Friday October 31, 2014
BOARDROOM JOURNAL

Heads or Tails, the Union Wins

The National Labor Relations Board’s complaints may infringe on managements’ business judgment rights.

The National Labor Relations Board is supposed to be an independent arm of the U.S. government, appointed by the president and confirmed by the Senate, whose primary duty is to “forbid employers from interfering with employees in the exercise of rights to form a labor organization….” Its jurisdiction includes labor activity from Indian tribes to law firms to the largest companies involved in interstate commerce. Ergo, Boeing.

South Carolina Gov. Nikki Haley (left) and Attorney General Alan Wilson are sworn in before testifying at a hearing on an NLRB complaint against Boeing. (photo by Associated Press)

The agency last spring filed a complaint—since dropped—on behalf of the 31,000-member International Association of Machinists and Aerospace Workers, siding with the union. Boeing contested the charges on the grounds that opening up an assembly line in South Carolina, where it already had a facility, was in fact a business decision and not antilabor.

Lafe Solomon, NLRB acting general counsel, testified that he issued the complaint to encourage the company and union to reach a settlement. Yes, we know what kind of settlement he had in mind.

Where a company does business is a decision that managements make all the time—in the best interests of their shareholders. But, apparently, not unionized company management under the Obama administration NLRB.

Jeff Cunningham writes about leadership and business, boards and corporate governance. He is the founder of Directorship magazine and currently serves as managing director and senior advisor to NACD. Previously, he was president of the Internet venture firm CMGI, publisher of Forbes and managing partner of the U.K. private equity firm Schroders. He has served as an independent board chair or director of 10 public companies. The views expressed are his own.

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