Index: java/engine/org/apache/derby/impl/sql/compile/ConditionalNode.java
===================================================================
--- java/engine/org/apache/derby/impl/sql/compile/ConditionalNode.java	(revision 464618)
+++ java/engine/org/apache/derby/impl/sql/compile/ConditionalNode.java	(working copy)
@@ -153,10 +153,20 @@
 			//At bind phase, we should bind it to the type of V1 since now we know the
 			//type of V1  
 			BinaryComparisonOperatorNode bcon = (BinaryComparisonOperatorNode)testCondition;
+			
+			/* 
+			 * NULLIF(V1,V2) is equivalent to: 
+			 * 
+			 *    CASE WHEN V1=V2 THEN NULL ELSE V1 END
+			 * 
+			 * The untyped NULL should have a data type descriptor
+			 * that allows its value to be nullable.
+			 */
 			QueryTreeNode cast = getNodeFactory().getNode(
 						C_NodeTypes.CAST_NODE,
 						thenElseList.elementAt(0), 
-						bcon.getLeftOperand().getTypeServices(),
+						new DataTypeDescriptor(
+								bcon.getLeftOperand().getTypeServices(), true),
 						getContextManager());
 			thenElseList.setElementAt(cast,0);
 		}
Index: java/testing/org/apache/derbyTesting/functionTests/tests/lang/union.sql
===================================================================
--- java/testing/org/apache/derbyTesting/functionTests/tests/lang/union.sql	(revision 464618)
+++ java/testing/org/apache/derbyTesting/functionTests/tests/lang/union.sql	(working copy)
@@ -343,3 +343,25 @@
 drop table t2;
 drop table insert_test;
 drop table insert_test2;
+
+-- DERBY-1967
+-- NULLIF with UNION throws SQLSTATE 23502.
+
+create table a (f1 varchar(10));
+create table b (f2 varchar(10));
+insert into b values('test');
+-- this used to throw 23502
+select nullif('x','x') as f0, f1 from a
+   union all
+   select nullif('x','x') as f0, nullif('x','x') as f1 from b; 
+drop table a;
+drop table b;
+create table a (f1 int);
+create table b (f2 int);
+insert into b values(1);
+-- ok
+select nullif('x','x') as f0, f1 from a
+   union all
+   select nullif('x','x') as f0, nullif(1,1) as f1 from b; 
+drop table a;
+drop table b;
Index: java/testing/org/apache/derbyTesting/functionTests/master/union.out
===================================================================
--- java/testing/org/apache/derbyTesting/functionTests/master/union.out	(revision 464618)
+++ java/testing/org/apache/derbyTesting/functionTests/master/union.out	(working copy)
@@ -911,4 +911,40 @@
 0 rows inserted/updated/deleted
 ij> drop table insert_test2;
 0 rows inserted/updated/deleted
+ij> -- DERBY-1967
+-- NULLIF with UNION throws SQLSTATE 23502.
+create table a (f1 varchar(10));
+0 rows inserted/updated/deleted
+ij> create table b (f2 varchar(10));
+0 rows inserted/updated/deleted
+ij> insert into b values('test');
+1 row inserted/updated/deleted
+ij> -- this used to throw 23502
+select nullif('x','x') as f0, f1 from a
+   union all
+   select nullif('x','x') as f0, nullif('x','x') as f1 from b;
+F0  |F1        
+---------------
+NULL|NULL      
+ij> drop table a;
+0 rows inserted/updated/deleted
+ij> drop table b;
+0 rows inserted/updated/deleted
+ij> create table a (f1 int);
+0 rows inserted/updated/deleted
+ij> create table b (f2 int);
+0 rows inserted/updated/deleted
+ij> insert into b values(1);
+1 row inserted/updated/deleted
+ij> -- ok
+select nullif('x','x') as f0, f1 from a
+   union all
+   select nullif('x','x') as f0, nullif(1,1) as f1 from b;
+F0  |F1         
+----------------
+NULL|NULL       
+ij> drop table a;
+0 rows inserted/updated/deleted
+ij> drop table b;
+0 rows inserted/updated/deleted
 ij>