Boeing Makes Its Case Against the NLRB at Senate Committee Hearing

May 12, 2011
Hundreds of thousands of jobs could be at risk, Boeings Luttig says.

The Boeing Co.'s general counsel warned a Senate committee Thursday of profound consequences should the federal courts validate the law principles by which the National Labor Relations Board is attempting to stop the aerospace company from operating a second Dreamliner production line in South Carolina.

No company with a unionized workforce in a non-right-to-work state will be permitted to locate additional work in another state, said J. Michael Luttig, who is also executive vice president of the Chicago-based aerospace giant.

"But I urge this be understood as well: neither will companies be willing to locate new production facilities in non right to work states because they will not thereafter be free to locate additional work outside of those states," Luttig said.

Boeing's general counsel was addressing the U.S. Senate Committee on Health, Education, Labor and Pensions when he issued his dire prediction, which included a claim that potentially hundreds of thousands of jobs were at risk should NLRB's legal claims prevail and be enforced across the country.

"It will harm all states in the country," he said.

Ostensibly convened to address the plight of the middle class, the Senate committee hearing was largely consumed by talk surrounding the NLRB complaint issued April 20th against Boeing. In that complaint, NLRB Acting General Counsel Lafe Solomon alleges the aerospace company violated two sections of the National Labor Relations Act when it transferred a second production line for the 787 Dreamliner from Everett, Wash., to a non-union facility in South Carolina for discriminatory reasons.

The Washington state location of the initial Dreamliner production line is represented by the International Association of Machinists and Aerospace Workers and has been host to several strikes, most recently in 2008. The NLRB, which issued the complaint in response to a charge filed by the IAW, alleges that Boeing's decision to locate in South Carolina is in part "motivated by a desire to retaliate for past strikes and chill future strike activity."

Boeing has emphatically denied the charges.

At Thursday's hearing, Luttig further addressed the potential remedy sought by the NLRB -- an order that Boeing maintain a second production line in Washington rather than in South Carolina.

"The board has never before ordered an employer actually to construct or expand a facility in a particular state in what is frankly a breathtaking substitution of the board for management in the running of an American company," Luttig said.

He also told lawmakers he expected Boeing to lose in a hearing before an NLRB administrative law judge, the next step in the process if the parties cannot reach a settlement.

A hearing is slated for June 14.

"I presumptively believe that we will lose before the ALJ [administrative law judge] and also before the NLRB for an institutional reason which is wholly legitimate -- which is the general counsel of the NLRB is charged in the same way that the ALJ is and the board," Luttig said. "So when he [Solomon] makes a consequential decision like this, if he is acting properly then he is sharing a view of the law by the National Labor Relations Board."

Boeing's general counsel added that he expected Boeing's position to prevail in the federal courts, if the complaint goes that far.

He also estimated the case could go on for some three years, were it to be appealed all the way to the U.S. Supreme Court.

Thursday's presentation by Boeing to the Senate committee was just the latest in what has become a very public and polarizing battle between Boeing and the NLRB.

In a May 9 statement, the NLRB's Solomon said, "The complaint involves matters of fact and law that are not unique to this case, and it was issued only after a thorough investigation in the field, a further careful review by our attorneys in Washington, and an invitation by me to the parties to present their case and discuss the possibility of a settlement."

Further, "It is important to note that the issuance of a complaint is just the beginning of a legal process, which now moves to a hearing before an administrative law judge. That hearing, scheduled for June 14 in Seattle, is the appropriate time and place to argue the merits of the complaint."

The complete hearing can be viewed online. See it here. (Luttig's testimony begins at about the 55-minute mark.)

See also:

Business Groups Blast NLRB Complaint Against Boeing

About the Author

Jill Jusko

Bio: Jill Jusko is executive editor for IndustryWeek. She has been writing about manufacturing operations leadership for more than 20 years. Her coverage spotlights companies that are in pursuit of world-class results in quality, productivity, cost and other benchmarks by implementing the latest continuous improvement and lean/Six-Sigma strategies. Jill also coordinates IndustryWeek’s Best Plants Awards Program, which annually salutes the leading manufacturing facilities in North America.

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