Board Says Company Is Wrong In Opening Non-Union Shop In "Right-To-Work" South Carolina

The National Labor Relations Board (NLRB) has issued a complaint against the Boeing Company, alleging that it violated federal labor law by deciding to transfer a second production line to a non-union facility in South Carolina for discriminatory reasons.

Boeing announced in 2007 that it planned to assemble seven 787 Dreamliner airplanes per month in the Puget Sound area of Washington state, where its employees have long been represented by the International Association of Machinists and Aerospace Workers. The company later said that it would create a second production line to assemble an additional three planes a month to address a growing backlog of orders. In October 2009, Boeing announced that it would locate that second line at the non-union facility. In repeated statements to employees and the media, company executives cited the unionized employees’ past strike activity and the possibility of strikes occurring sometime in the future as the overriding factors in deciding to locate the second line in the non-union facility.

The NLRB launched an investigation of the transfer of second line work in response to charges filed by the Machinists union and found reasonable cause to believe that Boeing had violated two sections of the National Labor Relations Act because its statements were coercive to employees and its actions were motivated by a desire to retaliate for past strikes and chill future strike activity.

“A worker's right to strike is a fundamental right guaranteed by the National Labor Relations Act,” said NLRB Acting General Counsel Lafe Solomon in announcing the complaint Wednesday. “We also recognize the rights of employers to make business decisions based on their economic interests, but they must do so within the law. I have worked with the parties to encourage settlement in the hope of avoiding costly litigation, and my door remains open to that possibility.”

To remedy the alleged unfair labor practices, the Acting General Counsel seeks an order that would require Boeing to maintain the second production line in Washington state. The complaint does not seek closure of the South Carolina facility, nor does it prohibit Boeing from assembling planes there.

Boeing says it will vigorously contest the complaint. "This claim is legally frivolous and represents a radical departure from both NLRB and Supreme Court precedent," said Boeing Executive Vice President and General Counsel J. Michael Luttig. "Boeing has every right under both federal law and its collective bargaining agreement to build additional U.S. production capacity outside of the Puget Sound region." 

Union officials have been pressing the NLRB for more than a year to bring forward the complaint and force Boeing to abandon plans to produce aircraft in South Carolina and ramp up production in Puget Sound. With Wednesday's action by the NLRB's acting general counsel, the board now will begin a formal proceeding to hear the IAM's allegations.

Boeing also was critical of the timing of the complaint, which comes a full 17 months after the company announced plans to expand its manufacturing capacity in the United States in South Carolina. Construction of the factory is nearly complete and the company has hired more than 1,000 new workers. Final assembly of the first airplane is slated to begin in July. 

Boeing has made it clear that none of the production jobs created in South Carolina has come at the expense of jobs in Puget Sound and that not a single union member has been adversely affected. In fact, Boeing says IAM employment in Puget Sound has increased by approximately 2,000 workers since the decision to expand in South Carolina was made in October 2009.

Prior to that decision, Boeing held extensive discussions with the IAM over the potential placement of the new 787 production capacity in Puget Sound. Those discussions ended with Boeing unable to reach agreement with union leadership on demands that would have hampered the company's competitiveness in the increasingly competitive global market for large commercial airplanes.

Luttig said Boeing was confident that the claim would be rejected by the federal courts. He also emphasized that the company will begin assembling 787s in South Carolina this summer, as planned. "We fully expect to complete our new state-of-the-art facility in South Carolina in the weeks ahead, and we will be producing 787s – America's next great export – from our factories in both Puget Sound and South Carolina for decades to come," he said.

Senator Jim DeMint (R-SC)

The NLRB's actions were opposed by both Senators from South Carolina, Republicans Jim DeMint and Lindsey Graham. "This is nothing more than a political favor for the unions who are supporting President Obama's re-election campaign," DeMint said in a statement published on his website. "Unfortunately, it comes at the expense of hundreds of jobs in South Carolina and thousands of jobs nationwide. There is no doubt that if the National Labor Relations Board's claim against Boeing moves forward, it will have a chilling effect on job growth in my state and in right-to-work states across the country. Using the federal government as political weapon to protect union bosses at the expense of American jobs cannot be tolerated. I intend to use every tool at my disposal as a United States Senator to stop the President from carrying out this malicious act."

Absent a settlement between the parties, the next step in the process will be a hearing before an NLRB administrative law judge in Seattle, set for June 14, at which both parties will have an opportunity to present evidence and arguments.

FMI: www.nlrb.gov, www.boeing.com