It’s a Runaway National Labor Relations Board

A former member of the National Labor Relations Board today reaffirmed the NLRB’s authority to punish companies that close facilities, eliminate jobs and relocate to escape union contracts, but said the board’s recent complaint against Boeing does not fall under that “runaway shops” category under federal labor law.

Cleveland attorney Peter Kirsanow, who served as a Republican appointee on the NLRB in 2006-2007, addressed the board’s actions in a blogger briefing call this afternoon sponsored by the National Association of Manufacturers.

On April 20, the NLRB’s acting general counsel, Lafe Solomon, filed a complaint against The Boeing Company, accusing it of commiting an unfair labor practice by building new production facilities for the 787 Dreamliner in South Carolina instead of the Puget Sound region. As a remedy, Solomon seeks to force Boeing to build production facilities in Washington State, even though the company has already invested an estimated $2 billion in South Carolina and hired 1,000 employees.

Kirsanow explained that in typical “runaway shop” cases, an employer decides not to bargain with a union about the company’s decision to move from an existing unionized location to a non-union one: “In such a circumstance, if the employer failed to bargain with the union where labor costs were a consideration, then he has committed an unfair labor practice. And there IS a restoration remedy, that is, the board has the right and ability to order the employer to resume or return to the status quo and continue bargaining with the union.”

But Boeing’s construction of a new production line in North Charleston, S.C., did not transfer existing union jobs or move equipment from Washington, Kirsanow said. In fact, the International Association of Machinists and Aerospace Workers have added some 2,000 union jobs in the Puget Sound area.  Kirsanow continued:

In other words this is not, at least as the facts are pled, the type of situation that merits or warrants under existing precedent a “restoration remedy.” In fact, there is copious precedent that indicates the while the board … has broad latitude in fashioning remedies to alleged unfair labor practices, such remedies can’t be, No. 1, punitive or, No. 2, an undue burden on the employer respondent.

Employers have reason to be deeply concerned about the implications of the NLRB’s move because it effectively countermands Boeing’s decision to “locate work in a manner it deems best for business operations, for its economics and finances,” Kirsanow said.

That is something that all employers who are aware of this particular complaint clearly have to take into consideration if they’re thinking about diversifying or expanding operations in places that are not their original place of location or places or places where they no longer, or don’t have a union. If the type of remedy that the board seeks here could be imposed, then any prudent employer has to wonder whether or not it should engage in a capital outlay before it makes the decision to locate in a non-union location. So this is a fairly significant step that’s being taken here, and it’s clearly one that I would believe would have the business community alert to the prospect of how it affects their business plan going forward.

We have audio of the Kirsanow’s briefing here. His comments follow brief remarks by Joe Trauger, the NAM’s vice president for human resources policy.

Join the discussion 3 Comments

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  • Shaun Reid says:

    The Complaint alleges that Boeing made numerous comments to its employees and the media that it was putting the work in SC due to past strikes and the possibility of future strikes, and that such considerations were expressed as “the overriding factors in deciding to locate the second line in the non-union facility”.

    If true, it would not be a stretch to say such language can have the effect of chilling employees from exercising their right to engage in concerted activity. For that reason, I would never have advised any of my clients to use such language in announcing such a move. I cant think of any of my peers who would approve such language. Why give the Board a reason to come after your client? Instead, just announce Sc has been chosen as the new site, and move on. Why even mention union activity at all? Not a smart move, if true.

  • The comment that Boeing should have discussed this with the Machinists Union first is absurd. Its decision had no impact upon the bargaining unit in the Puget Sound area. No work was moved from them. This is no run away shop. Nor is it a Darlington Mills case. It is a legitimate exercise of the employer’s entrepreneurial rights. Big Brother back at the Nanny State NLRB thinks otherwise, but he will be handed his teeth on a platter by the Courts.

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