Journalism in the Public Interest

Primer: In Labor Board Dispute With Boeing, Growing Controversy Clouds Facts


Boeing C-17 Globemaster III (Getty Images)

Just months after fights to limits labor rights in Wisconsin and other states grabbed national attention, another messy labor dispute is getting headlines.   

One of the nation’s largest manufacturers, Boeing, has been sued by the government for allegedly punishing union workers by shifting a proposed new plant to another state. Republicans and other critics have charged that the government is overstepping its authority and creating a dangerous precedent.

The dispute has taken over congressional hearings, prompted more than a dozen states to chime in on Boeing’s side, and has even become a talking point for Republican presidential candidates. Tim Pawlenty compared the case to “the Soviet Union circa 1970s or 1960s or ‘50s.”

Amid all the rhetoric, we’ve decided to step back and lay out the facts.

What the controversy’s about

The National Labor Relations Board has alleged that Boeing scrapped its plans for a new plant in Washington state to punish union workers there for going on strike. The company opened up a nonunion plant in South Carolina last Friday. If the claims are true, Boeing broke federal labor law.

The complaint was originally brought by the machinists union in 2010. The NLRB investigated and ultimately decided that the allegations were well-founded, and it sued. Cases like this often settle before going to a judge. That hasn’t happened here. And this week, Boeing and the NLRB faced off in court for the first time.

The administrative hearing this week is a hearing on the facts. If the decision is appealed, it will go to the NLRB’s board, which serves as a quasi-judicial body and acts independently of the agency’s general counsel. (As the agency explains it, the general counsel functions as a prosecutor, and the board functions as a court.)

Though the issue hasn’t yet come before the board, Republican critics have worried that it will rule in favor of the union because it has a Democratic majority at the moment.

Why the law’s simple, but the facts in the case aren’t

Federal labor law—specifically, the National Labor Relations Act—protects workers from retaliation or threats of retaliation for exercising the right to form a union, bargain collectively, or go on strike.

“There’s nothing particularly extraordinary about this case as a matter of the legal principles at stake,” said Catherine Fisk, a University of California-Irvine law professor and former Justice Department attorney. Fisk has written extensively about labor law and the NLRB.

According to Fisk, the question is whether the labor board can prove that the dispute with the workers in Seattle was Boeing’s primary reason for moving its planned plant. Companies may legally shift work for reasons such as labor costs, but they may not do so out of retaliation against workers for past strikes or to prevent future strikes.

But at least two former NLRB chairmen have said that the case is unprecedented and have taken issue with the agency’s conclusion about Boeing’s motive.

Why establishing motive is tricky

In an interview last year with the Seattle Times, Boeing executive Jim Albaugh said the following about the decision to relocate: “The overriding factor was not the business climate, and it was not the wages we’re paying people today. It was that we can’t afford to have a work stoppage every three years.”

NLRB’s general counsel took that statement—and others—to mean that Boeing was trying to avoid the union, which had a history of strikes dating back to the 1970s.

However, the company has argued that Albaugh’s quote was taken out of context and have noted that his full statement went on to say more: “We can’t afford to continue the rate of escalation of wages as we have in the past. You know, those are the overriding factors. And my bias was to stay here but we could not get those two issues done despite the best efforts of the Union and the best efforts of the company.”

The Seattle Times had this take on Albaugh’s statements about the work in Seattle:

He repeatedly made clear that those two things—first, no strikes; second, lowered escalation of wages in the future—remain deal breakers for placing future work here.

Here’s the NLRB’s complaint against Boeing, filed in April [PDF]. Boeing has argued that it did not make the decision to open the plant in South Carolina out of retaliation against unionized employees. The company has also argued that the workers in Seattle weren’t adversely affected by the opening of the South Carolina factory because no jobs in Seattle were lost. 

What’s happening now

An administrative law judge will have to decide whether the NLRB’s lawsuit against Boeing has merit. That hearing began Tuesday in Seattle.

Boeing kicked off the hearing by asking the judge to dismiss the case. Judge Clifford Anderson urged Boeing and the NLRB to work out a settlement, stressing that the case could take years if the decision keeps getting appealed: “I’ll be retired or dead,” he said.

How the process has become politicized

What was initially a dispute between one company and its workers has ballooned into a broader political fight. Republican politicians on both the state and congressional level have criticized the NLRB and rushed to Boeing’s defense, framing the NLRB’s action as an attack on what are known as right-to-work states, or states that bar employers or unions from making union membership a condition of employment. South Carolina is a right-to-work state.

Last week, Rep. Darrell Issa, chairman of the House Oversight committee, announced that his panel would investigate whether the NLRB was overreaching and trying to force workers into unions. Several House Democrats said the investigation was an attempt to influence a legal proceeding, but Issa said such hearings “are not inherently improper by virtue of exploring a pending administrative matter.”

South Carolina politicians—from the state’s attorney general to its governor to its congressional representatives—have also sought to influence the court. The state’s governor, Nikki Haley, is slated to testify tomorrow at Issa’s hearing. “There’s no secret that I don’t like the unions,” she has said. Haley has vowed to keep up the political pressure in order to stop the lawsuit.

Sen. Lindsay Graham of South Carolina has threatened to block the Obama administration’s Commerce Secretary nominee until President Obama supports Boeing: “Tell the country we think Boeing’s a good, ethical company and they’ve done nothing wrong,” Graham said this week. (Obama’s pick for Commerce Secretary happens to be a former Boeing board member.) Graham’s colleague, Sen. Jim DeMint, also filed a public records request last week for any communications the agency had with the union and Obama administration officials. DeMint had previously called the labor board “a bunch of thugs.”

And South Carolina’s attorney general—joined by the attorneys general of 15 other states—filed an amicus brief [PDF] last week alleging that the NLRB’s action against Boeing could harm job growth in the United States.

Even Republican presidential contenders have weighed in on the issue. As The Hill notes, Mitt Romney, Newt Gingrich, and Tim Pawlenty have all criticized the labor board.  

The White House meanwhile, has mostly stayed quiet about the matter. A White House official told Fox News that the case is “an independent agency’s enforcement action,” and “the White House does not get involved in particular enforcement matters.”

But the White House did tell the NLRB to back off in March when the agency issued a statement criticizing House Republicans’ proposed cuts to the NLRB budget. An official from the Office of Management and Budget ordered the labor board to remove the statement from its website. “Administration positions on proposed legislation are provided by the White House,” an OMB spokeswoman told Huffington Post. 

Why, pray tell, isnt it the right of a provate company to locate production anywhere they choose? Its not like they were going to China.

The Boeing workers in South Carolina are not precluded from joining a union and bargaining - if they wish. The point of “Right to Work” is that they cannot be compelled to join as a condition of employment.

Boeing isn’t a private company, Mike.

What legal authority exists that the NLRB can file an injunction against a corporation seeking to make a move within these United States? Boeing should ignore this frivilous and unfounded action and proceed with its sound business plan.  Settle it later from it’s new corporate headquarters in SC.  If Boeing is not big enough to stand up for itself what will we, the smaller businesses, do against unjust government interference from our business plans?  Are we in business to shrink or to grow?  Which is better for workers, contraction or expansion? Hello?

John F. Palmer

June 17, 2011, 12:13 a.m.

It is about time that the NLRB did something positive on the side of worker’s rights.

This Republican Party would have everyone working for minimum wage, no benefits, etc. as they do in the South and other so called right to work states.  In the south, it is near to impossible to organize due to the repressive environment and the use of fear of losing one’s job if a plant becomes union..

Unions protect people not corporations and the NLRB is suppose to rule on the merits of the cases brought before them, not on the political whims of politicians.

this is Boeings way to break the union influence over its labor force. the right to work laws in states, especially red states are intended to demean the value of labor, lower wages and prevent workers from equal voice on wages and benefits. The BOEING company seeks govt contracts, it is required to pay decent wages- as the american people believe in fairness. The NLRB like most govt agencies had been created to right the abuses on the common good so often perpetrated by men doing business in persuit of profit by hook or by crook. WALL STREET deregulation led to economic collapse and the american taxpayer bailout, FDA because consumer opened cans of veggies and got rat feces and body parts, the EPA because business entities have no qualms about poisoning the air and water of the nation, OSHA - workers died, because in the rush to profits, business took short cuts that murdered workers i.e. Horizon in the Gulf and the Massey mine disaster. Union workers not only achieve decent wages and benefits, they have a voice that values workers’ lives and protects their safety in the work place. The NLRB needs to do its job. There is no real justice in the nation with the current business influence over the SCOTUS, so I hope the workers win. It is about time, we get back the middle class.

Maybe all y’all should step back and do a little homework….union or non union where do you think your benefits, that most of you take for granted, come from?....whether it’s vacation time or sick time or holidays or retirement or 8hr days instead of being forced to work 12, 14, 16hr days at straight time or getting a 1/2 hr for lunch or getting paid time and a 1/2 for working overtime or getting bereavement pay when somebody dies in your family, etc., etc… ALL comes from actions taken by organized labor throughout the years…...that’s the facts, whether you like it or not…..South Carolina historically, for the most part, is a non union state so any company that already has a factory in another state that is a union factory and it wants to open a new non union factory in a historically non union state one would not have to be a rocket scientist to figure out what they are trying to do Boeing would not be the first company to try and pull this…...For all you nay sayers out there, who are not folks owning your own business, because it is obvious why they would be against unions, stop and think… has been said that we don’t need unions anymore…that we have labor law now to protect us….well, pull your collective heads out of the sand because the bottom line is that law, any law for that matter, only works if it is enforced…..and we all know that there are many laws out there that are not enforced…..the unions at times might leave a little to be desired, but for the most part they have the workers backs, which on the other hand, for the most part, company’s do not…’s all about the money and that my friends is the bottom line…’s called checks and balances….when a company looks to move it’s operations from a union factory to a non union factory it’s all about the all mighty dollar and trying to break the union…..and you had better believe that if
the unions went away it wouldn’t take long for labor law to pretty much
ceased to exist… would see to that.

Right on Bruce!!!

Over the years company’s have moved to Southern states for cheap labor and thus avoiding union shops. True, true for manufacturing. As the southern labor pool pushed for better wages and work environments those company’s skirted responsibility and moved oversees. The despicable behavior of these company’s can not be blamed on the union for wanting or demanding a piece of the pie—instead we should hold these company’s and yes Wall Street accountable for their greed.

Bruce is exactly right. People who actually work for a living understand that unions prevent us from going back to the ‘20s. I don’t know about you but I’m kind of glad my 12 year old son doesn’t have to go to work in a factory.

And by the way, the people of South Carolina, not Boeing, are paying for the construction of the Boeing plant - in the form of $900Million+ in the form of incentives. This is about $150Million more than the cost of the plant. That’s Corporate Welfare.

I’d put the source link in to prove it, but there is software on this site that apparently doesn’t allow that. Go figure.

Obama and his neoliberal ilk are no friends of labor; they stand idly by and are complicit in the financial capitalist’s war against the middle class, working class and poor.  Since Reagan’s firing of air traffic controllers in the 1980s, the union movement in America has been in a death spiral.  Now the plutocrats are waging its final attack on the workers of America via their satraps: republican and some democratic governors in many states by pitting the unionized working class against the nonunionized, claiming why should the former have better benefits and working conditions than the latter.  Any country in Europe with a strong union movement, like Germany, treats its average citizens fairly and show concern for their well being, which is absent here in America.  America’s political elite and its plutocrats are a disgrace and will fully deserve the social unrest and revolution that must appear soon.

According to the Seattle Times, In 2003 Washington State taxpayers gave Boeing $3.2 Billion in tax incentives to build the first 787 production line in Everett, WA.  Boeing said the new line would add about 3600 supplier jobs.  In fact, only four small supplier companies with a total of 200 unskilled jobs were created and the Everett plant only employs about 1,000 people.  The tax breaks started in 2005 and Boeing has added 14,000 jobs since then.  However, that is only one-quarter of the Washington Boeing jobs lost in the previous six years.  Boeing sliced millions from their tax bill, moved their corporate headquarters to Chicago and wanted more tax incentives to open the second line in Washington.  Pretty darn expensive jobs, wouldn’t you agree?

Regarding the NLRB actions, here’s a quote from the Seattle Times on 9/29/09: “...Boeing has repeatedly made clear this year that a key issue in the competition is its concern about the company’s poor relationship with the Machinists union and the number of strikes in recent years, including a two-month work stoppage in 2008. Boeing has been pressuring the union to agree not to strike when the next contract comes around in 2012, but so far the union shows no sign of agreeing.”  The Washington State Legislature and governor wisely turned down Boeing’s proposal so they moved the plant to South Carolina where they are being given huge incentives, at taxpayer expense, to build the line.  Robbery.

What’s that line about, those who forget history are doomed to repeat it, or something like that?Well, the workers in the beginning, to establish for themselves better working conditions and the right to form a union and the like, were subject to Pinkerton Agents, police officers, and outright thugs to quell the workers who were standing up for themselves.Some of these folks DIED,............YES DIED trying to deal with the unfair practices of these companies. It was a hard fought battle to get a decent wage that actually raised union and non-union workers up. So, then the companies would just raise the price on the consumers, inflating the whole process. What would be a real negotiation would be when the company is made to raise workers wages using their profits, not raising the costs of the goods produced. Some folks think actors are overpaid, well, maybe they are, but when an actor can make millions for the movie house by bringing in a great amount of people to watch the movies, then isn’t it fair to pay them accordingly? What is the rate exactly for actors, 5% of the total cost? I do not know. But, yet if the movie is a hit, then the amount of compensation is not that much comparatively speaking. For if they(the actors) didn’t get their reasonable per centage, all the money would go to the administrative side, or the producers, and basically to the ones who didn’t really do the work of the actor in bringing in the people. There is the Screen Actor’s Guild, a union that was formed around some of the same things I mentioned. Sure, I was in a union, and my complaint was that there was policy that was based on seniority, and also if there was somebody who did the least possible for their money, and you who worked you butt off doing the same job, both would get the same rate of pay(really a minor point). But in spite of that, unions are still relevant and important. Many people in the media rail against the unions, yet they themselves(Glenn Beck) would not work without a contract, which unions engage in producing for the workers.

Get rid of unions. We have to compete with China. Why should anyone make more than $2.00 per hour? What’s this 5 day 40 hour work week all about? How is a millionaire to make money in America?

Why hasn’t the NRLB had any say on what the Governors of Wisconsin and other states have done?

It seems to me that since the Citezen’s United ruling applied rights to collectives that the rights of the collective, a union in this case, are being undermined by the “right to work” laws.  These “right to work” laws may be infringing on the constitutional rights of the collective, the union.

The key to this case is not WHY Boeing is building the plant in SC.  The key to this case is the fact that Boeing is NOT MOVING JOBS from WA to SC, but is creating MORE jobs in SC rather than creating them in WA.  No body in WA is getting fired, laid off, having their hours reduced or anything.  THIS IS NOT, as the NLRB claims, Boeing making
“coercive statements to its employees that it would remove or had removed work from the Unit because employees had struck and Respondent threatened or impliedly threatened that the Unit would lose additional work in the event of future strikes”  BECAUSE NO WORK IS BEING REMOVED.  NOT PUTTING ADDITIONAL WORK IN WASHINGTON IS NOT THE SAME AS REMOVING WORK.

I have read all the above 16 reply’s and I am not for or against Union’s
or non union’s I just from the info in above replie’s sound’s like a company that want’s to expand and also create job’s and market share
in this world of sending job’s over sea’s to china has chose to start a
new expanded site to make plane’s on the east cost of the united state’s as I read and am told from all replie’s in this chat blogg or what ever it’s called Free Market or do we call this something else.
yes union’s have changed the face of employer/ employee’s and we are all very thankfull for the sacifices maid over the many year’s of people
fighting and standing up to unfair working conditon’s low pay and long hour’s Let us not forget the long hard time’s and sacifices that they maid. but now to say that no company can expand and open a new plant or office building in the united state’s YES I said the united state’s
can’t do so without being labled as a Union buster or a company that is trying to cheat’ really” sound’s like no job’s are cut or lost in this expansion to make plaine’s on the east coast’ maybe if the company just decided to close all plant’s and open a new one in china,Taiwan,or better yet Mexico ’ or even Canada then that would really be something
that you could jot a note on the back of a 30 day pink slip againe I am just saying the info on the replies say no job’s are lost or hour’s cut back and yet eveyone is in a tizzy you should look at it as wow the company is doing well and expanding in the USA ’ job security that’s a good thing right? take care best of luck to all and againe I am not saying who’s rite or wrong just saw the dispute on web.

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