Punching In: The Boeing Conundrum

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By Chris Opfer and Hassan A. Kanu

Monday morning musings for workplace watchers

SCOTUS for Breakfast | NLRB Makes Money Moves | Uber Assault Settlements Unlikely

Chris Opfer: Last week, the Supreme Court took some of the wind out of worker advocates’ sails when it said businesses can require employees to waive their right to sue their bosses in class actions. Will SCOTUS also do a number on labor unions by killing “fair share” fees for government workers who choose not to join? We’re watching for a possible decision this morning in the Janus case. Bloomberg Law will have updates in your inbox and here.

Meanwhile, the machinists aren’t giving up their fight to organize workers at a Boeing plant in South Carolina. A group of about 178 workers is slated to vote Thursday on whether to unionize at a North Charleston facility that is home to some 7,000 employees, according to Boeing.

National Labor Relations Board Regional Director John Doyle cleared the path for the vote last week. Doyle said the workers can unionize as a separate group within the larger workforce, despite the NLRB’s December decision limiting “micro-unit” organizing. The aerospace giant has fought organizing tooth and nail for decades. Nearly three-fourths of Boeing workers at the plant last year voted against union representation.

Boeing already has asked the NLRB to pause the election and review Doyle’s decision. The first question for the five-member board is whether two of its three Republicans may have to sit out the case. Chairman John Ring’s and member Bill Emanuel’s former law firms, Morgan Lewis and Littler Mendelson represent Boeing in other, unrelated labor matters. The board has yet to rule on motions in another Boeing case, arguing that Emanuel should have recused himself and that Ring should sit out any new proceedings. The board has been sitting on the Emanuel recusal motion for more than four months.

Regardless of how the conflicts question shakes out, International Association of Machinists’ lawyer William Haller told me he’d be “shocked” if the board pumped the brakes before Thursday’s vote. Haller said the board is more likely to consider the company’s arguments after the ballots are lodged.

Tyrone Richardson, Jaclyn Diaz, and I have more on the Boeing case for subscribers here.

If all this talk about micro-units and conflicts of interest has you hankering for more labor news, you’re in luck. Ben is easing his way back from the long weekend, so Bloomberg Law reporter Hassan Kanu is punching in with me this week.

Hassan Kanu: Good to be with you this morning while our intrepid colleague enjoys his little hiatus.

The federal labor board has been keeping us busy with a parade of controversies since late 2017. And there are still a number of important unanswered questions and unresolved issues.

Money, money, money is certainly one: NLRB General Counsel Peter Robb has, at different points, referred to both the current and next year’s budget as a justification for a number of proposals he put forth to overhaul the board’s structure and operations. The proposals were made public mostly by leaks: one was a memo containing a list of 59 suggestions that Robb issued just weeks into his tenure, and others came during a conference call between Robb and senior agency managers.

The moves Robb is considering reportedly include structural changes that would strip the career feds who currently oversee field offices of much of their authority and consolidate decision-making in the general counsel’s office. Overhauling how the agency processes unfair labor practice complaints and union elections, including shortening investigation times and imposing strict deadlines on complainants, is also among the possibilities.

Some of the moves the general counsel has suggested also come from a series of cost-savings measures developed internally before Robb came in.

Robb’s critics—including some inside the agency—like to note that the White House budget request is usually a non-starter. In fact, Congress generally rejected President Trump’s vision for the federal bureaucracy and the NLRB as outlined in the White House budget proposal for this year, and the board’s funding hasn’t been cut since at least 2012. Republicans simply haven’t had the numbers to continue slashing the NLRB’s budget, and Democrats consider the agency underfunded as is.

Robb’s supporters and many management-side lawyers note that agency heads always have to prep for the future. They say it’s prudent to be prepared for apossible shortfall whether it comes or not. The general counsel also likes to point out that the agency’s structure has been static for decades and that it’s time for a change. Some sources close to Robb say he feels news coverage gives short shrift to that point, as well as his goal of achieving increased efficiency at the board.

I reported last month that the NLRB was freezing some of its funds until the White House and some Republicans in Congress sorted out a plan to rescind certain government funding. The White House did eventually release a rescission package—essentially a renegotiation of the already enacted budget—but it didn’t include trying to take money back from the NLRB. Sources tell me that was a relief to many of the career workers inside the agency and their employees’ unions.

Shortly afterward, Robb and Ring pulled back on some cost-cutting moves said to have been in the works. The two officials announced in a memo early this month that the NLRB would pay out “previously approved” bonuses “for FY 2017.” The memo also seems to communicate that the board will pay out bonuses “moving forward”—i.e. this year, FY 2018.

The agency heads said they’re also keepin in place a professional office exchange program, and a professional development program that sources characterize as important career advancement opportunities for staffers.

“We wish to thank everyone for their patience and understanding during the continuing budget process,” the agency heads wrote in the memo.

Maybe some of the several “Robbed” posters that went up at NLRB headquarters in D.C. when the general counsel was considering shuttering an employee health unit will be taken down now. We’ll see.

CO: Remember when Uber made headlines by saying it wouldn’t fight to move sex assault claims by a group of women riders from federal court to closed-door arbitration? Hours after that announcement, the ride-share company asked a judge to require the women—who allege they were raped or assaulted by drivers—to arbitrate claims that the company marketed safe rides despite knowing drivers weren’t properly screened.

Jeanne Christensen, the women’s lawyer, is expected to file a motion opposing arbitration today. She told me that having to arbitrate those claims individually, while pursuing civil sex assault claims in court, would “gut” the case. The sex assault claims would likely need to be separated and thus might not allow for the broad-based discovery that Christensen wants to try to prove that Uber turned a blind eye to rider assault.

No matter what happens, Christensen says she won’t consider any offers from Uber to settle the cases individually.

“I just said that I’m not going to keep negotiating one-off private settlements with them,” Christensen told me. “Because then I’d be part of the problem. My clients agreed that they want to be the ones to get this out there.”

HK: There’s another money-related issue still to be worked out at the NLRB.

The chairman and general counsel made their announcement about bonuses and professional programs after my report about possible back-channel discussions—between NLRB leadership and the White House Office of Management and Budget—to restrict the board’s spending. If, as sources have said, the OMB had directed the agency to freeze spending in some manner, that could be a violation of the federal Impoundment Control Act.

The Government Accountability Office has been looking into those alleged improprieties. The GAO comptroller said on April 25 that it would report to Congress “within the next few weeks,” but there’s been nothing yet.

Folks inside the NLRB remain concerned, despite that leadership seems to have found some slack in the budget.

“Why was it that the agency told us straight up that OMB was leaning on them? Was that not true?” one union official said to me recently, referencing the alleged instruction that the agency should restrict its spending of already-allocated funds. “We still have questions about what happened.”

CO: We’re punching out. Daily Labor Report subscribers can check in during the week for updates. In the meantime, feel free to reach out to us: copfer@bloomberglaw.com, hkanu@bloomberglaw.com, bpenn@bloomberglaw.com or on Twitter: @ChrisOpfer, @HassanKanu and @BenjaminPenn

Do you drink wine and have concerns about a potential robot apocalypse? Keep an eye out for Joyce Culter’s look at the rise of the machines in California vineyards. Do you have business in the Northern District of Alabama? You may want to check in this week with Bloomberg Law’s Patrick Dorrian, who’s crunching the numbers to see how likely it is that your case will be decided at the motion to dismiss or summary judgment stage.

See you back here next Monday.

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