[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-

[[Page S3413]]

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

[[Page S3414]]

     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.
                                  ____


            [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.

                          ____________________