The NLRB Overreaches - Once Again

The NLRB Overreaches - Once Again

May 02, 2011
Originally published in Real Clear Markets

The National Labor Relations Board (NLRB) has gone lawsuit crazy. With the U.S. House of Representatives now under Republican control, the Board is now a key vehicle that the Obama administration is using to push policies favorable to its Big Labor allies. And it seems willing to stretch the law beyond recognition.

Now the NLRB is trying to tell companies where to locate factories and dictate to states how they may amend their constitutions. Reorganization or even abolition of this outdated - and now bullying - institution should be a top priority for government reformers.

On April 20, the NLRB ruled that Boeing Corp.'s decision to open a factory in South Carolina amounted to "coercion" of its unionized workers in Washington State. South Carolina, unlike Washington, is a right-to-work state where employees cannot be required to join a union in order to work. Therefore, it's a good place to open a factory if you're trying to fulfill a backlog of orders while avoiding work stoppages.

Under the National Labor Relations Act (NLRA or Wagner Act), business actions to punish workers for striking are indeed illegal. Yet it is hard to see where the coercion and discrimination occurred in this case. The union in this case, the International Association of Machinists and Aerospace Workers (IAM), had waived its NLRA-granted right to a say in where production facilities could be set up.

Moreover, far from punishing workers in Washington State, Boeing has hired 2,000 more workers on Puget Sound, twice as many as will be employed at its South Carolina facility, since it announced plans for the latter. But apparently that's not good enough for the NLRB, which is seeking a court injunction to force Boeing to build its 787s in Washington State.

Even a former NLRB member says that the Board has gone too far. John Raudabaugh told a Charleston, South Carolina TV station, "It seems to me that Boeing has done nothing wrong. The union representatives had repeated meetings with the company. They fully understood the reasons that Boeing was undertaking and they have a legal obligation to communicate to their members. I find this just amazing; I can't believe that Boeing won't prevail." Boeing says it plans to "vigorously contest" the NLRB's suit. A hearing is expected in Seattle on June 14.

Meanwhile, the NLRB has announced lawsuits against two states - Arizona and South Dakota - that recently passed, by large margins, state constitutional amendments to guarantee the right to a secret ballot in union elections.

The NLRB argues that the National Labor Relations Act preempts state laws governing union elections. Yet the amendments protect a right which the NLRA recognizes - to demand secret ballots for union organizing elections. As Clint Bolick of the Goldwater Institute, who helped draft the amendments' language, notes, "States will respond that they have the power to protect rights recognized under both the federal and state constitutions."

Far from protecting the rights of workers, the NLRB's suit against Arizona and South Dakota would only protect union bosses' "right" to use a process known as card check, whereby a union can be certified as the exclusive bargaining agent for a group of employees by having organizers collect union cards signed by employees. Cards are signed out in the open, with employees thus exposed to intimidation and high-pressure tactics - precisely what the secret ballot is designed to avoid.

In a letter to NLRB General Counsel Lafe Solomon, the attorneys general of Arizona and South Dakota - as well as those of South Carolina and Utah, which have passed similar amendments - have said that they will defend their state amendments. "Such lawsuits," they add, "would seek to undermine individual rights that the NLRA and our state and federal Constitutions protect."

The NLRB is stuck in the past. Its pro-union overreach may have been acceptable in the 1930s, but it certainly isn't now. Its decisions, like the two just issued, discourage innovation and hamper flexibility. The old adversarial model of labor relations has little to offer to a modern workforce characterized by greater workplace flexibility and job mobility.

Boeing and the four states threatened by the NLRB have the law on their side, but it will need considerable patience to see their case through. The NLRB's recent actions go so far in seeking to reinterpret the National Labor Relations Act that litigation could go far in the federal court system, potentially even reaching the U.S. Supreme Court.

Congress, for its part, should not wait for these cases to wind their way through the courts. It needs to rein in the NLRB before it does any more damage to the nation's economy or to workers' rights of free association.