The Corner

The New NLRB: Boeing Is Just the Beginning

The National Labor Relations Board (NLRB) raised a lot of eyebrows by filing a complaint against Boeing for opening a new plant in a right-to-work state. But that action is just the beginning of the board’s aggressive new pro-union agenda. An internal NLRB memorandum, dated May 10, shows that the board wants to give unions much greater power over employers and their investment and management decisions.

Under current NLRB rules, companies can make major business decisions (like relocating a plant) without negotiating with their union — as long as those changes are not primarily made to reduce labor costs. For example, a business can unilaterally merge several smaller operations into one larger facility to achieve administrative efficiencies. Companies only have to negotiate working conditions, not their business plans.

The NLRB apparently intends to change that. In the internal memorandum, the board’s associate general counsel, Richard Siegel, asks the NLRB’s regional directors to flag such business-relocation cases. Siegel explains that the Board is considering “whether to propose a new standard” in these situations because the chairman of the NLRB, Wilma Liebman, has expressed her desire to “revisit existing law in this area” by modifying the rule established in a case called Dubuque Packing.

Apparently, Liebman did not like having to apply the Dubuque Packing rules in a recent case involving the Embarq Corporation and the AFL-CIO. The NLRB decided that under the Dubuque Packing rules, Embarq did not violate the National Labor Relations Act by refusing to bargain with the union over its decision to close its call center in Las Vegas (a right-to-work state) and relocate that work to its call center in Florida (also a right-to-work state).

Specifically, the NLRB wants to force companies to provide detailed economic justifications (including underlying cost or benefit considerations) for relocation decisions to allow unions to bargain over them — or lose the right to make those decisions without bargaining over them. It is a “heads I win, tails you lose” situation for unions. Either way, businesses would have to negotiate their investment plans with union bosses. In the concurrence that she wrote in the Embarq decision Liebman expressed her displeasure that “the law does not compel the production of” such information to unions.

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.

The NRLB’s goal is not just to prevent companies from investing in right-to-work states. The board apparently also wants to force employers to make unions “an equal partner in the running of the business enterprise,” something the Supreme Court ruled in First National Maintenance Corp. v. NLRB is specifically not required by the NLRA. But the board wants business decisions made to benefit unions, not the shareholders, owners, and other employees of a business, or the overall economy. The Boeing charges are evidently just a first step toward that goal.

— James Sherk is a senior policy analyst in labor economics, and Hans A. von Spakovsky is a senior legal fellow, at the Heritage Foundation.

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