In Boeing Dispute, Growing Controversy Clouds Facts

by Marian Wang, Pro Publica

Just months after fights to limits labor rights in Wisconsin and other states grabbed national attention, another messy labor dispute is getting headlines.

One of the nation’s largest manufacturers, Boeing, has been sued by the government for allegedly punishing union workers by shifting a proposed new plant to another state. Republicans and other critics have charged that the government is overstepping its authority and creating a dangerous precedent.

The dispute has taken over congressional hearings, prompted more than a dozen states to chime in on Boeing’s side, and has even become a talking point for Republican presidential candidates. Tim Pawlenty compared the case to “the Soviet Union circa 1970s or 1960s or ‘50s .”

Amid all the rhetoric, we’ve decided to step back and lay out the facts.

What the controversy’s about

The National Labor Relations Board has alleged that Boeing scrapped its plans for a new plant in Washington state to punish union workers there for going on strike. The company opened up a nonunion plant in South Carolina last Friday. If the claims are true, Boeing broke federal labor law.

The complaint was originally brought by the machinists union in 2010. The NLRB investigated and ultimately decided that the allegations were well-founded, and it sued. Cases like this often settle before going to a judge. That hasn’t happened here. And this week, Boeing and the NLRB faced off in court for the first time.

The administrative hearing this week is a hearing on the facts. If the decision is appealed, it will go to the NLRB’s board, which serves as a quasi-judicial body and acts independently of the agency’s general counsel. (As the agency explains it, the general counsel functions as a prosecutor, and the board functions as a court.)

Though the issue hasn’t yet come before the board, Republican critics have worried that it will rule in favor of the union because it has a Democratic majority at the moment.

Why the law’s simple, but the facts in the case aren’t

Federal labor law—specifically, the National Labor Relations Act—protects workers from retaliation or threats of retaliation for exercising the right to form a union, bargain collectively, or go on strike.

“There’s nothing particularly extraordinary about this case as a matter of the legal principles at stake,” said Catherine Fisk, a University of California-Irvine law professor and former Justice Department attorney. Fisk has written extensively about labor law and the NLRB.

According to Fisk, the question is whether the labor board can prove that the dispute with the workers in Seattle was Boeing’s primary reason for moving its planned plant. Companies may legally shift work for reasons such as labor costs, but they may not do so out of retaliation against workers for past strikes or to prevent future strikes.

But at least two former NLRB chairmen have said that the case is unprecedented and have taken issue with the agency’s conclusion about Boeing’s motive.

Why establishing motive is tricky

In an interview last year with the Seattle Times, Boeing executive Jim Albaugh said the following about the decision to relocate: “The overriding factor was not the business climate, and it was not the wages we’re paying people today. It was that we can’t afford to have a work stoppage every three years.”

NLRB’s general counsel took that statement—and others—to mean that Boeing was trying to avoid the union, which had a history of strikes dating back to the 1970s.

However, the company has argued that Albaugh’s quote was taken out of context and have noted that his full statement went on to say more: “We can’t afford to continue the rate of escalation of wages as we have in the past. You know, those are the overriding factors. And my bias was to stay here but we could not get those two issues done despite the best efforts of the Union and the best efforts of the company.”

The Seattle Times had this take on Albaugh’s statements about the work in Seattle:

He repeatedly made clear that those two things—first, no strikes; second, lowered escalation of wages in the future—remain deal breakers for placing future work here.

Here’s the NLRB’s complaint against Boeing, filed in April [PDF]. Boeing has argued that it did not make the decision to open the plant in South Carolina out of retaliation against unionized employees . The company has also argued that the workers in Seattle weren’t adversely affected by the opening of the South Carolina factory because no jobs in Seattle were lost.

What’s happening now

An administrative law judge will have to decide whether the NLRB’s lawsuit against Boeing has merit. That hearing began Tuesday in Seattle.

Boeing kicked off the hearing by asking the judge to dismiss the case. Judge Clifford Anderson urged Boeing and the NLRB to work out a settlement, stressing that the case could take years if the decision keeps getting appealed: “I’ll be retired or dead,” he said.

How the process has become politicized

What was initially a dispute between one company and its workers has ballooned into a broader political fight. Republican politicians on both the state and congressional level have criticized the NLRB and rushed to Boeing’s defense, framing the NLRB’s action as an attack on what are known as right-to-work states, or states that bar employers or unions from making union membership a condition of employment. South Carolina is a right-to-work state.

Last week, Rep. Darrell Issa, chairman of the House Oversight committee, announced that his panel would investigate whether the NLRB was overreaching and trying to force workers into unions. Several House Democrats said the investigation was an attempt to influence a legal proceeding, but Issa said such hearings “are not inherently improper by virtue of exploring a pending administrative matter.”

South Carolina politicians—from the state’s attorney general to its governor to its congressional representatives—have also sought to influence the court. The state’s governor, Nikki Haley, is slated to testify tomorrow at Issa’s hearing. “There’s no secret that I don’t like the unions,” she has said. Haley has vowed to keep up the political pressure in order to stop the lawsuit.

Sen. Lindsay Graham of South Carolina has threatened to block the Obama administration’s Commerce Secretary nominee until President Obama supports Boeing: “Tell the country we think Boeing’s a good, ethical company and they’ve done nothing wrong,” Graham said this week. (Obama’s pick for Commerce Secretary happens to be a former Boeing board member.) Graham’s colleague, Sen. Jim DeMint, also filed a public records request last week for any communications the agency had with the union and Obama administration officials. DeMint had previously called the labor board “a bunch of thugs.”

And South Carolina’s attorney general—joined by the attorneys general of 15 other states—filed an amicus brief [PDF] last week alleging that the NLRB’s action against Boeing could harm job growth in the United States.

Even Republican presidential contenders have weighed in on the issue. As The Hill notes, Mitt Romney, Newt Gingrich, and Tim Pawlenty have all criticized the labor board.

The White House meanwhile, has mostly stayed quiet about the matter. A White House official told Fox News that the case is “an independent agency’s enforcement action,” and “the White House does not get involved in particular enforcement matters.”

But the White House did tell the NLRB to back off in March when the agency issued a statement criticizing House Republicans’ proposed cuts to the NLRB budget. An official from the Office of Management and Budget ordered the labor board to remove the statement from its website. “Administration positions on proposed legislation are provided by the White House,” an OMB spokeswoman told Huffington Post.

ProPublica is an independent, non-profit newsroom that produces investigative journalism in the public interest.   This article is republished with permission under a Creative Commons license.