Attorney General Alan Wilson - Prepared Remarks for: House Committee on Oversight and Government Reform

South Carolina Attorney General Alan Wilson

Prepared Remarks for:

House Committee on Oversight and Government Reform

June 17, 2011 Field Hearing

Thank you Chairman Issa and members of the House Oversight Committee for inviting me here today. This hearing is about far more than Boeing or South Carolina. It is about an individual’s right to allocate capital in the way they believe best serves their business.

As Attorney General, it is my duty as South Carolina’s chief legal officer to defend our constitution, our State, and our citizens. Fifteen Attorneys General, representing both right-to-work and union states, have joined me in opposing the NLRB’s complaint against Boeing. This complaint is without legal merit or precedent and threatens the company’s $6.1 Billion annual impact on South Carolina’s economy.

The draconian remedy sought by the Acting General Counsel would allow the Board to choose where a private business may locate its capital. Neither the Board nor the federal government should make private business decisions. It is business that creates capital and capital that creates jobs.

Since its adoption in 1935, the National Labor Relations Act has never been so distorted that it would destroy a company’s ability to make sound business decisions. The Act imposes few constraints upon the free flow of capital to a right-to-work state. Legal precedents clearly demonstrate that Boeing’s decision to expand to South Carolina is lawful.

Boeing did not eliminate union jobs or remove work from Washington State, it merely created new work in Charleston. Under Board law, it must be shown that existing work was eliminated, subcontracted, or relocated. In fact, even legal experts who support the Board, concede this action is unprecedented.

The Board’s audacity to file this complaint constitutes “the shot heard round the business world.” Companies around the globe are thinking twice about locating or expanding operations in this country – especially expansion to union states. Based on its complaint and recent memos, the Board appears anxious to challenge any business expansion it deems detrimental to unions as an ‘unfair labor practice.’

Capital investment as well as fundamental business decisions related to unionization are not anti-union animus under Section 8(a)(3.) While Boeing has not discouraged union membership, the Supreme Court has upheld legitimate business interests even though union membership may be discouraged.

How could a rational person legitimately disagree with Boeing’s decision when looking at South Carolina’s business climate, its labor stability, and its $900 million incentive package?

The Acting General Counsel’s legal theory under Section 8(a)(3) that Boeing’s actions are “inherently destructive” of unionization is nothing but an attempt to thwart a company’s fundamental business judgment. That theory is inapplicable to Boeing’s decision to expand to South Carolina.

In the words of the Supreme Court, a business may “make a prediction as to the precise effects [it] believes unionization will have on [its] company.” Such predictions, including those concerning work

stoppages, are protected by the First Amendment. Any claim by the Acting General Counsel that the statements made by Boeing officials were “coercive” and thus violate Section 8(a)(1) is patently incorrect.

The last work stoppage cost Boeing nearly $2 Billion and caused customers to question whether or not to buy from Boeing ever again. Despite this fact, Boeing desired to keep production in Washington State, but the union refused to assure labor stability. Furthermore, Boeing’s collective bargaining agreement, with the union, dates back to 1965 and guarantees the company’s right to determine where work is to be performed.

The Supreme Court has recognized that management must have the flexibility to make business decisions without being second guessed as ‘an unfair labor practice.’ The Board is ignoring the rule of law in filing a complaint without precedent. The consequences of the Board’s actions would abolish a company’s discretion to make business decisions.

In 1788, Alexander Hamilton warned that the freedom of the states “can be subverted by the federal head” and such subversion “is repugnant to every political calculation.” Our founding fathers went to great lengths to prevent an out-of-control federal government from nullifying private business decisions. We too must go to great lengths to ensure the founders’ promise is honored.

The Board’s complaint is a first step towards radically rewriting the NLRA. The Board’s Chairman has testified to Congress that she seeks to restructure the Act as a “collective action to redress economic inequalities.” Unless deterred, this bureaucratic agency’s actions will further paralyze our nation’s economy. Action must be taken in the halls of Congress, I ask the Committee to join me and fellow Attorneys General in the effort to preserve economic freedom in America.

Thank you, and I would be happy to answer your questions.

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