NLRB ruling on Boeing factory angers GOP

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WASHINGTON -- A decision last month to recommend a labor case to a judge has mushroomed into a national political debate, pitting Boeing and Republicans against unions and the Obama administration.

On April 20, the acting general counsel of the National Labor Relations Board, Lafe Solomon, issued a complaint against Boeing for starting an airplane production line in South Carolina, alleging the company did so in retaliation for strikes at a unionized plant in Washington state.

The decision sent the case filed by the local machinists' union to an administrative law judge and sent politicians into a tizzy.

Though the decision didn't directly halt construction at the new North Charleston, S.C., plant, it threw the project into limbo and brought quick denunciations from South Carolina officials.

From there, it vaulted onto the national stage. The story was raised during the May 5 GOP presidential primary debate, and South Carolina Gov. Nikki Haley said it was a crucial topic for presidential candidates to address.

"What the NLRB has done to Boeing in South Carolina is just the beginning of the labor unions bullying our right-to-work states," she said in Greenville, S.C., after the debate.

"That's an issue we really need to get into. That's an issue the candidates need to address, and it's an issue they can't just address on the surface. They have to go into the details of how they're going to stop it."

Ms. Haley has done her part to spread the word, appearing at a news conference in Washington last week sponsored by the steadfast union foil U.S. Chamber of Commerce.

The rhetoric escalated further in a hearing by the Senate Health, Education, Labor and Pensions Committee on Thursday. Intended to be a look at the squeezed middle class, the hearing was hijacked by Republicans who invited Boeing's general counsel and basically turned it into a three-hour debate on the NLRB.

"Employers across the country have been greatly disturbed by this complaint and the possibility that a government bureaucrat serving in an acting capacity could direct U.S. companies about where to locate facilities, what work to do where and who to hire," said Sen. Mike Enzi of Wyoming, the committee's top Republican. "This is not the way to encourage new job creation in the U.S. or even keep the jobs we currently have."

The response from Democrats has boiled down to: Back off and let the legal process play out.

"What borders almost on unethical activity is for people in the political branch of the Congress to begin to interfere in a judicial process and to color that judicial process and to try to make it a political matter," committee chairman Sen. Tom Harkin, D-Iowa, said during the hearing Thursday.

The process already has been a protracted one.

In 2009, Boeing announced its plans to open a second production line for the 787 Dreamliner airplane at a nonunion plant in North Charleston, S.C., as opposed to a location close to the unionized production line in Everett, Wash.

In March 2010, the machinists' union from Puget Sound filed a complaint alleging that Boeing was putting the facility in South Carolina in retaliation for previous strikes, a violation of the National Labor Relations Act.

More than a year later, Mr. Solomon -- a career attorney who first worked for the board in 1972 and awaited Senate confirmation as general counsel since June 2010 -- agreed and filed a complaint asking an administrative law judge to order Boeing to open its plant in Everett.

Citing news reports, the complaint states that in an October 2009 conference call with investors, CEO Jim McNerney "made an extended statement regarding 'diversifying [respondent's] labor pool and labor relationship, and moving the 787 Dreamliner work to South Carolina due to 'strikes happening every three to four years in Puget Sound.' "

In several other public comments and internal communications, the complaint states, Boeing executives made statements linking the decision with avoiding production disruptions that come with strikes.

An administrative law judge will hear the case June 14 in Seattle, and if the judge upholds the machinists' complaint, it goes before the full NLRB.

Boeing general counsel J. Michael Luttig testified Thursday that he expects to lose the first two rounds and take the case to an appeals court, because he figures the opinion of Mr. Solomon likely is shared by the entire NLRB apparatus.

But the former judge said the case against Boeing has no legal merit.

The decision to make 787s in South Carolina was due to a variety of factors, he said, from tax incentives offered by the state to the desire for more geographic diversity in its airplane production.

Most important to the legal case, Mr. Luttig said, Boeing did not transfer any work -- as the complaint states repeatedly -- nor was there any harm to the unionized workers in Washington state, where Boeing has hired more workers. Mr. Luttig estimated that Boeing has spent more than $1 billion on the South Carolina facility, which is scheduled to open in July, and hired more than 1,000 people.

Mr. Luttig and Republicans argued Thursday that the NLRB's action would cause any company with a union workforce to think twice about locating operations in a state with a right-to-work law, which bans union-only workplaces. By extension, they added, heavily unionized states should be worried as well because companies wouldn't want to locate there then be handcuffed in future expansion.

Especially in a sputtering economic recovery, the threat is eye-catching. And it fits with Republican claims that the heavy hand of the Obama administration is inhibiting the economy through everything from environmental to tax policy.

Union supporters are left to argue that the National Labor Relations Act is meant to promote unionization, and the NLRB is going through its usual methods to enforce the law.

"What I'm defending is the processes of the board and the legal theory," AFL-CIO attorney Sarah Fox, a former NLRB member, testified Thursday. "I'm trying to make the point that I find the legal theory on which the case is based not extraordinary. It's certainly extraordinary applied to a company as large as this."

After the failure of Democrats and unions to pass the Employee Free Choice Act, which would have made it easier for workers to unionize in a variety of ways, the NLRB has become an even more hotly contested labor law battleground. Its appointees are highly politicized and its decisions carefully watched by labor and business groups.

And on Thursday, Republican Sens. Lamar Alexander, of Tennessee, and Jim DeMint and Lindsey Graham of South Carolina, introduced a bill that would block the NLRB from ruling where an employer could locate operations.

"This is a consequential matter," Mr. Alexander said in a floor speech introducing the bill. "It would stop a federal government regulation which is the single most effective action I know about to chase American jobs overseas and lower family incomes."

Daniel Malloy: or 1-202-445-9980. Follow him on Twitter at PG_in_DC.


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