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Originally published May 4, 2011 at 2:31 PM | Page modified May 4, 2011 at 8:35 PM

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Boeing lawyer rejects NLRB charges in 787 case

In a forceful letter sent Tuesday to the National Labor Relations Board (NLRB), top Boeing lawyer Michael Luttig rejected the labor agency's complaint against the company's opening of a South Carolina 787 plant, writing that the charges "fundamentally misquote or mischaracterize statements by Boeing executives."

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In a forceful letter sent Tuesday to the National Labor Relations Board (NLRB), top Boeing lawyer Michael Luttig rejected the labor agency's complaint against the company's opening of a South Carolina 787 plant, writing that the charges "fundamentally misquote or mischaracterize statements by Boeing executives."

The letter frames the dispute between Boeing and the NLRB as a matter of interpreting specific public statements made by Boeing Commercial Airplanes chief Jim Albaugh and Boeing CEO Jim McNerney.

Those statements clearly articulate that repeated strikes by the Machinists union were a factor — indeed an "overriding factor," according to Albaugh — in the company's 2009 decision to place a second 787 Dreamliner assembly line in North Charleston, S.C., instead of in Everett.

But Luttig's letter argues that this was an economic consideration "entirely permissible under existing law." He rejects the notion that the statements prove Boeing's intent was to "punish" the union work force for strikes in 2005 and 2008.

It is illegal under the National Labor Relations Act for employers to retaliate against workers for engaging in lawful activities, including strikes.

The letter is Boeing's first formal response to the complaint, filed two weeks ago by NLRB acting general counsel Lafe Solomon.

The complaint resulted from a yearlong investigation of Boeing's 2009 decision, which came after the company and the International Association of Machinists (IAM) failed to agree on a long-term no-strike deal.

The NLRB accused Boeing of making "coercive statements to its employees that it would remove or had removed work ... because employees had struck" and said Boeing "threatened or impliedly threatened that the (IAM bargaining unit) would lose additional work in the event of future strikes."

Luttig's letter begins by saying no work was removed from local Boeing employees. The second line in South Carolina added new work and did not transfer any existing work, he wrote.

Commitment to state

The letter quotes an NLRB spokeswoman arguing that the charge of moving work from the Puget Sound area stems from Boeing's original commitment in its 2003 agreement with the state of Washington to "build the Dreamliner airplanes in this state."

But Luttig's letter, first reported by The Herald in Everett, asserts "Boeing did not commit to the State of Washington that it would build all of its 787s in that state."

Luttig decries as "far more egregious" the NLRB's characterization of various statements by Albaugh and McNerney.

In an interview with The New York Times last month, the NLRB's Solomon said those statements amounted to an unignorable and "consistent message that they were doing this to punish their employees for having struck and having the power to strike in the future."

The most pointed statement he cited came from Albaugh in a videotaped interview with The Seattle Times in March 2010. Albaugh said "the overriding factor (in choosing South Carolina) was not the business climate. And it was not the wages we are paying today. ... It was that we can't afford to have a work stoppage every three years."

He added that another "overriding factor" was the "rate of escalation of wages" in the IAM bargaining unit.

And before the 2009 decision, McNerney responded to a question from The Seattle Times as to how an assembly line in South Carolina made business sense. He said inefficiencies inherent in the duplication of resources "are certainly more than overcome by strikes happening every three or four years in Puget Sound."

Joe Marra, a former NLRB lawyer who now represents employers with Davis Grimm Payne & Marra in Seattle, said he doesn't find the NLRB complaint surprising, given those statements.

"If my sympathies are anywhere, they are with management. But I am also a realist," said Marra. "If I'm their labor lawyer, I'm cringing when they are saying that."

The NLRB specifically cited the statements in its complaint, which next month goes before an administrative law judge in a Seattle hearing.

Luttig wrote that Boeing will argue the statements have been radically mischaracterized.

"When not misquoted, it is not even arguable that Mr. Albaugh's statement constitutes a 'message' of 'punishment' to the union," his letter states.

Similarly, he asserts McNerney "did not say, he did not suggest, and he did not imply in any respect that Boeing intended to punish union employees."

Luttig also wrote that, despite a statement in an NLRB news release that the remedy sought would not "prohibit Boeing from assembling planes" in South Carolina, the board's complaint would require Boeing to completely close down the 787 assembly-line operations under construction in North Charleston.

Finally, Luttig attacked Solomon's suggestion to The New York Times that Boeing's statements were obviously illegal.

Luttig wrote that in discussions with Boeing over the past six months, Solomon repeatedly said he "did not believe this was a matter in which the NLRB should be involved" and that Solomon offered "to take no action on the matter if Boeing agreed that it would not lay off any 787 employees in Puget Sound" for the life of the IAM contract that expires in September 2012.

Marra said he knows that the local NLRB regional office that handled the case — an office where he once worked — tried hard to get the union and the company to settle.

He said he believes Solomon would have told Boeing during that process he'd rather the NLRB not be involved, but that Solomon wouldn't have gone as far as bargaining with the company over layoffs.

"Maybe that's the way Boeing interpreted his position, but he wouldn't have done that," said Marra. "It's just not something the NLRB does. They don't get in there and bargain. Their job is to get the parties to bargain."

"Ultimately, there'll be some kind of settlement," Marra predicted. "I think Boeing would be smart to settle."

Dominic Gates: 206-464-2963 or dgates@seattletimes.com

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