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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