The National Labor Relations Board announced on Friday, December 9, 2011 that it was dropping its politically charged case against Boeing. The NLRB had accused Boeing of violating federal labor law by opening a new aircraft production plant in South Carolina instead of Washington State. See our blog article dated May 5, 2011.
The NLRB filed a complaint against Boeing in April 2011, seeking to force Boeing to move the 787 Dreamliner passenger plane production from a non-union plant in South Carolina to the union assembly line in Washington State. The NLRB contended that Boeing had retaliated against its workers for exercising their federally protected right to strike because Boeing management had announced that it was moving the plant to South Carolina to “punish” the Boeing workers for having power the strike in the future (Lafe Soloman General Counsel for NLRB April 22, 2011, see our blog article dated May 5, 2011).
Republican lawmakers and presidential candidates announced that the lawsuit was a prime example of regulatory overreaching by the Obama Administration, and argued that the federal officials should not be telling companies where they can or cannot build factories. Congress held hearings and demanded thousands of pages of documents. Boeing invested over a billion dollars in the South Carolina plant before the lawsuit was filed. On Wednesday, December 7, the International Association of Machinists approved a new contract with Boeing in which Boeing agreed to build its 737 Max Jet in the state of Washington with union labor. Within a few days, the NLRB dropped its lawsuit against Boeing.
The question now becomes whether the NLRB’s motivation to bring the lawsuit in the first place was simply born out of some political loyalty to side with the union over management in the collective bargaining situation? Boeing was very clear that the new contract to build the 737 Max Jet in Washington was not tied directly to a settlement of the NLRB complaint, and that it had always intended to build the 737 Max Jet in Renton because of the workforce and that the experience gained from manufacturing the present 737 offers certain efficiencies. It is nevertheless difficult to resist the conclusion that Boeing felt obliged to make the agreement to save its more than one billion dollar investment in South Carolina where it is presently building the 787s. As for the NLRB, its decision to drop the case as quickly as it did after the machinists made their deal exposes how politically motivated the Boeing suit may have been. The NLRB is supposed to be an even-handed and fair-minded referee in labor disputes, making sure that neither side breaks the federal law. In this instance, the NLRB seems to have come down squarely on the side of the union and against the employer’s move to assemble the 787 in a right to work state. The message appears to be that if an employer seeks to move its plant and operations to escape onerous collective bargaining agreements, that its investment will be at risk.
Although maintaining manufacturing in the state of Washington is vitally important to this state’s economy, this case raises questions as to the NLRB’s independence, and raises concerns that companies may be motivated to send even more jobs overseas where there is no NLRB to be concerned about.
References: New York Times and The Wall Street Journal.