Business Groups Blast NLRB Complaint Against Boeing

April 22, 2011
Federal agency wants the aerospace manufacturer to remedy unfair labor practices charge with transfer of S.C. production line to Washington.

Business community criticism of a National Labor Relations Board complaint filed against The Boeing Co. for alleged unfair labor practices grew Friday as the Business Roundtable weighed in with a statement.

It has no legal basis and represents a drastic departure from NLRB and Supreme Court precedent. We strongly encourage the NLRB to follow current federal law and go to Congress if they wish to change that law, said John Engler, president of the BRT, an association of U.S. CEOs.

Engler is speaking of the NLRBs complaint against Boeing Co., issued April 20, alleging that the aerospace company violated federal labor law by transferring a second production line for the 787 Dreamliner to a non-union facility in South Carolina for discriminatory reasons.

To remedy the alleged infractions, the board is seeking an order that would require Boeing maintain a second production line in Washington state, where an existing line is located. Meanwhile, construction of its S.C. plant is nearly complete, with final assembly operations slated to begin in July, according to Boeing.

Were talking about, in my opinion, an incredible, extraordinary remedy, says Benjamin Fryer, a lawyer at Moore & Van Allen with broad labor experience. Were not talking about restoring employees or penalizing an employer. Were talking about real business decisions. To have a government agency step in to tell Boeing how to staff and operate its business I cant think of a parallel.

In its complaint, the federal agency said it had reasonable cause to believe that Boeing had violated two sections of the National Labor Relations Act by issuing statements that were coercive to employees and for actions it said were motivated by a desire to retaliate for past strikes and chill future strike activity.

Chicago-based Boeing has vowed to vigorously contest the NLRB complaint.

Absent a settlement, the two parties are likely to proceed to a hearing before an NLRB administrative law judge, scheduled for June 14.

The complaint stems from an NLRB investigation launched in response to a charge filed by the International Association of Machinists and Aerospace Workers. The IAM represents Boeing employees in Washington state and the Puget Sound area.

The charges cite repeated statements by senior Boeing executives that lawful, protected activity was the overriding factor in the decision to locate a 787 assembly line in South Carolina, according to the IAM.

A 2008 strike by the machinists union in Puget Sound lasted about two months until both sides reached a new agreement.

Boeings decision to build a 787 assembly line in South Carolina sent a message that Boeing workers would suffer financial harm for exercising their collective bargaining rights, said IAM Vice President Rich Michalski in a statement. Federal labor law is clear: Its illegal to threaten or penalize workers who engage in concerted activity.

Boeing denies any wrongdoing.

This claim is legally frivolous and represents a radical departure from both NLRB and Supreme Court precedent, said Boeing Executive Vice President and General Counsel J. Michael Luttig in a statement. Luttig is a former federal appellate court judge. Boeing has every right under both federal law and its collective bargaining agreement to build additional U.S. production capacity outside of the Puget Sound region.

South Carolina officials quickly weighed in upon hearing the news, including Governor Nikki R. Haley, who said, This is an absolute assault on a great corporate citizen and on South Carolinas right-to-work status.

U.S. Sen. Lindsey Graham, R-S.C., took aim at the NLRB in his remarks. This is one of the worst examples of unelected bureaucrats doing the bidding of special interest groups that Ive ever seen.

And the National Association of Manufacturers, in its blog, said, The NLRB has greatly overstepped its bounds and would be wise to seriously reconsider its decision to pursue this complaint.

Boeing pointed out that none of the production jobs created at its North Charleston, S.C., factory has come at the expense of jobs in Puget Sound. IAM employment, in fact, has increased by about 2,000 workers since the decision to expand in South Carolina was announced in 2009, the company said.

Further, Boeing said it held extensive talks with the IAM over potential placement of additional 787 capacity in Puget Sound but was unable to reach an agreement. By contrast, the IAM said Boeing walked away from an extraordinary round of mid-contract talks to keep the added production in Puget Sound.

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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