If the NLRB should prevail in its suit against Boeing, more than an employer’s right to speak the truth plainly may be in jeopardy.  It is conceivable that an employer’s right to make fundamental decisions, such as where to locate operations, will be curtailed by this Board.  Throughout the complaint, the NLRB’s acting general counsel has requested an order requiring Boeing to operate its second line production of the 787 Dreamliner “in the State of Washington, utilizing supply lines maintained by the [union] in the Seattle, Washington, and Portland, Oregon, area facilities.”

The legal battle has resulted in a political jousting match fought along party lines.  Already, legislation has been introduced in the House and the Senate responding to the NLRB’s action. But setting political posturing and agendas aside, this article briefly focuses on the two parties with the most immediate interest in how this high-profile dispute plays out: the union and Boeing.

Since 1989, the machinists’ union has targeted Boeing with four strikes, the two most recent of which occurred in 2005 and 2008.  With that in mind, the complaint against Boeing characterizes the company’s move to a non-union environment in South Carolina as a vehicle for retaliating against the union and discouraging protected union activity.  Disputing that allegation, Boeing pointed to financial incentives from the State of South Carolina, an interest in achieving geographic diversity in its commercial airline operations, and an interest in protecting the stability of the 787’s global production system as justification for its business decision to locate production in South Carolina.

The complaint, which was filed well over a year after Boeing announced its decision to place a new second assembly line for the 787 in South Carolina, was immediately attacked in a press release issued by Boeing on the same day the complaint was filed.  As pointed out in Boeing’s press release, the new plant, which is in the final phase of construction, has resulted in Boeing’s hiring of 1,000 new workers.  Of perhaps even greater significance for purposes of refuting the claims at issue, Boeing announced that the creation of production jobs in South Carolina has not adversely affected a single union job.  In fact, as Boeing pointed out in its press release issued in response to the labor complaint, union employment at Boeing’s Puget Sound plant in Washington has increased by approximately 2,000 workers since the decision was made in October 2009 to place a production facility in South Carolina.

Some of Boeing’s supporters have argued that an outcome in favor of the union in this case could have widespread implications on the abilities of unionized manufacturers to maintain production operations in the United States and still be competitive globally.  From a union perspective, however, there are concerns about the leverage that unionized manufacturers could gain over an already-diminishing union workforce if those manufacturers are permitted to transition production into right-to-work states such as South Carolina.  Regardless of where your personal opinion falls along that spectrum, three things are certain: this case will be closely followed, the merits will be hotly debated, and the ultimate outcome will be significant.  In fact, last Thursday, Attorney Generals for 16 states filed an amicus brief opposing the NLRB’s lawsuit, claiming it would (1) harm their states’ abilities to attract employers, (2) harm states without right-to-work because employers would be reluctant to open shop there, and (3) encourage employers to move operations out of the country.

But for now, the battle must be fought one step at a time.  The next step comes on June 14, when an administrative law judge (“ALJ”) will hear the parties’ respective positions.  After the ALJ renders his decision, the case will likely proceed to the NLRB on appeal.  From there, the case could proceed to a federal appeals court and then possibly to the Supreme Court of the United States.  Interestingly, Boeing’s general counsel recently informed a Senate committee that he anticipates Boeing will ultimately prevail in federal court.

Matt Hansberry focuses his practice in the areas of employment litigation and ski-industry defense. Mr. Hansberry has defended companies and management in both federal court and state court cases. He has also defended employers before the West Virginia Human Rights Commission.
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