Resco Products, Inc.

National Labor Relations Board - Board Decisions

Aug 31, 2000

331 N.L.R.B. 1546 (N.L.R.B. 2000)

DECISIONS OF THE NATIONAL LAOBR RELATIONS BOARD 1546
Resco Products, Inc. and Vessell Mineral Products
Corporation and United Steelworkers of Amer-
ica, AFL–CIO, CLC. Cases 14–CA–24512–1 and
14–CA–24512–2
August 31, 2000
DECISION AND ORDER
BY MEMBERS FOX, LIEBMAN, AND HURTGEN
On February 23, 1998, Administrative Law Judge Mi-
chael O. Miller issued the attached decision. Respondent
Resco Products, Inc. (Resco) filed exceptions. Respon-
dent Vessell Mineral Products Corporation (VMPC) filed
exceptions and a supporting brief, and the General Coun-
sel filed cross-exceptions, a supporting brief, and an an-
swering brief. VMPC filed an answering brief and a
reply brief.
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.
The complaint alleges that Resco and its successor,
VMPC, violated Section 8(a)(5) of the Act by failing to
make contractually required payments of accrued vaca-
tion pay to employees. The complaint also alleges that
VMPC violated Section 8(a)(1) by conditioning offers of
employment to Resco employees on their waiving con-
tractually accrued vacation pay, and later by threatening
employees with termination if they accepted checks in
payment for accrued vacation pay. The General Counsel
also contends that VMPC is a Golden State1 successor to
Resco and that it should be found to be jointly and sever-
ally liable to remedy Resco’s unfair labor practices.
The judge found the alleged violations, and the Re-
spondents have excepted. The General Counsel has ex-
cepted to the judge’s finding that VMPC is not a Golden
State successor. For the reasons discussed below, we
affirm the judge’s findings that Resco violated Section
8(a)(5), that VMPC violated Section 8(a)(1), and that the
case should not be deferred to arbitration. However, we
disagree with his finding that VMPC violated Section
8(a)(5). We also find, contrary to the judge, that VMPC
is a Golden State successor to Resco.
For many years, the Union represented a unit of
Resco’s production and maintenance employees at its
dolomite lime production plant at Bonne Terre, Missouri.
The most recent collective-bargaining agreement pro-
vided for a pension plan. Article XIII, section 4 of the
contract provided, in relevant part, that “[a]ny employee
quitting or discharged shall be paid the pro rata part of
his earned vacation.” Consistent with the latter provi-
sion, six employees who were permanently laid off in
early December 19962 because of a loss of business were
paid their accrued vacation pay by Resco.

1 Golden State Bottling v. NLRB, 414 U.S. 168 (1973).
Royce Vessell was Resco’s vice president for opera-
tions. In October, Vessell began negotiating to buy the
Bonne Terre facility. On December 18, Vessell and
Resco signed an agreement for the purchase and sale of
the plant, to be effective January 1. On executing the
agreement, Vessell relinquished his position as vice
president of operations, but remained in a supervisory
capacity with Resco until VMPC took over the plant on
December 31. Vessell became president of VMPC.
Under the terms of the purchase and sale agreement,
VMPC agreed to take over the employee pension plan.
VMPC also assumed Resco’s liabilities to the employees
for accrued vacation pay. Specifically, the agreement
stated that VMPC would assume and agree to pay

obligations and liabilities of [Resco] with respect to va-
cation rights due to hourly employees resulting from
termination of the Union Agreement with the United
Steelworkers of America. The cost to [VMPC] will be
. . . deducted from . . . [the] purchase price of the pen-
sion plan . . . and [VMPC] indemnifies and holds
[Resco] harmless from any loss, costs and expenses . . .
in the event that the hourly workers are not paid by
[VMPC] or do not accept payment from [VMPC].

Consistent with that provision, the purchase price paid by
VMPC for the pension plan was reduced by more than
$80,000, which was the amount of the employees’ total
accrued vacation benefits.
On December 20, after the purchase and sale agree-
ment had been executed, Royce Vessell met with the unit
employees to discuss VMPC’s acquisition of the plant
and the employees’ future employment status there.
Also present were Flora Denton, who was Resco’s hu-
man relations manager and who would occupy that same
position under VMPC, and Brad Hiles, VMPC’s attor-
ney. Vessell told the employees that he was “on the
hook” for their accrued vacation pay. He offered em-
ployment with VMPC, effective January 1, to all em-
ployees on Resco’s payroll as of December 20, on terms
and conditions set forth in a two-page document. This
offer stated that the same pension plan would be main-
tained, with an increased benefit of $1.50 per month per
year of service. It also provided that
Note: By accepting this offer, an employee agrees to
waive and release any claims against Resco [] and
[VMPC] pertaining to accrued vacation pay or vacation
time, whether or not such claims exist at the time this
offer is accepted.
The acceptance clause at the end of the document repeated
the statement concerning waiver of claims for accrued vaca-
tion pay. The employees were informed that the increase in
2 All dates refer to the period between October 1996 and June 1997.

331 NLRB No. 162
RESCO PRODUCTS 1547
pension benefits was being given in exchange for the loss of
accrued vacation benefits. Vessell told them that they had to
sign the offer to be employed by VMPC, but that if they
wanted the vacation pay rather than the job, they could have
it.
All but 3 of the 34 unit employees signed the offers
and were employed by VMPC when their employment
with Resco terminated on December 31. They were not
paid their accrued vacation pay. The other three employ-
ees declined VMPC’s offer, and they were terminated
December 31. Those individuals were paid their accrued
vacation pay.
The Union was not notified in advance or given an op-
portunity to bargain concerning the proposed waiver of
accrued vacation pay or the substitution of increased
pension benefits in its place. On February 10 the Union
filed a grievance against Resco seeking accrued vacation
pay on behalf of the individuals who had accepted em-
ployment with VMPC. Their vacation pay has never
been paid. The grievance is apparently still pending.
The parties have stipulated that VMPC continued to
operate the business in the same form and with a work
force of whom a majority had been previously employed
by Resco, and that VMPC is a successor to Resco.3
When it took over operations of the Bonne Terre plant,
VMPC recognized and bargained with the Union as the
representative of the unit employees, but the parties did
not reach a contract.
At a bargaining session on March 18, VMPC Attorney
Hiles stated that the Company wanted to get to the bot-
tom of the vacation pay issue, and asked for a copy of the
Union’s grievance. He also told the union negotiators
that VMPC was willing to pay the accrued vacation pay
to any employee who wanted it, but that any employee
who accepted the payment would be terminated. After a
caucus, during which time the union negotiators con-
ferred by telephone with their attorney, Hiles repeated
the offer, but this time said that the employees could pick
up their checks that Friday. He reiterated that if they
accepted the checks, they would be terminated. The Un-
ion did not agree to that proposal, but informed the em-
ployees at a March 20 union meeting that it had been
made. When the employees went to pick up their pay-
checks that Friday, they were given a choice between
accepting their vacation pay and being terminated, or
signing a waiver stating, “I decline receipt of a check for
$____, representing my accrued vacation pay under the
collective bargaining agreement between Resco, Inc. and
Steelworkers Local 8734.”
Deferral to Arbitration
The judge rejected VMPC’s contention that the case
should be deferred to arbitration, noting that VMPC has
no collective-bargaining agreement with the Union and
that it did not assume the grievance/arbitration provisions

3 NLRB v. Burns Security Services, 406 U.S. 272 (1972).
of the Union’s contract with Resco.4 VMPC has ex-
cepted to this finding.5 We find no merit in the excep-
tion.
To begin with, VMPC did not make its request for de-
ferral either in its answer to the complaint or at the hear-
ing, but for the first time in its posthearing brief to the
judge. The request therefore was untimely raised.6
In any event, we would reject VMPC’s deferral request
even if timely raised. As the judge found, VMPC has no
contract with the Union and did not adopt the griev-
ance/arbitration provisions of the contract between the
Union and Resco.7 Moreover, the Union’s grievance was
directed only at Resco, not at VMPC. Thus, there is no
applicable grievance, or grievance/arbitration mecha-
nism, through which the complaint allegations against
VMPC could be adjudicated. Clearly, then, there is no
basis for deferring the allegations against VMPC. More-
over, even if the allegations against Resco otherwise
would be properly deferrable, those claims are inextrica-
bly related to the nondeferrable allegations against
VMPC. Under these circumstances, the allegations
against Resco also will not be deferred.8
The 8(a)(5) Allegation Against Resco
We agree with the judge that Resco violated Section
8(a)(5) by failing to pay accrued vacation pay to the em-
ployees who accepted employment with VMPC. As the
judge noted, Resco could not avoid its obligations under
the collective-bargaining agreement, without the Union’s
assent, simply by contracting with VMPC to assume
them. Resco’s failure to make the payments, especially
after the Union explicitly demanded payment by filing a
grievance, amounts to a complete abrogation of its con-
tractual obligations in this regard.9 And, as the judge
also found, the waivers signed by the employees do not
constitute a defense for Resco. The employees who
signed waivers on December 20 did so without the Un-
ion’s knowledge or consent; consequently, even if Ves-
sell was acting as Resco’s agent on that occasion, he was
4 See Collyer Insulated Wire, 192 NLRB 837 (1971).
5 Resco has not excepted to the judge’s refusal to defer the case to
arbitration. In support of its exceptions, however, Resco argues that the
issue of the parties’ obligations regarding vacation pay is a contractual
one, and should be determined by the arbitrator.
6 Cutten Supermarket, 220 NLRB 507, 509 fn. 19 (1975).
7 In its brief in support of exceptions, VMPC states, without citation
to the record, that it did adopt the grievance/arbitration mechanism of
the predecessor agreement. We find no support in the record for this
assertion, which the General Counsel disputes in his answering brief.
Although VMPC’s reply brief again argues for deferral, it does not
contain any support for, or even reiterate, VMPC’s earlier claim to have
adopted the grievance/arbitration provisions of Resco’s contract with
the Union.
8 Clarkson Industries, 312 NLRB 349, 352 (1993).
9 The Respondents argue that Resco did not deny liability for the ac-
crued vacation pay or abrogate its contractual obligations. We perceive
no merit in that argument. Whether or not Resco formally denied li-
ability or explicitly refused to pay the employees, its failure to make
those payments, in the face of a grievance over the issue, is sufficient to
support the judge’s findings.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1548
engaged in direct dealing with the employees over terms
and conditions of employment. As for the waivers
signed in March, the judge correctly found that the em-
ployees were declining payment by VMPC, not necessar-
ily relinquishing their rights against Resco. Thus, even
though the March waivers were signed with the Union’s
knowledge, they did not clearly and unmistakably waive
the employees’ Section 7 rights to enforce the contract
against Resco.10
VMPC contends that the judge erred in finding that the
individuals who accepted employment with it had a con-
tractual right to receive accrued vacation pay. It argues
that it is not clear under the collective-bargaining agree-
ment that discharged employees had the right to receive
accrued vacation pay in a successorship situation. We
find no merit in this argument.
It is well settled that the Board may interpret the terms
of a collective-bargaining agreement in order to deter-
mine whether an unfair labor practice has been commit-
ted.11 In interpreting a contract, the parties’ intent under-
lying the contract language is paramount and is given
controlling weight. To determine the parties’ intent, the
Board looks to both the contract language and to relevant
extrinsic evidence, such as the parties’ bargaining history
and past practice. When there is no extrinsic evidence,
the Board looks to the ordinary meaning of relevant con-
tract terms as applied to the facts of the case.12
Applying the foregoing principles, we agree with the
judge that the contractual term affording accrued vaca-
tion pay to discharged employees applies in a successor-
ship situation like this.13 In the first place, the plain lan-
guage of article XIII, section 4, states that “[a]ny em-
ployee quitting or discharged shall be paid the pro rata
part of his earned vacation[.]” (Emphasis added.) Con-
trary to VMPC’s contention, we find nothing in the con-
tract to indicate that that provision does not apply to
some discharged employees. Indeed, the very first word
in section 4—any—negates any such suggestion.14 The
parties have stipulated that Resco’s employees were all

10 A waiver of a statutory right will not be found unless it is clear and
unmistakable. Metropolitan Edison Co. v. NLRB, 460 U.S. 69 , 708 (1983). 3
11 Mining Specialists, Inc., 314 NLRB 268 fn. 5 (1994).
12 Id. at 268–269.
13 VMPC contends that the employees’ entitlement to accrued vaca-
tion pay must be shown by “clear evidence.” We are aware of no
precedent that imposes such an evidentiary burden. The cases cited by
VMPC (Milwaukee Spring Division), 268 NLRB 601 (1984), enfd. 765
F.2d 175 (D.C. Cir. 1985); DeSoto, Inc., 278 NLRB 788 (1986)), do not
stand for that proposition. But even if this heightened evidentiary
standard applied, we find that it was met here.
14 VMPC suggests that when the contract says “discharged,” it
means only “discharged for cause.” We find no support for this
suggestion. The phrase “discharged for proper cause” appears in art.
XIV. The inclusion of the modifier “for proper cause” indicates that
the parties did not intend for “discharged” to mean only “discharged for
cause.” Moreover, the employees who were laid off in early December,
as well as those who refused VMPC’s offer of employment and were
terminated on December 31, were paid their accrued vacation pay, even
though they were not discharged for cause.
terminated on December 31. “Discharged” and “termi-
nated” are widely used synonymously.15 We therefore
find that the ordinary meaning of article XIII, section 4,
supports the judge’s finding.
Turning to extrinsic evidence, we find no record evi-
dence that the meaning of “discharged” in article XIII,
section 4, was ever the subject of collective bargaining.
Nor is there any showing of any previous instance in
which the applicability of that provision in a successor-
ship situation has been tested or interpreted. Thus, there
is no bargaining history or explicit past practice to shed
light on the parties’ intentions underlying the contract
language. However, as the judge found, the actions of
both Resco and VMPC clearly indicate that they under-
stood that the employees would be entitled to receive
accrued vacation pay when they were terminated by
Resco. In their purchase and sale agreement, Resco and
VMPC agreed that, in return for VMPC’s assuming li-
ability for paying the employees their accrued vacation
pay, the purchase price VMPC paid for the pension plan
would be reduced by an amount equal to the total liabil-
ity for those payments for all employees, not merely
those who turned down VMPC’s employment offers.
There would be no reason for Resco to have entered into
such a quid pro quo had Resco not believed that the em-
ployees were entitled under the collective-bargaining
agreement to receive accrued vacation pay regardless of
whether they went to work for VMPC. Moreover, ac-
cording to the unrebutted testimony of James Peek, a
staff representative for the Union, Resco’s attorney, John
Dugan, told him that he believed the employees were
owed vacation pay. A letter from Dugan to Resco states
substantially that position. Thus, such extrinsic evidence
as exists further supports the judge’s finding that the em-
ployees who accepted VMPC’s employment offers were
contractually entitled to receive accrued vacation pay.16
The Allegations Against VMPC
The judge found that VMPC violated Section 8(a)(1)
by conditioning employment offers on the employees’
waiving their contractual rights to accrued vacation pay
and, later, by conditioning continued employment on
their abandonment of those rights. He also found that
VMPC consented to adopt the pension plan and the pro-
15 See, e.g., Webster’s Third New International Dictionary, Unabridged
(1966) at 644 (“discharge: to dismiss from employment: terminate the em-
ployment of”); 2359 (“terminate: to discontinue the employment of: dis-
charge”).
16 VMPC has cited decisions holding that, when a dispute is solely one
of contract interpretation, and there is no evidence of animus, bad faith, or
intent to undermine the union, the Board will not attempt to determine
which of two equally plausible contract interpretations is correct, and will
not find an 8(a)(5) unilateral change violation if the employer acts in accor-
dance with a contract interpretation that has a sound, arguable basis. See,
e.g., Crest Litho, 308 NLRB 108, 110–111 (1992). Those decisions are
inapposite here, because we find that VMPC’s contract interpretation lacks a
sound, arguable basis. This, in other words, is not a case in which the Board
is faced with two equally plausible contract interpretations.
RESCO PRODUCTS 1549
visions for accrued vacation pay contained in the contract
between Resco and the Union, and therefore that VMPC
was not free either to change those provisions unilater-
ally or by dealing directly with the employees. He there-
fore found that VMPC violated Section 8(a)(5) by chang-
ing the employees’ pension and vacation benefits, and by
repudiating its contractual obligation to pay them ac-
crued vacation pay, without notifying and bargaining
with the Union. For the reasons that follow, we agree
with the judge that VMPC violated Section 8(a)(1), but
we disagree with his finding that VMPC also violated
Section 8(a)(5).
In NLRB v. Burns Security Services,17 the Supreme
Court held that a successor employer is not required to
honor its predecessor’s collective-bargaining agreement.
The Court also held that a successor normally is free to
set initial terms and conditions of employment unilater-
ally, even if it ultimately is required to bargain with the
union that represented the employees of the predecessor.
There is, however, an exception to the latter rule. The
Court noted that when it is “perfectly clear” that the suc-
cessor intends to hire all of the unit employees, it is ap-
propriate for the successor to consult with the union be-
fore setting initial terms.18 Consistent with the Court’s
statement, the Board holds that, when a successor an-
nounces new terms before, or when, it extends employ-
ment offers to the predecessor’s employees, it is not
“perfectly clear” that the successor intends to employ all
of the unit employees, since some or even most of them
may choose not to work under the new terms.19
VMPC thus is correct in arguing that it was not re-
quired to adopt Resco’s collective-bargaining agreement
with the Union. The judge, however, found that it did
adopt the vacation pay and pension obligations of that
agreement. He based that finding on Vessell’s December
20 statements to the assembled employees acknowledg-
ing the continuity of pension benefits and his being “on
the hook” for the accrued vacation pay benefits. We
disagree with that finding.
Consistent with the well-established principle that a
successor normally is entitled to refuse to be bound by its
predecessor’s collective-bargaining agreement, the Board
requires clear and convincing evidence of consent, either
actual or constructive, before finding an assumption of
such a contract.20 We find no such clear and convincing
evidence here. Vessell’s statement that he was “on the
hook” for the employees’ accrued vacation pay was am-
biguous. Vessell did not state that he would adopt any
portion of the collective-bargaining agreement. In the

17 Supra, 406 U.S. 272.
18 Id. at 294–295.
19 Spruce Up Corp., 209 NLRB 194, 195 (1974), enfd. 529 F.2d 516
(4th Cir. 1975).
20 Field Bridge Associates, 306 NLRB 322, 323 (1992), enfd. sub
nom. Service Employees Local 32B-32J v. NLRB, 982 F.2d 845 (2d Cir.
1993).
circumstances, it is reasonable to infer that he was refer-
ring to VMPC’s agreement with Resco that VMPC
would be responsible for paying the accrued vacation
pay, or for reimbursing Resco if Resco had to pay it.
There simply is not enough evidence here to support a
finding that VMPC adopted any part of the collective-
bargaining agreement.
Concededly, VMPC agreed with Resco that VMPC
would pay the accrued vacation benefits owed to the em-
ployees under the Resco-Union contract. But this is not
the same as a VMPC agreement with the Union that
VMPC would pay those benefits. Thus, there was no
VMPC adoption of this portion of the collective-
bargaining agreement.
In any event, we would be reluctant to find that a suc-
cessor had “adopted” part, but not all, of a collective-
bargaining agreement. Collective-bargaining contracts
are usually the products of compromises, and the Board
has often held that a collective-bargaining agreement
does not arise until there is a meeting of the minds on all
material terms.21 We think that it would be inconsistent
with both this principle and reality to find that a succes-
sor employer had “adopted” one or two provisions of a
collective-bargaining agreement—in effect, creating a
sort of “mini-contract” embodying only those provi-
sions—unless it had the express consent of the union.
Otherwise, a successor employer might choose to
“adopt” only those provisions of the contract that it
found acceptable, and then refuse to negotiate with the
union over those terms on the ground that it was not re-
quired to do so under Section 8(d). Here, the Union did
not consent to the partial “adoption” of only the vacation
pay and pension provisions of the collective-bargaining
agreement, and there is no contention or evidence that
VMPC adopted the entire contract. We therefore find,
contrary to the judge, that VMPC did not assume a con-
tractual obligation to pay the employees their accrued
vacation pay, and that it did not violate Section 8(a)(5)
by failing to do so.
Concerning the 8(a)(1) allegations, VMPC argues that
it was not required to bargain with the Union before it
hired a majority of its work force from among the former
employees of Resco, but instead was privileged to set
initial terms unilaterally. Accordingly, it argues, it did
not violate Section 8(a)(1) by informing the employees,
either before or after they accepted its employment of-
fers, that employment with VMPC was conditioned on
their waiving their rights to accrued vacation pay. We
agree with the judge that there is no merit in that conten-
tion.
VMPC is correct that, in his meeting with the employ-
ees on December 20, Vessel made it clear that although
he was offering all of them employment with VMPC, he
21 Executive Cleaning Services, 315 NLRB 227, 228 (1994), enf. de-
nied on other grounds 67 F.3d 446 (2d Cir. 1995).
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1550
was doing so only on different terms and conditions from
those existing under the collective-bargaining agreement.
In particular, he stated that in order to work for VMPC,
the employees would have to waive their claims for ac-
crued vacation pay, and in return would have their pen-
sion benefits increased. We therefore find that it was not
“perfectly clear” that VMPC would hire Resco’s work
force and thus that it was entitled to set initial terms of
employment without first bargaining with the Union.22
We agree with the judge, however, that VMPC’s right
to set initial terms did not include the right to require the
employees to waive their right to insist on payment of
accrued vacation pay by Resco. As the judge recounted,
the employees had accrued rights under the contract to be
paid their accrued vacation pay as terminated employees
of Resco, and they had a statutory right under the Act to
insist on payment by Resco. By March 18, when VMPC
conditioned their continued employment on their re-
nouncing those claims, the Union had filed and was
processing a grievance on their behalf against Resco,
claiming their right to receive payment. Although, as a
successor, VMPC arguably was privileged to condition
those individuals’ employment on their waiving any
claims against it for the accrued vacation pay, VMPC
went further and demanded that they give up any claims
against Resco. We do not think that Spruce Up and its
progeny protect such conduct. It is one thing to say that
a successor may set initial terms and conditions of em-
ployment to which it will be bound, even if they differ
from those that prevailed under the predecessor. It
would be quite another to say that the successor could
require, as an employment condition, that employees
give up accrued contractual rights, or other rights pro-
tected by the Act, against the predecessor. As the judge
noted, such a holding would be fundamentally inconsis-
tent with the principle that an employer may not condi-
tion employment, or continued employment, on the
waiver of statutory rights or on the abandonment of a
grievance. We therefore affirm the judge’s finding that
VMPC violated Section 8(a)(1) by conditioning em-
ployment opportunities on the employees’ waiver of their
rights to accrued vacation pay and by threatening to dis-
charge them if they refused to waive those rights.23
The Golden State Successor Issue
The General Counsel contends that VMPC acquired
the Bonne Terre facility with the knowledge that the em-
ployees would not be paid their vacation pay, and there-
fore, under Golden State, VMPC should be jointly and

22 Spruce Up Corp., 209 NLRB at 195.
23 In so holding, however, we do not rely on Borden, Inc., 308 NLRB
113 (1992), enfd. 19 F.3d 502 (10th Cir. 1994), cited by the judge, or on
Swift Adhesives, 320 NLRB 215 (1995), enfd. 110 F.3d 632 (8th Cir. 1997),
and R.E. Dietz Co., 311 NLRB 1259 (1993), cited by the General Counsel.
None of those cases addressed whether a successor employer could lawfully
condition employment on employees’ waiver of accrued contractual rights
against the predecessor employer.
severally liable for Resco’s 8(a)(5) violation.24 The
judge rejected that contention on the ground that at the
time VMPC acquired the facility, Resco had not commit-
ted any unfair labor practices. The General Counsel ar-
gues, however, that VMPC knew, or should have known,
that Resco was not going to make the payments because
it had, in effect, contracted with VMPC to make them.
The judge disagreed, noting that if VMPC had paid the
vacation pay, as it should have, there would have been no
unfair labor practice by Resco. We agree with the Gen-
eral Counsel.
Liability under Golden State normally attaches only if
the successor acquires the predecessor’s business with
the knowledge that the predecessor has committed unfair
labor practices. As the judge found, Resco had not
committed any unfair labor practices at the time VMPC
took over the Bonne Terre facility; therefore, although
VMPC clearly was a successor to Resco, VMPC did not
purchase the facility knowing that Resco had violated
Section 8(a)(5). Unlike the judge, however, we do not
find that fact dispositive, because VMPC knew perfectly
well that Resco was going to violate Section 8(a)(5) by
failing to make the accrued vacation payments. VMPC
knew this because it had contracted to make those pay-
ments itself and had decided not to do so. Resco’s viola-
tion, in other words, was a direct, proximate, and fore-
seeable result of VMPC’s own conduct.
Moreover, as the General Counsel correctly points out,
the Supreme Court based its holding in Golden State in
part on the fact that a successor who knows about the
predecessor’s unlawful conduct can factor its own poten-
tial liability for that conduct into the purchase price.25
That, in effect, is what happened here. By negotiating a
reduction in the purchase price for Resco’s pension plan
to offset the liabilities it was assuming for accrued vaca-
tion pay, VMPC seemingly compensated itself for as
suming those liabilities. But since VMPC planned to,
and did, renege on its agreement with Resco, the reduc-
tion in the purchase price actually constituted compensa-
tion for VMPC’s liability for the violation that Resco
would commit by failing to make the vacation payments.
Indeed, under the purchase and sale agreement, VMPC
indemnified Resco for any losses resulting from VMPC’s
failure to make the payments.
In sum, then, when VMPC purchased the Bonne Terre
facility, it knew in advance that Resco would violate Sec-
tion 8(a)(5) as a result of VMPC’s own conduct, and it
negotiated a reduction in the purchase price commensu-
rate with its potential liability for remedying that viola-
tion. Accordingly, we find that VMPC was the Golden
24 The Supreme Court in Golden State held that a successor employer
that acquires and continues a business with knowledge that the predecessor
employer committed unfair labor practices may be held jointly and severally
liable, with the predecessor, to remedy the unlawful conduct.
25 414 U.S. at 185.
RESCO PRODUCTS 1551
State successor to Resco and that it is jointly and sever-
ally liable with Resco for the latter’s 8(a)(5) violation.
ORDER
A. The NLRB orders that the Respondent, Resco
Products, Inc., Norristown, Pennsylvania, its officers,
agents, successors, and assigns, shall
1. Cease and desist from
(a) Bargaining in bad faith with the United Steelwork-
ers of America, AFL–CIO, CLC by abrogating the terms
of the collective-bargaining agreement between it and the
Union.
(b) In any like or related manner interfering with, re-
straining, or coercing its employees in the exercise of the
rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) Jointly and severally with Respondent Vessell
Mineral Products Corporation, make whole those em-
ployees whom it terminated on December 31, 1996, for
any loss of accrued vacation pay in the manner set forth
in the remedy section of the judge’s decision.
(b) Preserve and, within 14 days of a request, make
available to the Board or its agents for examination and
copying, all payroll records, social security payment re-
cords, timecards, personnel records and reports, and all
other records necessary to analyze the amount of back-
pay due under the terms of this Order.
(c) Within 14 days after service by the Region, mail a
copy of the attached notice marked “Appendix A”26 to all
bargaining unit employees in the Bonne Terre, Missouri
facility who were employed by Resco and terminated on
December 31, 1996. The notice shall be mailed to the
last known address of each of the employees after being
signed by Respondent Resco’s authorized representative.
(d) Within 21 days after service by the Region, file
with the Regional Director a sworn certification of a re-
sponsible official on a form provided by the Region at-
testing to the steps that the Respondent has taken to
comply.
IT IS FURTHER ORDERED that the complaint be
dismissed insofar as it alleges a violation of the Act not
specifically found.
B. Respondent, Vessell Mineral Products Corporation,
Bonne Terre, Missouri, its officers, agents, successors,
and assigns, shall
1. Cease and desist from
(a) Conditioning employment on the waiver of statu-
tory rights or threatening employees with discharge if
they refuse to waive statutory and contractual rights.

26 If this Order is enforced by a judgment of a United States court of ap-
peals, the words in the notice reading “Posted by Order of the National
Labor Relations Board” shall read “Posted Pursuant to a Judgment of the
United States Court of Appeals Enforcing an Order of the National Labor
Relations Board.”
(b) In any like or related manner, interfering with, re-
straining, or coercing its employees in the exercise of the
rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) Jointly and severally with Respondent Resco Prod-
ucts, Inc., make whole those employees whom Resco
terminated on December 31, 1996, for any loss of ac-
crued vacation pay in the manner set forth in the remedy
section of the judge’s decision.
(b) Within 14 days after service by the Region, post at
its facility in Bonne Terre, Missouri, copies of the at-
tached notice marked “Appendix B.”27 Copies of the
notice, on forms provided by the Regional Director for
Region 14, after being signed by the Respondent’s au-
thorized representative, shall be posted by the Respon-
dent immediately upon receipt and maintained for 60
consecutive days in conspicuous places including all
places where notices to employees are customarily
posted. Reasonable steps shall be taken by the Respon-
dent to ensure that the notices are not altered, defaced, or
covered by any other material. In the event that, during
the pendency of these proceedings, the Respondent has
gone out of business or closed the facility involved in
these proceedings, the Respondent shall duplicate and
mail, at its own expense, a copy of the notice to all cur-
rent employees and former employees employed by the
Respondent at any time since December 20, 1996.
(c) Within 21 days after service by the Region, file
with the Regional Director a sworn certification of a re-
sponsible official on a form provided by the Region at-
testing to the steps that the Respondent has taken to
comply.

MEMBER HURTGEN, concurring.
I agree that Respondent successor VMPC is liable un-
der Golden State1 for the 8(a)(5) violation of Respondent
predecessor Resco. I also agree that Respondent VMPC
violated Section 8(a)(1). However, the bases for my
conclusions differ somewhat from those of my col-
leagues.
In the paradigm Golden State situation, a predecessor
has committed a violation prior to the transfer of the
business to a purchaser. The purchaser knows of that
violation. Under Golden State, the purchaser can be held
liable for the predecessor’s violation.
In the instant case, predecessor Resco did not commit
an 8(a)(5) violation prior to the transfer. At most, it was
obligated to make accrued vacation payments to dis-
charged employees. Even assuming arguendo that the
employees were discharged when Resco ceased opera-
tions, there is nothing to suggest that Resco was obli-
gated to make the vacation payments at the moment of
discharge. Thus, it cannot be said that Resco committed
27 See fn. 26, above.
1 Golden State Bottling v. NLRB, 414 U.S. 168 (1973).
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1552
a violation of Section 8(a)(5) at that time. I recognize
that, at that time, Resco had agreed with VMPC that
VMPC would be liable for the payments. But even if
this were tantamount to a declaration that Resco would
not make the payments, that declaration was not made to
the Union or to the employees. In any event, the declara-
tion was not the violation alleged by the General Coun-
sel. The alleged violation was a failure to pay, not a dec-
laration that Resco would not pay.
In sum, the violation, i.e., failure to pay, was not at
fruition at the time of the takeover. Although, Resco
ultimately did not pay, that occurred subsequently.
Thus, the paradigm Golden State situation is not pre-
sent here. Notwithstanding this, in the unique circum-
stances of this case, I would grant a Golden State rem-
edy. Golden State is an equitable doctrine to assure that
employees who are victims of unlawful conduct by a
predecessor are made whole after a transfer of the busi-
ness to a new employer. If the new employer knows of
the unlawful conduct, and has the opportunity to nego-
tiate a purchase price that takes account of future liabil-
ity, it is equitable to impose the remedy on the new em-
ployer. In the instant case, VMPC knew of Resco’s
intention not to pay, VMPC agreed to pay, and VMPC
negotiated for a concomitant reduction in the purchase
price. Thus, it is equitable to impose on VMPC the
obligation to rectify Resco’s failure to pay.2
I also concur with the conclusion that VMPC violated
Section 8(a)(1). I recognize that VMPC had a right to
unilaterally set its own terms and conditions of employ-
ment.3 However, in the circumstances of the instant case,
that right did not include the right to eliminate vacation
pay. Where, as here, the employees have a contractual
and statutory right to such pay from Resco, and a Golden
State right to such pay from VMPC, VMPC could not
unilaterally take away those rights from the employees.
Accordingly, Respondent VMPC could not condition
employment on employee waiver of claims against both
employers. Thus, VMPC violated Section 8(a)(1) when
it conditioned employment on the waiver of employee
rights vis-a-vis itself of Resco.
APPENDIX A
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government

The National Labor Relations Board has found that we vio-
lated the National Labor Relations Act and has ordered us to
post and abide by this notice.
WE WILL NOT bargain in bad faith with the United
Steelworkers of America, AFL–CIO, CLC, by abrogat-

2 My view is tied strictly to the unique facts of this case. It is not to
be taken as a willingness to broadly expand Golden State.
3 NLRB v. Burns Security Services, 406 U.S. 272, 294–295 (1972).
ing the terms of our collective-bargaining agreement
with the Union covering the employees in the following
unit:
All hourly production and maintenance employees em-
ployed by Resco at our Bonne Terre, Missouri facility,
excluding office clerical and professional employees,
watchmen, laboratory employees, guards and supervi-
sors as defined in the Act.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce you in the exercise of the rights
guaranteed you by Section 7 of the Act.
WE WILL jointly and severally with Vessell Mineral
Products Corporation make whole all our employees
whom we terminated on December 31, 1996, by paying
them the accrued vacation pay to which they were enti-
tled, plus interest.
RESCO PRODUCTS, INC.
APPENDIX B
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government

The National Labor Relations Board has found that we vio-
lated the National Labor Relations Act and has ordered us to
post and abide by this notice.
WE WILL NOT condition employment on the waiver
of statutory rights or threaten employees with discharge
if they refuse to waive their statutory or contractual
rights.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce our employees in the exercise of
the rights guaranteed them by Section 7 of the Act.
WE WILL jointly and severally with Resco Products,
Inc. make whole all employees whom Resco terminated
on December 31, 1996, by paying them the accrued vaca-
tion pay to which they were entitled, plus interest.
VESSELL MINERAL PRODUCTS
CORPORATION
Christal J. Gulick, Esq., for the General Counsel.
Terry L. Potter, Esq. (Peper, Martin, Jensen, Maichel & Het-
lage), for the Respondent, VMPC.
Karl A. Sauber, Esq. (Diekemper, Hammond, Shinners, Tur-
cotte & Larrew, P.C.), for the Charging Party.
DECISION
STATEMENT OF THE CASE
MICHAEL O. MILLER, Administrative Law Judge. This
case was tried in St. Louis, Missouri, on October 29, 1997,
based upon charges and amended charges filed by the United
Steelworkers of America, AFL–CIO, CLC (the Union) on April
7 and June 17 and 18, 1997, and a consolidated complaint
which issued on June 30, 1997, as thereafter amended. That
complaint alleges that Resco Products Co. (RESCO) violated
Section 8(a)(1) and (5) of the National Labor Relations Act (the
Act) by unilaterally failing and refusing to pay accrued vacation
RESCO PRODUCTS 1553
pay due its employees under its collective-bargaining agree-
ment with the Union. It further alleges that Vessell Mineral
Products Corporation (VMPC), as the successor to RESCO,
interfered with, restrained, and coerced its employees in the
exercise of their statutory rights, in violation of Section 8(a)(1),
by conditioning offers of employment upon their waiver of
contractually accrued vacation pay and by threatening employ-
ees with termination if they accepted checks to be tendered
them in payment of that vacation pay. And, it alleged that
VMPC failed to bargain in good faith, in violation of Section
8(a)(1) and (5), with the representative of its employees by
failing to continue in effect the terms and conditions of em-
ployment which it had assumed by repudiating the obligation to
pay employees their accrued vacation pay.
RESCO and VMPC’s timely filed answers deny the commis-
sion of any unfair labor practices.
Based on my observation of the witnesses and consideration
of the entire record, including the briefs filed by the General
Counsel and the Respondents, I make the following
FINDINGS OF FACT1
I. JURISDICTION
Until January 1, 1997, RESCO, a Pennsylvania corporation
with its principal offices in Norristown, Pennsylvania, and
plants located throughout the United States, including the plant
located in Bonne Terre, Missouri, was engaged in dolomite
lime production. The Bonne Terre facility is the only one in-
volved in these proceedings. The complaint alleges, and
RESCO admits that, during the 12-month period preceding
January 1, 1997, RESCO sold and shipped from its Bonne
Terre facility goods valued in excess of $50,000 directly to
points of the United States outside the State of Missouri.
RESCO admits and I find that it is an employer engaged in
commerce within the meaning of Section 2(2), (6), and (7) of
the Act.
Since January 1, 1997, VMPC, a Missouri corporation, with
its office and place of business in Bonne Terre, Missouri, has
been engaged in the business of dolomite lime production. The
complaint alleges, and VMPC admits that the projection of its
operations since January 1, 1997, establishes that it would an-
nually ship from its Bonne Terre facility goods valued in excess
of $50,000 directly to points outside the State of Missouri.
VMPC admits and I find that it is an employer engaged in
commerce within the meaning of Section 2(2), (6), and (7) of
the Act.
RESCO and VMPC admit, and I find, that the Union is a la-
bor organization within the meaning of Section 2(5) of the Act.
II. ALLEGED UNFAIR LABOR PRACTICES
A. Background
For many years, RESCO owned and operated the Bonne
Terre, Missouri dolomite lime production plant. Since about
1967, the Union was recognized as the exclusive collective-
bargaining representative of the hourly production and mainte-

1 The facts have, in substantial part, been stipulated by the parties
and are not in dispute. Although fully apprised of the hearing, no ap-
pearance was made on behalf of RESCO; in lieu of an appearance,
RESCO submitted a stipulation of facts, in which the counsel for the
General Counsel and the Union joined.
nance employees at that plant.2 That recognition was embodied
in a series of collective-bargaining agreements, the last of
which ran from August 16, 1996, to August 15, 1997.
Included within that collective-bargaining agreement was a
provision for annual vacations. For employees who began be-
fore August 16, 1987, the vacations ranged from 2 to 5 weeks.
For those whose service commenced after that date, the vaca-
tions ranged from one to 3 weeks.
Section 4 of the vacation article provided:
Any employee quitting or discharged shall be paid the pro rata
part of his earned vacation . . .
The agreement also provided for a pension plan. That plan paid
retired employees $17 per month for each year of service.
Normal retirement age was 65 but employees with 35 years of
service could retire at age 55. The maximum pension was for
35 years of service ($595 per month).
B. Sale of the Plant
In October 1996,3 RESCO began negotiating to sell the
Bonne Terre facility to Royce Vessell, its vice president for
operations. Those negotiations culminated in an agreement for
Vessell’s newly created corporation, VMPC, to purchase the
Bonne Terre assets, executed December 18 and effective Janu-
ary 1. Upon its execution, Royce Vessell ceased to function as
RESCO’s vice president although he retained a supervisory
role. He became VMPC’s president. RESCO notified the Union
of the sale of the plant.
In that purchase and sale agreement, VMPC expressly ac-
quired, assumed, and paid for the hourly employees pension
plan. Thus, VMPC’s purchase price included “the sum of . . .
being the value of the over funded portion of the Resco Prod-
ucts of Missouri Hourly Employees Pension Plan . . . which the
Buyer is assuming. . . .”
VMPC also assumed RESCO’s liabilities to the employees
for accrued vacation benefits. The cost of that liability, in ex-
cess of $80,000, was deducted from the price it paid to acquire
the pension plan. The agreement stated:

2.2.1. Buyer shall assume as of the Closing Date, and pay
when due, the following liabilities of the Seller (“Liabilities”);
2.2.2. Effective the Closing Date, Buyer shall assume and
agree to pay, perform and discharge, and to indemnify Seller
against and hold it harmless from any costs, expenses, losses
or liabilities, including attorneys’ fees, suffered by Seller by
reason of:
. . . .
(d) obligations and liabilities of Seller with respect to
vacation rights due to hourly employees resulting from
termination of the Union Agreement with the United
Steelworkers of America. The cost to Buyer will be . . .
deducted from . . . [the] purchase price of the Pension Plan
. . . and Buyer indemnifies and holds Seller harmless from
any loss, costs or expenses . . . in the event that the hourly
2 The unit, stipulated to be appropriate for the purposes of collective
bargaining within the meaning of Sec. 9(b) of the Act, was:
All hourly production and maintenance employees employed by
RESCO at its Bonne Terre, Missouri facility, EXCLUDING of-
fice clerical and professional employees, watchmen, laboratory
employees, guards and supervisors as defined in the Act.
3 All dates are from October 1996 to June 1997 unless otherwise
indicated.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1554
workers are not paid by the Buyer or do not accept pay-
ment from the Buyer.

In early December, prior to the transfer of the plant, about
six employees were permanently laid off due to a loss of busi-
ness. RESCO paid each of them their accrued vacation pay.
C. Vessell and VMPC Meet with the Employees
On December 20, Royce Vessell, VMPC’s (and RESCO’s)
human relations manager Flora Denton, and VMPC’s attorney,
Brad Hiles met with virtually all of the unit employees. Royce
Vessell told them that he was “on the hook” for their accrued
vacation pay. Those “individuals on the hourly payroll of Resco
Products Incorporated as of December 20” were given offers
which detailed the offered terms and conditions of employment,
including wages, health and life insurance, vacations and pen-
sions. It expressly provided:

Note: By accepting this offer, an employee agrees to waive
and release any claims against Resco Products Incorporated
and [VMPC] pertaining to accrued pay or vacation time,
whether or not such claims exist at the time this offer is ac-
cepted.

In regard to the pension plan, it was noted that VMPC would
maintain the same defined benefit pension plan previously pro-
vided by RESCO but would increase the benefit by $1.50 per
month per year of credited service.
The waiver of claims pertaining to accrued vacation pay and
time was repeated in the acceptance clause.
Hiles explained that the employees’ accrued vacation pay
would be taken away as of January 1 in exchange for which
they would receive the increased pension benefit. Royce Ves-
sell made clear that they had to sign the offer as proposed in
order to secure continued employment but that, if they wanted
the accrued vacation pay rather than the job, they could have
it.
Thirty-one of thirty-four employees accepted the employ-
ment offers and signed the proffered waivers; they did not get
their accrued vacation pay upon their December 31 termination
by RESCO. Three employees declined the offer; they received
the accrued vacation pay and were terminated effective De-
cember 31.4
There had been no notice to, or bargaining with, the Union
by either RESCO or VMPC concerning the waiver or the sub-
stitution of increased pension benefits for the accrued vacation
pay.
On February 10, the Union filed a grievance against RESCO
on behalf of those employees who accepted employment with
VMPC, seeking their accrued vacation pay. It has never been
paid and that grievance is, apparently, still pending. An unfair
labor practice charge filed on April 7, as amended on August
17, 1997, alleged that RESCO had abrogated its contractual
obligation by unilaterally failing to pay its employees their
accrued vacation benefits. This grievance came to VMPC’s
attention in mid-March.

4 They were paid their accrued vacation pay by RESCO and RESCO
was then reimbursed by VMPC. One employee sought to limit his
acceptance with language to the effect that he was reserving his rights
under federal labor laws. Denton rejected his language and insisted that,
if he wished to be employed by VMPC, he had to sign the offer as it
was made to him. He did so.
D. Recognition and Bargaining
As of January 1, VMPC continued to operate the business
“in basically an unchanged form and employed as a majority of
its employees individuals who were previously employees of
. . . Resco.” It was further stipulated that “VMPC has continued
the employing entity and is a successor to . . . Resco.” VMPC
recognized the Union as the collective-bargaining representa-
tive of the unit employees and entered into negotiations for a
new labor agreement.
After receiving notice of the vacation pay grievance filed
against RESCO, VMPC met with the Union in a negotiating
session on March 18. Present for VMPC were Royce Vessell,
Flora Denton and Brad Hiles. The Union was represented by its
International Representative, James Peek, its Local Union
president and a number of employee members of the negotiat-
ing committee. After some introductory matters, Hiles stated
that the employer wanted to get to the bottom of the vacation
pay issue; he asked for a copy of the Union’s grievance. He
then told the Union committee that VMPC was willing to pay
all of the employees their accrued vacation pay that day. If they
accepted those checks however, he stated, they would be termi-
nated.
The parties caucused and, when they got back together, Hiles
reiterated VMPC’s offer, changing it only to indicate that the
checks would be ready on Friday. Once again, the employees
were told that they could have those checks if they wanted
them, but that, if they accepted payment for accrued vacation
pay, they forfeited their employment. The Union never agreed
to VMPC’s proposal.
The other employees were told of VMPC’s latest “offer” at a
union meeting held on March 20. When the employees went in
to pick up their paychecks on that Friday, they were required to
either accept their vacation pay check or, once again, sign the
following express waiver:

I decline receipt of a check for $_______, representing my
accrued vacation pay under the collective bargaining agree-
ment between Resco, Inc. and Steelworkers Local 8734.

The vacation paychecks were in various and not insubstantial
amounts. Employee Denzele Grimes declined a check in the net
amount of $689.19 ($1038.69 gross); Jame’s Weible’s check
was for $3552.20 ($6404.58 gross).
E. Analysis
1. RESCO’s 8(a)(5) violation
When RESCO terminated its employees on December 31, it
became liable, under its contract, to pay them their accrued
vacation pay. It recognized this when it paid those employees
laid off prior to December 31 for the vacation pay they had
coming. It also recognized this, in its agreement with the pur-
chaser, when it reduced the sales price by the value of the ac-
crued vacation pay and provided that VMPC would make it
whole if RESCO was required to pay that vacation pay to those
employees.
It is elemental contract law that a party to a contract cannot
escape its obligations by agreeing with a third party to assume
them. Williston on Contracts, 3d Ed. (1960), Section 411, pp.
18–19. See also Gulf-Wandes Corp., 236 NLRB 810 (1978). In
that case, an employer who had recognized an international
union was found not to have breached its obligations under the
contract’s checkoff provisions when it refused to acquiesce in
the International’s assignment of the dues debt to a local union.
RESCO PRODUCTS 1555
Here, the Union never acquiesced in the transfer of liability
and, on behalf of the employees, it demanded that RESCO meet
its obligations.
Moreover, it is no defense that the employees may have
signed documents purporting to waive their rights to the ac-
crued vacation pay. In the first instance, the documents signed
by the employees merely indicated that the signatory was de-
clining a check proffered by VMPC, not necessarily waiving
rights as against RESCO. More significant, however, is the
principle that, even if Vessell was acting as agent of RESCO in
securing these purported [and coerced] waivers, an employer
may not change terms and conditions of employment by deal-
ing directly with its employees. Clemson Bros., 290 NLRB 944,
952 (1988).
RESCO has failed to comply with the demand that it pay the
terminated RESCO employees their accrued vacation pay and
its failure is more than a mere contract breach, it is a total abro-
gation of all remaining bargaining obligations in violation of
Section 8(a)(5). King Manor Care Center, 308 NLRB 884, 887
(1992); and Zimmerman Painting & Decorating, 302 NLRB
856, 857 (1991). I so find.
2. VMPC’s liability and conduct in violation of Section
8(a)(1) and (5)
a. Section 8(a)(1)
VMPC contends that, as a successor employer, it was free to
set whatever initial terms and conditions it chose and that the
employees were free to accept or reject employment upon those
terms. Marriott Management Services, 318 NLRB 144 (1995);
Planned Building Services, 318 NLRB 1049 (1995); Spruce Up
Corp., 209 NLRB 194, 195 (1974). Thus, it argues that condi-
tioning employment upon their acceptance of higher pension
benefits in lieu of vacation pay which had accrued to them as
RESCO employees did not restrain them in the exercise of
Section 7 rights.
The General Counsel, however, draws a distinction be-
tween the setting of future wages and benefits and the condi-
tioning of employment upon the relinquishment of accrued
contractual benefits. The latter, it is argued, presents the em-
ployees with a Hobson’s choice between continued employ-
ment and the abandonment of rights guaranteed under the
Act. Borden, Inc., 308 NLRB 113, 115 (1992). In that case,
the employer merged two units of employees, both of which
had been represented by a single union recognized by the
employer. The employer required that the employees in the
unit which had the superior benefits accept the lesser benefits
of the agreement covering the other unit as a condition of
continued employment. Those employees who retired rather
than accepting the lesser benefits were found to have been
constructively discharged in violation of Section 8(a)(3) and
(1).5 The employer’s statements to the effect that employees
would be denied transfers to the new facility unless the union
agreed to waive their rights to their contractual benefits were
deemed violative of Section 8(a)(1).
The General Counsel’s argument, I find, is the more per-
suasive. The employees had accrued contractual rights to their
vacation pay as terminated employees of RESCO. They had a

5 While a contention that I should find that the three employees who
declined VMPC’s offer of employment, received their accrued vacation
pay and were terminated, to have been constructively and discriminato-
rily discharged would appear to be warranted herein, no such argument
was presented.
statutory right to insist on payment by RESCO. Their Union
had filed a grievance on their behalf seeking to enforce those
rights. As Vessell had acknowledged to them, VMPC was “on
the hook” for the costs of those benefits. It was obligated to
make RESCO whole, to the extent that the former RESCO
employees insisted upon payment.6 To wriggle off that hook,
it demanded, as a condition of employment, that the employ-
ees waive their statutory rights. In essence, it threatened em-
ployee-applicants with the denial of employment on Decem-
ber 20, and current employees with discharge on March 18
and 21, if they did not give up those rights. The conditioning
of employment upon the waiver of Section 7 rights or upon
the abandonment of a grievance violates Section 8(a)(1). Ret-
law Broadcasting Co., 310 NLRB 984, 991 (1993); Prince
Trucking Co., 283 NLRB 806, 807 (1987). It also negates the
validity of any ”waiver” resulting from such coercion. Clem-
son Bros., supra at 951–952.
b. Section 8(a)(5)
It may be that, by virtue of its liability to RESCO, VMPC’s
financial responsibilities will be fully satisfied. However, the
complaint mandates that I determine whether its conduct in-
dependently violated Section 8(a)(5).
Contrary to VMPC’s contentions, its agreement with
RESCO clearly and expressly provided that it would assume
RESCO’s vacation pay and pension obligations arising from
the collective-bargaining agreement.7 Vessell’s meeting with
the employees on December 20, wherein he acknowledged
continuity of the pension benefits and “being on the hook”
with respect to the accrued vacation benefits, satisfied the
Board’s requirement of consent to an adoption of the contract.
Field Bridge Associates, 306 NLRB 322, 323 (1992); and E G
& G Florida, Inc., 279 NLRB 444, 453 (1986).8 Having as-
sumed those aspects of the agreement, it was not free to uni-
laterally change, or to “bargain” directly with the employees
for modifications of, them. Its failure to notify and bargain
with the Union, which it recognized as the employees’ collec-
tive-bargaining representative, over changes in the payment
of accrued vacation pay (and pension benefits), and its repu-
diation of its contractual obligation to pay the employees
terminated by RESCO their accrued vacation pay, violated
Section 8(a)(5). It is, I find, jointly and severally liable, with
RESCO, to make these employees whole.
c. Golden State liability
In Golden State Bottling v. NLRB, 414 U.S. 168 (1973), the
Supreme Court held that a successor employer who acquires
6 It is clear to me that Vessell intended, from the get-go, to discour-
age these employees from asserting their rights to their accrued vaca-
tion pay. Thus, the sales agreement, sec. 2.2.2 (3) (d), expressly refers
to the possibility that the buyer, VMPC, might not pay the employees
their accrued vacation pay, or that the employees might not accept
payment of it from VMPC.
7 That the price Vessell paid for the over-funded portion of the pension
plan was reduced by the exact cost to VMPC of the assumption of
RESCO’s obligations with respect to the accrued vacation pay (assuming
that VMPC were to pay it in full) belies any contention that Vessell pre-
sumed that it had no liability for accrued vacation pay.
8 Vessell’s preemptive strike with respect to accrued vacations and pen-
sions deprived the Union of an opportunity to consent to the adoption of
those portions of its contract. However, the union engaged in no conduct
inconsistent with consent and, when given the opportunity, timely objected
to VMPC’s unilateral actions.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1556
and continues a business with knowledge that the predecessor
had committed an unfair labor practice may be found jointly
and severally liable, with the predecessor, to remedy that
unfair labor practice. The General Counsel seeks application
of that principle to the facts of this case. While I have found
that VMPC independently violated Section 8(a)(5) and is
therefore jointly and severally liable, with RESCO, to make
the employees whole for the losses they suffered as a result of
that violation, I cannot find Golden State applicable. At the
point in time that VMPC acquired RESCO, RESCO had
committed no unfair labor practices. Its violations occurred
thereafter, when it abrogated its continuing obligations.9
d. Deferral to contractual arbitration procedures
VMPC seeks deferral of this dispute to the contract’s griev-
ance/arbitration procedures. However, it has no contract with
the Union and did not assume that portion of RESCO’s contract
which included a grievance procedure. Deferral of the allega-
tions involving VMPC is therefore inappropriate.
CONCLUSIONS OF LAW
1. By abrogating its agreement with the United Steelworkers
of America, AFL–CIO, CLC, thereby failing and refusing to
bargain in good faith, Resco Products, Inc. has engaged in an
unfair labor practice affecting commerce within the meaning of
Section 8(a)(5) and (1) and Section 2(6) and (7) of the Act.
2. By conditioning employment on the waiver of statutory
rights and threatening employees with discharge unless they
waived statutory and contractual rights, Vessell Mineral Prod-
ucts Corporation has engaged in unfair labor practices affecting
commerce within the meaning of Section 8(a)(1) and Section
2(6) and (7) of the Act.

9 The General Counsel also argues that VMPC knew or should have
known that RESCO intended to abrogate this portion of its collective-
bargaining agreement based upon the terms of the purchase and sale
agreement, reducing the purchase price by the exact amount of the
accrued vacation pay liability. However, if VMPC had satisfied its
obligations with respect to the vacation pay, there would have been no
unfair labor practice or unfair labor practice charge.
3. By unilaterally and without notice to the Union abrogating
the adopted terms of an agreement with the United Steelwork-
ers of America, AFL–CIO, CLC, thereby failing and refusing to
bargain in good faith, Vessell Mineral Products Corporation has
violated Section 8(a)(5) and (1).
REMEDY
Having found that RESCO abrogated its collective-
bargaining agreement by failing to pay its employees their ac-
crued vacation pay upon termination, which conduct is an un-
fair labor practice, I find that it must be ordered to cease and
desist and to take certain affirmative action designed to effectu-
ate the policies of the Act, including making those employees
whole by payment to them of that accrued vacation pay, plus
interest as computed in New Horizons for the Retarded, 283
NLRB 1173 (1987).
Having found that VMPC has engaged in certain unfair labor
practices, I find that it must be ordered to cease and desist and
to take certain affirmative action designed to effectuate the
policies of the Act, including making its employees whole for
the accrued vacation pay to which they were entitled under the
portion of the RESCO-United Steelworkers of America, AFL–
CIO, CLC collective-bargaining agreement assumed by it, plus
interest as computed in New Horizons for the Retarded, supra.
[Recommended Order omitted from publication.]