(Reprinted from Thursday’s edition of The Wall Street Journal by permission of Dow Jones, &Copy; 2012)
By WILLIAM J. KILBERG
In June 2011, the National Labor Relations Board began a case against Boeing for opening a nonunion plant in South Carolina. Six months later, the International Association of Machinists withdrew its charge that the company was engaging in unfair labor practices, and the NLRB dismissed its complaint. Not coincidentally, Boeing’s resolve in fighting the board — and in opening the South Carolina plant in the first place — had produced a collective-bargaining agreement with the machinists’ union without a strike for the first time in over a decade.
The Boeing case sparked scrutiny of the labor board for its possibly partisan political motives in bringing the case.
The board will continue to be scrutinized this election year — and, considering the history of this case and its other actions, with reason.
Unprecedented demand for Boeing’s 787 Dreamliner led the company to conclude in 2010 that it needed a second production line to assemble the innovative aircraft. The options were narrowed to two: a second line at the company’s existing facilities in Everett, Wash., or a new facility in Charleston, S.C.
Though Boeing wasn’t required by its existing collective contract to consult with the union, the company sought a deal to build the line in Everett: In exchange for more union jobs, the machinists would agree to restrained growth in wages and benefits and a long-term, no-strike clause.
The union balked, Boeing built the new line in South Carolina, and in March 2011 the union charged unfair labor practices.
To the American public, it seemed beyond imagination that a federal agency could prohibit a unionized company from opening a nonunionized plant in a right-to-work state. Boeing believed the NLRB would be unable to prove either of two essential elements of its case: (1) that Boeing’s action adversely affected the terms or conditions of employment of union members, and (2) that it acted with the intent to discourage union membership. My law firm represented the company, and I was lead counsel.
Boeing’s new assembly line did not cause any union members to lose their jobs, have their wages or benefits reduced, or suffer any change in status or working conditions.
Indeed, the labor board’s complaint did not allege that. It simply asserted that Boeing had “transfer[red]” its second line from Everett to Charleston. Not so—this was a new line. Boeing decided to increase its rate of production of 787s. That increase was new work, not existing work transferred away from Everett.
Boeing also did not act with an unlawful motivation. Perhaps recognizing as much, the NLRB’s complaint sought to avoid that legal requirement by alleging that Boeing’s second-line decision was “inherently destructive” of employees’ rights.
But Boeing’s contract with the machinists union expressly authorized the company to designate where work would be performed. It cannot be “inherently destructive” of collective bargaining for an employer to exercise a right under the parties’ collectively bargained agreement.
To win its case, the NLRB would have had to establish that Boeing located the second line in Charleston out of anti-union “animus,” or retaliation. It is not conceivable that Boeing’s board of directors — which included one former member of the Obama administration, Chief of Staff Bill Daley, and one future member of the cabinet, Secretary of Commerce John Bryson — made a billion-dollar decision simply to spite its union. Nor was there any evidence of such motivation.
A year after the fact, the NLRB case against Boeing is best understood as one in a series of recent administration steps to strengthen unions and weaken companies.
For example, last summer the board proposed its “ambush” election rule, which would sharply limit employers’ opportunities to challenge a union’s proposed bargaining unit. That rule recently was invalidated by a federal court.
In September, the board reversed decades of precedent to allow unions to organize “micro” bargaining units of small numbers of employees who represent a narrow part of a workforce.
Thus, one NLRB judge recently certified a bargaining unit consisting of the women’s shoe departments on the third and fifth floors of Bergdorf Goodman’s store in New York City.
And in January, the president made perhaps the most controversial recess appointments in history when he named three NLRB members while the Senate was still in session according to the Constitution and the Senate’s internal rules (though on a three-day break). The president did so to guarantee the board a working quorum — and a pro-union majority — through the end of this year. That action is also the subject of ongoing litigation.
The NLRB has experienced ideological swings throughout its existence, depending on the party in the White House.
But the degree of change and the willingness to ignore statutory language and judicial precedents is unique to the current administration. An “ends justify the means” attitude toward the law has taken hold at the National Labor Relations Board — and will continue unless the November election intervenes.
William J. Kilberg was lead counsel for Boeing in the NLRB case. He is chairman of the Mitt Romney Campaign Labor Policy Committee.