Federal Government Versus Boeing

 Daniel Rosenthal

In a dramatic and potentially groundbreaking move, the federal government has taken on Boeing, one of the largest and most important companies in the United States, for labor law violations.   The government has charged Boeing with violations in connection with its decision to build a new plant in South Carolina and thereby reduce production at a unionized plant in Washington.  Filed by the National Labor Relations Board last week, the complaint demands that Boeing maintain its full operations in Washington – effectively requiring it to shutter its nearly-complete new plant.

Some commentary has asserted that this is unwarranted “overreach” because the government is seeking to prevent Boeing from considering labor costs in its business decisions. But I think that misreads the complaint.  The primary problem with Boeing’s conduct here is the threatening statements by company managers, which suggest that continued strikes and union activity will lead to further loss of work opportunities in the future.  The government will portray this as a coercive exercise of Boeing’s power over employees and an obvious violation of established labor law.  The canonical Gissel Packing decision is directly on point.  Although the government also claims that the relocation decision itself violated labor law (due to its anti-union motive), I suspect that the Board sees this as a secondary and more speculative claim.

The most interesting issues here are tactical.  Why did the government decide to go after Boeing, a company that it usually showers with subsidies?  And why did it do so now, when the new plant is almost complete?  (As Boeing has noted, the company decided to move the plant 17 months ago.)

My guess it that the Board’s primary goal here is to send a signal that it intends to seriously investigate labor violations and that companies face real consequences for ignoring the law.  In particular, this move may help to compensate for federal labor law’s notoriously weak remedial regime, which ordinarily wouldn’t do much to dissuade a company like Boeing from blatant violations.  Moreover, the current political environment makes it harder for unions to enforce labor law by drawing on public support for workers.  The Board likely hopes that this move will force companies to take notice of labor law despite these enforcement challenges.

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