THE BLOG
08/12/2011 02:58 pm ET Updated Oct 12, 2011

Can Big Companies Pick Which Laws to Obey?

A great line in the Disney pirate movie was where Geoffrey Rush (as Captain Barbossa) explained the Code of the Pirates this way, to Keira Knightley (as Elizabeth Swann),

"... the Code is more what you'd call 'guidelines' really, than actual rules."

He was a pirate, after all.

Citizens are expected to obey laws, and we all get nervous when laws are ignored or swept aside, particularly at the insistence of someone who is wealthy or powerful.

We are witnessing a case in point, in the recent investigation by the National Labor Relations Board (NLRB), which charges that Boeing threatened and intimidated its unionized workers in Washington State. The intimidation and punishment are well documented. Boeing executives repeatedly threatened to move assembly work for the new 787 airplane from Washington State to South Carolina, pointing to strikes over the years by the Machinists' union.

In labor law, this is a textbook example of "runaway shop." It is illegal. Workers' right to strike is protected by law, and employers cannot punish or threaten workers for exercising that right. The National Labor Relations Board has a duty to protect that right.

Boeing's threats to workers were consistent with a statewide campaign, pressuring elected officials, newspapers and other media, civic groups, and residents around Washington state. One state legislator was so fed up with pressure from Boeing that he introduced a bill saying lobbyists may not

"... threaten any legislator ... with the relocation of manufacturing jobs ... involving commercial airplane manufacturing, based upon the outcome of any pending or proposed legislation."

Since the NLRB complaint was announced, Boeing and its supporters have been exceptionally harsh and intense in their criticism.

Boeing, the financial press, and sympathetic elected officials in South Carolina brush aside the threats Boeing made to employees and elected officials. The real issue, they say, is that the NLRB finding prevents Boeing from moving work to South Carolina.

I've tried to follow this logic. I think it goes like this:

The only way to move work from Washington to South Carolina is to threaten workers. If you cannot threaten workers in Washington, then it's impossible to move work to South Carolina. Laws prohibiting such threats cannot seriously apply to us, so it's OK when we do it.

Something like that. ....

By the way, that mentality explains a lot about why the 787 program is 3 years late and billions over budget.

Normally in America, an employer must follow certain minimum legal standards of behavior. If I am filling a job opening, I cannot say, "Sorry, we don't hire Italians, or veterans, or older workers." If I'm renting an apartment, or operating a restaurant, or selling airline tickets, I must comply with certain minimal protections for those I'm dealing with.

In this case, Boeing threatened retaliation openly, repeatedly and persuasively. After the NLRB announcement, Boeing and political allies personally threatened the Acting General Counsel of the National Labor Relations Board (NLRB) -- the official who conducted the investigation. Then they threatened funding for the entire National Labor Relations Board. They they threatened to block any new appointments to the NLRB. Then they threatened the law itself, introducing legislation to forbid any enforcement similar to the case with Boeing. Political allies demanded that the NLRB officials turn over internal documents, and subject themselves to threatening intrusions from Congress.

What's remarkable, here, is that Boeing sees itself as the victim.

The proposed remedy is to move work back. The NLRB investigator knows that Boeing is already moving work back, and is currently building a new assembly line in the original factory. Every communication from the NLRB encourages the parties to negotiate a settlement, which is typical in these cases.

Let's be clear about the issue. Businesses all over America can move work to West Virginia, South Carolina, North Dakota or Eastern Washington, complying with zoning laws, environmental regulations, labor protections and other state and federal laws. Boeing recently raised the salary of its Legal Counsel to $3.7 million. He and his very capable staff could sort all this out AND respect labor law AND set an admirable standard for corporate citizenship. If they chose to.

As the stakes continue to rise, it's becoming clear that Boeing has no intention of settling the case, or ever complying with the law. They've said they expect to lose their case before the NLRB. Their goal is to re-write the law. They will use this case to assert a new right for employers to intimidate workers who strike. This would shift power away from workers on a scale similar to Ronald Reagan using scabs to break the Air Traffic Controllers' strike in 1981.

Karl Rove teaches us to attack your opponent's strength. Organized labor is strong in the public sector, and strong in Wisconsin, Ohio and Michigan. Attack it there. In the private sector, Boeing Machinists are among the most effective unions. Attack there.

So, what about laws protecting workers' right to strike? To Boeing and its allies, that protection is "more what you'd call a guideline, really." With globalization, plus scab replacement workers, plus legitimizing runaway shop, the right to strike would be a hollow shell.

At a broader level, we need to ask how Boeing sees its role in American life. Boeing CEO, Jim McNerney, co-chairs the President's Export Commission, with a goal of doubling exports in five years. This Commission is near the heart of whatever manufacturing strategy we will create as a country. It's worth asking whether Mr. McNerney sees himself as acting in the public interest in that role, or does he see public policy as his tool for pursuing his narrow self-interest as an industrialist?

A public servant would start by respecting the rule of law, and by acknowledging that workers, communities, and government are legitimate stakeholders in creating shared prosperity.