BTS allowed
Precision to store certain equipment in BTS’s facility in
return for BTS being allowed to use that equipment,
failed to constitute a business relationship sufficient to
establish Golden State successorship.7 The Board stated:
[B]ecause the agreement allowed either party to termi-
nate the arrangement on a month’s notice, neither BTS
nor Precision could have known at the time the agree-
ment was reached how long they could expect to bene-
fit from it. In these circumstances, it is difficult if not
impossible to know what practical benefit BTS re-
ceived as a result of the agreement. Thus, the record
fails to show that, in negotiating over the terms of its
equipment-storage-and-use agreement with Precision,
BTS could have effectively insulated itself from poten-
tial exposure to liability for Precision’s unfair labor
practices. Nor does it show that BTS could have se-
cured indemnification from Precision as part of this
transaction.
Accordingly, we find that the overall nature of
the establishment of BTS operations was ultimately
not of a type under which BTS could have effec-
tively negotiated a method of insulation from liabil-
ity for Precision’s unfair labor practices. [320
NLRB at 1117.]
We find that the considerations present in Glebe Elec-
tric and Hill Industries apply here.8 We recognize that
Lebanite leased its property, plant, and equipment to
Oregon Panel.9 Thus, in theory, Lebanite and Oregon
Panel could have negotiated a reduction in the lease

7 The lease involved no monetary transaction between BTS and Pre-
cision.
8 The judge in the instant case noted that the Board in Hill Industries
set forth an alternative rationale, viz., that the businesses of Precision
and BTS were sufficiently different to find BTS not to be a Golden
State successor. While the Board cited this reason as an alternative
basis for finding BTS not to be a Golden State successor, that finding
did not negate the Board’s principal, independent rationale based on the
uncertain and potentially short duration of the agreement between Pre-
cision and BTS.
9 By contrast, in Hill Industries, Precision was a lessee, and BTS
took over that lease.
price—but only in that portion of the lease price not
fixed by Lebanite Corp.’s indebtedness to the bank—to
try to reflect the liability that Oregon Panel potentially
would be incurring for Lebanite Corp.’s unfair labor
practices. However, because the lease was terminable by
either party on 30-days’ notice, Oregon Panel’s total pay-
ments under the lease could have amounted to far less
than the potential unfair labor practice liability. For ex-
ample, if the lease had been terminated after 2 months,
the amount of money flowing from Oregon Panel to
Lebanite would have been $37,000 ($18,500 x 2). In
order to protect itself from liability, Oregon Panel would
need to set off $231,440. Thus, we find that Oregon
Panel could not have effectively protected itself from the
potential unfair labor practice liability by negotiating a
reduction in the lease price.10
The judge found that Oregon Panel had bargaining
leverage because it was taking over Lebanite Corp.’s
entire operation and, therefore, “could have negotiated or
at least tried to negotiate . . . an [indemnification] agree-
ment.” He based this finding on the fact that the lease
contained an indemnification clause binding on Oregon
Panel and also contained Frater’s personal guarantee
insuring Lebanite Corp.’s compliance with certain provi-
sions. In our view, however, the presence in the lease of
an indemnification clause binding on Oregon Panel has
little to do with the instant case. In order to protect itself,
Oregon Panel would want an indemnification clause
binding on Lebanite, whereby Lebanite would reimburse
Oregon Panel if the latter were to be held liable for the
unlawful conduct of the former. However, given Leban-
ite’s precarious financial situation when it closed, it is
not reasonable to believe that an indemnification clause
would have protected Oregon Panel.
Finally, the judge discounted the fact that the lease was
terminable on short notice because the Court, in Golden
State, approved of the Board’s refusal to “distinguish
among mergers, consolidations, and purchases of as-

10 While the dissent posits that the transaction “presumably” could
have been structured to take into account Oregon Panel’s potential
exposure, the dissent fails to show how this could have been done.
Further, contrary to the dissent’s assertion, our analysis is not premised
on the possibility that Lebanite Corp. might cancel the lease quickly or
would have an incentive to do so. Rather, our analysis simply recog-
nizes that, because the duration of the lease was uncertain, there could
be no assurance that a reduction in the rental payment would offset the
unfair labor practice liability to which Oregon Panel, if found a succes-
sor, would be exposed. Additionally, as a practical matter, it would
appear that the most likely risk of early lease termination would arise
from Oregon Panel’s failure to successfully resurrect the business, not
from a quick lease cancellation by Lebanite Corp. Thus, the dissent’s
assertion that we never explain why Lebanite would have an incentive
to quickly cancel the lease falls wide of the mark.
LEBANITE CORP. 751
sets.”11 However, our decision here does not turn on
such distinctions. It turns on the practical reality that
Oregon Panel could not have protected itself in the trans-
action with Lebanite, irrespective of the form that trans-
action assumed.12

11 Golden State Bottling Co. v. NLRB, 414 U.S. 182 fn. 5 (1973).
12 Member Schaumber finds additional support for his conclusion
that Oregon Panel is not a Golden State successor to Lebanite Corp. in
the Ninth Circuit’s successorship decision in Steinbach v. Hubbard, 51
F.3d 843 (9th Cir. 1995), a Fair Labor Standards Act (FLSA) case. In
Steinbach as in this case, the predecessor company was failing; and
Care Ambulance, the successor sought to be held liable under Golden
State, had leased the predecessor’s assets. In declining to impose
Golden State liability on Care Ambulance, the court of appeals empha-
sized, inter alia, the public’s “substantial interest in the free transfer of
capital and the reorganization of unprofitable businesses,” 51 F.3d at
846 (internal quotations omitted), and underlined the importance of
promoting “a trial run” in which “an acquirer could discover a poten-
tially viable company,” id. at 847. The court further noted that such a
trial run could also benefit the predecessor’s employees: “Permitting
shopping for dying companies increases the chances such companies
may find buyers, thus also increasing the chances buyers will be found
who perhaps may satisfy existing . . . liabilities.” Id. Member
Schaumber finds these considerations plainly apply here, further sup-
porting his Golden State successorship finding.
Though Member Schaumber agrees with the Chairman that he
would impose Golden State successorship where the successor has
notice of potential liability and a meaningful opportunity to protect
itself financially from that liability, so did the Ninth Circuit in Stein-
bach. Like the instant case, Steinbach involved a successor that leased
the predecessor’s assets under circumstances precluding the successor
from having a meaningful opportunity to protect itself from potential
liability. See 51 F.3d at 847 (finding that successor had “little room for
negotiation of protection”). The Steinbach court did not rely on the
policy concerns noted above in a vacuum. Rather, it cited those con-
cerns as part of the “equitable considerations inform[ing its] deci-
sion”—along with, it should be noted, “the policies underlying the
FLSA,” which “can best be effectuated by seeing to it that violations
are remedied in as many cases as possible.” Id. at 846. Nowhere did
the court suggest that it would decline to impose Golden State succes-
sorship to protect the free transfer of capital even where the successor
does have room to negotiate protection for itself. Indeed, the court
indicated to the contrary by stating: “[W]e do not intend to shield
companies who were merely lacking in foresight.” Id. at 847.
Member Schaumber also disagrees with Member Liebman’s asser-
tion “that the rationale of Steinbach v. Hubbard . . . does not apply
here.” As explained above, in Member Schaumber’s view, the ration-
ale of Steinbach is in all essential respects the same as the rationale
upon which the Chairman and Member Schaumber rely in this case.
Similarly Member Schaumber differs with Member Liebman’s charac-
terization of a law student case note as an “incisive criticism” of Stein-
bach. See Andrew P. Pickering, Steinbach v. Hubbard: Somebody Call
an Ambulance! The Fair Labor Standards Act and the Successor Li-
ability Doctrine Have Been Seriously Injured!, 1996 B.Y.U. L. Rev.
689 (1996). That student note actually mischaracterizes the Ninth
Circuit’s decision. For example, the note asserts that the court found
the first prong of the Golden State analysis—bona fide successorship—
was not met “because a permanent transfer of assets . . . never took
place.” Id. at 694. Contrast the court’s own, more nuanced rationale:
“[T]he interests of the affected parties, as well as the policies underly-
ing FLSA and supporting free transfer of capital, lead us to conclude
Care does not qualify as a bona fide successor.” 51 F.3d at 847. The
Our colleague asserts that it is “not unfair” to impose
liability on Oregon Panel, and she then cites equities
which, in her view, favor the employees. However, she
neglects to mention the equities in favor of Oregon
Panel, viz., the fact that it is entirely innocent of any
unlawful conduct.13 In order to balance the equities of
the employees and those of the innocent purchaser, the
Supreme Court and the Board are willing to impose li-
ability on the innocent purchaser provided that the pur-
chaser has the opportunity to protect itself in a meaning-
ful way. We agree with our colleague that if the pur-
chaser has that opportunity, and fails to take advantage of
it, the purchaser cannot be heard to complain. However,
our point in this case is that, given the amounts involved,
there was no meaningful opportunity for Oregon Panel to
protect itself.
Our colleague seemingly recognizes this, but says that
it is not “inherently impossible” that Oregon Panel could
have protected itself by using the acquired assets to gen-

court did place emphasis on the fact that the successor had leased its
predecessor’s assets, but it did not find the form of the transaction
controlling. To the contrary, the court expressly stated that “[f]aced
with a longer-term commercial lease, we might conceivably have
reached a different conclusion.” Id. at 848 fn. 1. The author of the note
also criticized the Ninth Circuit for allowing its application of the
Golden State “notice” prong to be informed by the reality that the suc-
cessor had little room to negotiate protection from potential liability.
“There are no special policy concerns in the test” for notice, the author
categorically asserted. 1996 B.Y.U.L. Rev. at 697. This criticism is
misguided at best, ignoring as it does that both the Supreme Court in
Golden State and the Board in Perma Vinyl expressly linked the notice
requirement to the successor’s consequent opportunity to strike a deal
that will offset potential liability. Where that opportunity is absent
notwithstanding notice of potential liability, as in this case and Stein-
bach, adopting the note’s “notice” fundamentalism will only induce
prospective successors in like straits to walk away from the deal alto-
gether—a result that not only does not help the predecessor’s employ-
ees be made whole for its unfair labor practices, but that also injures
both those employees (by depriving them of an employment opportu-
nity) and the public interest (by depriving it of an opportunity to have
the predecessor’s failing business resuscitated). Thus, Member
Schaumber finds Member Liebman’s reliance on Mr. Pickering’s note
misplaced.
Chairman Battista relies upon Steinbach to the extent that it teaches
that a successor who cannot protect itself from liability for its predeces-
sor’s unlawful conduct cannot be made liable for that conduct. He does
not rely upon Steinbach to the extent that it may teach that, quite apart
from the above consideration, a successor should be protected because
of such general considerations as the value of “free flow of capital” and
the value of reorganizing unprofitable business.
13 Our dissenting colleague asserts that Oregon Panel’s innocence
has already been taken into account by imposing a notice requirement.
Holding Oregon Panel liable for Lebanite’s unfair labor practices with-
out a notice requirement—i.e., if Oregon Panel lacked notice of Leban-
ite’s unfair labor practices—would surely be unfair. However, in
weighing whether to impose liability on Oregon Panel for Lebanite’s
misconduct, we do not agree that a mere notice requirement alone
grants sufficient recognition to the fact that Oregon Panel itself is inno-
cent of any unlawful conduct.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD752
erate sufficient income to satisfy the predecessor’s liabil-
ity. However, that can be said about virtually every
transaction. Presumably, every purchaser of a business
hopes to generate income, and that income could be used
to satisfy a seller’s liabilities. But, as discussed above,
that is not the test. The test is whether there was an op-
portunity to structure the transaction itself in a way that
would allow the employees to be made whole and would
also protect the purchaser.14
Our colleague then suggests that the parties would
purposefully modify their transaction for the opposite
purpose, i.e., to avoid successor liability. The simple
answer is that there is no allegation or evidence of such a
motive.
Finally, our colleague says that it should make no dif-
ference that a predecessor is financially distressed.
However, as discussed above, an indemnity clause is one
way in which a purchaser can protect itself. It would
seem apparent that an indemnity clause is worthless if
the predecessor has no assets to pledge.15
Contrary to the dissent, we find that this case shares
key similarities with Hill Industries. First, in both cases,
the predecessor’s unfair labor practice liability is sub-
stantially greater than the amount of the putative succes-
sor’s purchase or rental payment to the predecessor. Sec-
ond, in both cases, the predecessor had an agreement
with the putative successor that was terminable on a
month’s notice.
On these facts, the Board in Hill Industries found that
the alleged successor, BTS, could not have offset its po-
tential liability for the unfair labor practices of the prede-
cessor, Precision, by negotiating a price reduction for
BTS’s purchase from Precision because the unfair labor
practice liability was so much greater than the purchase
price. Additionally, the Board found that, as neither
party could have known how long they would have the
benefit of their equipment-use agreement, BTS, in nego-
tiating the agreement, could not have insulated itself
from exposure to Precision’s unfair labor practice liabil-
ity or secured indemnification for such liability. Thus,
the Board held BTS not to be a Golden State successor.

14 Our colleague also posits that business conditions might have im-
proved and Oregon Panel’s lease agreement with Lebanite might have
been extended indefinitely, but that, had those events occurred, the
employees nevertheless would have had no practical way to pursue
their backpay claims under our decision. The hypothetical facts sug-
gested by our colleague, however, are not presented before us, and we
need express no view here concerning the proper outcome given such
facts.
15 Our dissenting colleague’s assertion that Oregon Panel could have
bargained for indemnification in the form of title to a portion of Leban-
ite’s assets—despite the fact that Lebanite’ bank had a security interest
in those assets—is entirely speculative and highly implausible.
As indicated above, the same key considerations in
Hill Industries are present here. Lebanite Corp.’s unfair
labor practice liability, which exceeds $231,000, is much
greater than—and thus could not reasonably be offset
by—Oregon Panel’s $18,500 rental payment to it. Addi-
tionally, Oregon Panel’s lease agreement with Lebanite
Corp. was terminable by either party on 30-days’ notice,
so neither party could have known how long the lease
agreement would be in effect. On these similar facts, we
reach the same conclusion that the Board did in Hill In-
dustries. Oregon Panel “could not have effectively nego-
tiated a method of insulation from liability for [Lebanite
Corp.’s] unfair labor practices,”16 and therefore should
not be found a Golden State successor to Lebanite
Corp.17
Accordingly, for the reasons stated above, we reverse
the judge and find Oregon Panel not to be a Golden State
successor to Lebanite Corp.18

16 320 NLRB at 1117.
17 We disagree with the dissent’s contention that, in reaching this
conclusion, we have improperly focused on the specific terms of the
transaction between Lebanite Corp. and Oregon Panel. In basing our
analysis on these terms, we are doing no more than what the Board did
in Hill Industries, where its decision turned on the specifics of the
transaction between the parties, as detailed above.
We find markedly different from the present case two cases cited by
the dissent where the Board rejected contentions that alleged Golden
State successors could not have adjusted their transactions with prede-
cessors to compensate for unfair labor practice liability. We are not
holding here that a sale and purchase is a prerequisite to a finding of
successorship. Thus, the Board’s rejection of such an argument in
Ponn Distributing, Inc., 232 NLRB 312, 314 (1977), has no bearing on
our decision. Likewise, we are not finding that Oregon Panel could not
have negotiated a method of insulation from Lebanite Corp.’s unfair
labor practice liability on the basis that Lebanite Corp. refused to nego-
tiate about this matter. Thus, the Board’s rejection of such an argument
in S. Bent & Bros., 336 NLRB 788, 792 (2001), is equally of no mo-
ment here.
18 In finding that Oregon Panel had notice of its potential liability,
the judge relied on S. Bent & Bros., 336 NLRB 788 (2001). In that
decision, the Board held that so long as a successor was aware of con-
duct by its predecessor ultimately found unlawful by the Board, the
notice element of the Golden State analysis is satisfied regardless of
whether the successor was aware that charges had been filed or that the
Board had issued a complaint.
Member Schaumber disagrees with S. Bent’s categorical notice rule
because it fails to take into account the circumstances of the particular
case. He acknowledges that if the nature of a predecessor’s unfair labor
practice conduct makes potential liability obvious to a successor, it may
well be appropriate to hold the notice element satisfied where an al-
leged Golden State successor is aware of that conduct without more.
On the other hand, however, it is sometimes far from obvious, before
the fact, that conduct ultimately alleged and found to have violated the
Act was, in fact, likely to result in unfair labor practice liability. For
example, with the best of intentions, employers on the threshold of a
union election sometimes withhold a planned wage increase out of a
reasonable concern with being perceived as trying to buy employees’
votes. A successor not steeped in Board law would be unlikely to
suspect anything amiss in such a decision. Nevertheless, to withhold a
LEBANITE CORP. 753
ORDER
The National Labor Relations Board adopts the rec-
ommended Order of the administrative law judge as
modified and orders that the Respondent, Lebanite Cor-
poration, Lebanon, Oregon, and R. E. Service Company,
Lodi, California, their officers, agents, successors, and
assigns, shall take the action set forth in the Order.
MEMBER LIEBMAN, dissenting in part.
After unlawfully repudiating its collective-bargaining
agreement with the Union (and failing to make pension
contributions and medical insurance payments, among
other violations), Lebanite Corporation closed its opera-
tion—only to lease its property, plant, and equipment
(with an option to purchase) to Oregon Panel Products,
an entity formed by certain Lebanite managers, which
then proceeded to hire a substantial number of former
Lebanite employees. The question here is Oregon
Panel’s liability, as a successor employer under the
Golden State doctrine,1 for Lebanite’s unfair labor prac-
tices.
In contrast to the majority, I would find that Oregon
Panel did have a meaningful opportunity to insulate itself
from liability, as measured by the Board’s decisions in
this area. Oregon Panel had notice of Lebanite’s con-
duct, and given the nature of its relationship with Leban-
ite, imposing liability is not unfair. The majority’s ap-
proach neglects the Board’s traditional “emphasis on
protection for the victimized employee, who may be
‘without meaningful remedy when title to the employing
business operation changes hands.’” S. Bent & Bros.,
336 NLRB 788, 791 (2001), quoting Golden State Bot-
tling Co., supra, 414 U.S. at 181.
I.
The principles that govern this case are well estab-
lished. In Golden State Bottling, the Supreme Court en-
dorsed the approach to successor liability articulated in

raise because of a pending union election is an unfair labor practice;
and under the categorical rule of S. Bent, a successor aware only that
the raise had been withheld, without knowledge that the withholding
had been alleged as unlawful, would find itself, unfairly, well down the
path to being held liable as a Golden State successor. Thus, Member
Schaumber disagrees with the per se notice rule of S. Bent, and favors
instead a case-by-case approach. He need not decide here, however,
whether, applying that approach, he would find Oregon Panel did or did
not have notice of its potential liability because the considerations set
forth above in the instant decision would be independently dispositive
in any event of the Golden State successorship issue.
Inasmuch as the Board is reversing, on other grounds, the judge’s
finding that Oregon Panel was a Golden State successor to Lebanite
Corp., Chairman Battista finds it unnecessary to comment on the
judge’s reliance on S. Bent & Bros., supra, in reaching his finding.
1 Golden State Bottling Co. v. NLRB, 414 U.S. 168 (1973).
the Board’s Perma Vinyl decision. There, the Board held
that:
[O]ne who acquires and operates a business of an em-
ployer found guilty of unfair labor practices in basically
unchanged form under circumstances which charge
him with notice of unfair labor practice charges against
his predecessor should be held responsible for remedy-
ing his predecessor’s unlawful conduct.
Perma Vinyl Corp., 164 NLRB 968, 969 (1967), enfd. 398
F.2d 544 (5th Cir. 1968).
This test, the Supreme Court held, reflected an appro-
priate “balance between the conflicting legitimate inter-
ests of the bona fide successor, the public, and the af-
fected employee.” 414 U.S. at 181. As the Court ex-
plained:
Avoidance of labor strife, prevention of a deterrent ef-
fect on the exercise of rights guaranteed employees by
§7 of the Act . . ., and protection for the victimized em-
ployee . . . are achieved at a relatively minimal cost to
the bona fide successor. Since the successor must have
notice before liability can be imposed, “his potential li-
ability for remedying the unfair labor practice is a mat-
ter which can be reflected in the price he pays for the
business, or he may secure an indemnity clause in the
sales contract which will indemnify him for liability
arising from the sellers’ unfair labor practices.”
Id. at 185, quoting Perma Vinyl, supra, 164 NLRB at 969.2
Here, as the judge correctly found, Oregon Panel oper-
ated Lebanite’s business in basically unchanged form.
And Oregon Panel is properly charged with notice of
Lebanite’s unfair labor practices—despite my col-
leagues’ separate, apparent misgivings about controlling
law. Robert Walker, Lebanite’s general manager, was
aware of Lebanite’s conduct and then became a principal
of Oregon Panel. “[I]n determining whether a successor
had notice of its potential liability, the Board does not
consider whether the successor has seen the particular
charges or complaints, but rather, whether the successor
was aware of conduct that the Board ultimately found

2 The Golden State Bottling Court also observed that “there is no un-
derlying congressional policy here militating against the imposition of
liability.” 414 U.S. at 185 (emphasis added).
Accordingly, I agree with Chairman Battista that the rationale of
Steinbach v. Hubbard, 51 F.3d 843 (9th Cir. 1995)—a decision under
the Fair Labor Standards Act that emphasizes a public interest in the
“free transfer of capital and the reorganization of unprofitable busi-
nesses”—does not apply here. For an incisive criticism of Steinbach,
see Andrew P. Pickering, Steinbach v. Hubbard: Somebody Call an
Ambulance! The Fair Labor Standards Act and the Successor Liability
Doctrine Have Been Seriously Injured!, 1996 B.Y.U. L. Rev. 689
(1996).
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD754
unlawful.” S. Bent & Bros., supra, 336 NLRB at 790
(collecting cases).
II.
Based on the continuity of the enterprise, coupled with
Oregon Panel’s notice of the underlying unfair labor
practices, imposing successor liability in this case would
seem to be a straightforward matter. The majority, how-
ever, declines to do so, on the basis that Oregon Panel
“could not have effectively protected itself from the po-
tential unfair labor practice liability by negotiating a re-
duction in the lease price.” In support of this rationale,
the majority cites two Board decisions, Glebe Electric,
307 NLRB 883 (1992), and Hill Industries, 320 NLRB
1116 (1996). But the majority’s approach is flawed, and
the cases it cites are distinguishable.
A.
To begin, if a successor is on notice of potential unfair
labor practice liability, then the Board must, at the very
least, presume that the successor had the opportunity to
avoid or mitigate its liability. It is surely the successor’s
evidentiary burden to rebut this presumption, just as it is
the successor’s burden to prove lack of notice. See Bel-
lingham Frozen Foods, 237 NLRB 1450, 1466 fn. 26
(1978), enfd. denied on other grounds 626 F.2d 674, 681
(9th Cir. 1980). See also S. Bent & Bros., supra, 336
NLRB at 790 (successor’s burden to prove lack of no-
tice).
The burden, in turn, is a high one. The Golden State
Bottling test obviously does not require that the successor
actually succeed in winning indemnification or a reduced
price from the predecessor. If the successor, despite no-
tice, fails to insulate itself, but nevertheless proceeds
with the transaction, it does so at its own risk, and there
is no unfairness in imposing liability. See Bellingham
Frozen Foods, supra, 237 NLRB at 1466 fn. 26 (“[I]t is
unlikely that a successor with prior knowledge of the
unfair labor practice liability could invoke its own failure
to so adjust the purchase price as a means of evading
liability for remedying a predecessor’s unlawful con-
duct”).
The majority acknowledges that “Lebanite leased its
property, plant, and equipment to Oregon Panel” and
“[t]hus, in theory, Lebanite and Oregon Panel could have
negotiated a reduction in the lease price . . . to try to re-
flect the liability that Oregon Panel potentially would be
incurring for Lebanite’s unfair labor practices.” This
finding, it seems to me, should be sufficient to establish
successor liability.
The majority, however, focuses on the terms of the
lease, observing that “because the lease was terminable
by either party on 30-days’ notice, Oregon Panel’s total
payments under the lease could have amounted to far less
than the potential unfair labor practice liability.” Ac-
cording to the majority, “[i]n order to protect itself from
liability, Oregon Panel would need to set-off $231,440,”
but its lease payments to Lebanite might have amounted
to no more than $37,000 (two monthly payments of
$18,500), if Lebanite had cancelled the lease.
The majority’s reasoning is hard to follow. Oregon
Panel’s lease payments gave it the right to use Lebanite’s
property, plant, and equipment, as well as the option to
purchase those assets. Nothing about the transaction
made it inherently impossible for Oregon Panel to use
those productive assets to generate sufficient income to
discharge Lebanite’s liability—and thus the transaction
presumably could have been structured to take into ac-
count Oregon Panel’s potential exposure. More funda-
mentally, the majority errs in taking the terms of the
transaction between Lebanite and Oregon Panel as a
given and then concluding that, within that framework,
there was no room for a price reduction or an equivalent
means of addressing Oregon Panel’s legal exposure.
This approach wrongly invites parties to structure their
transactions to avoid successor liability. It simply as-
sumes—rather than requiring Oregon Panel to prove—
that it was somehow impossible for it to acquire the use
of Lebanite’s assets on terms that accounted for the po-
tential unfair labor practice liability.3
The proper focus, rather, is on the nature of the rela-
tionship between the predecessor and the successor, not
on the specific terms of the transaction between them.4

3 The majority’s analysis seems premised on the possibility that
Lebanite might cancel the lease quickly, leaving Oregon Panel with
successor liability but no means to satisfy it. But the majority never
explains why Lebanite would have an incentive to do so, if Oregon
Panel was operating the plant productively and, by its lease payments,
reducing Lebanite’s indebtedness. Oregon Panel also had acquired a
right to purchase, which the majority fails to factor into its analysis.
Moreover, the majority’s conclusion that Oregon Panel “could not
have protected itself” is incorrect even apart from the lease payments.
Although Lebanite leased all of its assets to Oregon Panel, it retained
those assets’ ultimate sale value. Thus, Oregon Panel could have bar-
gained for indemnification—i.e., for the right of title to at least some of
those assets in the event of Golden State liability. Although Lebanite’s
bank had a security interest in the same assets, it might well have
agreed to such an arrangement, because it clearly preferred the lease
agreement to the alternative of Lebanite’s going into bankruptcy.
However, Oregon Panel apparently did not even try to bargain for such
protection.
4 See, e.g., Ponn Distributing, Inc., 232 NLRB 312, 314–315 (1977)
(imposing liability on successor that foreclosed on security interest in
predecessor’s assets, rejecting argument that absence of sale-and-
purchase precluded successor from adjusting purchase price to compen-
sate for potential liability). Cf. S. Bent & Bros., supra, 336 NLRB at
792 (rejecting argument that successor, who purchased assets of prede-
cessor in secured private-party sale through banks, lacked opportunity
LEBANITE CORP. 755
Here, given the nature of the transaction—Oregon Panel
acquired the use of Lebanite’s entire operation—there is
no inequity in imposing successor liability. In such cir-
cumstances, employees would reasonably regard Oregon
Panel as substituting itself for Lebanite and as benefiting
from Lebanite’s unfair labor practices; thus, labor strife
might predictably follow Oregon Panel’s refusal to dis-
charge Lebanite’s legal obligations to employees.5 Hold-
ing Oregon Panel liable, of course, furthers the goal of
making victimized employees whole.
The majority observes that “given Lebanite’s precari-
ous financial situation when it closed, it is not reasonable
to believe that an indemnification clause would have
protected Oregon Panel.” But in imposing successor
liability, it should make no difference that a financially
distressed predecessor is unable, as a practical matter, to
indemnify the successor. As Golden State Bottling
makes clear, it is precisely those situations—in which
employees also have no meaningful recourse against the
predecessor—where the availability of successor liability
is most important to promote the policies of the National
Labor Relations Act.6
B.
The decisions on which the majority relies, Glebe
Electric and Hill Industries, do not support the result
reached here.
As the majority acknowledges, in Glebe Electric, the
Board refused to impose successor liability because it
found a “total absence of any business relationship be-
tween Glebe [the predecessor] and Aneco [the putative
successor].” 307 NLRB at 885. Aneco simply took over
Glebe’s contract to do electrical work for another party,
Centex, and never dealt with Glebe at all. In the major-
ity’s words here, “Aneco had not acquired anything of

to negotiate insulation from liability, despite testimony that banks were
unwilling to negotiate).
5 See Perma Vinyl, supra, 164 NLRB at 969 (explaining imposition
of successor liability in terms of employees’ perspective, describing
successor as “beneficiary of unremedied unfair labor practices,” and
observing that successor “is generally in the best position to remedy . . .
unfair labor practices most effectively”).
6 The majority emphasizes the purported “equities in favor of Ore-
gon Panel, viz. the fact that it is entirely innocent of any unlawful con-
duct.” Under established law, however, Oregon Panel’s innocence has
already been taken into account, by imposing a notice requirement.
The majority’s refusal to find Oregon Panel liable is all the more preju-
dicial to the wronged employees in view of the relationship between
Lebanite and Oregon Panel. Had Lebanite gone into bankruptcy, as it
clearly would have done in the absence of the lease agreement for all of
Lebanite’s assets, the Board could at least have pursued the employees’
backpay claims in the bankruptcy proceeding. The lease agreement
with Oregon Panel, however, might have been extended indefinitely
had business conditions improved. In that event, under the majority’s
decision, there would have been no practical way to pursue the backpay
claims.
value from Glebe.” This case is obviously different.
Oregon Panel and Lebanite did have a business relation-
ship, and Oregon Panel did acquire something of value
from Lebanite: the right to use (and to buy) its property,
plant, and equipment.
Hill Industries is distinguishable as well. There, the
only assets the putative successor (BTS) acquired from
the predecessor (Precision) were $3500 worth of materi-
als, while the unfair labor practice liability “greatly ex-
ceed[ed] $53,000.” 320 NLRB at 1116. Precision also
agreed to allow BTS to use certain equipment, in return
for permitting Precision to store it on the premises, but
the record did not show that BTS actually used the equip-
ment or that BTS derived any “practical benefit” from
the agreement. Id. at 1116–1117. The Board thus con-
cluded that:
[T]he overall nature of the establishment of BTS opera-
tions was ultimately not of a type under which BTS
could effectively have negotiated a method of insula-
tion from liability from Precision’s unfair labor prac-
tices.
Id. at 1117 (emphasis added). The Board went on to cite
“another equally important consideration” that militated
against a finding of successor liability: the “significant dif-
ference between the corporate missions of the two entities.”
Id. Based on these two considerations, the Board refused to
hold BTS liable.
Even accepting the majority’s debatable view that the
two considerations cited by the Board were independent
grounds for rejecting successor liability,7 Hill Industries
is easily distinguished from this case. In contrast to the
equipment-storage-and-use agreement in Hill Industries,
the lease agreement here certainly conveyed a substantial
“practical benefit” on Oregon Panel: the use of Leban-
ite’s entire productive operation. The “overall nature of
the establishment of [Oregon Panel’s] operations”—in
the words of Hill Industries—was indeed “of a type un-
der which [Oregon Panel] could have effectively negoti-
ated a method of insulation from liability.” 320 NLRB at
1117 (emphasis added).8
In short, the majority cites no case comparable to this
one in which the Board has refused to impose successor
liability.

7 The better reading of the decision is that the Hill Industries Board
treated the two considerations as cumulatively supporting its holding.
Nothing in the language of the decision indicates otherwise, much less
supports the majority’s labeling of the first consideration as the “princi-
pal . . . rationale.”
8 Moreover, there was no “significant difference between the corpo-
rate missions” of Lebanite and Oregon Panel, the second consideration
relied upon in Hill Industries.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD756
III.
The majority’s narrow focus predictably leads to the
wrong result. Concentrating entirely on Oregon Panel’s
interests, the majority gives no weight at all to the other
interests implicated here: the public interest in avoiding
labor strife and the interest of victimized employees in
being made whole. In analyzing Oregon Panel’s situa-
tion, the majority fails to appreciate the nature of the
transaction with Lebanite, which did give Oregon Panel a
meaningful opportunity to avoid or mitigate liability.
Here, Lebanite’s former employees should not be left
holding the bag. Accordingly, I dissent.
Richard C. Fiol, Esq., for the General Counsel.
Richard N. VanCleave, Esq. (Barran Liebmann), of Portland,
Oregon, for Lebanite Corporation and R. E. Service Com-
pany.
John L. Barlow, Esq. (Barnhisel, Willis, Barlow & Stephens),
of Corvallis, Oregon, for Oregon Panel Products.
Harlan Bernstein, Esq. (Jolles & Bernstein), of Portland, Ore-
gon, for the Charging Party.
DECISION
STATEMENT OF THE CASE
CLIFFORD H. ANDERSON, Administrative Law Judge. I heard
the above-captioned case in trial on November 2 and 3, 2004,
and January 26, 2005, pursuant to an order consolidating pro-
ceedings, amended complaint, compliance specification and
notice of hearing issued by the Regional Director for Region 19
of the National Labor Relations Board (the Board) on May 28,
2004. Posthearing briefs were due on March 23, 2005.
The amended complaint and compliance specification is
based on a charge filed by the Western Council of Industrial
Workers, Local 2554, affiliated with the United Brotherhood of
Carpenters & Joiners of America (the Charging Party or the
Union) against Lebanite Corporation (Lebanite) and/or R. E.
Service Company (RES), and Oregon Panel Products, LLC
(OPP) on October 10, 2003, amended on November 7, 2003,
and docketed as Case 36–CA–9463–1.
Respecting Lebanite: The complaint, as amended at the
hearing, alleges, inter alia, that Lebanite had a collective-
bargaining agreement with the Union respecting unit employees
at its Lebanon, Oregon facility which extended by its terms
from October 21, 2000, to September 30, 2004. The complaint
further alleges that Lebanite on and after April 28, 2003, failed
and refused to provide the Union with requested information
relevant to fulfilling its function as representative of employees.
It also alleges Lebanite, on and after about July 1, 2003, repu-
diated the contract refusing to comply with its terms and, on or
about August 1, 2003, ceased operations and laid off all its
employees—all without prior notice to the Union or affording it
an opportunity to bargain respecting the effects of its actions.
Finally the complaint alleges with respect to Lebanite, that the
conduct described above violates Section 8(a)(5) and (1) of the
National Labor Relations Act (the Act). In the compliance
specification the Regional Director alleges a specific liquidated
remedy for unit employees arising from the unfair labor prac-
tices alleged.
Lebanite did not file an answer contesting either the com-
plaint or the compliance specification. At the opening of the
hearing, I granted the General Counsel’s unopposed1 motion for
default judgment against Lebanite respecting both the unfair
labor practice allegations and the compliance specification.
Neither RES nor OPP in their answers denied the allegations of
the compliance specification, save that each denied those ele-
ments of the complaint which asserted grounds for extending
liability for the remedial requirements of the specification to
them. At the opening of the hearing, I granted the General
Counsel’s unopposed motions for limited, partial default judg-
ments against both RES and OPP respecting the compliance
specification elements of the Regional Director’s May 28, 2004
order consolidating proceedings, amended complaint, compli-
ance specification, and notice of hearing.
Thus, as a result of the pleadings, stipulations of counsel at
the hearing, and the positions taken by the parties respecting the
three trial motions of the General Counsel described above,
there was no dispute respecting: (1) all elements of the com-
plaint and compliance specification concerning Lebanite, and
(2) respecting RES and OPP there was no dispute regarding the
complaint or the compliance specification’s terms, save as to
the responsibility of RES and OPP, if any, for the unfair labor
practices and for the compliance specification remedy for the
violations, as set forth in greater particularity below.
Respecting RES: The amended complaint alleges, and RES
denies, that Lebanite and RES at all material times were a single-
integrated business and/or a single employer and, in conse-
quence, that RES is jointly and severally liable with Lebanite for
the unfair labor practices, the remedy set forth in the compliance
specification and any other remedy directed to Lebanite.
Respecting OPP: The amended complaint alleges and OPP
denies, that OPP has continued as the employing entity with
notice of Lebanite’s potential liability to remedy its unfair labor
practices and is a successor to Lebanite and jointly and sever-
ally liable for the remedy directed against Lebanite.
FINDINGS OF FACT
Upon the entire record herein, including helpful briefs from
RES, OPP, and the General Counsel, I make the following find-
ings of fact.2
I. JURISDICTION3
Lebanite is a State of Oregon corporation which had an of-
fice and a place of business in Lebanon, Oregon, until October

1 Counsel VanCleave, appearing for both Lebanite and RES, made it
clear that while Lebanite was not opposing the motion, RES was deny-
ing and defending against the joint employer/single employer, joint and
several liability allegations of the complaint.
2 As a result of the pleadings and the positions and stipulations of
counsel at the trial, there were few disputes of fact regarding collateral
matters. Where not otherwise noted, the findings herein are based on
the pleadings, the stipulations of counsel, or unchallenged credible
evidence.
3 The jurisdictional facts were established by the pleadings or the
stipulations and admissions of counsel at trial.
LEBANITE CORP. 757
2003 where, until on or about August 2003, it was engaged in
the business of manufacturing laminate wood products. RES is
a California corporation with an office and place of business in
Lodi, California, where it is engaged in the manufacture and
distribution of materials used in making printed circuit boards.
OPP is a State of Oregon corporation which at relevant times
had an office and place of business in Lebanon, Oregon, where
it was engaged in the business of manufacturing laminate wood
products.
Lebanite, during the period July 1, 2002, to July 1, 2003, in
the course and conduct of its business operations, manufactured
and shipped to sources outside the State of Oregon, goods and
materials valued in excess of $50,000. RES during the 12-
month period prior to the issuance of the complaint, a represen-
tative period, in the course and conduct of its business opera-
tions, manufactured and shipped goods or provided services
from its California facilities to customers outside the State, or
sold and shipped goods or provided services to customers
within California which customers were themselves engaged in
interstate commerce by other than indirect means, of a total
value of $50,000. OPP, in the 12-month period following Octo-
ber 24, 2003, in the course and conduct of its business opera-
tions, manufactured and shipped to sources outside the State of
Oregon, goods and materials valued in excess of $50,000.
Based on the above, there is no dispute and I find that Leban-
ite, RES and OPP have been, and each of them, at all times
material, has been, employers engaged in commerce within the
meaning of Section 2(2), (6), and (7) of the Act.
II. LABOR ORGANIZATION
The record establishes, there is no dispute, and I find the Un-
ion is, and has been at all times material, a labor organization
within the meaning of Section 2(5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. Lebanite Corporation and R. E. Service
Corporation
Lebanite, the product, is a longstanding, patented trade name
for an engineered composite hardboard panel developed and
manufactured at a facility in Lebanon, Oregon (the facility).
While Lebanite was made in different thicknesses and densities,
it comprised the essentially exclusive product of the facility.
Through the facility’s many years of operations, the facility and
the associated rights to manufacture and use the trade name
Lebanite have been owned and operated by various forest prod-
uct organizations including Champion International, U.S. Ply-
wood, and Georgia-Pacific. In January 2000, R. E. Service, a
Subchapter S, California corporation with offices and a manu-
facturing facility in Lodi, California, purchased the facility as
an ongoing operation from Georgia Pacific holding it under a
newly formed corporation, Lebanite Corporation, a Subchapter
S, Oregon corporation wholly owned by R. E. Service. Mark
Frater was and has at all times material been the founder, presi-
dent, chief executive officer, and a 90-percent owner of RES.
The Union had long represented employees at the facility
and Lebanite recognized the Union as the exclusive representa-
tive of its employees in the following unit (the unit) appropriate
for the purposes of collective bargaining within the meaning of
Section 9(b) of the Act:
All full, regular part-time and temporary production employ-
ees, maintenance employees and transportation employees
employed by Lebanite Corporation at its Lebanon, Oregon fa-
cility; excluding all professional employees, temporary con-
struction employees, independent contractors and their em-
ployees, guards and supervisors as defined in the Act.
Lebanite and the Union entered into a collective-bargaining
agreement, effective by its terms from October 21, 2000, to
September 30, 2004. In 2001, the unit comprised approxi-
mately 200 employees, but thereafter was greatly reduced as
discussed below.
Lebanite’s general manager was Robert (Skip) Walker, a
longtime employee who assumed the general manager position
in 2002. He testified he initially reported to Alex Watt, Leban-
ite’s chief operating officer and accountant who maintained
offices both at the RES facility in Lodi, California, and at the
Lebanon facility. Upon Watt’s departure, Walker testified,
Watt’s duties were assumed by Mark Frater. Walker as Leban-
ite’s general manager closely consulted with Watt and thereaf-
ter with Frater on production decisions as well as all decisions
involving expenditures of funds. Frater worked at his RES of-
fices in Lodi, California, but was in regular telephonic contact
with Walker respecting Lebanite’s operations and prospects.
Walker testified that from the beginning of RES’ ownership of
Lebanite in 2000, all its product prices were set by Frater.
RES’ general manager, Jeff Mason, also regularly participated
in twice monthly telephonic conference calls in which sales and
miscellaneous management topics would be discussed and de-
cisions taken.
The product “Lebanite,” Lebanite Corporation’s sole prod-
uct, had primary application as a hardboard used as a compo-
nent material in furniture and doors becoming part of the final
product. It was also used as transformer board, exit drill board
and saw board in the electronics industry. In the latter uses, the
product was used in the manufacturer of electronics and did not
become part of the final product.4 During the period 2000 into
2001, Lebanite’s production of exit drill board represented
between 30 and 50 percent of the facilities output.
At relevant times, RES was solely engaged in manufacturing
in the printed circuit board business providing drill board type
laminates and copper and aluminum foils, tooling plates and
various accessories related to manufacturing circuit boards, and
generally related to a laminating process done by RES. During
the period 2000 into 2001, RES purchased 25 to 30 percent of
Lebanite’s exit drill board output. Walker testified that ini-
tially, RES paid the same price for the products it purchased
from Lebanite’s as its other buyers. Later, however, he was
told by Watt that Watt had reduced RES’ prices to eliminate the
approximately 40-percent markup that Lebanite charged as its
gross profit over its cost. Walker testified that prices did not

4 Thus, for example, exit drill board is used as backing for circuit
boards when holes were drilled in them preventing harm to the circuit
board during the drilling process. Saw board served the same function
during the process of sawing or cutting circuit boards.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD758
change upon Watt’s departure, so Walker believed the discount
remained in place for RES purchases.
Clay David Donne, the Lebanite distribution sales manager
from October 2001 to its closure, testified that during his tenure
customers paid about $153 per 1000-square feet for Lebanite L-
30, a popular product type, but that RES throughout his tenure
paid “$50 to $60 per 1000,” a price of between a third and 40
percent of the price paid by others. His NLRB-prepared inves-
tigatory affidavit stated that he did not know the prices paid by
RES, but at trial Donne asserted that he had misunderstood the
Board agent’s question and the affidavit was incorrect, because
the RES price was in the Lebanite computer system and he was
familiar with it.
Frater testified that RES purchased its Lebanite materials
from Lebanite Corporation paying essentially the same price
for like volumes that other customers paid. In late 2001 and
into 2002 it became uneconomical for RES to use Lebanite as
drill board and it no longer purchased it. RES did continue to
use Lebanite blemished and off specification output as saw
board in 2002 and 2003, but Frater testified: “[M]ost of the saw
board we got from Lebanite, we just took,” i.e., the product was
neither invoiced by Lebanite nor paid for by RES.
Various market factors combined to reduce Lebanite’s sales
volume. Frater testified the national collapse of what has come
to be known as the “.com boom” seriously reduced the manu-
facture and sale of electronic equipment, the manufacture of
which was a significant basis for sales of Lebanite. Further,
other electronic manufacturers who had been purchasing
Lebanite earlier became reluctant to do so when RES, a com-
petitor, acquired Lebanite. Finally, other similar but cheaper
hard board products produced abroad became increasingly
competitive in all market areas in which Lebanite was used and
competitors’ sales further reduced Lebanite’s sales volume and
market share. In the aggregate these factors very seriously
reduced Lebanite’s sales volume beginning soon after RES’
acquisition, a sales deterioration that continued and worsened
over time. In response Lebanite instituted various cost reduc-
tion measures. The unit employee compliment was substan-
tially reduced, other staff was reduced, and the actions alleged
in the complaint as unfair labor practices during this period
were taken. Despite these efforts the operation became uneco-
nomic and, in August 2003, the plant ceased operation and was
closed. While there was initial hope the closure would be tem-
porary, circumstances did not change and the facility remained
closed.
B. Lebanite Corporation and Oregon Panel Products, LLC
During the deterioration in Lebanite’s sales and production
described above, Lebanite engaged in the admitted unfair labor
practices set forth in paragraphs 8, 9, and 10 of the complaint.
Thus, Lebanite improperly refused to provide the Union with
requested relevant information in and after April 2003, repudi-
ated the contract on and after July 2003 and closed the facility
laying off all its employees in August 2003. During these
events, Walker was Lebanite’s general manager and, while not
a decision maker with respect to Lebanite’s actions, was both
aware of them and aware of the Union’s protests concerning
them.
Following the closure of the Lebanite facility and cessation
of its operations, when initial attempts to sell the facility proved
unavailing, Walker and Donne and a third investor, Terry But-
ler, determined to acquire the rights to resume operations.
They formed Oregon Panel Products, LLC, which on or about
October 24, 2003, entered into agreements with Lebanite and
its creditors to lease the Lebanite operation. Neither Lebanite
nor RES nor its principal, Mark Frater, held any financial inter-
est in OPP. Walker was OPP’s general manager. Donne was its
general sales manager.
OPP entered into a lease agreement with Lebanite and Frater
covering the plant, and all equipment on the premises. The
terms of the lease provided for monthly payments to Lebanite
and to Lebanite’s bank holding notes on the property. An op-
tion to purchase lay with OPP. The documents comprise a
substantial commercial lease with numerous clauses including
indemnity obligations on the part of the tenants and personal
guarantees of Frater respecting Lebanite’s performance.
OPP took possession of the Lebanite site and in November
2003 commenced hiring and initiated cleanup and inspection.
By December 2003 production began and over 2 or 3 month’s
cleanup and repair took less time and staffing and production
was increased. Over time the original employee compliment of
about a dozen increased to a maximum of 52.
OPP operated with less manufacturing supervision, had less
stratified, more generalized production job functions, and paid
lower wages to its employees than Lebanite. The employee
complement was roughly an equal portion of former Lebanite
employees and employees without such prior experience. Em-
ployee applicants and employees were told that OPP was not
Lebanite, but rather was an independent entity and was not
bound by Lebanites recognition of the Union nor its collective-
bargaining agreement. OPP at no time recognized the Union as
the representative of its employees.
Despite every effort to lower production costs, attempts to
create new products and renewed sales efforts, the difficult
economics circumstances described previously got worse and
sales were and remained weak. The interim period when the
facility was closed—August into October 2003, had sent
Lebanite’s former customers looking for alternate supply and
suppliers and they did not return to OPP in sufficient numbers
as had been hoped. In early 2004, material costs increased sig-
nificantly. In sad summary, the resumption of operations was
not viable. In April 2004, OPP determined to abandon its op-
erations and that month the employees were laid off and the
plant was shut down.
C. Analysis and Conclusions
1. The relationship between Lebanite and RES
The complaint alleges at paragraph 5 that Lebanite and RES
have been at all material times a single-integrated business
and/or a single employer within the meaning of the Act. The
Board has long examined the following factors to determine if
two employing entities constitute a single employer:5 (1)
common ownership, (2) interrelation of operations, (3) common

5 The fountainhead case approving the doctrine is Radio Union v.
Broadcast Service of Mobile, 380 U.S. 255 (1965).
LEBANITE CORP. 759
management, and (4) centralized control of labor relations. Not
all of these criteria must be present to establish single employer
status, and a significant factor is the absence of an “arm’s-
length relationship found among unintegrated companies.”
Denart Coal Co., 315 NLRB 850, 851 (1994). Both counsel
for the General Council and for RES recognized the Board’s
approach and addressed each of the relevant factors. Counsel
for RES emphasized that under Masland Industries, 311 NLRB
184, 186 (1993), and Dow Chemical Co., 326 NLRB 288
(1998), the burden of establishing whether two entities consti-
tute a single employer rests with the General Counsel.
There is no dispute that the two entities involved herein,
Lebanite and RES, have identical ownership: Lebanite is
wholly owned by RES which in turn is 90 percent owned by
Mark Frater, the president of each. Merely because Lebanite is
a wholly owned subsidiary of RES, that legal relationship does
not, of itself, cause the parent and subsidiary to constitute a
single employer within the meaning of the Act. Esmark, Inc. v.
NLRB, 887 F.2d 739 (7th Cir. 1989).
Respecting the interrelationship of operations, save for RES’
use of Lebanite as saw and drill board, there was essentially no
interrelationship of operations. There was no record evidence
of unit employee transfers, shared production equipment or
common suppliers or customers. As described above, RES
initially used a substantial amount of Lebanite’s hardboard
product, Lebanite, as both saw board and drill board. Over
time however that use was very substantially reduced.
Concerning common management, Lebanite and RES had
their own hierarchy of supervision. There was, however, a
degree of overlap and consultation. Thus, Frater was the presi-
dent of each entity. Lebanite’s general manager Robert
Walker, generally in charge of day-to-day operations, initially
reported to Alex Watt, Lebanite’s chief operating officer who
maintained offices both at the RES facility in Lodi, California,
and at the Lebanon, Oregon facility. His title and authority at
RES was not made clear on the record. Later, following Watt’s
departure, Walker testified he reported to Frater and regularly
held telephonic conferences with RES’ general manager, Jeff
Mason.6 Importantly, Walker also testified that he had no au-
thority to make any decisions respecting financial matters and,
as the need arose, made requests of and took instruction from
Frater. Frater in turn meets with RES’ general manager to dis-
cuss RES’ business matters. I found Walker to be the more
convincing witness respecting his limited authority over Leban-
ite operations as opposed to Frater’s self-description of his
more own limited role.7 Common management may be found
where the separate managerial hierarchies take close instruction
from a common owner. Masland Industries, supra.

6 Walker was a principal in OPP and therefore arguably aligned in
interest with the General Counsel in establishing RES’ joint liability for
Lebanite’s remedial obligation which joint liability had the potential to
lighten any possible obligation of OPP. Nonetheless, I found him a
straightforward and honest witness whose testimony seemed to be
given completely from memory without self-censure and without edit-
ing. I fully credit all aspect of his testimony.
7 Frater was less direct and forthcoming in his testimony and was
frequently disputative on the stand. I also found his demeanor less
convincing than Walker who was an unusually believable witness.
Respecting centralized control of labor relations, day-to-day
management at Lebanite resided with Walker and local super-
vision. Clearly, however, the larger policy decisions were
taken by Frater. Thus, decisions respecting final approval of
contract negotiations, the various decisions taken by Lebanite
regarding the actions found to be unfair labor practices, and the
various instructions to Walker given in managing the conse-
quences of these decisions were all handled by Frater. While
there was little evidence respecting Frater’s control of labor
relations with RES, Frater testified that as the president of
RES he could and did make decisions respecting labor policy as
a matter of right. These facts in their totality support a finding
of centralized control over labor relations. “In assessing the
appropriateness of single employer treatment, the fact that day
to day labor matters are handled at the local level is not control-
ling.” Pathology Institute, 320 NLRB 1050, 1063 (1996).
Considering these factors under the Board guidlines, it is a
close question whether the General Counsel has met his burden
of establishing that Lebanite and RES together constitute a
single employer. It is unnecessary to decide the issue at this
point in the analysis, however, because the significant factor of
the arm’s-length relationship between the two entities needs
still to be considered.
The testimony respecting the price RES paid for Lebanite’s
hardboard products was at variance. As set forth above in
greater detail, Walker testified that after an initial period, RES
paid much less for the products it bought than other suppliers,
in effect obtaining the product at or close to Lebanite’s cost.
Donne corroborated this testimony. Frater denied that this was
so, testifying rather that RES paid in effect what other custom-
ers buying like volume of product paid.
The amount billed and received for sales of its commercial
product is normally a matter recorded in invoices and other
financial documents. The General Counsel subpoenaed Leban-
ite’s records respecting this question, however the records were
allegedly lost in some fashion after the close of Lebanite’s op-
erations and OPP’s initiation of operations—apparently while
being shipped from Lebanon, Oregon to Lodi, California. The
General Counsel challenges this evidence and seeks an adverse
inference against RES and Frater that the records would have
corroborated the testimony of Walker respecting the price paid
by RES for Lebanite’s product. RES opposes that request. I do
not find it necessary to resolve the matter because I find that a
similar inference may be drawn against RES for not providing
its own records of what it paid for the product. Both commer-
cial sales and commercial purchases are subject to documenta-
tion. RES and Frater had the means to document their conten-
tions as to the prices paid for Lebanite product, but did not offer
such business records.
Further, even without the adverse inference, I credit Walker,
and the corroborating testimony of Clay David Donne,8 over

8 Donne’s testimony was inconsistent with his affidavit as discussed
above. None the less, I was impressed with his testimony and de-
meanor and credit his explanation of the confusion that resulted in the
variation between his recollection at trial and the recorded recollection
of his affidavit. I credit his testimony respecting Lebanite product
pricing to RES.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD760
Frater respecting the prices paid by RES for Lebanite products.
It is even possible that Frater did not know the price that was
paid by RES. In all events, I find that RES received a very
favorable, unreasonably favorable, nonarm’s-length price for
Lebanite product and this price was far superior not only to the
price paid by other customers of Lebanite, but beyond any price
based on an arm’s-length relationship. In other words, I find
the price to constitute significant evidence that RES and Leban-
ite were not dealing with one another on an arm’s-length basis.
This determination is reinforced by the testimony of Frater
that RES in effect simply took, without any payment whatso-
ever, truckloads of blemished Lebanite product for use by RES
as saw board. Even if blemished or off specification product
did not have the full market worth of unblemished material, and
the record does not establish the particulars relevant here, the
fact that RES simply took Lebanite output in truckload lots
without any compensation whatsoever, is beyond question not
an arm’s-length transaction.
Given all the above, and based on the record as a whole, the
other factors discussed above, and the less-than-arm’s-length
relationship manifested in the very favorable product pricing of
its regular products and the gratis provision of product seconds
to RES for use as saw board, I find that the General Counsel
has met his burden of proving that Lebanite and RES were a
single employer. Two companies which are geographically
separate may constitute a single employer where there is other
evidence of an interrelationship between them. Allegheny
Graphics, 320 NLRB 1141, 1143 (1996). I find that to be the
case here.
I therefore find that the General Counsel has met his burden
of showing that Lebanite and RES are a single employer as
alleged in paragraph 4 of the complaint and that RES is there-
fore jointly and severally liable, with Lebanite, for the unfair
labor practices alleged in the complaint, as well as the posting
of the notice contained in the motions for summary judgment
and for the compliance specification remedy also in the motion
and as directed herein.
2. The relationship between Lebanite and OPP
The complaint alleges at paragraph 3 and the General Coun-
sel argues that OPP is a successor employer to Lebanite under
the Supreme Court’s decision in Golden State Bottling Co., 414
U.S. 168 (1973). The Court in Golden State accepted the
Board’s doctrine that a successor was required to remedy the
unfair labor practices of its predecessor of which it was aware
at the time of acquisition. The Court made clear that this doc-
trine of sucessorship is broader than the general rules of corpo-
rate law respecting the liability of purchaser for the debts or
liabilities of its seller. The Court stated, 414 U.S. at 182 fn. 5:
The refusal to adopt a mode of analysis requiring the Board to
distinguish among mergers, consolidations, and purchases of
assets is attributable to the fact that, so long as there is a conti-
nuity in the “employing industry,” the public policies underly-
ing the doctrine will be served by its broad application. . . .
a. Was OPP aware of Lebanite’s unfair labor practices at
the time of acquisition?
The General Counsel argues that OPP well knew of the un-
fair practices of Lebanite at the time of their commission and
also knew that the Union had been seeking relief obtaining this
knowledge through Walker, Lebanite’s general manager and at
all relevant times OPP’s subsequent principal and agent.9 In-
deed, Walker engaged in conversations both with union offi-
cials and with Lebanite’s principal, Mark Frater, respecting
Lebanite’s unfair labor practice conduct and the Union’s griev-
ances respecting that conduct—all well before OPP took over
Lebanite’s operations.
The Government notes that the burden of proving a lack of
successor knowledge of the predecessor’s unfair labor practices
is on the alleged successor and argues OPP has not sustained
that burden here. In particular, the General Counsel relies on S.
Bent & Bros., 336 NLRB 788 (2001), in which the Board made
it clear the successor need be aware only of the unfair labor
practice conduct and need not be aware of a particular unfair
labor practice Board charge or a Board issued unfair labor prac-
tice complaint.
Counsel for OPP argues on brief that while Walker did have
initial knowledge of Lebanite’s failures to meet its commit-
ments to the unit employees, neither Walker nor OPP were
aware of subsequent developments after the closure. Thus,
OPP was not aware of the unfair labor practice charges, the
Unions postclosure efforts and what, if any actions Lebanite
had taken with the agreement of the Union or otherwise to re-
solve the disputes. Counsel emphasizes Walker’s testimony:
“As far as I knew, that the trust and Mr. Frater had worked
something out.”
Having considered the arguments of the parties at the hearing
and on brief in conjunction with the record as a whole, I find, in
agreement with the General Counsel and the cited S. Bent &
Bros. decision, supra, that OPP at the time of its acquisition of
the Lebanite facility was in fact aware of the conduct of Leban-
ite that is the basis for the unfair labor practice findings herein.
b. Was there substantial continuity of the
employing industry?
“The keystone in determining sucessorship is whether there
is substantial continuity of the employing industry.” Miami
Industrial Trucks, Inc., 221 NLRB 1223, 1224 (1975). Factors
which the Board considers in making this assessment include
“whether there is substantial continuity in operations, location,
work force, working conditions, supervision, machinery,
equipment, methods of production, product and services.” (Id.)
The General Counsel argues on brief at 16–17 that there was
substantial continuity in the employing industry in the Lebanite
to OPP transition. Counsel for the General Counsel acknowl-
edges the hiatus in operations from August to November 2003,
but notes that OPP principals Walker and Donne were on the
premises during that period and maintained contact with cus-

9 OPP was not named in the October 10, 2003 charge nor was it
served with it. It was however named in the November 7, 2003
amended charge which charge was served on OPP on or about that
same date.
LEBANITE CORP. 761
tomers and negotiated an agreement with Frater respecting
OPP’s lease of Lebanite’s premises and equipment.
Counsel for the General Counsel notes the site location and
its general process of manufacturer remained the same for each
entity. The facilities plant and equipment was used to manufac-
ture the product without significant purchase of new manufac-
turing equipment beyond maintenance and repair. The final
product, Lebanite, essentially the entire output of both Lebanite
and OPP, was unique to the facility and Lebanite, the product
name, was a licensed trademarked appellation. While due to
deterioration in market conditions customers were not identical,
there was substantial overlap.
Addressing commonality of supervision, work force and
working conditions, the government argues that continuity does
not depend on retention of the original workforce or even a
majority of that workforce and that in all events OPP employed
a substantial, significant number of Lebanite’s former employ-
ees. The General Counsel further argues that there is no particu-
lar significance to the fact that OPP’s wages were about half of
Lebanite’s unit wages. Respecting supervision the General
Counsel argues that two front-line supervisors, Heinback and
Passi, had been Lebanite supervisors and that Donne, Walker,
and Office Manager Shirley Oxford held the identical positions
with OPP they had earlier held with Lebanite.
Counsel for OPP argues on brief that OPP was but a short-
term leaseholder which did not acquire the business of Leban-
ite. As such, it could not have negotiated for indemnity or a
hold harmless agreement and therefore should not be held liable
for Lebanite’s conduct. In making his argument counsel relies
on the Board’s decision in Hill Industries, 320 NLRB 1116
(1996). In that decision, and in Glebe Electric, 307 NLRB 883
(1992), the Board focused on the nature of the business rela-
tionship between the predecessor and alleged successor. In
Hill, the alleged Golden State successor leased rather than pur-
chased equipment from the predecessor on terms that allowed
either party to terminate the arrangement on 30 days’ notice.
The Board found that under such circumstances the successor
had no opportunity to negotiate indemnity or other relief for the
successor's conduct. The Board stated at 307 NLRB at 1117:
And because the agreement allowed either party to
terminate the arrangement on a month's notice, neither [the
alleged successor] nor [the predecessor] could have known
at the time the agreement was reached how long they
could expect to benefit from it. In these circumstances, it
is difficult if not impossible to know what practical benefit
[the alleged successor] received as a result of the agree-
ment. Thus, the record fails to show that, in negotiating
over the terms of its equipment-storage-and-use agreement
with [the predecessor], [the alleged successor] could have
effectively insulated itself from potential exposure to li-
ability for [the predecessor’s] unfair labor practices. Nor
does it show that [the alleged successor] could have se-
cured indemnification from [the predecessor] as part of
this transaction.
Accordingly, we find that the overall nature of the es-
tablishment of [the alleged successor] operations was ul-
timately not of a type under which [the alleged successor]
could have effectively negotiated a method of insulation
from liability for [the predecessor’s] unfair labor practices.
In Hill, however, the business of the alleged predecessor and
successor were not the same, but were sufficiently different for
the judge to find the successor was not a Golden State succes-
sor based essentially on that fact alone.
OPP argues that there was no discussion of Lebanite’s unfair
labor practices or any potential liability for them in the negotia-
tions between Lebanite and OPP respecting OPP resuming
operations at the facility. Further, counsel argues that OPP
received neither favorable treatment nor a compromise on price
in the negotiations based on unfair labor practice conduct or
potential liabilities. Neither an indemnity nor a hold harmless
clause was incorporated in the final agreement.
I have considered the arguments of the parties in light of the
case law and the record as a whole. I find that there is substan-
tial continuity in the employing industry for the following rea-
sons. First and foremost, both Lebanite and OPP operated the
same Lebanite, Oregon facility using the same equipment to
produce essentially the same product. OPP was clearly leaner
and meaner and improvised and reorganized its staff in an at-
tempt to hold down costs, make do with equipment that was
not new or it the best of repair, and achieve efficient produc-
tion with a smaller work force paid much less that Lebanite’s
bargaining unit.
As counsel for OPP has eloquently argued, the work force
was not the same, suppliers and customers were not identical,
the principals of OPP were trying new ways to make a go of it
knowingly taking up an operation where Lebanite had failed.
Yet, it was the same site, the same general manufacturing proc-
ess and the same manufactured output. Significant proportions
of the workforce, the suppliers and the customers were the
same. The dearth of customer demand for its hard board prod-
uct which caused it to cease operations was in many ways the
same circumstance that laid Lebanite low.
In reaching this conclusion I have considered and rejected
counsel for OPP’s argument that it, like the alleged Golden
State successor in Hill Industries, supra, should not be held
liable because it could not have negotiated an indemnity or
other relief for its predecessor’s conduct. I reject this argument
because I find that in fact OPP could have negotiated or at least
tried to negotiate such an agreement. Thus, I note that the lease
negotiated included an indemnification clause binding OPP and
a personal guarantee given by Frater insuring compliance with
certain provisions by Lebanite. OPP could well have sought
indemnification or other provisions respecting Lebanite and its
derivative’s potential future liability for Leabonite’s unfair
labor practices. Unlike Hill, OPP was in essence taking over
Lebanite’s entire operation. This was no collateral or minor,
small scale, slightly related junction of unrelated business inter-
ests. OPP was seeking to take over all of Lebonite which was
at the time a closed operation. In such a context OPP had lev-
erage and, if it had sought and failed to obtain satisfactory
treatment for the potential unfair labor practice risks OPP
would assume in taking over the operation, OPP could have
declined to enter into an agreement with Lebonite unless the
terms were satisfactory to it.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD762
I am also aware that OPP entered into a lease agreement ter-
minable at short notice by any party. The Court in Golden
State, however, made it clear, as quoted above, that it approved
of the Board’s disinclination “to distinguish among mergers,
consolidations, and purchases of assets.” (414 U.S. at 182 fn.
5.) I therefore do not find the means by which OPP took over
the operation to be of major importance. OPP took over the
operations by means of an agreement with Lebanite which had
options allowing OPP to purchase the property. It could have
negotiated indemnities or other protection for unfair labor prac-
tice liability as noted. The form of the commercial agreement
between the predecessor and the successor here does not defeat
or limit the relationship I have found above.
I find therefore that OPP took over Lebanite’s operations,
preserving substantial continuity in the employing industry at a
time when it knew of Lebanite’s conduct found to constitute
unfair labor practices herein.
c. Balancing the conflicting interests
I have found OPP is a Golden State successor to Lebanite. Is
it therefore jointly and severally liable, without limit, for the
remedy of the unfair labor practices of Lebanite as found
herein? The Board in S. Bent & Bros., 336 NLRB 788, 793
(2001), restated the current policy respecting evaluation of the
equities of the Golden State successor relationship:
The determination of whether a successor is obligated to rem-
edy its predecessor’s unfair labor practices involves a balanc-
ing of “the conflicting legitimate interests of the bona fide
successor, the public, and the affected employee[s].” [Golden
State Bottling Co. v. NLRB, 414 U.S. 168 (1973)] 414 U.S. at
181. The balancing process includes an emphasis on protec-
tion for the victimized employee, who may be “without mean-
ingful remedy when title to the employing business operation
changes hands.” Id. (citing Perma Vinyl Corp., 164 NLRB at
969). Guided by these principles, we find that the interests of
the public and the victimized employees in this case are best
served by requiring Samuel Bent to remedy the unfair labor
practices of its predecessor, Bent.9
________________________
9 Interests of the public, which must be weighed, include
avoidance of labor strife and prevention of a deterrent effect on
the exercise of Sec. 7 rights, which may occur if victimized em-
ployees find themselves without remedy. 414 U.S. at 184–185.
However, counsel for OPP argues on Brief at 13:
OPP respectfully submits that even if it is considered a bona
fide successor, Golden State and its progeny require that a
balance be struck among the legitimate conflicting interests of
successors, the affected employees, and the public. Funda-
mental to this balance is whether a successor who is on notice
is in the best position to redress the violations without being
unduly burdened. In this case, there is no evidence that OPP
was aware of, or bargaining based on, its potential liability. In
any event, OPP, having gone out of business, is in no position
to remedy any unfair labor practices found against Lebanite
and/or RE Service Company, and there is no evidence of any
bad faith or impropriety in OPP’s decision to cease opera-
tions.
OPP makes the point that, whereas the cases describe mak-
ing a successor liable for the unfair labor practices of the prede-
cessor as a means of providing the employees with a meaning-
ful remedy, this is a balancing determination. Here OPP is
itself out of business after only a 6-month attempt to become a
viable manufacturer. Arithmetically, the sums due under the
compliance specification are roughly a like amount to the total
OPP lease agreement payments for the 6 months that OPP op-
erated the Lebanite facility. OPP was not a huge financial con-
glomerate in its Lebanon, Oregon operation and the dollar
amount of the remedy directed herein is not small.
Are the equities here so disproportionate that the obligations
of OPP as a successor should be eliminated or reduced on equi-
table or balancing grounds? Board cases give no guidance in
reducing a liquidated remedy of the type involved herein, al-
though counsel for OPP cites United States Circuit Court of
Appeals in Board and Department of Labor cases where he
argues such balancing occurs. See, e.g., Steinbach v. Hubbard,
51 F.3d 843 (9th Cir. 1995); Coronet Foods, Inc. v. NLRB, 158
F.3d 782, 795 (4th Cir. 1998). I am not aware of the Board
ever in effect reducing the amount of liability by some portion
under a balancing process in Golden State cases.
Having considered the arguments of the parties, the cited
cases and the record as a whole, I find and conclude that OPP,
as a bona fide successor to Lebanite with knowledge of its un-
fair labor practice conduct, should be found jointly and sever-
ally liable with Lebanite for the entire remedy directed against
it herein. The Board has not suggested that portions of liability
or elements of the remedy directed should be apportioned or
reductions made. The Board has consistently found an alleged
successor to be jointly and severally liable for all the known
conduct of the predecessor or not liable at all: No apportioning,
all or nothing. On the facts present herein, the balance to be
struck among the legitimate conflicting interests of successors,
the affected employees, and the public must favor the employ-
ees and the public. I therefore sustain complaint paragraph 3 of
the complaint and find OPP is liable to remedy the unfair labor
practices alleged in the complaint and the liquidated remedy set
forth in the compliance specification and below.
REMEDY
The General Counsel’s motions for summary judgment and
partial summary judgment, granted at the opening of the hear-
ing as described above, provide as the remedy to the unfair
labor practices and in remedy of the compliance specification a
specific order and notice.10 The remedy directed herein, includ-
ing the notice, is that set forth in the granted summary judg-
ment motions adjusted to incorporate Board procedural re-
quirements. Lebanite, RES, and OPP are jointly and severally
liable for the remedy directed.

10 The General Counsel’s Motion for Summary Judgment, Exhs. 8(a)
and (b) in the record as GC Exh. 2.
LEBANITE CORP. 763
CONCLUSIONS OF LAW
On the basis of the above findings of fact and the record as a
whole and Section 10(c) of the Act, I make the following con-
clusions of law.
1. Lebanite Corporation, R. E. Service Company, and Ore-
gon Panel Products, LLC are, and each has been at all times
material, employers engaged in commerce within the meaning
of Section 2(2), (6), and (7) of the Act.
2. At all material times, the Lebanite Corporation and R. E.
Service Company, constitute a single employer within the
meaning of the Act.
3. On or about October 24, 2003, and at all times thereafter,
Oregon Panel Products, LLC has continued to be the employing
entity with notice of Lebanite Corporation’s potential liability
to remedy its unfair labor practices and is a successor to the
Lebanite Corporation.
4. The Charging Party is, and has been at all relevant times,
a labor organization within the meaning of Section 2(5) of the
Act.
5. The Charging Party represents the Lebanite Corporation’s
employees in the following unit, which is appropriate for bar-
gaining within the meaning of Section 9 of the Act:
All full, regular part-time and temporary production employ-
ees, maintenance employees and transportation employees
employed by Lebanite Corporation at its Lebanon, Oregon fa-
cility; excluding all professional employees, temporary con-
struction employees, independent contractors and their em-
ployees, guards and supervisors as defined in the Act.
6. Lebanite Corporation violated Section 8(a)(5) and (1) of
the Act by engaging in the following acts and conduct respect-
ing the unit set forth above:
(a) At all times since April 30, 2003, failing and refusing to
provide the Charging Party requested information relevant to its
duties as the exclusive representative of unit employees.
(b) Since on or about July 1, 2003, repudiating the contract,
which repudiation included its failure and/or refusal to pay (or
on behalf of) unit employees the following:
i. vacation pay
ii. 4th of July holiday pay
iii. floating holiday pay
iv. bonus pay
v. wage increase effective July 1, 2003
vi. pension contributions
vii. medical insurance payments
(c) On or about August 1, 2003, ceasing operations and lay-
ing off all employees and thereafter leasing its facility on or
about October 24, 2003, all without prior notice to the Charging
Party and/or affording the Charging Party an opportunity to
bargain with respect to the effects of such conduct.
7. The unfair labor practices described above are unfair labor
practices within the meaning of Section 2(6) and (7) of the Act.
Based upon the above findings of fact and conclusions of
law, and on the basis of the entire record herein, and in particu-
lar the proposed order in the Motion for Summary Judgment
granted at the beginning of trial, as described supra, I issue the
following recommended11
ORDER
The Lebanite Corporation, R. E. Service Corporation and
Oregon Panel Products, LLC, their officers, agents, successors,
and assigns, shall, jointly and severally:
1. Cease and desist from
(a) Failing and refusing to furnish the Western Council of
Industrial Workers Local 2554 affiliated with United Brother-
hood of Carpenters and Joiners of America with the informa-
tion requested by it, relevant and necessary to their representa-
tion of unit employees.
(b) Failing and refusing to notify and offer to bargain with
the Union respecting the effects of its closure of its Lebanon,
Oregon facility.
(c) Since on or about July 1, 2003, repudiating the contract,
which repudiation included its failure and/or refusal to pay (or
on behalf of) unit employees the following:
i. vacation pay
ii. 4th of July holiday pay
iii. floating holiday pay
iv. bonus pay
v. wage increase effective July 1, 2003
vi. pension contributions
vii. medical insurance payments
(d) On or about August 1, 2003, ceasing operations and lay-
ing off all employees and thereafter leasing its facility on or
about October 24, 2003, all without prior notice to the Charging
Party and/or affording the Charging Party an opportunity to
bargain with respect to the effects of such conduct.
(e) In any like or related manner restraining or coercing em-
ployees in the exercise of the rights guaranteed them by Section
7 of the Act.
2. Take the following affirmative action designed to effectu-
ate the policies of the Act.
(a) Pay to the employees named below the amounts set forth
next to their names, consistent with the compliance specifica-
tion, with interest to be computed in the manner prescribed in
New Horizons for the Retarded, 283 NLRB 1173 (1987):

11 If no exceptions are filed as provided by Sec. 102.46 of the
Board's Rules and Regulations, the findings, conclusions, and recom-
mended Order shall, as provided in Sec. 102.48 of the Rules, be
adopted by the Board and all objections to them shall be deemed
waived for all purposes.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD764
Employee Back Pay Owed
Anderson, Edwin $4,031.53
Bergh, James L. 5,674.88
Bottcher, Dennis Mervyn 5,371.27
Breshears, Chuck E. 3474.48
Burbach, David C. 4,053.73
Christensen, Richard L. 7,084.55
Coelho, Lanita Ann 2,505.71
Davis, Duane A. 2,415.22
Doll, Harold J. 294.80
Evans Sr., Michael L. 6,464.40
Fast, Gordon L. 3,816.90
Flanagan, Terry Lee 5,275.26
Fraba, George F. 9,460.36
Grill Byron G. 2,464.73
Grumbo Jr., Frederick N. 5,106.43
Hoover, Kenneth Gene 5,424.05
Hopkins, Howard E. 5,381.77
Horner, Ralph M. 2,922.35
Hubbard, James L. 4202.78
Huston, Kevin A 3,268.30
Johnson, Pillip Morris 3,091.26
Jones, Sammy L. 5,533.25
Lawson, Robin R. 2,710.90
Lindley, Russell A. 2,510.82
Lowman, Julius M. 4,009.81
Lyons, Donald J. 4,639.68
Marshall, Ronnie J. 5,167.69
Mitsch, Richard E. 3,282.43
Neal, Johnnie D. 5,436.42
Nissen Jerry L. 5,736.82
Oeder, Michael Gene 5,620.13
Orr, Earl W. 3,762.94
Peters, Brian E. 3,105.65
Peters Ernest J. 6,974.10
Pettner, Charles A. 4,031.67
Plagmann, Lynn E. 4,039.58
Port, Stanley D. 3,576.24
Ridenour, Rosalie Y. 3,441.34
Robertson, Benny 5,425.20
Rounsavelle, Donald 3,200.68
Ryan, Michael W. 7,294.29
Ryan, Robert E. 5,107.84
Selensky Jr., Steven P. 3,631.83
Stevens, David W. 1083.31
Stoering, Rodney E. 3,504.41
Summers, Larry 4,849.61
Tansley, Ronald C. 4,407.83
Thayer, Matthew E. 4,634.62
Torres, Francisco 1059.04
Tuma, Gary N. 3,172.87
Walls, Terry N. 7,015.60
Ward, Virgil Ray Jr. 5,811.16
Webb, Daniel D. 3,994,16
Zwetzig, Terry A. 1,883.55
TOTAL: $231,440.27
(b) Provide, to the extent it has not already done so, the in-
formation requested by the Union in it letter dated April 30,
2003.
(c) Upon request bargain collectively with the Union with re-
spect to the effects on its unit employees of its decision to close
its facility in Lebanon, Oregon, and reduce to writing any
agreement reached as a result of such bargaining.
(d) Considering that, during the pendency of these proceed-
ings, the Respondent has gone out of business or closed the
facility involved in these proceedings, the Respondent shall,
within 14 days after service by the Region, duplicate and mail,
at its own expense an exact copy of the attached notice to the
Union and to all of its unit employees employed at its former
Lebanon facility during the period from April 10, 2003, through
August 31, 2003.12 Reasonable steps shall be taken by the Re-
spondent to ensure that the notices are not altered, defaced, or
covered by any other material. Copies of the notice, on forms
provided by the Regional Director for Region 19, in English
and such other languages as the Regional Director determines
are necessary to fully communicate with employees, after being
signed by the Respondent's authorized representative, shall be
mailed immediately upon receipt thereof.
(e) Preserve and within 14 days of a request, or such addi-
tional time as the Regional Director may allow for good cause
shown, provide at a reasonable place designated by the Board
or its agents, all records, including an electronic copy of such
records if stored in electronic form, necessary to determine if
the terms of this Order have been complied with.
(f) Within 21 days after service by the Region, file with the
Regional Director a sworn certification of a responsible official
on a form provided by the Region attesting to the steps that the
Respondent has taken to comply.
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
FEDERAL LAW GIVES YOU THE RIGHT TO
Form, join, or assist a union
Choose representatives to bargain with us on your be-
half
Act together with other employees for your benefit and
protection
Choose not to engage in any of these protected activi-
ties.
An employer subject to the National Labor Relations Act must
collectively bargain with the labor organization that represents
its employees concerning wages, hours, and working condi-
tions. While an employer need not bargain with a union about
its determination to cease all operations and go out of business,
it must give the union notice of such a decision and an opportu-

12 If this Order is enforced by a judgment of a United States court of
appeals, the words in the notice reading “Posted by Order of the Na-
tional Labor Relations Board” shall read “Posted Pursuant to a Judg-
ment of the United States Court of Appeals Enforcing an Order of the
National Labor Relations Board.”
LEBANITE CORP. 765
nity to bargain concerning the effects of such a sale, lease,
and/or closure upon employees represented by the labor organi-
zation.
WE WILL NOT interfere with your free exercise of any of these
rights;
WE WILL NOT fail or refuse to timely furnish Western Council
of Industrial Workers Local 2554 affiliated with United Broth-
erhood of Carpenters of America (the Union) information that
is relevant and necessary to its role as the exclusive representa-
tive of employees in the unit described below.
WE WILL NOT repudiate the contract with the Union by refus-
ing to abide by its terms, including the failure to properly pay to
unit employees, 4th of July holiday pay, floating holiday pay,
bonus pay, a wage increase, pension contributions; and/or med-
ical insurance payments.
WE WILL NOT fail and refuse to notify the Union of our deci-
sion to cease operations for our business, lay off employees,
and lease our Lebanon, Oregon facility to Oregon Panel Prod-
ucts, and WE WILL NOT fail and refuse to provide the Union with
an opportunity to bargain respecting the lease and closure of
our facility, and the laying off of our employees.
WE WILL NOT in any like or related manner, violate the Act.
WE WILL furnish the Union, in a timely manner, the informa-
tion it requested by letter of April 30, 2003.
WE WILL upon request, bargain with the Union with respect to
the effects on our employees of the decision to cease opera-
tions, lay off employees, and lease our Lebanon, Oregon facil-
ity to Oregon Panel Products, and reduce to writing any agree-
ment reached as a result of the bargaining
WE WILL pay unit employees named in the Order in this deci-
sion, the amount set forth next to their names, with interest.
The Union represents employees in the following unit:
All full, regular part-time and temporary production employ-
ees, maintenance employees and transportation employees
employed by Lebanite Corporation at its Lebanon, Oregon fa-
cility; excluding all professional employees, temporary con-
struction employees, independent contractors and their em-
ployees, guards and supervisors as defined in the Act.
LEBANITE CORPORATION