Job Protection Act and the NLRB

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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-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.

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