The U.S. Court of Appeals has upheld one of the most controversial decisions of the National Labor Relations Board, ruling that the board correctly allowed a unionized auto-parts plant in Milwaukee to shift its work to a nonunion facility as a cost-saving move.
The decision is the latest in a series involving NLRB rulings that have made it easier for unionized companies to move, subcontract or close operations to reduce labor costs. Organized labor has strongly criticized the trend, but the board and business community defend it as a legitimate adjustment.
In a unanimous decision Tuesday, a three-judge panel said that the 1982 move by the Milwaukee Spring Division of the Illinois Coil Spring Co. was legal because the move was not specifically barred by its union contract and was not prompted by "antiunion animus" that would have violated the law.
The United Auto Workers said yesterday it was considering an appeal to the Supreme Court. AFL-CIO spokesman Rex Hardesty said the federation considered the ruling "an outrage" that reinforces the need for unions to negotiate "work preservation" clauses.
The court's decision "is a major new victory for American industry" because it recognizes that union contracts containing "management rights" clauses give corporations broad power "to move the work without union consent," said Gerard C. Smetana, a Chicago lawyer who argued the case for the Council on Labor Law Equality, an employer group based in New York.
The case arose when Illinois Coil Spring Co. told the UAW it would move work from the Milwaukee unionized plant to its nonunion plant in McHenry, Ill., unless the union agreed to contract concessions. The UAW argued that the company was making an illegal threat to violate its contract.
Judge Harry T. Edwards, writing on behalf of Judges Spottswood W. Robinson III and Antonin Scalia, said that the UAW acknowledged the company was acting for financial, not antiunion, reasons. Therefore, he said, "it is lawful -- and indeed common, in this era of concession bargaining."