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Boeing vs. the NLRB: A Naked Power Grab by Radical Pro-Unionists

Boeing made a legal business decision that unions opposed, and the National Labor Relations Board is using this as a pretext to unlawfully expand its power.

by
Hans A. von Spakovsky and James Sherk

Bio

May 12, 2011 - 12:31 am
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The law does not prohibit a company from responding to economic realities, or saying that they are doing so. The Supreme Court has ruled that the NLRA permits management to make decisions “essential for the running of a profitable business” and “to reach decisions without fear of later evaluations labeling its conduct an unfair labor practice.”

But under the NLRB’s warped view of the law, all manufacturers who have facilities in heavily unionized states (like Washington) could not expand their operations into right-to-work states (like South Carolina).This interpretation violates the fundamental structure of the NLRA. Congress carefully balanced the interests of both union members and employers. The Act protects workers’ ability to unionize, but it also allows states to implement right-to-work laws so that workers cannot be forced to join unions.

The NLRB is trying to upend that balance. Its interpretation effectively means unionized companies cannot expand in right-to-work states, at least not without serious litigation. The Board wants to force companies to invest in only unionized operations instead of exercising other options.

If the NLRB succeeds it will do serious damage to American workers and the economy. Businesses do not have to make capital investments or create new jobs. They will invest less if the government tells them they cannot take advantage of their best opportunities.

Studies show that unions raise costs, leading unionized firms to invest 15 to 20 percent less in R&D than nonunion firms. As a result, union shops create fewer new jobs. Employment grows 3 to 4 percentage points less a year in unionized firms than nonunion ones. The NLRB’s charges are a guaranteed prescription for even higher unemployment.

Boeing’s General Counsel, Michael Luttig, will testify before the Senate’s Health, Education, Labor and Pension Committee on May 12 at a hearing on the “Endangered Middle Class.” He will certainly have a lot to say about how the NLRB is endangering the employment prospects of thousands of middle class workers.

The NLRB’s complaint will be heard by an administrative law judge on June 14. Whatever the decision, it is sure to be appealed to the four-member board of the NLRB, which is dominated by radical, pro-union appointees. The worst is Craig Becker, an Obama recess appointee who has argued that the freedom of businesses to invest and make decisions about capital should be limited by the government in order to strengthen unions. If the NLRB finds against Boeing, the company will then appeal the NLRB’s illegitimate actions in federal court. Even one of President Obama’s liberal, empathetic judges would have a hard time upholding the NLRB, given Supreme Court precedent and the complete lack of a legal basis for these claims.

What is really going here is a direct frontal assault against right-to-work states being engineered by an out-of-control federal agency staffed by union activists. Federal law allows states to compete for new investment by implementing labor laws that prohibit workers from being forced to join unions. The NLRB has no authority to threaten business investment and job creation to benefit unions by forcing businesses to expand only in closed shop states.

Congress should amend the National Labor Relations Act to reaffirm its longstanding interpretation that any new investment decisions — such as expanding existing facilities or building new plants — do not constitute an unfair labor practice. This amendment would prevent abusive litigation by an overzealous NLRB and protect companies’ ability to freely make investments that benefit their shareholders, their customers, their employees, and the overall economy.

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Hans A. von Spakovsky is a Senior Legal Fellow and James Sherk is a Senior Policy Analyst at The Heritage Foundation; their new legal analysis on the NLRB actions against Boeing is available here.
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