NLRB memo: More in store for businesses like Boeing; Update: NLRB responds

posted at 12:45 pm on May 17, 2011 by Tina Korbe

The complaint against Boeing might have just been the beginning. It seems the National Labor Relations Board can’t bear to let businesses relocate without allowing unions to have a say.

Current NLRB rules allow a business to move without first negotiating the relocation with its union — provided the decision doesn’t turn on labor costs. But according to a recent internal memo from the NLRB general counsel’s office, NLRB Chairman Wilma Liebman now wants to compel businesses to provide unions with information about relocation decisions in advance. That way, Liebman reasons, unions will have a chance to ascertain to what extent the business is moving because of labor costs — and will ultimately be able to bargain against the move.

On one level, this sounds sensible: If a business decides to relocate and the decision seems to be based primarily on labor cost concerns, union leaders might complain to the NLRB — and say, given the chance to bargain, they would have made concessions that might have altered the business’ decision. In other words, requiring businesses to advise unions as to the motivation for a move in advance might necessitate bargaining — but it might also spare companies NLRB involvement. That seems to be what Liebman wants businesses to believe, anyway.

But to require business leaders to provide unions with this kind of detailed information about their business plan is just one step closer to making unions “equal partner[s] in the running of the business enterprise” — and the Supreme Court has already said the National Labor Relations Act in no way mandates such equal partnership.

Moreover, these requirements would be expensive.

What Liebman envisions would raise business costs enormously. Current labor law and the attitude of the pro-union NLRB enables unions to drag negotiations on … and on … and on. Until bargaining hits an “impasse,” employers could not legally make any business changes opposed by their union.

If the NLRB really wants to preserve work in any given state, its best bet would be to advise that state to pass right-to-work legislation. Compared to forced-unionism states, right-to-work states have more new residents, more new businesses, more new jobs and faster income growth, according to a new report from Sen. Jim DeMint. What’s not to like?

Update: NLRB Public Affairs Director Nancy Cleeland wasn’t able to get back to me with a statement before scheduled publication, but she called after publication of the post to say she is looking into the implications of the memo and will respond shortly.

Update: Here’s the full response from NLRB spokeswoman Nancy Cleeland:

A 30-year-old Board decision called Dubuque Packing sets the framework for when an employer with a union workforce must bargain over relocation. If the decision is considered ‘entrepreneurial,’ involving a change in the scope of the business, it does not have to be bargained. However, if labor costs are a factor in the move, the employer is obligated to bargain to give the union a chance to make concessions, unless the employer can show that the union could not make sufficient concessions to change the decision. The Dubuque decision advised that employers would improve their chances of showing the union could not have made sufficient concessions by explaining its reasons to the union in advance of the move and asking whether the union could offer sufficient labor cost reductions, but did not require it.

In the Embarq decision issued by the Board on March 31, 2011, which found the employer did not have a duty to bargain before moving, Chairman Wilma B. Liebman suggested in her concurring opinion that the “Board’s task would be easier, and, more importantly, the Act’s policy of promoting collective bargaining might well be better served, if employers were required to provide unions with requested information about relocation decisions whenever there was a reasonable likelihood that labor-cost concessions might affect the decision. To encourage more constructive good-faith bargaining, we might modify the Dubuque framework, for example, by requiring the employer to timely advise the union whether its contemplated relocation plan turns on labor costs.”

The Operations Management Memo issued on May 10 and available on our website merely asks regional offices to identify cases that might raise this issue and send them to the Division of Advice at NLRB’s Washington DC headquarters for review, in light of the Embarq decision. Based upon the review, the General Counsel’s office could bring a case to the Board to revisit the question of timing on providing information.

This is an extremely early stage of a process that may lead to reevaluating one aspect of Board law with an eye toward making it more useful and efficient for all parties involved.

Cleeland’s point is well-taken: Board law should be “more useful and efficient for all parties involved.” Hopefully that means the NLRB will consider whether ”requiring the employer to timely advise the union whether its contemplated relocation plan turns on labor costs” would be more useful or efficient from an employer’s standpoint, too.


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I believe another factor in the move was workmens comp

wash states rates are four times that of SC

Sonosam on May 17, 2011 at 7:03 PM

Captive audience speeches by either side 24 hrs before an election are already prohibited, and the leaflet rule doesn’t strip employer speech, it just gives unions equal time.

crr6 on May 17, 2011 at 6:35 PM

Do they get equal bricks through workers’ windows like I got from opposing the International Brotherhood of Embezzling Weasels when they tried to unionize the company I work for?

Random Numbers (Brian Epps) on May 17, 2011 at 7:05 PM

Say yes darwin, now I understand.

darwin on May 17, 2011 at 6:24 PM

It has to happen sometime, I disagree with you….I think expansion is the word since they did increase the work load in Washington plus open a location in S.C.. Or at least trying to.

Cindy Munford on May 17, 2011 at 7:07 PM

Do they get equal bricks through workers’ windows like I got from opposing the International Brotherhood of Embezzling Weasels when they tried to unionize the company I work for?

Random Numbers (Brian Epps) on May 17, 2011 at 7:05 PM

That’s OK, if your shop gets unionized, you’re free to find another line of work.

At least, that’s the apparent logic from crr6.

spinach.chin on May 17, 2011 at 7:08 PM

My previous posts on this thread have been rabidly anti-union, as I was witness to a union aiding and abetting the destruction of their members jobs. In full disclosure, I now draw a nominal pension from Boeing, by having worked for a company that was acquired by Boeing.

Although unions are composed of a large number of sloths slackers, and guardhouse lawyers, management is ofter a nest of vipers also. I don’t know which is the result of the other. However, a happy memory for me is the Christman message from the president of our company in 1993. “Merry Christmas Teammates, and I would like to take this opporltunity to officially notify you that we will be closing this plant in 60 days. You will be allowed to work for this time and will assist you in finding further employment.” According to the courts, this plant had the largest percentage of employees ready to retire, and they made this decision based on saving paying full pensions and on getting attaboys to move the work to the headquarters facility with the IAM union.

Old Country Boy on May 17, 2011 at 7:10 PM

Simple for Boeing really…simply ignore the Feds and finish their move.

JIMV on May 17, 2011 at 7:17 PM

Simple for Boeing really…simply ignore the Feds and finish their move.

JIMV on May 17, 2011 at 7:17 PM

It worked for Obama when the courts ordered him to go back to drilling in the Gulf.

gryphon202 on May 17, 2011 at 7:20 PM

Although unions are composed of a large number of sloths slackers, and guardhouse lawyers, management is ofter a nest of vipers also.

Old Country Boy on May 17, 2011 at 7:10 PM

Indeed. Let’s not kid ourselves here. As Thomas Sowell brilliantly pointed out in a recent column, unions are for unions. Corporations are for corporations (as embodied in their shareholders). And employees are for employees. Any union thug, any corporate supervisor/officer, or even any of your fellow employees that tell you they’re putting your interests above their own are flat-out lying. It goes against human nature. If altruism was natural, it wouldn’t make such big headlines in the news as it does.

gryphon202 on May 17, 2011 at 7:25 PM

Makes me sick to my stomach. Tired of unions and Arab springs.

ultracon on May 17, 2011 at 7:34 PM

Current NLRB rules allow a business to move without first negotiating the relocation with its union — provided the decision doesn’t turn on labor costs.

A business should never need approval to move from anyone regardless of the reasion – especially unions. If it’s true that a company cannot relocate itself at it’s own whim then we are already a communist-lite country.

gwelf on May 17, 2011 at 8:11 PM

If it’s true that a company cannot relocate itself at it’s own whim then we are already a communist-lite country.

gwelf on May 17, 2011 at 8:11 PM

But Boeing isn’t relocating jobs. This isn’t a labor issue. Boeing is relocating a proposed plant that hasn’t been built, with which they will employ people that haven’t been hired yet.

gryphon202 on May 17, 2011 at 8:15 PM

Not necessarily, no. It’s a classic free-rider problem. Individual employees can choose not to join the unions and contribute dues, and they’ll still benefit from the benefits and wage increases obtained by the union’s bargaining. But at a certain point, if enough people “free ride,” the union’s bargaining position will weaken (because it will have less members and income) and as a result, everyone’s pay and benefits will suffer. Agency shops are a way to solve this free rider problem.

crr6 on May 17, 2011 at 5:12 PM

This is utter BS.

First off an employer can negotiate a completely unique/independent ‘contract’ with an employee. If the union wants to force an employer to offer ‘union contracts’ to every employee regardless of union membership that’s their business. In fact unions push this sort of arrangement so they can do precisely what you’re highlighting here (force every employee to be a union member and pay dues) but the reason is because unions aren’t competitive. They need a monopoly or they will fold. Its just like the mafia demanding protection money.

gwelf on May 17, 2011 at 8:29 PM

But Boeing isn’t relocating jobs. This isn’t a labor issue. Boeing is relocating a proposed plant that hasn’t been built, with which they will employ people that haven’t been hired yet.

gryphon202 on May 17, 2011 at 8:15 PM

You’re right – it’s worse than how I stated it.

gwelf on May 17, 2011 at 8:29 PM

So when does the McDonalds Corporation get sued for expanding its business outside of Illinois?

“NLRB forces McDonald’s to relocate all its franchises to Illinois”

BobMbx on May 17, 2011 at 8:42 PM

So when does the McDonalds Corporation get sued for expanding its business outside of Illinois?

“NLRB forces McDonald’s to relocate all its franchises to Illinois”

BobMbx on May 17, 2011 at 8:42 PM

Actually, McDonald’s has already “relocated” several times in its history. The two McDonald brothers who started the whole thing “relocated” from here in New Hampshire to San Bernadino, where they opened their first store in 1940. But their first franchise was in Arizona, the second in Michigan.

Ray Kroc, who sold the brothers milk shake machines in California, was the one who moved McDonald’s to Illinois. He later also bought them out.

Del Dolemonte on May 17, 2011 at 9:36 PM

You’re right – it’s worse than how I stated it.

gwelf on May 17, 2011 at 8:29 PM

When the premise is incorrect, it’s never a good idea to start by playing devil’s advocate.

gryphon202 on May 17, 2011 at 10:11 PM

crr6 on May 17, 2011 at 5:12 PM

That cuts both ways, crr6. My father lost a badly needed job when unions decided an extra $.50 an hour was worth months of being out of work. He didn’t want to be in a union or suffer from the harassment he got for not joining. He just wanted to be able to support his family.

I have no problem recognizing that unions have done some good things for workers, but I do so with the understanding that many have and continue to do serious harm to people just looking to get by. I have no idea if their good outweighs their bad, but these days, the tilt rarely seems in their favor.

Esthier on May 17, 2011 at 10:17 PM

this plant had the largest percentage of employees ready to retire, and they made this decision based on saving paying full pensions and on getting attaboys to move the work to the headquarters facility with the IAM union.

Old Country Boy on May 17, 2011 at 7:10 PM

Was this company formerly a Ryder subsidiary?

AH_C on May 17, 2011 at 10:34 PM

NLRB: Another lawless agency running amok and trying to destroy jobs in the USA.

De-fund it, de-fang it (by requiring Congressional approval of ALL NLRB actions) and then kill it when we kick the Zero out of Washington.

landlines on May 18, 2011 at 12:02 AM

When the premise is incorrect, it’s never a good idea to start by playing devil’s advocate.

gryphon202

He never said anything about relocating jobs or labor, you did. His premise was entirely correct: A business should never need approval to move from anyone regardless of the reason.

xblade on May 18, 2011 at 1:15 AM

Seriously people, I hate this as much as any of you, but good luck just ignoring laws you decide you don’t like.

There is no law that says you can’t expand into another state, so no law is being ignored.

xblade on May 18, 2011 at 2:02 AM

Here’s the full response from NLRB spokeswoman Nancy Cleeland

Oddly she doesn’t mention Boeing in her examples of how this works.

You know, the new rule by which you can’t even propose building a new factory in a right-to-work state without the NLRB coming after you because the chance of non-union workers getting jobs is offensive to them.

Given that new rule, the existence of old rules doesn’t make a lot of difference. If they’ll ignore all the old rules with the Boeing decision, what makes the old rules meaningful now?

We already know they don’t care about the rules, why bother to list any of them?

gekkobear on May 18, 2011 at 4:27 AM

Excellent first post Tina.

DarkCurrent on May 17, 2011 at 12:49 PM

Indeed.

Siddhartha Vicious on May 18, 2011 at 5:33 AM

Obama will go down in history as the President who destroyed the United States of America. And I believe he would be tickled pink to be remembered that way.

{^_^}

herself on May 18, 2011 at 6:22 AM

merely asks

Always be leary when the government “merely asks…..”

E9RET on May 18, 2011 at 6:44 AM

They should just go ahead and change the name from the National Labor Relation Board to National Labor Commisariat and be done with it. There not fooling anybody anyway. They should just admit they are a bunch of stinking communists and be up front about it.

LCT688 on May 18, 2011 at 8:13 AM

My advice to Boeing? Move you’re entire operations out of the US and out from under the NLRB’s influence…

Eventually, the government and it’s relationship with the unions will drive every business under or away. Maybe then people will wake up and realize that neither have a place in making business decisions.

Doesn’t anyone else find it odd to see a government is so hellbent on destroying itself?

Oh, and welcome Tina, good first topic/post.

Geministorm on May 18, 2011 at 9:00 AM

For Boeing, I think the solution is simple.

Just create a new company, lets call it “The Boeing Subsidiary Formed To Circumvent The NLRB, LLC”, base it in South Carolina.

BobMbx on May 18, 2011 at 10:04 AM

Public sector workers aren’t subject to the NLRA. I was referring to the NLRA.

crr6 on May 17, 2011 at 5:00 PM

Why not?

Badger40 on May 18, 2011 at 12:25 PM

It worked for Obama when the courts ordered him to go back to drilling in the Gulf.

gryphon202 on May 17, 2011 at 7:20 PM

And when the judge in FL declared ObamaCare unconstitutional…

Mr_Magoo on May 18, 2011 at 1:42 PM

Geministorm on May 18, 2011 at 9:00 AM

The best you could get is a split. Otherwise you’d be making an NLRB problem, a potential DoD problem. A sufficiently motivated administration would not care what part of the world Boeing would end up at. Moving the entirety overseas would only multiply their problems.

sethstorm on May 18, 2011 at 4:00 PM

The Dubuque decision advised that employers would improve their chances of showing the union could not have made sufficient concessions by explaining its reasons to the union in advance of the move and asking whether the union could offer sufficient labor cost reductions, but did not require it.

Gee, you mean that the union doesn’t ALWAYS have an ONGOING dialogue with the employer about cost reductions–labor and otherwise–so that the employer would have no reason even to think about relocating because labor cost reductions would be a non-issue? I’m shocked, SHOCKED to learn that the employer’s profitability and long-term economic viability in the competitive marketplace are not the union’s highest priorities.

Owen Glendower on May 19, 2011 at 12:27 PM

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