The NLRB’s Overreach

When I first read the WSJ editorial accusing the National Labor Relations Board of filing an unfair labor practice complaint against Boeing for deciding to build an aircraft assembly plan in South Carolina instead of Washington State, I was flabbergasted. According to the editorial, the NLRB filed the complaint because statements by Boeing executives suggested that one factor in the company’s decision to invest in South Carolina, and not further expand its Washington production facilities, was partially due to prior strikes and work stoppages. In sum. Boeing was to be penalized because it wanted to build a facility where it would be most profitable.

Surely the Journal‘s editorialists were hyperbolizing, I thought. Then I saw this Alex Tabarrok post, noting this AP story and, more significantly, the complaint. The WSJ did not exaggerate — at least not much. The Journal may have erred in saying the NLRB seeks to halt production of the SC plant — by my read, the complaint only seeks to force Boeing to operate an equivalent facility in Washington (a remedy that could have the same effect, to be sure) — but the WSJ‘s suggestion that the NLRB is seeking to punish Boeing for making an economically rational investment decision and “undercut” state right-to-work laws is dead on. It sends a message that if a company does not like the economic consequences of work stoppages — Boeing endured a 58-day strike in Washington in 2008 — they’re not allowed to take this into account when making investment decisions. And perhaps the unintended message to future Boeings is not to invest in non-right-to-work states in the first place.