[Congressional Record Volume 157, Number 74 (Thursday, May 26, 2011)]
[Senate]
[Pages S3412-S3414]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
JOB PROTECTION ACT AND THE NLRB
Mr. ALEXANDER. Mr. President, last month the Acting General Counsel
of the National Labor Relations Board (NLRB) filed a complaint against
the nation's largest exporter, the Boeing company--a company with
170,000-some employees, 150,000 of which in the United States, who
sells airplanes around the world and makes them in the United States.
The complaint basically said there was prima facie evidence of illegal
discrimination because Boeing has decided to expand and build a
production plant in South Carolina. Boeing's main operation is in
Washington State, a State without a right-to-work law. In contrast,
South Carolina is a State with a right-to-work law. This is
notwithstanding the fact that Boeing has already added 2,000 employees
in Washington State since announcing its expansion. At the same time,
it has nearly finished this new plant in South Carolina, spending $1
billion, hiring 1,500 construction workers and over 500 employees to
work in the facility. Then, all of a sudden, here comes this complaint.
This is not just a South Carolina matter. It affects the entire
country and many of us have spoken out about it. I want to review it
just for a moment.
This complaint against Boeing is just one indication of the
Administration's anti-business, anti-growth, and anti-jobs agenda. That
is why Senators Graham, DeMint, and I--actually there are 35 Senators
who are cosponsoring this bill--have introduced the Job Protection Act,
to protect right-to-work states and employers from an independent
government body run amok.
Our bill preserves the Federal law's current protection of state
right-to-work laws in the National Labor Relations Act and provides
necessary clarity to prevent the NLRB from moving forward in its case
against Boeing or attempting a similar strategy against other
companies.
Now it seems the NLRB wants to change the rules governing how and
when a company can relocate from one State to another. According to a
May 10 internal memorandum from the NLRB General Counsel's Office, they
want to give unions power over major business decisions and require
companies, such as Boeing, to collectively bargain if it wants to
relocate a facility.
As was explained by James Sherk, a senior policy analyst in labor
economics, and Hans A. Von Spakovsky, a senior legal fellow at the
Heritage Foundation, in a recent article in National Review Online:
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. . . . Either way, businesses
would have to negotiate their investment plans with union
bosses.
Sherk and von Spakovsky describe this as a ``heads I win, tails you
lose'' scenario for unions. These decisions belong in the corporate
boardroom, not at the collective bargaining table.
The goal of this NLRB is to place the interests of organized labor
over those of business, shareholders, and economic growth. Their means
is to change well-
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established law governing business decisions under the National Labor
Relations Act.
The Supreme Court has reasoned that ``an employer must have some
degree of certainty beforehand as to when it may proceed to reach
decisions without fear of later evaluations labeling its conduct an
unfair labor practice. Under the Dubuque Packing case and subsequent
NLRB jurisprudence, a company may make a major business decision, such
as relocation, outside of collective bargaining. Accordingly, the
burden is initially on the NLRB's General Counsel to establish that an
employer's decision to relocate work is unaccompanied by a basic change
in the nature of the employer's operation, such as being part of an
overarching restructuring plan.
The Dubuque test was most recently applied by the NLRB in holding
that an employer, Embarq Corporation, did not violate the law by
refusing to provide information about or bargain over a planned
relocation of its Nevada call center to Florida. Both of those happen
to be right-to-work States, as Tennessee is.
In a concurring opinion, NLRB Chairman Liebman expressed her desire
to change the rules governing relocation decisions and collective
bargaining. The Chairman noted her displeasure that, in her words,
``the law does not compel the production of'' information fully
explaining the underlying cost or benefit considerations of a company's
relocation decision. The Chairman then suggested requiring employers to
provide unions with economic justification wherever there was a
``reasonable likelihood'' that labor-cost concessions might affect an
impending decision to relocate.
In practice, the burden would shift to the employer, before making
its relocation, to advise and explain to its union the basis for its
decision, supported by detailed economic justification. Then, if it
does turn on labor costs, the employer would be required to provide the
union with information supporting the labor cost/savings underlying its
decision. If the employer failed to provide such information and labor
costs were a factor, it would be precluded from making those decisions
without collective bargaining.
Following this decision against Embarq Corporation, the NLRB
Associate General Counsel issued an internal memorandum on May 10
suggesting that Chairman Liebman's new test should now be examined and
considered in all cases concerning relocations that come before the
board.
Now, I am all for requiring employers to provide advance notice to
their labor organizations and offering the economic reasons for a
proposed relocation, a shutdown, or a transfer of existing or future
work. Providing notice and reasoning is already required under existing
law and jurisprudence. We included this in our Job Protection Act to
make sure the spirit of the law was maintained. But, what the NLRB and
Associate General Counsel are now proposing goes much further, changes
understood law, and places an unreasonable burden on employers.
As was observed by Sherk and Spakovsky, this new test would raise the
costs to businesses by dragging on collective bargaining, by preventing
them from legally executing a decision that is in the best interests of
their shareholders until bargaining hits an impasse, and by forcing
them to provide detailed economic justification and negotiate their
investment plans with union bosses before having the right to execute a
relocation plan. Effectively, it would give a union a seat at the board
of directors through the force of law and tip the scales of justice in
their favor. If employers do not comply, then they will lose the right
to later claim their relocation decision did not have to be
collectively bargained under the National Labor Relations Act.
So as with the NLRB Acting General Counsel's action against Boeing,
this potential new posture by the Office of the General Counsel
represents a departure from well-established law. They do not like the
outcome, so they want to change the rules and give unions greater
leverage over their employers, who provide the jobs in the first place.
They are more concerned about producing outcomes that facilitate the
collective bargaining process, rather than those that foster economic
growth, exports, and jobs.
Those decisions are best left to the owners, officers, shareholders,
and directors of businesses, not organized labor or the Federal
Government. This potential change in well-established law would be
another blow to manufacturing growth and expansion in the United States
and further incentive for manufacturers to expand or open a new
facility in Mexico, in China, or in India to meet their growing need.
Republicans are not the only ones who are outraged by the direction
the NLRB seems to be headed. William Gould, who chaired the NLRB during
the Clinton administration, was recently quoted in Slate magazine
expressing his unease with the board's action. Specifically, he said,
``The Boeing case is unprecedented,'' and he ``doesn't agree with what
the [Acting] General Counsel has done [by] . . . trying to equate an
employer's concern with strikes that disrupt production and make it
difficult to meet deadlines . . . with hostility toward trade
unionism.'' That is the Clinton Administration's NLRB General Counsel.
Coming back to the Boeing issue, which is set to be heard by an
administrative judge on June 14, recent comments in the press from an
NLRB spokeswoman shed further light on how the board's agenda flies in
the face of the very concept of capitalism.
On May 19, various press outlets quoted this spokeswoman suggesting
that the NLRB Acting General Counsel would drop his case against Boeing
if the company agreed to build 10 planes in Washington, rather than 7.
Specifically she said:
We are not telling Boeing they can't build planes in South
Carolina. We are talking about one specific piece of work:
three planes a month. If they keep those three planes a month
in Washington, there is no problem.
So they can build planes in South Carolina, just not the three they
had planned. So now the Federal Government or the NLRB is sitting on
Boeing's board and determining the means of production for American
industry while the economy continues to struggle. In Tennessee, we have
had 24 months of 9 percent unemployment.
Our job is to make it easier and cheaper for the private sector to
create jobs. The NLRB is not acting in the best interests of American
workers through its continued attempts to depart from well-established
law and dictate integral business decisions to companies.
I ask unanimous consent to have printed in the Record a memorandum
from the Associate General Counsel of NLRB, dated May 10, as well as an
article from National Review Online, dated May 16.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Office of the General Counsel,
Division of Operations-Management
May 10, 2011.
MEMORANDUM OM 11-58
To: All Regional Directors, Officers-in-Charge, and Resident
Officers.
From: Richard A. Siegel, Associate General Counsel.
Subject: Submission to Advice of Information Cases in
Relocation Situations.
In Embarq Corp., 356 NLRB No. 125 (2011), the Board held
that the Employer did not violate Section 8(a)(5) by refusing
to bargain with the Union over its decision to close a call
center in Nevada and relocate that work to its call center in
Florida. Applying Dubuque Packing Co., 303 NLRB 386 (1981),
enforced in pertinent part, 1 F.3d 24 (D.C. Cir. 1993), cert.
denied, 511 U.S. 1138 (1994), the Board found that, although
the decision did not involve a change in the scope or
direction of the enterprise, and labor costs were a factor,
the relocation was nevertheless not a mandatory subject of
bargaining because the Union could not have offered labor-
cost concessions sufficient to alter the Employer's decision.
The Board also dismissed an allegation that the Employer had
violated Section 8(a)(5) by refusing to provide information
relevant to its relocation decision; since the decision was
not a mandatory subject of bargaining, there was no
obligation to provide information about it.
In a concurring opinion, however, Chairman Liebman
suggested that she would consider modifying the Dubuque
Packing framework with regard to information requests if a
party were to ask the Board to revisit existing law in this
area. Specifically, she identified an anomaly in present law,
which provides somewhat inconsistently that: (1) an employer
would enhance its chances of establishing that labor-cost
concessions could not have altered the decision, under the
Dubuque Packing standard, ``by describing its reasons for
relocating to the union, fully explaining the underlying cost
or benefit considerations, and asking whether the union
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could offer labor cost reductions that would enable the
employer to meet its profit objectives,'' 303 NLRB at 392,
and (2) a union is not entitled to such information if the
Board determines in hindsight that the union could not have
made sufficient concessions to change the decision and
therefore that the decision was not a mandatory subject of
bargaining. Chairman Liebman would consider modifying the
Dubuque Packing framework by requiring employers to provide
requested information about relocation decisions whenever
there is a reasonable likelihood that labor-cost concessions
might affect the decision. She posits that, if the employer
provided the information and the union failed to offer
concessions, the union would be precluded from arguing to the
Board that it could have made concessions. If, on the other
hand, the employer failed to provide such information where
labor costs were a factor, it would be precluded from arguing
that the union could not have made sufficient concessions.
The General Counsel wishes to examine the concerns raised
by Chairman Liebman in Embarq, and determine whether to
propose a new standard in cases involving these kinds of
information requests. That determination will be made based
upon a case-by-case review of submissions to the Division of
Advice. Therefore, Regions should submit to Advice all cases
presenting the question of whether an employer violated
Section 8(a)(5) by refusing to provide information related to
a relocation or other decision properly analyzed under
Dubuque Packing.
Signed,
R.A.S.
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[From the National Review Online, May 16, 2011]
The New NLRB: Boeing Is Just the Beginning
(By Hans A. von Spakovsky and James Sherk)
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 and 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.
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