NLRB Strong Arm Tactics Work, Deal Blow to Free Markets

What started with a bang ended with a whimper as the National Labor Relations Board officially dropped its case against Boeing on Friday.

Sadly, it can hardly be considered a win for free market conservatives.

The suit was dropped only after Boeing reached a deal with the Machinists Union to extend the contracts of workers for four years. ABC News reports:

“If the deal is ratified by its members next week, the union said it would drop the unfair labor practice suit against Boeing that is currently pending before the National Labor Relations Board. . . ‘It secures a strong future here, provides top-notch pay and benefits and really signals the start of a potential new relationship with Boeing,’ said Union spokeswoman Connie Kelliher.”

It’s may be over, but the message has already been sent: If you cross the unions, they’ll sue, the Obama Administration’s NLRB will take the case, and you are gambling with the future of your company.

The case was questionable from the outset.

This is not Boeing’s first costly run in with the unions. In the past 20 years, Boeing union workers have gone on strike four times, the longest being 69 days. As you can imagine, when your workforce doesn’t show up, it can really impact your bottom line. Indeed, analysts estimated that the 2008 strike cost Boeing as much as $120 million per day and could have soared higher if the strike had lasted much longer and orders for their popular plane, the 787 Dreamliner, had been canceled.

Unless you’re a green energy company, you probably recognize that losing billions of dollars is not a viable business strategy. And only Washington thinks it’s a good idea to throw money down the drain. Given that common sense calculus, Boeing had an idea – move construction to a state where you won’t have to shut down production every five years.

They did, which took them to South Carolina, whose right-to-work laws ensured that their plant could operate without the threat of picket lines.

More than one thousand jobs created and $2 billion in investment later, the Machinists Union realized that they couldn’t just let Boeing escape their clutches so easily. They filed a politically-charged complaint with the NLRB alleging that Boeing’s move to South Carolina was in “retaliation” for their strike.

Well, the case was about retaliation. But it wasn’t on the part of Boeing. It was about the union retaliating against a company for moving to a non-union state. And as the blog LaborUnionReport writes, “it was the union retaliating against South Carolina employees for having decertified the same union in 2009.”

That’s right. South Carolina workers vote the Machinists Union out for poorly representing them, including holding 11th hour, secretive meetings to approve questionable labor contracts.

So to get back at Boeing for threatening their existence and South Carolina workers for their disloyalty, the Machinists Union filed suit. The only trouble was the law clearly wasn’t in their favor. Labor law allows a company to locate or move production based on business sense, of which “production stability” is a factor.

But none of that mattered. The suit carried such big stakes (if the union won, Boeing may have had to shut down its entire South Carolina operation) and enough uncertainty (who knows where Obama’s pro-union NLRB will come down) that it was safer, albeit still expensive to settle.

And settle is what Boeing eventually did, agreeing to extend a generous contract for Washington workers in return for dropping the suit.  The deal left a bad taste in many conservative’s mouths.

“The NLRB’s dismissal of charges against Boeing only after union approval of their new contract only confirms the charges were a politically-motivated negotiation tactic, not a serious complaint based on merit,” DeMint said in a statement. “Unfortunately, real and serious damage to America’s competitiveness has already been done. A precedent has been set by the NLRB that they will attack businesses in forced-unionism states that try to create jobs in right-to-work states.”

And for that, we are all worse off.