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Labor board says Boeing case is closed

(Reuters) - The National Labor Relations Board said on Friday it dismissed a high-profile labor case that accused Boeing Co of illegally opening a non-union production line in South Carolina to punish unionized Washington-based workers for past labor strikes.

The move comes after the company's biggest union this week approved a contract extension that ensures a revamped aircraft will be built in Washington state.

The complaint, originally lodged by the International Association of Machinists and Aerospace Workers union in April, said Boeing engaged in unfair labor practices by locating a second assembly line for the 787 Dreamliner in the southern U.S. state.

"The union asked to withdraw the charge following the ratification of a four-year collective bargaining agreement between its members and Boeing earlier this week," NLRB Acting General Counsel Lafe Solomon said in a telephone briefing with reporters.

The labor pact included a commitment to build the upcoming version of Boeing's best-selling 737 narrowbody aircraft, called the 737 MAX, in Washington state, where Boeing has always made its jets.

The MAX, which will feature a new, more fuel-efficient engine, will compete with a revamped A320 neo to come from European rival Airbus.

The agreement with the IAM also gave Boeing some assurance that strikes will not disrupt operations as it increases the production rates of many aircraft.

The dispute with the machinists drew attention in Washington, elevating partisan debate over collective bargaining rights and the ability of companies to hire non-union employees and build factories where they want.

Boeing shares were up 2 percent at $71.58 in afternoon trading.

(Reporting by Karen Jacobs in Atlanta; editing by Andre Grenon)