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May 6, 2011

NLRB Complaint

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Mr. HATCH. Mr. President, I rise to speak about an unfortunate and, quite frankly, disturbing matter.

While we were all back home during the most recent Senate recess, the National Labor Relations Board's acting general counsel, Lafe Solomon, after 17 months of indecision, issued one of the most far-reaching and outrageous complaints ever issued by the Board against a private business. This complaint against Boeing is one of the most outlandish and regrettable complaints I have seen in all my years in the Senate.

The NLRB's acting general counsel--emphasis on the ``acting''--sitting in his ivory tower in Washington, DC, essentially substituted his business judgment for that of a private corporation. In essence, Mr. Solomon claimed the authority to determine where and how a private company is permitted to do business.

This is a specious claim. Boeing did nothing wrong, and I am confident it will ultimately prevail. Yet this complaint carries a potential cost of billions of dollars and thousands of new jobs for the company in the community where it chose to operate.

So why make this decision at all? Why attack a private company with a legal challenge that will cost an enormous amount of money to defend, disrupts business, undermines the efforts of States to increase jobs and promote economic recovery but that will fail for its lack of merit? The answer is simple. The unions want it. This is another chapter in the sorry relationship between unions, big government, and the party of big government.

I have to say, I admire Mr. Solomon's moxie. By making this decision during a congressional recess, it is almost as if he thought it might avoid our scrutiny. Maybe he thought news such as this might not make its way back to the States. To that I say: Nice try, but you will not escape the scrutiny of the American people when it comes to an action this over the top. Sunshine will fall on a decision this politically motivated. In the light of day, the decision and the decisionmakers are going to look awfully bad.

The NLRB's Boeing complaint has been widely criticized in the media, in the Senate by a number of my colleagues, and throughout the business community as a prime example of a Federal bureaucracy run amok. But this is more than another example of an unaccountable bureaucracy harming job creators and employees. What makes this case particularly ugly is, this is a case of regulators conveniently supporting the interests of big labor against private enterprise. What makes this case appalling is, it is a gift-wrapped present to the interests that just so happen to be the largest contributors to Democratic Party campaigns.

The NLRB issued its complaint against Boeing--one of our Nation's iconic companies--for allegedly transferring assembly work on its Dreamliner 787 fleet of airplanes from Puget Sound, WA, to North Charleston, SC. Boeing made a legitimate business decision to open a new plant with new workers in a new more business-friendly climate. It chose South Carolina, in part, to avoid labor disputes and crippling strikes which had befallen the company repeatedly over the past few years.

When Boeing first made this decision way back in 2009, it had experienced four major labor strikes in 20 years. The most recent work stoppage--a 58-day strike in 2008--cost the company $1.8 billion.

Was the decision to bring new work to South Carolina a prudent business decision? Boeing faces significant global competition. The French company, Airbus, is anxious to take Boeing's business with the help--and backing, I might add--of the French Government.

Was the decision good for American workers? Clearly, Boeing's decision was. In the current marketplace, many of Boeing's competitors might have considered moving jobs overseas. Instead of following that course, Boeing saved American jobs.

The President likes to talk about jobs he has created and saved. Well, not a single job--union or nonunion--was lost in the State of Washington as a result of Boeing's decision. In fact, over 2,000 new jobs have been created in Puget Sound since the company's announcement to begin work on the new facility. This is not to mention South Carolina, where hundreds of new jobs were created. Added jobs in Washington plus added jobs in South Carolina sounds like a win-win for American workers to me.

So, yes, Boeing's decision to build its new plant in South Carolina was good for just about everybody. Yet, without asserting any evidence of anti-union animus on the part of Boeing or of an adverse impact on union workers exercising their legal rights, the NLRB filed its complaint and has sought to step in and make Boeing's business decisions for them.

As South Carolina Gov. Nikki Haley described it in an April 26 Wall Street Journal editorial:

The excitement of South Carolina turned to gloom for millions of South Carolinians who are rightly aghast at the thought of the greatest economic development success our state has seen in decades being ripped away by federal bureaucrats who appear to be little more than union puppets.

Governor Haley should be applauded for calling the NLRB's decision for what it is: a hand-wrapped present to big labor, courtesy of their friends in the Federal bureaucracy and the administration.

Let's take a look at the NLRB's complaint for a moment. First, let's consider the timing of the complaint. It is highly suspect, if you ask me. The Boeing complaint comes just a few short months before the new South Carolina facility was scheduled to open in July and well after most of the construction was completed and the new workers were hired. In other words, after most of Boeing's substantial investments had been made, the heavy hand of the Federal bureaucracy intervened to dictate that its business decision must be reversed.

In its April 21 editorial, the Wall Street Journal describes the Boeing complaint saying:

After 17 months and $2 billion, the NLRB sandbags Boeing.

The editorial continued:

There are plentiful legal precedents to give business the right to locate operations in Right to Work states. That right has created healthy competition among the states and kept tens of millions of jobs in America rather than overseas.

An opinion editorial by Steven Pearlstein in the April 26 Washington Post is even more telling. Although Mr. Pearlstein was, not unexpectedly, somewhat supportive of big labor and the NLRB's actions in this case, he nevertheless acknowledged that:

[i]f the agency prevails and is able to force Boeing to open an additional production line

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for its new 787 Dreamliner in Seattle, it could finally put a brake on the steady flow of manufacturing jobs to right to work states in the South.

Pearlstein hits it on the head here. The decision to file this complaint is an attack on business-friendly States that are attracting companies and creating jobs. It is an effort by Washington Democrats and career bureaucrats to force unionism on the entire country. Yet, in my view, Pearlstein does not adequately state the radicalism of the NLRB's position.

The fact is, if the NLRB--doing the bidding of the International Association of Machinists and Aerospace Workers--prevails, it will give them the right to dictate business location decisions everywhere, even in non-right-to-work States.

There is a great deal of misinformation coming from those who support the NLRB's actions. In this article, Pearlstein inaccurately describes Boeing's new manufacturing facility in South Carolina as a runaway shop. Boeing had no legal obligation to locate any and all new work in Puget Sound. It was not obligated, under any collective bargaining agreement, to keep the work there. It simply chose to locate new work and new expansion in a business-friendly, right-to-work State. Is that a runaway shop? I think not, and I think most everybody would think not.

Apparently, the NLRB agrees with me because the complaint does not allege that this was a classic runaway shop. In those situations, bargaining unit work that is contractually obligated to be performed by members of the union is shut down unilaterally by management. Employees are laid off, and the company stealthily slips out of town with little or no notice, only to reopen in a new location to perform the exact same work on a union-free basis. Under the law, that is wrong.

The NLRB makes no such allegations because that is not what happened in this case. Instead, the complaint falls back on the broad, catchall argument that Boeing's actions were inherently destructive of union workers' section 7 rights, referring to the rights protected by section 7 of the National Labor Relations Act which, in this case, means the right to strike. If that theory were to apply to all cases such as this one, if companies cannot factor labor conditions into decisions regarding new operations without it being inherently destructive of section 7 rights, there is no logical end to what private decisions can be overruled by the NLRB.

This is an agency run amok and trying to take the place of this Congress.

Fortunately, the legal precedents dealing with this type of decision do not support the acting general counsel's interpretation in the Boeing complaint. The cases cited in the complaint are all distinguishable. Not one of them deals with fact patterns involving new work because there is nothing unlawful about opening a new facility to perform new work that is not obligated under an existing collective bargaining agreement.

Put simply, this is just another effort on the part of the union-packed Obama NLRB to undo years of legal precedent

to satisfy big labor. If Boeing's actions are inherently destructive of the union's rights, where is the antiunion discrimination? Once again, not a single union worker lost a job or even lost an hour of work as a result of Boeing's business decision.

Let's be perfectly clear. Boeing workers in the State of Washington actually gained new work and gained 2,000 new jobs following the decision in 2009. These jobs are among the best paid in America. Does that sound like anti-union discrimination? Of course not.

This was not a stealth move in the dark of the night. No one was surprised or caught off guard. The machinists' union knew Boeing was building a new facility in South Carolina. Boeing had even discussed a new location with them. Workers knew about Boeing's plans as well and so did the NLRB. But before issuing his complaint, the acting general counsel stewed for 17 months, while new facilities were being constructed at great expense in South Carolina, at a cost of billions of dollars, and workers were hired to run the assembly lines.

It goes without saying that if Carolina workers wanted a union, they, similar to any other private sector employees in South Carolina or any other State, could file a petition with the NLRB for a union representation election. There was no evidence--zero evidence--of anti-union discrimination by Boeing to any union petition or union representation election. But--and I can't stress this enough--the most important factor is, the work in South Carolina was new work which Boeing was not obligated to perform in the State of Washington under its collective bargaining agreement. Boeing simply decided, for sound business reasons, to open a new facility to perform new work in a business-friendly State. This is something businesses can do all the time and do do all the time; that is, they used to do it all the time before President Obama's acting general counsel and the might of the Federal bureaucracy, under the heavy-handed control of big labor, decided to step in and interfere with Boeing's decision. If this complaint is upheld and this interpretation becomes the new status quo, who knows how it will impact businesses in the future?

Every citizen in South Carolina and every Member of Congress--Republican or Democratic--ought to be outraged by the National Labor Relations Board's decision and action. To borrow from Frank Sinatra, if they can do it there, they can do it anywhere. If the NLRB can do this in South Carolina, disrupting business and killing jobs, it can happen anywhere, including Utah or any other right-to-work State. It can happen even in non-right-to-work States as well.

But the most appalling part about this complaint is not the NLRB's borderline frivolous interpretation of the law. No, it is the remedies the agency is seeking. After asserting that Boeing unlawfully transferred bargaining unit work to South Carolina, the acting general counsel--a career NLRB bureaucrat who, throughout his government legal career, has never been responsible for making a single entrepreneurial decision or creating a single job--sought an order stipulating that Boeing's work on the 787 Dreamliner could not be performed in South Carolina and would have to be moved back to the State of Washington. Well, not back; it would have to be moved to the State of Washington. This is a new business.

As is typical in these cases, the Boeing complaint will surely be subject to lengthy litigation, while Boeing's foreign competitors eagerly seek to supplant Boeing's business orders. Even if Boeing ultimately prevails in the litigation battle, it could lose the business war to fierce global competition. That is stupid to put them in this position.

The Machinists know that and so does the NLRB.

Might I remind supporters of the NLRB that justice delayed is justice denied. Here, the longer the wheels of justice turn, the worse it is for Boeing's business and the worse it is for American jobs and prosperity.

Delay does not favor Boeing, but it plays right into the hands of its global competitors, as well as the Machinists Union and President Obama's acting general counsel at the NLRB, who, it seems, would force the company into accepting a settlement that cements an untenable business decision in law.

This is no less than economic warfare being waged by the NLRB on behalf of President Obama's friends--the labor unions--against Boeing, against the workers in South Carolina and all South Carolinians, and against all the 22 right-to-work States across the country. It may even be against the rights and the privileges and the benefits of the people in Washington because if Boeing, to be competitive, has to move offshore, they are going to lose their jobs. In the end, it is economic warfare by the Obama administration against all business friendly States and against capitalism and free enterprise everywhere.

I am not the only one saying this. I note, for example, that the attorneys general in nine States across the country--Nevada, Virginia, Texas, Georgia, Arizona, Oklahoma, Alabama, Florida, and South Carolina--have written to Mr. Solomon asking that the Boeing complaint be withdrawn.

Their April 28 letter states:

This complaint represents an assault upon the constitutional right of free speech, and the ability of our states to create jobs and recruit industry. ..... The only justification for the NLRB's unprecedented retaliatory action is to aid union survival. Your action seriously undermines our citizens' right to work as well as their ability to compete

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globally. Therefore, as Attorneys General, we will protect our citizens from union bullying and federal coercion. We thus call upon you to cease this attack on our right to work, our states' economies, and our jobs.

Editorials from newspapers across the country have criticized the Boeing complaint. Even the Seattle Times wrote in an April 22 editorial:

This page regretted Boeing's decision, but has never thought of it as something that could be, or should be, reversed by the federal government.

The article continues, saying:

[T]he National Labor Relations Board has labeled Boeing's decision an unfair labor practice, and is asking a federal court to order the line to be moved to Washington ..... we would celebrate the day Boeing decided to do that--but it is Boeing's decision.

Later the same editorial concluded:

The company has the right to build assembly plants. It can build them in South Carolina or in Afghanistan if it likes. Its decision may be unwise, but it is Boeing's.

These same sentiments were expressed in the President's hometown newspaper. A Chicago Tribune editorial on April 22 described the NLRB acting general counsel's actions a ``gross intrusion.'' The editorial continued:

Boeing, the Chicago-based aviation company, already has one government-induced headache. Its main rival, Airbus SAS, has received from European nations about $20 billion in subsidies that are prohibited by international trade agreements. That is challenging enough for Boeing as it tries to compete in an international market. But when the U.S. government tries to dictate where Boeing can do business ..... that's even harder to stomach.

The Tribune editorial concluded:

The disastrous, unintended message to a major U.S. employer: Keep your mouth shut and find another country to do business.

The Detroit News has the President and his pro-union administration pegged. About this decision, the editors wrote:

President Barack Obama has made conciliatory sounds seeking to reassure business, but the actions of the NLRB illustrate the real face of his administration. Congress ought to hold hearings on reining in the NLRB.

So if the NLRB's complaint is so transparently awful, what is this all about? Let's see. An unfair decision comes late in the game. It threatens to destroy rather than create jobs, and it is based on specious legal reasoning. Rest assured, the issue is not jobs. The issue is union jobs, and the issue is not better pay for workers. The issue is about money in the union coffers. Ultimately, the issue is about the 2012 elections, because money in union coffers means money for Democratic candidates.

The International Association of Machinists Union is important to President Obama. It endorsed him and contributed substantial resources to his campaign. While President Obama could not deliver on such legislative initiatives as the Employee Free Choice Act, he appears determined that every level of government--especially at the National Labor Relations Board--will be turned in the union's favor.

The contempt for the American people on display in this decision is astounding. The President and congressional Democrats were unable to enact the Employee Free Choice Act, even with supermajorities in Congress. That is the card check bill. But not to worry. Just have some bureaucrats do it for them. Since the Congress could not act, why not have these bureaucrats usurp Congress's position and do it for them?

Keep this episode in mind next time we hear progressives talk about the need for enlightened administration. Keep it in mind when we hear progressives--liberals--claim the President is just interested in doing what works and that he is not ideological.

Progressives ultimately have little respect for the rule of law or for the people themselves.

For all their talk about nonpartisanship and doing what works, what they promote is a supposedly enlightened bureaucracy that, in fact, will push liberal policies, regardless of what the people want.

Progressives are to nonpartisanship as Donald Trump is to subtlety.

Ultimately, progressives are as partisan as they come, and they push their liberalism through a vast and permanent bureaucracy that plods along day after day, largely out of sight of the American people, who would never elect representatives who would actually promote this leftist, antibusiness agenda. When former Speaker of the House Nancy Pelosi said elections should not matter as much as they do, this is what she meant. Liberalism should advance no matter what the people of this country actually desire. The foot soldiers who will advance the causes of progressive leftism day in and day out are the unelected and largely unaccountable bureaucrats that churn out page after page of regulation and infiltrate the decisionmaking process of every business, no matter how small the decision or how small the business.

Which brings me to the NLRB's acting general counsel.

How did he even wind up in a position to cause this level of economic mayhem? Not under the established procedure for appointing an interim general counsel under section 3(d) of the National Labor Relations Act, which provides very clearly as follows:

In case of vacancy in the office of the General Counsel the President is authorized to designate the officer or employee who shall act as General Counsel during such vacancy, but no person or persons so designated shall so act (1) for more than forty days when the Congress is in session unless a nomination to fill such vacancy shall have been submitted to the Senate, or (2) after the adjournment sine die of the session of the Senate in which such nomination was submitted.

President Obama ignored the clearly established statutory procedure for appointing an acting general counsel under the National Labor Relations Act and instead made Mr. Solomon his personal acting general counsel under the more generous terms of the Federal Vacancies Act, which is intended to apply to government vacancies in general.

Even if he is technically authorized to do so, the President should not use the Vacancies Act to supplant or displace specific statutory procedures for appointing Federal employees to vacancies where, as here under the National Labor Relations Act, the organic law is perfectly clear as to the intended process.

Why did President Obama make the appointment under the Vacancies Act rather than follow the more preferred and traditional procedure provided under the National Labor Relations Act? The answer is pretty simple.

Under the Vacancies Act, Mr. Solomon is allowed to stay in the job in an acting capacity, without Senate approval, for an initial 210 days--rather than the 40 days provided under the National Labor Relations Act--and then be reappointed again for another 210 days, and a third time for yet another 210 days, until the end of President Obama's term.

This is yet another example of the President end running the law in order to ensconce in office individuals who would have a difficult time surviving the constitutionally required confirmation process--a process that ensures the people and their representatives have some meaningful oversight of the appointee.

So why did no one complain about this appointment before now? I suppose some should have. I suppose after the battle over the nomination of AFL-CIO and SEIU Associate Counsel Craig Becker to the NLRB, many were convinced they could do a lot worse than having a career NLRB civil servant serve as acting general counsel. I am not so sure anyone feels that way now. In fact, in light of his recent actions, including the Boeing complaint, it is hard to conceive of a worse choice for acting general counsel.

That decision should be revisited. That is why I am writing to President Obama to request that he withdraw the appointment of Mr. Solomon.

As far as President Obama's nomination of Mr. Solomon for a full term as general counsel is concerned, it is difficult to imagine how Mr. Solomon could ever be confirmed by the Senate, in view of his actions while serving as acting general counsel.

Government actions such as the ones we have seen with the Boeing complaint are debilitating to our economy at a time when we are struggling to recover from one of the Nation's worst recessions since the Great Depression. Such bureaucratic decisions cost jobs at a time when we are struggling to reduce unemployment. They delay business decisionmaking and interfere with competition. They undermine business confidence in government.

Why should companies invest in expanding business in the United States

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if, with the drop of a hat, a Federal bureaucrat can simply reverse that decision and destroy that investment?

At this point, we are left scratching our heads. Why would the acting general counsel do this outrageous act? Unfortunately, the answer appears to be that the decision to issue the complaint was a political one designed to placate an important ally of the President's--organized labor. That answer, while unacceptable, is the only logical answer.

As the April 21 Wall Street Journal concluded:

Beyond labor politics, the NLRB's ruling would set a terrible precedent for the flow of jobs and investments within the United States. It would essentially give labor a veto over management decisions about where to build future plants.

That must never be allowed to happen. The NLRB should withdraw the Boeing complaint.

I suggest the absence of a quorum.

(Senate - May 5, 2011)

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