NLRB and Union Use Shameless Pressure Tactic Against Boeing

NLRB and Union Use Shameless Pressure Tactic Against Boeing
by Peter Schaumber
08/10/2011

The National Labor Relations Board (NLRB) and the International Association of Machinists and Aerospace Workers (IAM) continue to work in tandem to punish The Boeing Company—for opening a second production line where management wanted it but the union did not.

In April, the acting general counsel of the NLRB, Lafe Solomon, complied with the IAM’s request to issue an unprecedented complaint requiring Boeing to produce all of its 787 Dreamliner aircraft at its unionized facility in Washington State. When the complaint was filed—a full 13 months after the union filed its charge—Boeing had already invested more than $750 million in the facility in Charleston, S.C. , and hired more than 1,000 workers. The complaint alleged that Boeing’s decision was retaliatory because some of the company’s senior executives said the decision was made partly to avoid the economic consequences of future strikes at the company’s facility in Washington State.

The complaint has significant shortcomings.

Apart from the complaint’s inconsistency with controlling law, the complaint’s retaliation claim is without substance. Boeing’s collective bargaining agreement with the IAM expressly recognizes Boeing’s right to produce its aircraft wherever it chooses. Moreover, Boeing’s unionized workers in Washington State have not been affected by the company’s decision: Since that decision, Boeing has hired more than 2,000 additional workers at its Washington facility.

The acting general counsel misleadingly described the complaint as “regular” and “routine.” It is not anything of that sort. It is an effort to achieve for organized labor a long-sought-after goal, to control management’s capital allocation decisions—structural decisions, including where to open a new plant. Think about it: If a union can prevent a company with a skilled work force from augmenting its productive capacity with a new nonunion facility somewhere else, it will have a stranglehold on the employer if and when it calls a strike.

During a congressional hearing on the matter in South Carolina, the acting general counsel stated matter-of-factly that if the Charleston facility were unionized, it is unlikely that the union would have filed a charge, or the agency a complaint. And Solomon tried to avoid answering questions as to how Boeing’s new second production line in Charleston could be an unlawful “transfer” of unit work as alleged in the complaint. What he did say on this point underscored the frailty of his complaint's legal theory. According to Solomon, opening a second production line was a "transfer" of unit work because the production could have been done at Boeing's unionized facilities in Washington.

All of this brings into focus the vision of an “independent” agency of the Executive Branch controlled by one of its stakeholders: Big Labor. That vision has become even clearer since June 14 in the continuing proceedings before an agency administrative law judge.

A massive number of Boeing’s documents have been subpoenaed.

The parties and the judge have recently been trying to resolve disagreement over the agency’s and the union’s subpoenas for a massive number of Boeing documents. As a routine part of this process, the judge instructed the parties to try to negotiate a protective order to protect Boeing’s confidential and proprietary information, including its trade secrets. Many of the documents subpoenaed from Boeing fall into this category. The 787 Dreamliner is the first of its kind, fuel-efficient, and less costly to operate. Boeing spent billions of dollars developing this airplane. It gives the company an advantage over its competitors. The acting general counsel and the union have subpoenaed documents that contain information on the design and manufacture of the 787, along with its actual and projected costs and revenue structures. Boeing’s competitors would be happy to have this information.

It is important to point out that a protective order does not prevent a document from being used at trial. It merely seeks to ensure that the document is disclosed only to those that have a need to know its contents, and that it is used for the purpose for which it was subpoenaed, nothing else.

The agency has followed the union’s lead and, according to Boeing, reneged on agreements.

Last week, after a month of negotiations, first the IAM, and 10 days later the agency, filed proposed protective orders that, according to Boeing, have little resemblance to the protective order the parties had been successfully negotiating. In a sharply worded motion, the company charged that both the union and the acting general counsel reneged on agreements the parties had reached. For example, each proposal eliminates a requirement that the order be entered by a federal district court even though a district court is the only legal authority that can enforce it. The proposals also drop any reference to documents containing “Highly Confidential” information, a separate category Boeing proposed because the disclosure of this information would give the IAM an unfair advantage in subsequent collective bargaining negotiations. And it is information the union would not otherwise be entitled to. Boeing proposed that documents containing Highly Confidential information be disclosed to the acting general counsel and his staff that are responsible for prosecuting the complaint and to union counsel, but that the information not be made available to anyone who will be involved on behalf of the union in subsequent collective bargaining negotiations.

One would expect disagreement over these matters when dealing with an aggressive union trying to pressure Boeing to settle the case on terms favorable to it, and one that would not be unhappy at the prospect of using Highly Confidential information for its benefit during collective bargaining. One would also expect that a federal agency in litigation with Boeing would share the company’s concerns and join with it to protect the company’s confidential and proprietary information to the maximum extent possible. Not so. The NLRB appears to be more concerned with not being perceived as diverging from the union’s position. What other explanation can there be for it mimicking the union’s objection to documents being categorized “Highly Confidential” because they contain information that would give the IAM an unfair advantage in future collective bargaining? The acting general counsel and his staff would have the information available for trial, as would union counsel. The information would simply be protected from disclosure to those who would be involved on behalf of the union in future collective bargaining negotiations with Boeing. This is a matter peculiar to the interests of the union and Boeing. It does not involve the acting general counsel.

Many Democrats in Congress have expressed opposition to congressional inquiries into the Boeing complaint and the unusual circumstances surrounding its filing. But if they look closely and objectively both at existing law and how the acting general counsel is prosecuting the case, they will understand why Congress is asking such good questions—and deserves answers.

Peter Schaumber is a former chairman of the National Labor Relations Board.