WFI - NLRB in the news

Boeing Lawyers Tells Senate Committee NLRB Suit Could Cost Hundreds of Thousands of Jobs

The Washington Examiner
Philip Klein

If it succeeds, a suit by the National Labor Relations Board seeking to block Boeing from building airplanes in a non-union facility in South Carolina will set a precedent that could cost hundreds of thousands of jobs nationwide, the company's vice president and general counsel Michael Lutting said at a Senate hearing on Thursday.

Most directly, if Boeing is forced to shut down its new factory, it would kill thousands of jobs in South Carolina. But it would also have wider-ranging effects, Luttig argued in testimony before the Senate Health, Education, Labor and Pensions (HELP) Committee.

Applied across the economy, Luttig said, it means that many companies that have production lines in unionized states won't be able to build additional facilities in right-to-work states. And on the flip side, companies won't want to open new factories in unionized states, because they'll be worried that they'll be limited in where they can expand in the future. Still other companies, Luttig said, would locate overseas.

The NLRB complaint calls for moving the new production line to the unionized Washington state, which Luttig described as a “breathtaking substitution of the board for management in the running of American company.”

He also dismissed the NLRB's charge that the factory was built to retaliate against the union.

“No company commits billions of dollars of capital to build a production facility out of spite,” Luttig said.


GOP Bill Seeks to Undercut Labor Agency in Boeing Case
James Rosen

Thirty-four Republican senators introduced legislation Thursday to protect states' "right-to-work" status and to ban the chief federal labor agency from determining where companies can do business.

The measure is the GOP response to a bid by the top lawyer for the National Labor Relations Board to prevent Boeing from opening a South Carolina plant this summer to make its next-generation 787 Dreamliner planes.

Lafe Solomon, the NLRB's acting general counsel, charges that Boeing violated federal labor laws that protect workers' collective-bargaining rights by deciding to build the factory in North Charleston instead of at the aerospace giant's hub in Everett, Wash.

Solomon claims that Boeing executives chose South Carolina, a right-to-work state, to retaliate against the International Association of Machinists and Aerospace Workers for having led four strikes at its Puget Sound facilities since 1977.

Sen. Lamar Alexander, a Tennessee Republican who crafted the measure, said the Boeing case had broad implications.

"This is not just about South Carolina, and it's not just about making airplanes," Alexander said. "This is about jobs in every state in the country, and whether or not manufacturers are going to be able to make in the United States what they sell in the United States."

Obama aides declined to comment on the legislation. NLRB spokeswoman Nancy Cleeland said the Boeing case didn't threaten the 22 states that had implemented laws banning union membership as a condition of employment.


Boeing and the Union Berlin Wall
Wall Street Journal
Arthur B. Laffer and Stephen Moore

The Obama administration's National Labor Relations Board filed a complaint last month against Boeing to block production of the company's 787 Dreamliner at a new assembly plant in South Carolina—a "right to-work" state with a law against compulsory union membership. If the NLRB has its way, Dreamliner assembly will return to Washington, a union-shop state, along with more than 1,000 jobs.
The NLRB's action, which Boeing will challenge at a hearing next month, is a big deal. It's the first time a federal agency has intervened to tell an American company where it can and cannot operate a plant within the U.S. It lays the foundation of a regulatory wall with one express purpose: to prevent the direct competition of right-to-work states with union-shop states. Why, as South Carolina Gov. Nikki Haley recently asked on these pages, should Washington have any more right to these jobs than South Carolina?
A recent New York Times editorial justified the NLRB decision by arguing that unions are suffering from "the flight of companies to 'Right-to-Work' states where workers cannot be required to join a union." That's for sure, and quite an admission. We've been observing that migration pattern for years, but liberals have denied it's actually happening—until now.
Every year we rank the states on their economic competitiveness in a report called "Rich States, Poor States" for the American Legislative Exchange Council. This ranking uses 15 fiscal, tax and regulatory variables to determine which states have policies that are most conducive to prosperity. Two of these 15 policies have consistently stood out as the most important in predicting where jobs will be created and incomes will rise. First, states with no income tax generally outperform high income tax states. Second, states that have right-to-work laws grow faster than states with forced unionism.
As of today there are 22 right-to-work states and 28 union-shop states. Over the past decade (2000-09) the right-to-work states grew faster in nearly every respect than their union-shop counterparts: 54.6% versus 41.1% in gross state product, 53.3% versus 40.6% in personal income, 11.9% versus 6.1% in population, and 4.1% versus -0.6% in payrolls.
For years, unions argued that right-to-work laws were bad for workers and for the states that passed them. But with the NLRB complaint, they've essentially thrown in the towel. If forced unionism is better for the economy of a state, why would the NLRB need to intervene to keep Boeing from leaving Washington? Why aren't businesses and workers moving operations to heavily unionized places likeMichiganNew YorkOhio and Pennsylvania and fleeing states like GeorgiaTennesseeSouth Carolina and Texas?
In reality, the stampede of businesses from forced-union states like Washington has accelerated in recent years. A 2010 study in the Cato Journal by economist Richard Vedder of Ohio University found that between 2000 and 2008 4.8 million Americans moved from forced-union states to right-to-work states. That's one person every minute of every day.
Right-to-work states are also getting richer over time. Prof. Vedder found a 23% higher per capita income growth rate in right-to-work states than in forced-union states, which over the period 1977-2007 amounted to a $2,760 larger increase in per-person income in those states. That's a giant differential.
So now the unions concede that this migration is indeed happening, but they say that it is unhealthy and undesirable because workers in right-to-work states are paid less and get worse benefits than the workers in union states. Actually, when adjusting for the cost of living in each state and the fact that right-to-work states were poorer to begin with, a 2003 study in the Journal of Labor Research byUniversity of Oklahoma economist Robert Reed found that wages rose faster in states that don't require union membership.
Employers that move away from forced-union states mainly do so not to scale back wages and salaries—although sometimes that happens—but to avoid having to deal with intrusive union rules, the threat of costly work stoppages, lawsuits, worker paychecks going to union fat cats, and so on.
Boeing officials have admitted that their decision to build the new Dreamliner plant in South Carolina was due in part to the fact that the company could not "afford a work stoppage every three years" as had happened in Washington state over that past decade. (By the way, this is the comment the NLRB complaint cites as proof of "retaliation" against union workers.)
Boeing is merely making a business decision based on economic reality. In fact, the company chose South Carolina for the new plant even though Washington has no income tax and South Carolina does. The two of us are often accused of arguing that income tax rates are the only factors that influence where businesses and capital relocate. Taxes certainly matter. But Boeing's move shows that taxes are not always the definitive factor in plant location decisions. In the case of Washington the advantage of its no income tax status is outweighed by its forced-union status. Lucky are the six states—Texas, Tennessee, South Dakota, Nevada, Florida and Wyoming—that are both right-to-work states and have no income tax.
While there are only six right-to-work states that also have a zero earned income tax rate and three zero earned income tax rate states that have forced- union shops, their performance differences over the past decade (2000-09) are revealing. Of the nine zero income tax rate states, those six that are also right-to-work have grown a lot faster than the three with forced-union shops: 64.9% versus 53.8% in gross state product, 59.0% versus 46.8% in personal income, 15.5% versus 10.3% in population and 8.2% versus 6.9% in payrolls.
The Boeing incident makes it clear that right-to-work states have a competitive advantage over forced-union states. So the question arises: Why doesn't every state adopt right-to-work laws? Four or five are trying to do so this year, and have faced ferocious opposition from the union movement.
But that shouldn't stop state legislators in forced-union states from doing what's in their workers' best interests. They need to decide whether they want to continue to see jobs and tax receipts exit their states, or whether they want to adopt laws that afford their workers the right to join a union or not. The only alternative is to build a regulatory Berlin Wall around their borders to keep their businesses from leaving.
Mr. Laffer is the chairman of Laffer Associates. Mr. Moore is senior economics writer for the Journal's editorial page. They are co-authors of "Return to Prosperity: How America Can Regain Its Economic Superpower Status" (Threshold, 2010).


Boeing Expects US Labor Complaint to End in Court
John Crawley and Kyle Peterson

Boeing Co (BA.N) expects a court to settle a complaint alleging it punished union workers for a past strike by choosing a state with laws unfriendly to organized labor to build its 787 Dreamliner.

J Michael Luttig, the company's general counsel and a former appeals judge, told a Senate committee on Thursday he anticipates losing before an administrative law judge in Seattle in June and at the National Labor Relations Board after that, but prevailing at the U.S. Court of Appeals.


"That our rights will be vindicated one way or another before a federal court is correct," Luttig told Democratic Sen. Richard Blumenthal of the Health, Education, Labor and Pensions Committee at a hearing on middle class economic issues that was dominated by the NLRB complaint against Boeing.


Luttig said the April complaint was without merit, a view supported by Republicans on the Senate panel who said the case was an unprecedented attack on U.S. corporations.


Luttig said Boeing was not asking for congressional relief. But Tennessee Republican Lamar Alexander said he would propose legislation prohibiting the NLRB from taking similar action against other companies.


Alexander said the bill would protect so-called "right-to-work" laws, found mainly in southern and western states, that make union membership a condition of employment.


Overseas automakers have flocked to southern states with nonunion facilities in contrast with their U.S. rivals whose factory workers are members of the United Auto Workers.


The NLRB complaint, in response to machinists union allegations and challenging Boeing's decision to build a 787 plant in South Carolina rather than union-heavy Washington state, could take two or more years to move through the courts, Luttig said.


Boeing said it selected Charleston in 2009 after failed talks with the International Association of Machinists (IAM) to continue building the Dreamliner in the Puget Sound region where it assembles the 787 and other commercial airliners.


The NLRB complaint alleged Boeing engaged in unfair labor practices by moving the follow-on 787 work to discourage union strikes, a protected activity.


The NLRB wants an order requiring Boeing to operate the second 787 line in Washington state.


The IAM said on Thursday Luttig's statements were not "relevant or appropriate."


Boeing's Dreamliner, its signature new aircraft, is about three years behind schedule because of supply chain problems. But Boeing also blames part of the delay on the 2008 strike.

The NLRB complaint "has nothing to do with right-to-work (state) laws, which are expressly permitted under our statute," Cleeland said. "Rather, it concerns a particular line of assembly work that was allegedly moved for discriminatory reasons. The effect would have been the same if the line had been moved to a nonunion facility in any state."

Boeing isn't moving its Dreamliner factory. The Chicago-based firm plans to open a second production plant near Charleston International Airport, where it intends to build three of the 787 commercial jets per month.

An administrative law judge in Seattle is scheduled to hear the case June 14. He'll decide whether to dismiss the complaint or refer it to the five-member NLRB.

The labor agency has three Obama appointees — including two former union lawyers — along with one named by Republican President George W. Bush and a vacancy.

Obama last year made recess appointments of the two former general counsels for large unions — Mark G. Pearce and Craig Becker — after Senate Republicans blocked their confirmation.

Solomon himself is serving in an acting capacity as the NLRB's top lawyer because GOP opposition would make it hard to gain the 60 votes required for his Senate confirmation.

The new Senate measure would say that the NLRB can't order a company where to operate and would guarantee an employer's right to decide where to do business. It has a free-speech clause protecting executives' ability to cite their fear of labor stoppages free of government punishment.

Almost all of the bill's 34 sponsors represent right-to-work states. The Republicans' show of force in lining up more than three-quarters of their 43 senators behind the measure signals party leaders' desire to elevate the Boeing case into an election issue next year.

Even if all 43 GOP senators vote for the legislation, it would face an uphill climb toward the 60 votes needed to overcome Democrats' procedural obstacles.

The measure's sponsors said they'd target 11 Democratic senators from right-to-work states, starting with Senate Majority Leader Harry Reid of Nevada.

Reid, though, was defiant in defending the NLRB and criticizing the Republican senators who are siding with Boeing.

"Republicans are threatened by unions," Reid said. "Because Republicans and the big businesses they defend so often try to take away workers' rights, workers don't often vote Republican."

Reid accused the GOP senators of political interference in a quasi-judicial proceeding.

"This kind of interference is inappropriate," he said. "It is disgraceful and dangerous. We need agencies like the NLRB to be able to operate freely and without political pressures."