The NLRB vs. Boeing

The National Labor Relations Board accused Boeing earlier this year of illegally retaliating against unionized workers by expanding its facilities in a largely nonunion state, South Carolina. Republicans joined much of corporate America in denouncing the board’s complaint, calling it a barely disguised attack on state “right to work” laws that make it harder for unions to organize. The questions raised by the board are legitimate ones. The problem is the remedy it has proposed, which would have the perverse effect of confining Boeing’s growth to its home region.

At issue is Boeing’s fractious relationship with Local 751 of the International Assn. of Machinists and Aerospace Workers, which represents employees at Boeing’s plants around Seattle and Portland, Ore. The union has gone on strike five times since 1975, most recently in 2008. Although the company and the union settled their differences and agreed to a four-year contract later that year, in 2009 Boeing announced that it would create a second production line for its new 787 Dreamliner in North Charleston, S.C., a right-to-work state, instead of at the Puget Sound plants that were already building the plane.

The machinists union protested to the NLRB, and in April the board’s acting general counsel filed a complaint against Boeing. According to the complaint, company executives explicitly told investors, the media and employees that they put the new line in South Carolina specifically because of the machinists’ work stoppages. These statements carried an implicit threat, the NLRB complaint alleged, that employees who exercised their legal right to strike would lose work.

Federal law doesn’t stop Boeing from putting production lines where labor costs are lower. And the company’s defenders say that Boeing’s expansion in South Carolina hasn’t cost machinists jobs in the Puget Sound region; to the contrary, the company has added more than 2,000 jobs there. Nevertheless, the complaint raises a valid issue of whether the comments by Boeing executives crossed the line from being transparent about their motives to trying to intimidate workers to avert future strikes and hold down labor costs. That kind of intimidation is illegal.

That issue is now before an NLRB administrative law judge. Even if the judge rules against Boeing, though, the remedy sought by the complaint — moving the second production and supply lines for the Dreamliner back to Washington and Oregon — would be too draconian a response. Local 751 can be assured of its right to strike after its contract expires next year without dictating where Boeing expands its operations. Otherwise, companies may be reluctant to locate in union-friendly states for fear of being trapped there.