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Flying Into the Future with Boeing: What Should Happen When Legitimate Business Decisions Collide with Union Discrimination
I. Introduction: The Complaint Against Boeing A political firestorm recently erupted in the news about the fate of a straightforward, commonplace administrative procedure. International flight-giant Boeing received a rash of media attention after its October 2009 decision to build a second $750 million production factory for its 787 Dreamliner, the worlds most fuel-efficient jet.1 The new factory was built and now operates in South Carolina, a right-to-work state; however, prior to its expansion decision, Boeing exclusively produced the 787 Dreamliner in an existing factory in Washington, a pro-union state.2 Because Boeings decision prevented union workers from automatically getting the new factory jobs, the International Association of Machinists and Aerospace Engineers (IAM), which has a strong presence in Boeings Washington facility, questioned Boeings motivation for not building the new factory near the old one.3 The IAM was concerned that Boeings decision to expand in South Carolina instead of Washington was done out of antiunion animus so that Boeing did not have to further deal with the IAM. 4 Because of its concerns about this potential anti-union discrimination, the IAM sued Boeing and sought an

Kathy Lohr, Union Workers Cry Foul over New S.C. Boeing Plant, NPR (June 9, 2011), http://www.npr.org/2011/06/09/137081954/union-workers-cry-foul-over-new-s-c-boeing-plant. 2 See infra note 22, 29; S.C. CODE ANN. 41-7-70(1) (2011) (demonstrating that South Carolina, like all right-to-work states, does not prohibit union organization; it simply does not force workers to join a union or pay union dues if the workers do not want to voluntarily join); WASH. REV. CODE ANN. 49.32.020 (West 2011) (stating in the Notes of Decisions that Washington permits closed shop agreements in which employers agree to only hire union members and employees must remain members of the union in order to retain their jobs). 3 See, e.g., James Rosen, Fight over Boeings S.C. Factory Erupts onto National Stage, MCCLATCHY NEWSPAPERS (June 12, 2011), http://www.mcclatchydc.com/2011/06/12/115652/fight-over-boeings-sc-factory.html (discussing the IAMs doubts about Boeings motivations in not expanding in Washington). 4 Dominic Gates, Boeing Re-Creating Local Plants in S.C., SEATTLE TIMES (Oct. 30, 2009, 1:13 PM), http://seattletimes.nwsource.com/html/boeingaerospace/2010156801_boeing29.html.

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order commanding the company to operate its second production facility in Washington with the IAM.5 After the complaint was filed, Boeings decision to locate its new facility in South Carolina captured the mind of the public because of the potential future effects it could have. Congress, the media, and the business sector were concerned about the implications for businesses who want to transfer their operations from pro-union to right-to-work states in order to cut operating costs.6 Because both Boeing and the IAM felt they had the law on their side, the five Board members of the National Labor Relations Board (N.L.R.B.) would likely have made the final administrative decision.7 In making this decision, the Board would have applied two primary labor law tenets: (1) Employers may not discriminate against unions and employees exercising their union rights enumerated by N.L.R.A. Section 7,8 but (2) Employers may make legitimate business decisions that negatively impact unions as long as the decisions are not made to encourage or discourage union membership.9 Although the complaint against Boeing was ultimately settled on December 7, 2011, without proceeding to formal judgment,10 this case demonstrates a recurring problem in labor

Complaint and Notice of Hearing at 13(a), The Boeing Co. and the Intl Assn of Machinists & Aerospace Workers Dist. Lodge 751, _____ N.L.R.B. _____, filed, No. 19-CA-32431 (N.L.R.B. Apr. 20, 2011), available at http://seattletimes.nwsource.com/ABPub/2011/04/20/2014824340.pdf. 6 See, e.g., Motion to Dismiss at Introduction, The Boeing Co. and the Intl Assn of Machinists & Aerospace Workers Dist. Lodge 751, ____ N.L.R.B. ____, filed, No. 19-CA-32431 (N.L.R.B. Apr. 20,2011), available at http://www.scribd.com/doc/57895591/Boeing-Motion-to-Dismiss (allowing the IAMs claim to prevail would effect a governmental intrusion into an American business not seen since Youngstown Sheet & Tube v. Sawyer, 343 U.S. 579.). 7 See infra notes 55-56 and accompanying text. The N.L.R.B. is an administrative agency in charge of enforcing the National Labor Relations Act (N.L.R.A.). 8 See infra Part III.B.1.a and III.B.2. 9 See infra Part III.B.1.b. 10 See Boeing Workers Approve Deal Expected to End Labor Disputes, FOXNEWS.COM (Dec. 8, 2011), http://www.foxnews.com/us/2011/12/08/boeing-workers-approve-deal-expected-to-end-labordisputes/?cmpid=cmty_email_Gigya_Boeing_Workers_Approve_Deal_Expected_to_End_Labor_Disputes.

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law cases what happens when these two rules are in direct conflict with each other? In other words, what happens (or what should consistently happen) when an employer takes an action designed to lower its business costs, but the lower business costs are a direct result of antiunion discrimination? As the Boeing case illustrates, this problem is not one easily resolved, and the inexorable recurring conflict between these rules requires a definitive approach to these types of situations. Therefore, in an effort to explain and resolve these inherent

inconsistencies, this article uses Boeing as a springboard to analyze the larger issue of what should happen when this problem inevitably reoccurs. This article lays out the facts culminating in Boeings expansion decision and the subsequent lawsuit.11 Next, it legally analyzes the alleged violations. After describing general jurisdiction and procedural information about unfair labor practices (ULPs), the article discusses the two ways an employer may violate N.L.R.A. Sections 8(a)(1) and 8(a)(3): through

comparatively slight discriminatory behavior or through inherently destructive behavior.12 The general rule is that an employers conduct only has a comparatively slight effect on employee rights.13 The employer is initially presumed to have made the decision due to antiunion discrimination;14 however, the employer may assert an affirmative defense to rebut the presumed ULP.15 This affirmative defense is simply that the employer committed the

comparatively slight act because it had a legitimate business purpose for doing so. 16 Many

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See infra Part II. See infra Part III.B. 13 See infra Part III.B.1. 14 The N.L.R.A. prohibits employer decisions made with anti-union animus. See infra Part III.B.1.a. 15 See infra Part III.B.1.b. 16 Id.

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times, this purpose is pure economics the employer was acting to protect its bottom line.17 If believed, the employer has not committed a ULP, and the Board will not craft a remedy to fix the alleged problem18. If the business purpose is found to be pretextual, and the true

motivation for the employers action is deemed to have been anti-union animus, the Board returns to its initial finding that the employer committed a ULP.19 In that case, the Board has broad authority to impose a remedy.20 Determining whether Boeings actions had a comparatively slight effect on employee rights or whether Boeing had a legitimate business purpose for expanding away from the IAM would have been difficult for the N.L.R.B. due to its inconsistent precedent.21 In some cases like this, the Board and the courts have required that the affirmative defense be the sole reason the employer acted the way it did; however, in others, the employer need only have acted predominantly for a non-discriminatory reason.22 The most factually similar cases indicate that Boeings decision to expand in South Carolina did have a comparatively slight effect on the IAMs rights;23 however, Boeings asserted purposes for expanding there lowering labor costs, increasing production capabilities, and meeting production schedules should be recognized by the Board as legitimate and effective affirmative defenses, and Boeing ultimately should not have been required to make restitution to the IAM for its business decision.24

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Id. Id. 19 Id. 20 Id. 21 Compare infra Part III.B.1.a.ii., with infra Part III.B.1.b.ii. 22 See infra Part III.B.1.b. 23 See infra Part III.B.1.a.ii. 24 See infra Part III.B.1.b.ii.

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Because Boeing should have had an affirmative defense to the comparatively slight charge, the only other way the N.L.R.B. could have found a ULP is by finding Boeings expansion decision to be inherently destructive of union employee rights. Accordingly, the General Counsel must have shown either that Boeings decision distinguished between striking and nonstriking workers, or that the decision made the union thinking the entire collective bargaining process would be futile in the future.25 When an employers conduct is ruled inherently destructive, the N.L.R.B. will conduct a balancing test between how destructive the employers behavior is of employee rights and the justification the employer asserts for acting that way. 26 In general, this balancing test is weighted heavily against the employer, and the N.L.R.B. therefore imposes a remedy to right the wrong.27 However, Boeings decision does not meet the inherently destructive criteria, and had the Board decided the case, it likely would not have found Boeings behavior to be inherently destructive of the IAMs rights.28 Ultimately, the Boeing case (and the inevitable future cases with similar facts) is most controversial when applying the comparatively slight prong of the ULP test due to the Boards inconsistent case precedent. Therefore, this article proposes a solution to more easily resolve future litigation. The N.L.R.B. simply needs to make an administrative rule that chooses one of its previous approaches: either legitimate business decisions should only be accepted as affirmative defenses when they are the sole reason an employer acted, or legitimate business decisions should be accepted as affirmative defenses when they are the predominant reason for an employers action.
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See infra Part III.B.2. Id. 27 Id. 28 Id.

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I believe that accepting this affirmative defense as the predominant reason for an employers action allows for more flexibility in making business decisions without running afoul of the N.L.R.A. In my mind, giving businesses this flexibility, especially in depressed economic times, is one way of ensuring future business stability and job production. Further, by engaging in this type of administrative rulemaking, the N.L.R.B. will partially restrict its own authority to impose whichever outcome the current political majority desires. Instead, it will have concrete guidelines it must stay within, but, at the same time, it retains latitude to continue engaging in the fact-intensive inquiries it always has. By following a more consistent administrative rule, the N.L.R.B. will become more consistent in its decisions and allow both employers and employees to more easily determine whether a ULP has been committed before undertaking the time and expense of litigation. II. The Boeing Expansion Decision: What Happened Then, and What is Happening Now Boeing is a Chicago-based aviation company with factories nationwide, but its main factory for producing its fuel-efficient 787 Dreamliner jets is in Washington, a pro-union state.29 The IAM has a strong presence in that Washington facility.30 Since 1977, the local IAM there has gone on strike 5 times, including most recently a 58-day walkout in 2009 that cost Boeing $1.8 billion in losses.31 Following that strike, Boeing entered into negotiations with the IAM to change the current collective bargaining agreement.32 Boeing firmly demanded 20 strike-free

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Lohr, supra note 1; Gates, supra note 4. The 787 is the fastest selling plane in aviation history, with a backorder log extending through 2020. Motion to Dismiss, supra note 6, at I.A.. 30 Gates, supra note 4. 31 Kendra Marr, South Carolina Boeing Factory Turns Sour for Obama, POLITICO.COM (Oct. 13, 2011, 8:42 PM), http://www.politico.com/news/stories/0911/64199.html; Big Labors Attack on Democracy, WASH. TIMES (May 3, 2011), http://www.washingtontimes.com/news/2011/may/3/big-labors-attack-on-democracy/; Motion to Dismiss, supra note 6, at I.B.; Complaint, supra note 5, at 5(d). 32 See Gates, supra note 4.

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years to start catching up with a backlog of over 800 outstanding orders for the 787s. 33 It told the IAM that if it did not receive this clause in the new collective bargaining agreement, it would seek another location for its expansion facility.34 The IAM was only willing to negotiate up to 11 strike-free years (through the year 2020).35 Since the parties could not come to terms, and since Boeings current collective bargaining agreement with the IAM allowed Boeing to locate work elsewhere, Boeing relocated its expansion plans.36 Boeing held a nationwide beauty contest among several states including Washington in order to decide where to locate a proposed second facility to produce the 787 Dreamliner jets.37 In October 2009, it ultimately selected to build the facility in South Carolina, a right-towork state, in part because a strike among assembly workers would not affect the employees in the South Carolina facility.38 Other factors in Boeings decision included the tax incentives

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Big Labors Attack on Democracy, supra note 30; Rosen, supra note 3; Gates, supra note 4. Dominic Gates, Machinists File Unfair Labor Charge Against Boeing over Charleston, SEATTLE TIMES (June 5, 2010, 8:35 AM), http://seattletimes.nwsource.com/html/businesstechnology/2012034258_boeing05.html. 35 Big Labors Attack on Democracy, supra note 30; Rosen, supra note 3; Gates, supra note 4. Labor law permits unions to waive their federally protected right to strike for set periods of time in negotiated agreements with firms. Rosen, supra note 3. 36 Lohr, supra note 1; Letter from Barry J. Kearney, Assoc. Gen. Counsel, N.L.R.B. Div. of Advice, to the N.L.R.B. Office of Gen. Counsel (Apr. 11, 2011) (2011 WL 6543311 at *2) (quoting the relevant current language of the collective bargaining agreement between the IAM and Boeing);.cf. Previous Collective Bargaining Agreement Between Boeing and the IAM at Section 21.7 (agreement valid from 9/2/02-9/1/05; current collective bargaining agreement is not available), available at http://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1244&context=blscontracts (last visited Mar. 9, 2012). This was a change from normal procedure Boeing was usually willing to do last minute deals with the IAM in most of the recent contract negotiations. Gates, supra note 4. 37 John Gillie, South Carolina Boeing Plant to Open Friday, NEWS TRIBUNE (June 8, 2011, 3:58 AM), http://www.thenewstribune.com/2011/06/08/1697176/south-carolina-boeing-plant-to.html. 38 Id.; see also Complaint, supra note 5, at 6, 7(a). Right-to-work states, also known as open shops, prohibit agreements between unions and employers that force employees to join a union as a condition of their employment. They do not prohibit union organization; they simply do not force workers to join a union or pay union dues if the workers do not want to join voluntarily. See supra note 2; Right to Work States, NATL RIGHT TO WORK LEGAL DEF. FOUND., INC., http://www.nrtw.org/rtws.htm (last visited Mar. 9, 2012); Open Shop Law & Legal Definition, USLEGAL.COM, http://definitions.uslegal.com/o/open-shop/ (last visited Mar. 9, 2012). Conversely, in closed shop states, employees are forced to join a union or pay union dues as a condition of their employment. See supra note 2; Closed Shop (Labor) Law & Legal Definition, USLEGAL.COM, http://definitions.uslegal.com/c/closed-shop-labor/ (last visited Mar. 9, 2012). Since South Carolina workers are

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provided to it by the state and its huge backorder log.39 South Carolina offered over $900 million in tax breaks in exchange for the influx of new jobs and the boost to its economy.40 Further, Boeing needed more production capacity than the Washington facilities were capable of in order to meet the overwhelming demand for the 787s.41 Claiming that Boeing built the plant in right-to-work South Carolina to retaliate against the Washington workers for previous strikes, the IAM filed a complaint with the N.L.R.B.42 It alleged that Boeings actions were inherently destructive of the employees N.L.R.A. Section 7 rights, and that Boeing was discriminating against the union in violation of N.L.R.A. Sections 8(a)(1) and 8(a)(3).43 The heart of the N.L.R.B. case [against Boeing] is that opening the South Carolina plant was done for purposes of intimidating the Washington employees from striking again or from being unduly aggressive in their wage demands. 44 Specifically, the IAM is concerned that if it engages in N.L.R.A.-protected Section 7 activities (i.e. striking), Boeing will
not forced to join a union, the union will have a harder time getting a foothold there, and non-union workers are not compelled to strike when the unionized workers do so like in closed shops. 39 Rosen, supra note 3. 40 Rosen, supra note 3. Boeings move was especially important for South Carolina because of the jobs the plant would bring to the state. In October 2009, South Carolinas unemployment rate was 11.9%, compared to a nationwide average of 10%. Compare Unemployment in the U.S., GOOGLE PUBLIC DATA EXPLORER, http://www.google.com/publicdata/explore?ds=z1ebjpgk2654c1_&met_y=unemployment_rate&idim=state:ST45 0000&fdim_y=seasonality:S&dl=en&hl=en&q=south+carolina+unemployment+rate (last visited Mar. 5, 2012) (hover cursor arrow over the unemployment rate line to see specific unemployment rates in South Carolina from January 1990 to the present), with id. (check box labeled United States on the left to have a second line appear showing nationwide unemployment rates contrasted with South Carolinas rates). Boeings new plant was projected to provide more than 1,000 production worker jobs and 2,800 engineering, management, sales, support, and administrative personnel jobs to the state. Lohr, supra note 1; Gates, supra note 4. 41 Lohr, supra note 1. Boeing had a long-term plan to produce ten planes per month in order to meet the backorder log, with seven planes being produced from the Washington facility and three being produced from the South Carolina facility. Big Labors Attack on Democracy, supra note 430; Rosen, supra note 3; David Kesmodel & Melanie Trottman, Boeing Union Presses Plant Relocation Issue, WALL ST. J. (Sept. 26, 2011, 10:01 AM), http://online.wsj.com/article/SB10001424052970204831304576594622547658168.html. Boeing already had 2,600 workers responsible for producing fuselage sections at two preexisting facilities in South Carolina when this started in 2009; the expansion plans involved Boeing adding several other units involved in different stages of production onto those preexisting plants. Gillie, supra note 36; Gates, supra note 4. 42 Complaint, supra note 5. 43 Id. at 7-10. 44 Rosen, supra note 3.

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expand production in South Carolina and lay off the newly-hired union workers in Washington.45 The IAM was particularly convinced of this for two reasons. First, as revealed through internal company documents, Boeing considered South Carolina its highest risk option when deciding between the new potential plant locations.46 The documents indicated that the decision to expand in South Carolina was only made to avoid future labor problems with the IAM, especially future strikes and the resulting loss of revenue; specifically, Boeing hoped that relocating would help rebalanc*e+ an unbalanced and uncompetitive labor relationship.47 Moreover, the startup costs associated with building the new facility in South Carolina significantly exceeded the costs of simply adding capacity at Boeings Washington facility.48 Second, the IAM was also concerned about Boeings motivation because of some remarks made to the media by top Boeing executives.49 Boeing officials openly acknowledged that dealing with the strikes and the union was a major reason they chose to build the new plant in a right-to-work state.50 In fact, the chief executive of Boeing told The Seattle Times,

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Id. While the complaint was still pending, Boeing went ahead with its expansion plans, building and opening the new plant in South Carolina. Tim Devaney, Boeing Opens $750 Million Plant in South Carolina, WASH. TIMES (June 10, 2011), http://www.washingtontimes.com/news/2011/jun/10/boeing-opens-750-million-plant-south-carolina/. Since opening the new plant, Boeing has added at least 2,000 to 5,000 jobs at the Washington facility as well. Gillie, supra note 36; Lohr, supra note 1. 46 Kesmodel & Trottman, supra note 40. 47 Kesmodel & Trottman, supra note 40; Complaint, supra note 5, at 6(b); Steven Greenhouse, Labor Board Tells Boeing New Factory Breaks Law, N.Y. TIMES (Apr. 20, 2011), http://www.nytimes.com/2011/04/21/business/21boeing.html?_r=2. 48 Kesmodel & Trottman, supra note 40. 49 See, e.g., Complaint, supra note 5, at 6(a), (c), (d), (e). 50 Interview by Margaret Warner, PBS News Hour, with Steven Greenhouse, writer for The N.Y. Times (June 17, 2011), transcript available at http://www.pbs.org/newshour/bb/business/jan-june11/boeingjobs_06-17.html.

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The overriding factor was not the business climate ... [or] the wages were paying today. It was that we cannot afford to have a work stoppage every three years.51 Conversely, Boeing claimed it was not retaliating against the IAM, instead saying it made the decision because of legally protected business factors such as ensuring future competitiveness, meeting production deadlines, and avoiding production disruptions.52 Boeings main goals for expanding in South Carolina were to improve cost-competitiveness, meet customer demand by filling its backorders, and regain its reputation among its customers.53 The lower labor costs in South Carolina further incentivized Boeing to make the decision it did.54 Moreover, Boeing pointed out that it should not have been surprising or noteworthy that a new site in South Carolina required bigger up-front investments and some degree of risk any new expansion of a business entails both of these things, regardless of the location of the expansion.55 Both sides presented strong arguments, but Boeings defense stirred up enough controversy that Congress, the media, and the N.L.R.B. regional director stepped into the fray. 56 Republicans and Democrats in both Houses of Congress were sharply divided over this case

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Greenhouse, supra note 46; Marr, supra note 30. Kesmodel & Trottman, supra note 40; Motion to Dismiss, supra note 6; Rosen, supra note 3. 53 Id.; Boeings customers have said that the delays caused by the last IAM strike were catastrophic to their businesses, and if there was a risk of further strikes, they may not buy Boeing products again. Dominic Gates, Boeings Top Customer Predicts Big Production Cuts, SEATTLE TIMES (Feb. 6, 2009, 2:00 PM), http://seattletimes.nwsource.com/html/businesstechnology/2008715220_webhazy06.html. 54 Interview with Steven Greenhouse, supra note 49; Steven Greenhouse, House is Expected to Pass Bill Aiding New Boeing Plant, N.Y. TIMES (Sept. 14, 2011), http://www.nytimes.com/2011/09/15/business/boeing-plant-isexpected-to-get-lift-from-house.html?_r=2. 55 Kesmodel & Trottman, supra note 40. 56 For example, Sen. Jim DeMint (R-SC) criticized the N.L.R.B. complaint against Boeing as being a payoff for the IAMs $1.9 million in political contributions to Democratic candidates in 2009 and 2010. Gillie, supra note 36.

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because neither party was clearly in the right.57 Richard Ahearn, the N.L.R.B. regional director investigating the complaint, said that if Boeing had moved existing work away from Washington, rather than placing new work in South Carolina, it would have been an easier case for the IAM to argue.58 As it was though, Ahearn could not point to a bright line rule making clear this was either anti-union retaliation or a legitimate business decision.59 Many

Republicans and almost every major business group heavily supported Boeing and its right to expand in a right-to-work state, instead of being forced to only operate in a pro-union state.60 On the other hand, Democrats strongly opposed Boeings expansion plan decision.61 For example, House Minority Leader Nancy Pelosi and others called for the South Carolina plant to be shut down and forcibly relocated to Washington.62 Ultimately, the dispute between Boeing and the IAM was settled on December 7, 2011.63 The IAM voted overwhelmingly to accept a proposed four-year contract extension promising to build an updated version of Boeings popular 737 Max in Washington. 64 In exchange for this concession from Boeing, the IAM agreed to drop the ULP charges filed with

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See, e.g., infra notes 43-44 and accompanying text; James Rosen, Labor Agency-GOP Dispute over S.C. Boeing Plant Escalates, MCCLATCHY NEWSPAPERS (Apr. 19, 2011), http://www.mcclatchydc.com/2011/08/19/121360/laboragency-gop-dispute-over.html (stating the dispute between Rep. Darrell Issa (R-CA) and N.L.R.B. Acting-General Counsel Lafe Solomon was notable even compared to the ordinary acid partisan discourse in Washington). 58 Gates, supra note 52. 59 Id. 60 Rosen, supra note 3; Rosen, supra note 56; Sam Hananel, Boeing, NLRB Case Faces House Vote, HUFFINGTON POST (Sept. 15, 2011, 5:27 PM), http://www.huffingtonpost.com/2011/09/15/house-nlrb-boeing-case_n_963802.html; see also Greenhouse, supra note 53. 61 See, e.g., Jason Pye, Pelosi: Shut Down Boeing in South Carolina, UNITED LIBERTY (Nov. 2, 2011, 12:08 PM), http://www.unitedliberty.org/articles/9005-pelosi-shut-down-boeing-in-south-carolina. 62 Jason Pye, Pelosi: Shut Down Boeing in South Carolina, UNITED LIBERTY (Nov. 2, 2011, 12:08 PM), http://www.unitedliberty.org/articles/9005-pelosi-shut-down-boeing-in-south-carolinaId.; see also Greenhouse, supra note 53. 63 See Boeing Workers Approve Deal Expected to End Labor Disputes, supra note 10. 64 Id. In July 2011, Boeing had announced it was looking at other locations to build a new plant for the 737s, similar to the controversial decision in question to expand in South Carolina. Id.

Formatted: Font: 10 pt, Italic

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the N.L.R.B.65 Although the two sides are satisfied with the new agreement,66 many people and businesses are left with the question, What if?. What if the N.L.R.B. had been forced to make a final decision on the case how would it have decided? More importantly, how will the N.L.R.B. decide similar cases in the future? Filing the complaint against Boeing was the most controversial thing the NLRB has done in two or three decades. 67 The subsequent sections of this article examine the reasons behind the controversy, the likely possible outcomes had this case proceeded to trial, and a suggestion for how to resolve similar conflicts in the future. III. Looking to the Past to Determine the Hypothetical Outcome of a Decision in Boeing A.) Unfair Labor Practices: Jurisdiction, Procedure, and Background of the N.L.R.A. When a union thinks an employer has committed a ULP, it may file with the Regional Office of the N.L.R.B.68 This initial filing triggers a preliminary investigation by the Regional Office in which it will take depositions and interrogatories and decide whether or not to make a formal complaint against the employer.69 If the Regional Office finds the unions allegations meritorious, it will issue a ULP complaint.70 The N.L.R.B. will try to settle the complaint informally, but if a settlement cannot be reached, its General Counsel will prosecute the case in
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After Contentious Labor Dispute, Machinists Union Reaches Tentative Deal with Boeing, FoxNews.com (Nov. 30, 2011), http://www.foxnews.com/politics/2011/11/30/after-contentious-labor-dispute-machinists-union-reachestentative-dealwith/?cmpid=cmty_email_Gigya_After_Contentious_Labor_Dispute%2C_Machinists_Union_Reaches_Tentative_D eal_With_Boeing. The lawsuit against Boeing was filed by the N.L.R.B. at the behest of the IAM, so if the IAM no longer has a dispute with Boeing, the Board is unlikely to pursue the case. Id. 66 See Boeing Workers Approve Deal Expected to End Labor Disputes, supra note 10. 67 After Contentious Labor Dispute, Machinists Union Reaches Tentative Deal with Boeing, supra note 65.Id. 68 29 U.S.C. 160(b). Any party (employee, union, or employer) can file with the Regional Office, but because the Boeing case involved a union filing against the employer, I will only discuss the rules in this light. 69 Id. 70 Many labor law scholars were puzzled both by the level of interest this case generated and by Congresss (and the publics) premature and conclusory mindsets regarding what an appropriate remedy should have been, especially since there was no formal decision on the merits. See, e.g., Mark Barenberg et al., Labor Rights, Under Republican Attack, N.Y. TIMES (Oct. 13, 2011), http://www.nytimes.com/2011/10/13/opinion/labor-rights-underrepublican-attack.html?_r=3; Jeffrey Hirsch, Boeing and the NLRB, NEWSOBSERVER.COM (Oct. 3, 2011, 4:32 AM), http://www.newsobserver.com/2011/10/03/1529972/boeing-and-the-nlrb.html#ixzz1ZkH6V2mc.

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front of an Administrative Law Judge (ALJ) within the N.L.R.B.71 The ALJ will then issue an order stating the findings of fact and either dismissing the complaint (if no ULP is found) or ordering cessation of the N.L.R.A. violations (if a ULP is found).72 ALJ decisions may be appealed to the N.L.R.B.s Board in Washington, D.C.73 When an appeal comes before the Board, either a three-person panel or the full five-person Board will decide the appeal.74 Interestingly, the Board is not bound by its own precedent so long as it explains why it is departing from its previous decisions. 75 Full Board decisions can be appealed to the Federal Courts of Appeals.76 Although federal courts generally give deference to the Boards findings of fact, their primary duties are to enforce the N.L.R.A. and ensure the Board is not simply concerned with policy or establishing per se violations in specific types of cases.77 This is because the N.L.R.A. prohibits unfair labor practices, not evil intent as a whole, and the courts must confine themselves to the statutory violations.78 Congress specifically enumerated which behaviors are

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What We Do, NATL LABOR REL. BD., https://www.nlrb.gov/what-we-do (last visited Jan. 26, 2012). 29 U.S.C. 160(c). 73 Decide Cases, NATL LABOR REL. BD., https://www.nlrb.gov/what-we-do/decide-cases (last visited Jan. 26, 2012). 74 Id. 75 Unfair Labor Practice, WIKIPEDIA.ORG, http://en.wikipedia.org/wiki/Unfair_labor_practice (last visited Jan. 26, 2012). Cf. Hinson v. Natl Transp. Safety Bd., 57 F.3d 1144, 1149-50 (D.C. Cir. 1995) (stating an administrative agency, such as the N.L.R.B., is not irrevocably bound to its own precedents, so long as it gives a reasoned explanation for its departure.). 76 29 U.S.C. 160(f) (employer may file to appeal the N.L.R.B.s decision); see also 29 U.S.C. 160(e) (N.L.R.B. can file for enforcement of its own order if employer fails to comply with it). The Circuit Court with jurisdiction over the action is either: (1) the Court of Appeals for the District of Columbia, (2) the Court of Appeals where the company is located, or (3) the Court of Appeals where the ULP occurred. See, e.g., 29 U.S.C. 160(e). 77 N.L.R.B. v. Miranda Fuel Co., 326 F.2d 172, 177 (2d Cir. 1963). 78 51A C.J.S. Labor Relations 508 (2011) (citing Selby-Battersby & Co. v. N.L.R.B., 259 F.2d 151 (4th Cir. 1958); N.L.R.B. v. Mueller Brass Co., 509 F.2d 704 (5th Cir. 1975)).

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ULPs in the N.L.R.A.; the term unfair labor practice is not a term of art that has independent significance transcendent of the statutory definition.79 The Boeing case specifically implicated three potential ULPs previously identified by the N.L.R.A.: relocations (runaway shops), complete shutdowns, and partial closings. Two

distinct lines of cases have developed from these three potential ULPs.80 One line of cases clearly demonstrates that the N.L.R.A. prohibits employers restraint of an employees Section 7 rights, including the employees right to join a union or engage in concerted activities for the purpose of collective bargaining.81 This line of cases prohibits discrimination for the purpose of encouraging or discouraging union membership.82 In contrast, a second line of cases allows for employers to make legitimate business decisions, even if they negatively impact a union, so long as the decision is not made for discriminatory purposes.83 These two case lines are discussed in more depth in the subsequent section.84 B.) Violations of N.L.R.A. Sections 8(a)(1) and 8(a)(3) that Result in ULPs N.L.R.A. Section 8(a)(1)85 was broadly designed to prohibit employers from interfer*ing+ with, restrain[ing], or coerc[ing] employees in the exercise of [their Section 7] rights.86 For example, Section 8(a)(1) proscribes interrogating any employees interested in forming a union
79 80

Id. See infra Parts III.B.1.a and III.B.1.b for an in-depth discussion of these case lines. 81 N.L.R.A. Section 7 rights have been codified in 29 U.S.C. 157. See also, e.g., S. Tours, Inc. v. N.L.R.B., 401 F.2d 629, 631 (5th Cir. 1968) (listing ways to violate Section 7 rights under N.L.R.A. Section 8(a)(1), including interrogating employees about union activities, promising pay raises conditioned on withdrawing from the union, correcting employer grievances against employees to induce union withdrawal, creating the impression of surveillance of union activities, or threatening to eliminate work or furlough or fire employees if a union is brought in). 82 See, e.g., B.G. Costich & Sons, Inc. v. N.L.R.B., 613 F.2d 450, 454 (2d Cir. 1980) (recognizing that encouraging or discouraging union membership by means of discrimination is clearly a ULP under N.L.R.A. Section 8(a)(3)). 83 See, e.g., N.L.R.B. v. Bausch & Lomb, Inc., 526 F.2d 817, 821 (2d Cir. 1975). 84 See infra Part III.B. 85 N.L.R.A. Section 8(a)(1) has been codified in 29 U.S.C. 158(a)(1). 86 29 U.S.C. 158; Russell-Newman Mfg. Co. v. N.L.R.B., 406 F.2d 1280, 1281 (5th Cir. 1969).

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about their organizing activities.87 An employers action violates this section (thus becoming a ULP) only when the interference with the employees rights outweighs any business justification for the action.88 Furthermore, violating this section presupposes an act that is unlawful even absent discriminatory motive.89 Since the IAM alleged Boeing violated this section of the N.L.R.A., it is specifically relevant to note that while poor or questionable employer decisions may be so peculiarly matters of management prerogative that they do not violate Section 8(a)(1), those same decisions may still be ULPs if they violate Section 8(a)(3).90 N.L.R.A. Section 8(a)(3)91 makes it a ULP for an employer to discriminate in a way that encourage*s+ or discourage*s+ membership in any labor organization,92 including firings based solely on union activities,93 partial plant closings,94 or plant relocations.95 Inherent

encouragement or discouragement of union membership occurs when an employers conduct has an immediate, realizable impact on an employees rights.96 However, Section 8(a)(3) also generally requires an unlawful intent, so [i]t has long been established that a finding of violation under [Section 8(a)(3)] will normally turn on the employers motivation.97

87 88

See, e.g., Singer Co. v. N.L.R.B., 429 F.2d 172, 176 (8th Cir. 1970). Textile Workers Union of Am. v. Darlington Mfg. Co., 380 U.S. 263, 269 (1965). 89 Id.; Robertshaw Controls Co., Acro Div. v. N.L.R.B., 386 F.2d 377, 384 (4th Cir. 1967). This is opposed to violations of Section 8(a)(3), which require an anti-union discriminatory intent. See infra note 89-94 and accompanying text. While employers words alone can violate Section 8(a)(1), the words must contain an explicit or implicit threat or coercion; anti-union animus, extreme annoyance with the union, or unfortunate word choices are not enough to constitute a ULP. Id. 90 Darlington, 380 U.S. at 269. 91 N.L.R.A. Section 8(a)(3) has been codified in 29 U.S.C. 158(a)(3). 92 29 U.S.C. 158(a)(3); see also Russell-Newman Mfg. Co., 406 F.2d at 1282; B.G. Costich & Sons, 613 F.2d at 454. 93 See, e.g., S. Tours, Inc. v. N.L.R.B., 401 F.2d 629, 632-33 (5th Cir. 1968). 94 See, e.g., Darlington, 380 U.S. at 268. 95 See id. at 272-73. 96 B.G. Costich & Sons, Inc. v. N.L.R.B., 613 F.2d 450, 456 (2d Cir. 1980). 97 Am. Ship Bldg. Co. v. N.L.R.B., 380 U.S. 300, 311 (1965).

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There is considerable overlap between Sections 8(a)(1) and 8(a)(3). The guarantees of Section 8(a)(3) are more specific than Section 8(a)(1), but employer actions can easily and conceivably violate both sections.98 For example, discriminatory employer hiring policies (such as hiring only those employees who do not support unionization) violate the specific guarantees of Section 8(a)(3) but also more broadly implicate Section 8(a)(1)s prohibition against interference with Section 7 rights.99 Since the two sections are so similar, the crux of a violation of Sections 8(a)(1) or 8(a)(3) is usually the true purpose or real motive of the employers discriminatory action.100 The Supreme Court divided Section 8(a)(3) violations into two categories. Some

employer actions may have a comparatively slight effect on employee rights, and an employer may submit evidence of a legitimate and substantial business justification*+ for its action to exonerate itself.101 Other employer actions are so inherently destructive of

employee interests that they carry with them a strong inference of impermissible motive. 102 These two categories are meant to be comprehensive there is no middle ground between the two.103 *C+omparatively slight simply means less than inherently destructive. 104 Characterizing an employers actions as either comparatively slight or inherently destructive is critical in considering Section 8(a)(3) violations because it determines which
98

See, e.g., Intl Bhd. of Boilermakers, Local 88 v. N.L.R.B., 858 F.2d 756, n.1 (D.C. Cir. 1988) (The Supreme Court made it clear that the analysis of [N.L.R.B. v. Great Dane Trailers, Inc., 388, U.S. 26, 32-33 (1967)] is equally applicable to section 8(a)(1) [as it is to section 8(a)(3)], and that both sections should be considered together under that analysis.). 99 N.L.R.B. v. Bausch & Lomb, Inc., 526 F.2d 817, 823 (2d Cir. 1975). 100 Pittsburgh-Des Moines Steel Co. v. N.L.R.B., 284 F.2d 74, 77 (1960) (citing N.L.R.B. v. Jones & Laughlin Steel Corp., 301 U.S. 1, 45-46 (1937)). 101 Metro. Edison Co. v. N.L.R.B., 460 U.S. 693, 701 (1983). 102 Id. (quoting N.L.R.B. v. Great Dane Trailers, Inc., 388 U.S. 26, 33 (1967)) (internal citations and quotation marks omitted). 103 Intl Bhd. of Boilermakers, 858 F.2d at 761-62. 104 Id. at 762.

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party has the burden of proof.105 Actions that have only a comparatively slight effect on employee rights are prima facie lawful as long as an employer shows a legitimate business purpose for its action.106 At that point, the General Counsel must affirmatively prove the employers discriminatory motivation.107 On the other hand, if the employers actions are inherently destructive, unlawful motivation is presumed to exist, and the Boards General Counsel does not need to prove discriminatory motivation.108 Although the employer may try to justify its inherently destructive conduct, the burden on the employer at that point is heavy if not impossible to meet.109 Inherently destructive conduct is the exception to the rule though; most of the time, the General Counsel needs to show that the employer intended to discriminate against the union.110 As such, this paper turns to the general, comparatively slight rule first. 1.) The General Rule: Comparatively Slight Employer Behavior and How to Rebut It The IAMs efforts likely would have been best spent arguing Boeings behavior had a comparatively slight effect on its rights; indeed, this area of law had the potential to make or break the case against Boeing because of an inherent conflict between two lines of comparatively slight cases. On one hand, Boeing and other employers cannot discriminate against unions.111 On the other hand, Boeing and other employers can make nondiscriminatory

105 106

Kan. City Power & Light Co. v. N.L.R.B., 641 F.2d 553, 557-59 (8th Cir. 1981). Id. at 558-59; Great Dane, 388 U.S. at 34. 107 Id.; Kan. City Power & Light, 641 F.2d at 558-59. 108 Loomis Courier Serv., Inc. v. N.L.R.B., 595 F.2d 491, 495 (quoting W. Exterminator Co. v. N.L.R.B., 565 F.2d 1114, 1118 n.3 (9th Cir. 1977)); Kan. City Power & Light, 641 F.2d at 558; N.L.R.B. v. Brown, 380 U.S. 278, 287 (1965); N.L.R.B. v. Great Dane Trailers, Inc., 388, U.S. 26, 34 (1967). 109 Intl Paper Co. v. N.L.R.B., 115 F.3d 1045, 1048 (D.C. Cir. 1997) (quoting Intl Bhd. of Boilermakers, Local 88 v. N.L.R.B., 858 F.2d 756, 763 (D.C. Cir. 1988)). 110 Compare infra note 185, with infra notes 258-60 and accompanying text. 111 See infra Part III.B.1.a.

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legitimate business decisions negatively impacting the union.112 Boeing claimed it expanded in South Carolina to lower labor costs costs it said were elevated due to dealing with the IAM.113 Therefore, Boeing made a legitimate business decision to maximize production efficiency, meet customer demands, and lower labor costs; however, it allegedly made its decision due to antiunion animus, thereby discriminating against the IAM. This section explores the two cases lines and attempts to explain how the N.L.R.B. should have ruled on this case. a. Employers cannot discriminatorily restrict employees Section 7 rights. Employer actions negatively impacting workers can often be seen as discriminatory.114 For example, if an employer fires an employee for joining a union, the firing discriminates against workers exercising their Section 7 rights.115 Similarly, if an employer fires an employee for habitual tardiness, the firing discriminates against workers who do not show up on time. 116 Therefore, employer actions can discriminate against workers for an anti-union purpose or for a more benign purpose. However, only the former is prohibited by the N.L.R.A. 117 With respect to N.L.R.A.-prohibited actions, [t]he crux of a violation of Section 8(a)(1) or (3) is the true purpose or real motive of the employer in taking the action complained of. 118 As evidenced by the legislative history of the N.L.R.A., Congress intended the employers

112 113

See infra Part III.B.1.b. See Interview with Steven Greenhouse, supra note 49; Greenhouse, supra note 46 (*A+ Boeing executive said, The overriding factor *for making the decision to move to South Carolina+ was that we cannot afford to have a work stoppage every three years because the last one cost the company $1.8 billion dollars). 114 Cf. N.L.R.B. v. Richards, 265 F.2d 855, 860 (3d Cir. 1959) (When an employer lays off some employees while retaining others , he is acting discriminatively.). 115 Cf. id. 116 Cf. id. 117 See Allied Indus. Workers, Local 289 v. N.L.R.B., 476 F.2d 868 (D.C. Cir. 1973) (A practice applied uniformly to all employees may be discriminatory and violate the [N.L.R.A.] just as a discriminatory practice may be held to be perfectly innocuous.) (citations omitted); Richards, 265 F.2d at 860. 118 Pittsburgh-Des Moines Steel Co. v. N.L.R.B., 284 F.2d 74, 77 (9th Cir. 1960) (citations omitted).

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discriminatory purpose to be controlling.119

Anytime an employer has an anti-union purpose,

and its action is not deemed inherently destructive, there may still be a Section 8(a)(3) violation because the effect is comparatively slight.120 In the Boeing case, the facts will remain disputed since the case never proceeded to final judgment, but the IAM claimed that Boeings expansion in South Carolina was done out of anti-union animus.121 Boeings actions would likely not have been deemed inherently destructive,122 so the IAM would have had to argue that they were comparatively slight, thus still constituting a Section 8(a)(3) violation. i. An Overview of Comparatively Slight Employer Behavior As previously discussed, an employers conduct normally violates Section 8(a)(3) when it is motivated by anti-union animus and when it has the proximate and predictable result of discouraging or encouraging union membership.123 In order to make out a Section 8(a)(3) violation, the union must prove by a preponderance that the employees protected Section 7 activities motivated the employers conduct.124 The General Counsel need only show the

119

N.L.R.B. v. Brown, 380 U.S. 278, 287 (1965); Clear Pine Mouldings, Inc. v. N.L.R.B., 632 F.2d 721, 726 (9th Cir. 1980). 120 Intl Bhd. of Boilermakers, Local 88 v. N.L.R.B., 858 F.2d 756, 761-62 (D.C. Cir. 1988). But see infra Part III.B.1.b for a discussion of an affirmative defense to comparatively slight actions. 121 See, e.g., Complaint, supra note 5, at 6. 122 See infra Part III.B.2 for a discussion of why Boeings actions were likely not inherently destructive. 123 See supra note 89-93 and accompanying text; N.L.R.B. v. Del E. Webb Constr. Co., 196 F.2d 702, 706 (8th Cir. 1952); Goldtex, Inc. v. N.L.R.B., 14 F.3d 1008, 1011 (4th Cir. 1994); Conoco, Inc. v. N.L.R.B., 740 F.2d 811, 813 (10th Cir. 1984) (While not all employer actions which might have the effect of discouraging union membership are illegal, actions that are motivated by anti-union animus are illegal.) (citing Metro. Edison Co. v. N.L.R.B., 460 U.S. 693 (1983)). An action discourages union membership if the action would not have been taken absent the union activity. N.L.R.B. v. Wis. Aluminum Foundry Co., 440 F.2d 393, 402 (7th Cir. 1971). 124 Temp-Masters, Inc. v. N.L.R.B., 460 F.3d 684, 689 (6th Cir. 2006); see also N.L.R.B. v. Red Top Cab & Baggage Co., 383 F.2d 547, 553 (5th Cir. 1967) (*A+ discriminatory act on the part of the employer is not in itself unlawful unless intended to prejudice an employees position because of his union activity, i.e., some element of antiunion animus is necessary.). Courts have found circumstantial evidence alone sufficient to create an inference of the employers anti-union animus. See, e.g., Ky. Gen., Inc. v. N.L.R.B., 177 F.3d 430, 436 (6th Cir. 1999).

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employers actions would drive a reasonable employees decision on whether to become a union member or not.125 In making his decision, the ALJ must weigh the employers and employees interests in the disputed action.126 Even when the General Counsel presents a prima facie case of antiunion discrimination, the employer is given an opportunity to rebut the evidence against it by presenting a legitimate business reason for its decision.127 The employer must prove that the true reason for its decision was the legitimate business reason and not the anti-union purpose put forth by the General Counsel.128 If the employers purported business reason is found to be disingenuous, there is nothing left to balance against the impermissible motive, and the N.L.R.B. does not have to further analyze whether *the employer+ would have taken the same action in the absence of union activity.129 Instead, once the legitimate business reason put forth is discredited, a ULP has occurred in violation of Sections 8(a)(1) and 8(a)(3).130 While weighing the employers and employees interests in the disputed action, the ALJ may infer anti-union motivation by considering several factors, such as:

125

Wyman-Gordon Co. v. N.L.R.B., 654 F.2d 134, 145 (1st Cir. 1981). See also infra note 181 for a fuller discussion of the burden-shifting analysis the ALJ will engage in when considering ULPs. 126 Soule Glass & Glazing Co. v. N.L.R.B., 652 F.2d 1055, 1077 (1st Cir. 1981), abrogated on other grounds by N.L.R.B. v. Curtin Matheson Scientific, Inc., 494 U.S. 775 (1990). 127 Goldtex, 14 F.3d at 1013; infra Part III.B.1.b. 128 See infra Part III.B.1.b for more information about this. 129 Temp-Masters, 460 F.3d at 693; see also N.L.R.B. v. Erie Resistor Corp., 373 U.S. 221, 227 (1963) (When specific evidence of a subjective intent to discriminate or discourage union membership is shown, and found, *s+uch proof itself is normally sufficient to destroy the employers claim of a legitimate business purpose and provides strong support to finding that there is interference with union rights or that union membership will be discouraged. Conduct which on its face appears to serve legitimate business ends in these cases is wholly impeached by the showing of an intent to encroach upon protected rights. The employers claim of legitimacy is totally dispelled.) (internal citations omitted). 130 See Temp-Masters, 460 F.3d at 693.

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(1) The employers expressed enmity towards the union, including any prior history of opposition or hostility toward the union, combined with its knowledge about the unions ongoing activities;131 (2) The proximity in time between the unions activities and the employers action;132 (3) Any inconsistencies between the offered justification for the employers action and any other actions taken by the employer;133 (4) Any deviation by the employer from past practices in bargaining or implementing decisions; and134 (5) Whether the employers decision demonstrates future special rewards for employees who refrain from striking.135 Regarding these factors, an employer does not have to completely eradicate the union before a ULP can be found. For example, in Nachman Corp. v. N.L.R.B., the court held an employers discriminatory motive was not disproven by evidence that all union adherents were not weeded out.136 The more factors that are present, the more readily the Board or the court will find a ULP.137 With respect to the Boeing case, raising an initial inference of anti-union motivation should have been relatively straightforward. Each of the five factors above weighed in favor of an initial finding that Boeing had an anti-union motivation against the IAM. Boeing made several statements to the media regarding taking the union and its frequent strikes into account when making the decision to expand in South Carolina.138 Further, Boeings decision to

131 132

Id. at 689; New Eng. Web, 309 F.2d 696, 701 (1st Cir. 1962). Temp-Masters, 460 F.3d at 689. 133 Id. 134 Id. 135 Soule Glass, 652 F.2d at 1077. 136 Nachman Corp. v. N.L.R.B., 337 F.2d 421, 424 (7th Cir. 1964). Similarly, in N.L.R.B. v. Nabors, the court held an employer retaining some union employees while firing others due to anti-union animus did not exculpate itself from a ULP with respect to the fired employees. N.L.R.B. v. Nabors, 196 F.2d 272, 276 (5th Cir. 1952). 137 Cf. Thompson Transport Co., 165 N.L.R.B. 746, 747 (1967); Jays Foods, Inc. v. N.L.R.B., 573 F.2d 438, 445 (7th Cir. 1978) (In view of *the employers+ campaign to prevent its truckdrivers from joining the Teamsters union coupled with the fact that [the employer] was satisfied with performing its own trucking operation until a time almost simultaneous with the truckdrivers union activity, the Board could reasonably conclude that *the employers+ decision to contract to Nielsen was motivated at least in part by antiunion considerations.) (emphasis added). 138 Complaint, supra note 5, at 6; supra notes 37, 46, 48-50 and accompanying text.

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expand in South Carolina was made less than a year after the most recent IAM strike. 139 Even though Boeing bargained with the IAM to build the expansion plant in Washington, Boeing was allegedly unreceptive to a last-minute deal with the IAM, which was apparently a change in the normal bargaining procedures between the two groups.140 Lastly, the IAM argued that Boeings action will discourage union members from exercising their Section 7 rights in the future, with the inference being that the employees in South Carolina are receiving extra benefits because they refrained from unionizing or striking.141 Because Boeings actions supported an initial finding of comparatively slight behavior through anti-union animus, it would have needed to show the true reason for making its decision to expand in South Carolina was based on a legitimate business purpose.142 As a final point, each rule and factor above is a mere application of the common law rule that a man is held to intend the foreseeable consequences of his conduct.143 Therefore, the ultimate question in Boeing was how foreseeable it was that building its new plant in South Carolina would discourage union membership and the exercise of union rights. The subsequent section analyzes cases more factually similar to Boeing in order to better predict how the present case would have turned out had it not been settled prior to formal judgment.

139

Compare Complaint, supra note 5, at 5(c), (d), with id. at 7(a); see also supra Part II. One year seems to be a relatively small amount of time between the IAMs activities and Boeings decision to expand in South Carolina; however, most of the time, the period of time between the union activities and the employers decision is considerably shorter. See, e.g., N.L.R.B. v. Kelly & Picerne, Inc., 298 F.2d 895 (1st Cir. 1962) (4 days); N.L.R.B. v. Brown-Dunkin Co., 287 F.2d 17 (10th Cir. 1961) (3 weeks); Jays Foods, Inc. v. N.L.R.B., 573 F.2d 438 (7th Cir. 1978) (1 month and 2 months for each of the respective charges); Metromedia, Inc., 182 N.L.R.B. 202 (1970) (1 month). 140 See supra note 35; Gates, supra note 4. 141 See supra notes 43-44 and accompanying text. 142 See infra Part III.B.1.b for a discussion of how this may have been presented and decided. 143 N.L.R.B. v. Richards, 265 F.2d 855, 860 (3d Cir. 1959) (citing Radio Officers Union v. N.L.R.B., 347 U.S. 17, 45 (1954)).

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ii. The Relocation Cases144 Comparatively Slight As Applied to Boeing An employers partial discontinuance or change of business operations may be a ULP if motivated by anti-union considerations like discouraging union membership or evading collective bargaining obligations with the union.145 Speaking figuratively, the issue is whether the employer acted in an effort to thwart the union and evade its obligations under the N.L.R.A.146 Because the employers true motivation is such an important part of the Boards decision process, the permissible inferences *drawn+ from the established facts are crucial. 147 When the employers proffered justification has a hollow ring in light of the totality of the circumstances or is determined to be pretextual, a ULP is found.148 One such example of a pretextual employer justification is affirmatively concealing expansion plans from the union, which tends to be a ULP because the employers action carries a strong inference of anti-union animus.149 In N.L.R.B. v. Joseph Magnin Co., a company voluntarily extended recognition to the union in each of its newly opened stores through 1977; after that, a new facially-neutral company policy prohibited transfers between stores, subject

144

I use the term Relocation Cases to denote all cases dealing with companies closing their businesses, relocating a section of their businesses, or changing their businesses by reapportioning labor responsibilities (either to an independent contractor or to another factory). These cases should be some of the most factually similar to the Boeing case, and as such, they are analyzed separately from the general rules. 145 51A C.J.S. Labor Relations 577 (2011). These same actions may not be ULPs if motivated by economic or financial considerations. See infra Part III.B.1.b. 146 Valley Forge Flag Co. v. N.L.R.B., 364 F.2d 310, 310 (3d Cir. 1966). 147 N.L.R.B. v. Brown-Dunkin Co., 287 F.2d 17, 19 (10th Cir. 1961). 148 N.L.R.B. v. Kelly & Picerne, Inc., 298 F.2d 895, 898 (1st Cir. 1962); Temp-Masters, Inc. v. N.L.R.B., 460 F.3d 684, 689 (6th Cir. 2006). This is why the first two factors in the five factor list above the employers expressed enmity towards the union and the proximity between the union activities and the employers decision seem to be weighted so heavily by the Board. See supra notes 127-28. Interrogating employees about their union activities or immediately subcontracting work after unionization is successful both carry strong inferences of anti-union animus as the primary motivating factor of a decision. See, e.g., N.L.R.B. v. Cape County Milling Co., 140 F.2d 543 (8th Cir. 1944); Jays Foods, Inc. v. N.L.R.B., 573 F.2d 438 (7th Cir. 1978). 149 See N.L.R.B. v. Joseph Magnin Co., 704 F.2d 1457 (9th Cir. 1983).

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to two limited exceptions.150 When the company expanded its business again to open a store in a new location, it took affirmative steps to conceal its plans from the union.151 Further, once the expansion plans became known, the company specifically told the unionized employees that there would be no transfers allowed; however, it allowed employees to transfer from nonunionized locations, claiming each of these transfers fell within one of the two exceptions. 152 To further discourage the union employees from requesting a transfer, the company told them that they could resign, thereby losing all of their accumulated seniority, and then apply at the new store.153 The company claimed that it was simply adhering to its neutral policy, but the court found this to be pretextual, and the company was found to have violated Section 8(a)(3).154 Also factually similar to Boeing, the employer in Century Air Freight, Inc. told the union it could not afford a wage increase and tried to bargain for a wage freeze.155 The union stood firm and threatened to strike if not given the raise.156 To avoid the strike, the employer fired several employees and contracted its work out.157 The Board ruled that attempting to avoid a strike was an insufficient reason to justify intentionally discriminatory conduct.158 In part, the employers excuse was rejected because it failed to quantify how closing the unionized portion of its business would enhance its balance sheet. 159 The Board also noted the disparity

150 151

Id. at 1459. Id. 152 Id. 153 Id. 154 Id. at 1460. 155 Century Air Freight, Inc., 284 N.L.R.B. 730, 730 (1987). 156 Id. at 731. 157 Id. The employer testified it saw no choice between paying higher wages and suffering an imminent, paralyzing strike, so it chose the option most economically beneficial to the company. Id. 158 Id. at 732. 159 Id.

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between the employers chosen action in firing the union employees and the purportedly necessary action of negotiating a wage freeze, describing the difference between the two as vast and critical.160 Because the employer fired the union employees at least in part to forestall their engaging in protected concerted activity, the employers conduct could have adversely affected employee rights to some extent, and thus violated the N.L.R.A.161 In all Section 8(a)(3) cases before the Board, the employers motivation is a controlling factor.162 This means that even if employees ultimately benefit from an employers

discriminatory decision, there may still be a ULP. For example, in N.L.R.B. v. Brown-Dunkin Co., the employer conducted an extensive anti-union campaign to convince the employees not to unionize.163 The union was nevertheless certified, and the employer subcontracted the

employees jobs out to another company.164 Each employee retained his job and received a substantial increase[] in [his] wages;165 however, *t+he crucial and decisive factor *was+ whether the work was subcontracted to another in order to evade the collective bargaining process.166 The court found the employer subcontracted the work due to the unions

certification; therefore, the employers motivation was impermissible and a ULP was found.167 As a final demonstration of the how fact-intensive the inquiry into the employers true motivation is, the court in Jays Foods, Inc. v. N.L.R.B. indicated that, had it been deciding the

160 161

Id. Id. 162 See, e.g., supra notes 98-99 and accompanying text; N.L.R.B. v. Brown-Dunkin Co., 287 F.2d 17, 18 (10th Cir. 1961) (In circumstances like these, motivation becomes important, indeed decisive.). 163 Brown-Dunkin Co., 287 F.2d at 18. 164 Id. at 18-19. 165 Id. at 19. 166 Id. 167 Id.

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case de novo, it may well have come to the opposite conclusion the Board did in its decision. 168 There, some truck drivers were interested in unionizing, and the employer made several public anti-union statements.169 The employer then subcontracted the employees jobs to another company in order to save $100,000 annually.170 However, the Board found that the employer had consistently spurned *the subcontractors+ approaches for a number of years and did not seriously consider and decide to accept *the+ offer until a time frame contemporaneous with the union activity of *its+ truckdrivers.171 Therefore, the Board inferred the employers true motivation was to discriminate against the union, and a ULP was found.172 As each of the preceding four cases should indicate, the more of the five factors that are present, the more likely the ALJ will be to find a ULP.173 To some extent, Boeing demonstrated aspects of each of the five factors and each of the above cases. Similar to Joseph Magnin Co., Boeing inhibited (at least to some extent) the proliferation of the union to the new location in South Carolina. It could have expanded in Washington where the IAM was sure to gain footing and bargaining power in the new plant; however, instead Boeing chose to move to South Carolina, a right-to-work state, where employees are not mandated to join or financially

168 169

Jays Foods, Inc. v. N.L.R.B., 573 F.2d 438, 440 (7th Cir. 1978) (Jays Foods II). Id. at 442. 170 Id. at 443. 171 Id. 172 Id. at 445 (In view of *the employers+ campaign to prevent its truckdrivers from joining the Teamsters union coupled with the fact that [the employer] was satisfied with performing its own trucking operation until a time almost simultaneous with the truckdrivers union activity, the Board could reasonably conclude that *the employers+ decision to contract to Nielsen was motivated at least in part by antiunion considerations.) (emphasis added). Compare id. (Jays Foods II) (the employers decision was made at least in part due to anti-union considerations and was only seriously considered after union activities had commenced), with Jays Foods, Inc. v. N.L.R.B., 292 F.2d 317 (7th Cir. 1961) (Jays Foods I) (the employers decision was made solely to avert economic loss and was contemplated a year and a half prior to any union activities). 173 See supra notes 127-31, 133.

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support a union.174 Similar to Century Air Freight, Inc., Boeing executives told the media that they saw their future business options as suffering the devastating economic consequences of frequent strikes or expanding in a right-to-work state.175 The IAM also argued that Boeings expansion was done as an effort to cow workers from exercising their Section 7 rights, similar to the unions charge in Brown-Dunkin Co. where the employer subcontracted work to evade its duty to collectively bargain.176 Finally, similar to Jays Foods II, the time frame of Boeings decision may be suspect because its expansion plans began only after realizing the consequences of the IAMs most recent strike.177 Given each of these factual parallels, the ALJ likely would have found Boeing discriminated against the IAM. Therefore, in order to avoid a ULP, Boeing would have had to prove that its decision to expand in South Carolina was not made because of any anti-union sentiment, but rather because of a legitimate business purpose. b. Employers may make nondiscriminatory legitimate business decisions. Contrary to the IAMs allegations, Boeing asserted its sole reason for expanding in South Carolina was purely economic it needed to meet customer demand with a reliable production schedule and regain customer confidence so as not to lose future business.178 Boeing also sought to lower its labor costs, and it publically stated that it believed the IAMs actions were

174

Right to Work States, supra note 37; S.C. CODE ANN. 41-7-70(1) (2011). This does not prohibit the IAM from attempting to organize the employees; it just makes it more difficult for unions to gain extensive bargaining power. 175 See supra Part II. 176 Boeing was concerned with the employees exercising their Section 7 right to strike; the employer in BrownDunkin Co. tried to evade a different Section 7 right the right to collectively bargain. 177 See supra Part II. 178 See supra notes 51-52 and accompanying text.

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costing the company needless expense.179 If Boeing had been able to prove that its reasons for expanding in South Carolina were solely economic, finding a ULP would have been less likely. The reason the Boeing case is so interesting is because it brings to light an inherent conflict in the Boards previous rulings. In some cases, the Board did not allow employers to take into account the anticipated future effects of unionization, including future costs the union might cause through protected activities or wage demands.180 In other cases, the Board ruled in favor of the employers proffered legitimate business reason, even if that reason took into account the economic consequences the union would have on the business.181 The following sections analyze these discrepancies and posit the probable outcome of a fully-litigated Boeing. i. An Overview of Employers Legitimate Business Decisions Employers decisions, even those that have a negative impact on a union, are permissible when they are made because of legitimate business considerations or [are] otherwise free of anti-union animus.182 *I+f every discriminatory action taken by an employer which could foreseeably result in the encouragement or discouragement of union membership were proscribed by the [N.L.R.A.], very few of the legitimate prerogatives of management could

179 180

See supra notes 50, 109 and accompanying text (Boeing specifically referred to the costs of the IAMs strikes). See, e.g., Bridgford Distrib. Co., 229 N.L.R.B. 678, 679 (1977) (It is well settled that an employer who accelerates a decision to transfer unit work in order to avoid recognition of, and bargaining with, the collectivebargaining representative of its employees is in violation of Section 8(a)(3). This is the case even where the initial decision to effect the transfer is based on legitimate economic considerations.). 181 See, e.g., Jays Foods I, 292 F.2d at 320; N.L.R.B. v. Lassing, 284 F.2d 781, 783 (6th Cir. 1960); N.L.R.B. v. Rapid Bindery, Inc., 293 F.2d 170, 175 (2d Cir. 1961); Bali Blinds Midwest, 292 N.L.R.B. 243, 246-47 (1989), overruled on other grounds by Elec. Data Sys. Corp., 305 N.L.R.B. 219, 261-62 (1991); see also infra Part III.B.1.b.ii (discussing the facts and holdings of Lassing, Rapid Bindery, and Bali Blinds). 182 N.L.R.B. v. Bausch & Lomb, Inc., 526 F.2d 817, 821 (2d Cir. 1975).

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survive the flood of unfair labor practice charges;183 therefore, these types of decisions are not Section 8(a)(3) violations.184 Proving a decision was made due to legitimate business considerations functions as an affirmative defense for the employer.185 The N.L.R.A. not only recognizes this affirmative defense; it has always permitted the employer to infringe on employees rights when the infringement is motivated by a desire to protect rights which are legitimately the employers, even when a natural foreseeable consequence of employer discrimination might be the discouragement of union activity.186 Employers must be free to choose between capable and worthy alternatives, especially economic alternatives, without being forced to discriminate in favor of union workers due to fear of action by the N.L.R.B. or the courts.187

183 184

Pittsburgh-Des Moines Steel Co. v. N.L.R.B., 284 F.2d 74, 82-83 (9th Cir. 1960). Bausch & Lomb, Inc., 526 F.2d at 821. This rule is the reason employers may fire union employees at all, whether for good reason, bad reason, or no reason just because a specific employee is coincidentally inefficient and engaged in union activities is not alone enough to reverse the employers decision to fire him. See, e.g., N.L.R.B. v. Red Top Cab & Baggage Co., 383 F.2d 547, 554 (5th Cir. 1967) (citing N.L.R.B. v. Soft Water Laundry, Inc., 346 F.2d 930, 934 (5th Cir. 1965)). Instead, there must be a showing of anti-union animus in order to make out a Section 8(a)(3) violation. Id. 185 Temp-Masters, Inc. v. N.L.R.B., 460 F.3d 684, 689 (6th Cir. 2006). It functions as an affirmative defense because the General Counsel must initially show that union activity may have motivated the employers decision, and that the effect of the decision was comparatively slight on the employees. Id.; Gottfried ex rel. N.L.R.B. v. Purity Sys., Inc., 707 F. Supp. 296, 301 (W.D. Mich. 1988). The employer may then rebut this evidence (i.e. affirmatively defend itself) by showing that it had a substantial and legitimate business end it sought to achieve. N.L.R.B. v. Great Dane Trailers, Inc., 388, U.S. 26, 33-34 (1967); Teamsters Local 20 v. N.L.R.B., 610 F.2d 991, 994 (D.C. Cir. 1979); Temp-Masters, 460 F.3d at 689. The employers claim tends to be weightier if it can show that the same decision would have been made even in the absence of union activities. See id.; Kamtech, Inc. v. N.L.R.B., 314 F.3d 800, 807 (6th Cir. 2002) (citing W.F. Bolin Co. v. N.L.R.B., 70 F.3d 863, 870 (6th Cir. 1995)). Once this affirmative defense has been proven by a preponderance of the evidence, the General Counsel must affirmatively prove the asserted legitimate business purpose is merely pretextual, and that the true underlying rationale for the decision included anti-union discrimination. Temp-Masters, 460 F.3d at 689; N.L.R.B. v. Brown, 380 U.S. 278, 289 (1965); Great Dane, 388 U.S. at 34. Since the N.L.R.A. makes that type of intentional discrimination illegal, any decision to suspend or change operations motivated by it is a violation of Section 8(a)(3). See N.L.R.B. v. Adkins Transfer Co., 226 F.2d 324, 327 (6th Cir. 1955). 186 Pittsburgh-Des Moines Steel Co. v. N.L.R.B., 284 F.2d 74, 83 (9th Cir. 1960). 187 Martel Mills Corp. v. N.L.R.B., 114 F.2d 624, 633 (4th Cir. 1940); cf. Phelps Dodge Corp. v. N.L.R.B., 313 U.S. 177, 186-87 (1941) (The natural construction *of+ the text *of the N.L.R.A.+ does not impose an obligation on the employer to favor union members in hiring employees. The statute does not touch the normal exercise of the

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As previously discussed, determining an employers true motivation is an extremely difficult, fact-intensive inquiry, especially when the employer proffers economic reasons of any substance for the decision it made.188 This problem is only compounded by the fact that employers are free to make bad business judgments without running afoul of the N.L.R.A. 189 Again, the wisdom or business acumen of the decision does not determine whether there is a Section 8(a)(3) violation; the only thing that matters is the predominant motive behind underlying the decision.190 As a further wrinkle, Motives are notoriously susceptible of being misunderstood and hard to prove or to disprove. If an ordinary act of business management can be set aside by the Board as being improperly motivated, then indeed our system of free enterprise, the only system under which either labor or management would have any rights, is on its way out, unless the Boards action is scrupulously restricted to cases where its findings are supported by substantial evidence, that is evidence possessed of genuine substance. 191 A final and perhaps the most significant difficulty arises due to courts and the N.L.R.B. disagreeing on the threshold necessary for this affirmative defense to kick in.192 Sometimes, a ULP is found unless the legitimate business purpose is the sole reason the

right of the employer. It is directed solely against the abuse of that right by interfering with the countervailing right of self-organization.) (internal quotation marks omitted). In order to be a true legitimate and substantial business purpose, though, the employers justification must have a non-frivolous purpose such as economic considerations, business necessity, efficiency, employee discipline, plant safety, or plant custom. Local 15, Intl Bhd. of Elec. Workers v. N.L.R.B., 429 F.3d 651, 657 (7th Cir. 2005) (citing Harter Equip. Inc., 280 N.L.R.B. 597, 600 n.9 (1986), and Great Dane, 388 U.S. at 38); Soule Glass & Glazing Co. v. N.L.R.B., 652 F.2d 1055, 1077 (1st Cir. 1981), abrogated on other grounds by N.L.R.B. v. Curtin Matheson Scientific, Inc., 494 U.S. 775 (1990). 188 N.L.R.B. v. Kingsford, 313 F.2d 826, 830 (6th Cir. 1963). 189 Id. 190 Id. 191 N.L.R.B. v. Hous. Chronicle Pub. Co., 211 F.2d 848, 854-55 (5th Cir. 1954). 192 This is not a circuit split on how to handle these cases; instead, the N.L.R.B. has not always followed its own case precedent, which is permissible so long as they explain the reason for their departure. See supra note 72 and accompanying text. Since courts generally must give deference to the N.L.R.B.s factual findings and holdings, the courts are simply reviewing the administrative record to see if there is substantial evidence to support the N.L.R.B.s holding. See supra note 74-76 and accompanying text. Therefore, they are powerless to require the N.L.R.B. to adopt a more consistent rule in these situations because doing so would be exceeding the courts statutory authority granted in the N.L.RA. See id.

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employer made its decision.193 For example, in Jays Foods II, the court noted that the existence of valid grounds for *the employers+ action is no defense unless such action was predicated solely on these grounds and not by a desire to discourage protected activity. 194 Conversely, other times, the legitimate business purpose is only required to be the predominant (i.e. 51% or greater) reason the decision was made.195 In those cases, the employer may have some small anti-union purpose when acting so long as the action is primarily done to advance the legitimate business reason for the decision. This divergence in the rulings is particularly noticeable when the employers legitimate business purpose is one that involves the financial health and future of the company.196 For example, in N.L.R.B. v. Rapid Bindery, Inc., the court firmly declared that *t+he decided cases do not condemn an employer who considers his relationship with his plants union as only one part of the broad economic picture he must survey when he is faced with determining the desirability of making changes in his operations.197 However, the N.L.R.B. took exception to that point of view in Forest Dodge, Inc.198 The Board argued that employer opposition to

193

See, e.g., Jays Foods, Inc. v. N.L.R.B., 573 F.2d 438, 443-44 (7th Cir. 1978) (Jays Foods II); N.L.R.B. v. Townhouse T.V. & Appliance, Inc., 531 F.2d 826, 828-29 (7th Cir. 1976); N.L.R.B. v. George J. Roberts & Sons, Inc., 451 F.2d 941, 945 (2d Cir. 1971) (Even if there were ample grounds to fire *the employee+, if his discharge was even partially motivated by his union activity, there is a violation of 8(a)(3).); Century Air Freight, Inc., 284 N.L.R.B. 730, 732 (1987). 194 Jays Foods II, 573 F.2d at 443 (emphasis added) (quoting N.L.R.B. v. Fairview Hosp., 443 F.2d 1217, 1219 (7th Cir. 1971)). 195 See, e.g., Valley Forge Flag Co. v. N.L.R.B., 364 F.2d 310, 311 (3d Cir. 1966) (Several circuits have held that a predominant economic motive to subcontract or to close the plant and transfer operations, even though accelerated by union organizing efforts, does not constitute a violation of the *N.L.R.A.+.) (emphasis added) (citing N.L.R.B. v. New Eng. Web, Inc., 309 F.2d 696 (1st Cir. 1962); N.L.R.B. v. Rapid Bindery, Inc., 293 F.2d 170, 173-75 (2d Cir. 1961); Jays Foods, Inc. v. N.L.R.B., 292 F.2d 317 (7th Cir. 1961) (Jays Foods I); N.L.R.B. v. Lassing, 284 F.2d 781 (6th Cir. 1960); Houston Chronicle Pub. Co., 211 F.2d at 854-55); Kingsford, 313 F.2d at 831 (discussing whether the employer had a predominant motive of anti-union discrimination). 196 See, e.g., Lassing, 284 F.2d at 783 (The advent of the Union was a new economic factor which necessarily had to be evaluated by the respondent as part of the overall picture pertaining to costs of operation.). 197 Rapid Bindery, 293 F.2d at 175. 198 Forest Dodge, Inc., 145 N.L.R.B. 1463, 1471 (1964).

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unions is generally based on some sort of an economic basis, such as fear of an increase in labor costs.199 Further, it stated that distinguishing between economics and hostility to the union is not helpful, thereby rejecting that distinction.200 The N.L.R.B. later pointed out that strikes are specifically intended to (and usually do) cause economic harm to an employer.201 It went on to say that if employers could prove some specific, significant economic impact in the event of an imminent strike, it might be a permissible legitimate business decision; however, general negative economic impacts from future-striking employees are not sufficient to justify an employers discriminatory actions.202 The two approaches of when to apply the affirmative defense may simply be a result of disparate political philosophies or interpretations of the N.L.R.A. throughout the years.203 However, the differences may also be the result of the fact-intensive inquiries necessary to resolve each case. Therefore, the subsequent section analyzes cases more factually similar to Boeing in order to better predict how the action would have turned out had it not been settled prior to formal judgment.

199 200

Id. Id.; see also Metromedia, Inc., 182 N.L.R.B. 202, 202 (1970) (holding that the employers legitimate business decision cannot relate to the unions presence in the plant; The employees here were discharged because the Union had organized them, and the unlawfulness of that discharge under the [N.L.R.A.] is in no way minimized or affected by the fact that *the employer+ may have believed, even accurately, that the Unions becoming the employees exclusive bargaining representative would cost him money, or cost him the time and effort spent in bargaining. Indeed, if these kinds of business reasons could justify discrimination, the proscriptions and protections of the *N.L.R.A.+ would be rendered largly *sic+ nugatory.). 201 Caterpillar, Inc., 322 N.L.R.B. 690, 693-94 (1996), vacated due to settlement, 138 F.3d 1105 (7th Cir. 1998). 202 Id. 203 For example, after President Obamas election in 2008, a Democratic majority took control of the N.L.R.B. and signaled a desire to adopt a more liberal, pro-union tilt after years of pro-employer decisions under President Bush. Greenhouse, supra note 46. Similar past swings of the political leanings of the majority of the Board could have caused the disparity in the required threshold for the affirmative defense. Requiring the defense to be the sole reason the employer acted is much more employee- and union-friendly than allowing the employer to have some anti-union purpose so long as his predominant motive was the legitimate business purpose.

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ii. The Relocation Cases204 Legitimate Decisions As Applied to Boeing In general, an employer has an absolute right to permanently close its business, even if done to avoid bargaining or otherwise dealing with a union; permanent closures do not constitute a ULP, regardless of the employers motivation.205 In contrast, when an employer changes or closes only part of its business, the action must be dictated by sound economic reasons to avoid a ULP charge; however, it is acceptable to accelerate implementing the decision due to union activity.206 For example, the court in N.L.R.B. v. Rapid Bindery, Inc. held: The Boards position appears to be that a move by management when that move is required for sound business reasons is nevertheless and [sic] unfair labor practice if the move is accelerated or reinforced by contemporaneous employer differences with a union. This position is not supported by the language of the [N.L.R.A.] or by the decisional law interpreting that language.207 Management decisions made for economic reasons like abating or avoiding financial distress are not ULPs.208 This is especially true for changes lying at the core of entrepreneurial control, such as recommitting capital investments, reinvesting funds into the business, or changing the economic direction of the company.209 Normal management decisions like those

204 205

See supra note 140. 51A C.J.S. Labor Relations 577 (2011) (citing N.L.R.B. v. Brown, 380 U.S. 278 (1965)). The N.L.R.A. is not concerned with permanent closures because a complete liquidation of a business yields no future *economic+ benefit for the employer, regardless of if done out of spite instead of legitimate business reasons; therefore, the employer will not profit from its discrimination. Textile Workers Union of Am. v. Darlington Mfg. Co., 380 U.S. 263, 272 (1965). The N.L.R.A. is concerned with changing or discontinuing parts of a business if done solely to discourage union membership because, in that situation, the employer is profiting from illegal discrimination. See 51A C.J.S. Labor Relations 577 (citing N.L.R.B. v. Cape Cnty. Milling Co., 140 F.2d 543 (8th Cir. 1944)). 206 Id. (citing N.L.R.B. v. Royal Plating & Polishing Co., 350 F.2d 191 (3d Cir. 1965); N.L.R.B. v. New Eng. Web, Inc., 309 F.2d 696 (1st Cir. 1962); N.L.R.B. v. Preston Feed Corp., 309 F.2d 346 (4th Cir. 1962)). 207 N.L.R.B. v. Rapid Bindery, Inc., 293 F.2d 170, 174 (2d Cir. 1961). 208 See supra note 165 and accompanying text; N.L.R.B. v. Kingsford, 313 F.2d 826, 829, 830 (6th Cir. 1963); N.L.R.B. v. Brown-Dunkin Co., 287 F.2d 17, 19 (10th Cir. 1961) (It may be assumed that economy is a legitimate reason for good faith subcontracting.); New Eng. Web, 309 F.2d at 701. 209 Royal Plating & Polishing Co., 350 F. 2d at 195-96; see also N.L.R.B. v. Doug Neal Mgmt. Co., 620 F.2d 1133, 1135, 1136 (6th Cir. 1980) (incurring additional up-front expenses when expanding or modernizing a business is not necessarily indicative of a ULP, even if the impact is ultimately negative on a union).

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cannot be set aside or modified by the N.L.R.B. 210 In the same vein, an employer has the right to objectively and independently consider the economic impact of unionization of a shop and to manage its business accordingly.211 Again, *t+he issue is not whether the business reasons advanced by the [employer are] good or bad, but whether the [employer] actually in good faith ha[s] business motives for the change, or whether the change [is] illegally motivated due to anti-union discrimination.212 So long as the employer is sincerely exercising its business

judgment, it may subcontract work previously performed by its own employees.213 There are two common legitimate business reasons advanced when companies are changing or relocating operations. The first is concerns about future strikes and other

protected Section 7 activities which affect a businesss ability to meet its production demands.214 The second is monetary concerns, such as paying high union salaries, the

companys bleak financial picture, a depressed economy, and the like.215 Boeing could have potentially implicated both of these legitimate business concerns. At times, employers may take action to blunt the effectiveness of anticipated future strikes. For example, in Bali Blinds Midwest, the N.L.R.B. held an employers partial lockout of its employees was justified because the employer legitimately feared repeated work stoppages due to strikes.216 There, the employers production schedule had strict deadlines missing the

210 211

New Eng. Web, 309 F.2d at 700-01 (citing N.L.R.B. v. Hous. Chronicle Pub. Co., 211 F.2d 848, 855 (5th Cir. 1954)). Jays Foods, Inc. v. N.L.R.B., 292 F.2d 317, 320 (7th Cir. 1961) (Jays Foods I); see also supra notes 174-79 and accompanying text. 212 Hous. Chronicle Pub. Co., 211 F.2d at 851. 213 51A C.J.S. Labor Relations 577 (2011) (citing N.L.R.B. v. Kelly & Picerne, Inc., 298 F.2d 895 (1st Cir. 1962); Brown-Dunkin Co., 287 F.2d at 19). 214 See infra notes 216-28 and accompanying text. 215 See infra notes 229-38 and accompanying text. 216 Bali Blinds Midwest, 292 N.L.R.B. 243, 246-47 (1988), overruled on other grounds by Elec. Data Sys. Corp., 305 N.L.R.B. 219, 261-62 (1991).

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deadlines would immediately result in lost sales and customers by the employer. 217 In order to counter the unions frequent, unannounced strikes, the employer relocated future production orders from the striking plant to its other plants.218 The N.L.R.B. held that, although the employer obviously took into account the effect of the strike when making its decision, it did not have an unlawful motivation and did have significant economic justification, i.e., a reasonable fear of recurring strikes that would disrupt its production schedules to the extent [the employer] would face a serious loss of customers.219 Therefore, the N.L.R.B. found the employer had not committed a ULP.220 As the N.L.R.B. pointed out in McLoughlin Manufacturing Corp., the appropriate time for an employer to assess the effects a union could have is when making a decision about the future closing or expansion of the company.221 In McLoughlin, the employer suffered a large employee-turnover rate due to an onerous provision in the collective bargaining agreement that caused a prohibitive cost on its business.222 When negotiating a new collective

bargaining agreement with the union, the employer made clear what relief was vital to its continuing in business, but the union displayed an unwillingness to afford *the employer+ any hope for relief.223 Therefore, the employer initially decided to close its business before ultimately changing its mind and relocating to Alabama, which is a right-to-work state.224 The

217 218

Id. at 244. Id. at 245. 219 Id. at 246-47 (emphasis added). 220 Id. at 247. 221 Cf. McLoughlin Mfg. Corp., 164 N.L.R.B. 140, 140 (1967) (Some of the economic problems stemmed from what [the employer] regarded as restrictive union practices. The time of negotiations for a new collective-bargaining contract was therefore appropriate for a decision as to continued operations.). 222 Id. 223 Id. at 140-41. 224 Id. at 140; ALA. CODE 25-7-30 (2011).

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N.L.R.B. held that the employers decision to relocate was not a ULP even though the contract provision and difficulties in negotiation were the economic straw*s+ which tipped the scale in the decision to close.225 Finally, employers may make changes to their operations if their current production location is insufficient to meet customer demands. For example, in N.L.R.B. v. Rapid Bindery, Inc., the employer saw an influx of business but lacked sufficient operating space, requiring it to readjust its operations in order to adequately service its customers.226 The employer and the union had a well-documented history of animosity, but the court held that all of the evidence, including the employer taking into account dealing with the newly certified union, pointed to the motivation being sound business reasons.227 The court ruled: Though there may have been animosity between [the union and the employer], animosity furnishes no basis for the inference that this was the preponderant motive for the *employers decision+ when convincing evidence was received demonstrating business necessity. The decided cases do not condemn an employer who considers his relationship with his plants union as only one part of the broad economic picture he must survey when he is faced with determining the desirability of making changes in his operations.228 While the previous three cases involved employers legitimate business decisions made due to concern over future strikes and meeting production demands, employers frequently assert a second legitimate business reason for their decisions: monetary concerns. These financial concerns can involve anything ranging from the companys bleak financial picture to
225

McLoughlin, 164 N.L.R.B. at 141 (internal quotation marks omitted). But see Bridgford Distrib. Co., 229 N.L.R.B. 678, 679 n.2 (1977) (distinguishing McLoughlin because the employer there did not accelerate its decision to close or relocate in order to avoid bargaining with a newly formed union; if an employer decision is accelerated due a desire to avoid union activity, it is a ULP). 226 N.L.R.B. v. Rapid Bindery, Inc., 293 F.2d 170, 171, 172, 173 (2d Cir. 1961). For a case slightly less factually similar to Boeing but that also involves a company not being able to meet production demands (due to low quality output from the employees) and being forced to make changes, see N.L.R.B. v. New Eng. Web, Inc., 309 F.2d 696 (1st Cir. 1962). 227 Id. at 173-75. 228 Id. at 175.

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the effects of a depressed economy to simply being forced to pay higher salaries due to a newly-certified union. When businesses experience financial difficulty, it justifies any

reasonable business mans attempts to reduce overhead expenses and operational costs. 229 Many employers who assert their decisions were made due to financial concerns study the anticipated economic impact of a decision before implementing it.230 Their justifications are strengthened in court if they can show concrete figures for past losses, actual losses, and anticipated losses; this chronology helps show a company is suffering from actual financial distress and not just trying to circumvent its duties under the N.L.R.A. in other words, it proves the employers asserted motivation is genuine and not mere pretext. 231 In those cases where employers assert financial necessity as the justification for their actions, there is an established split between whether an action must be solely because of the economic reasons or predominantly for the economic reasons.232 As previously discussed, this unresolved split makes it difficult to determine whether Boeing would have won its case or not; however, N.L.R.B. v. Lassing may shed some light on a potential outcome because it is arguably the most factually similar case to Boeings action. In Lassing, the employer discontinued a part of its business because of mounting costs and equipment that had become inadequate to serve the needs of its customers; it decided on a future date to implement the partial closure and subcontract the remaining work.233 After this decision, but before the closing date occurred,

229 230

N.L.R.B. v. Kingsford, 313 F.2d 826, 830 (6th Cir. 1963). See, e.g., Sun Oil Co. of Pa., 245 N.L.R.B. 59, 63 (1979); N.L.R.B. v. R.C. Mahon Co., 269 F.2d 44, 46 (6th Cir. 1959). 231 Thompson Transp. Co., 165 N.L.R.B. 746, 747 (1967). Any employers asserted financial justifications are also weightier if it can show a lack of prior hostility to the union and other efforts the company made to cut expenses besides just the contested decision. R.C. Mahon Co., 269 F.2d at 47. 232 See supra notes 170-79 and accompanying text. 233 N.L.R.B. v. Lassing, 284 F.2d 781, 782 (6th Cir. 1960).

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three of the employees in the affected division joined a union; these employees were laid off three weeks later, long before the decided-on closing date.234 The employer publically

announced that it had considered closing the division prior to the advent of the union, but that the reason it was closing that area of its business was because of the added payroll expenses expected due to the union.235 The Lassing court held that the new union was an economic factor that necessarily had to be evaluated by the employer in order to get a full picture of the operating costs.236 Further, it ruled that prohibiting an employer from changing its operations when it sees reasonably anticipated increased costs and instead forcing it to wait for those costs to materialize would be completely unrealistic.237 In a final decisive statement, the court held: Fundamentally, the change was made because of reasonably anticipated increased costs, regardless of whether this increased costs [sic] was caused by the advent of the Union or by some other factor entering into the picture. This did not constitute discrimination against the three employees with respect to their tenure of employment because of membership in the Union, within the provisions of Section 8(a)(1) and (3) of the [N.L.R.A.].238 Boeing shares many similarities with each of the previous four cases. Akin to the employer in McLoughlin, Boeing was unable to negotiate its way out from under the collective bargaining agreement with the IAM; while in McLoughlin, the court permitted the company to close and relocate in a right-to-work state, Boeing only wanted to expand new business to a

234 235

Id. Id. 236 Id. at 783. 237 Id. 238 Id. (citing N.L.R.B. v. Hous. Chronicle Pub. Co., 211 F.2d 848, 854 (5th Cir. 1954)); see also Jays Foods, Inc. v. N.L.R.B., 292 F.2d 317, 319-20 (7th Cir. 1961) (Jays Foods I) (upholding employers decision to subcontract work out after the employer determined it could not afford increased costs the union would bring); supra notes 201-04 and accompanying text. But see, e.g., Myers Ceramic Products Co., 140 N.L.R.B. 232, 234 n.8 (1962) (disagreeing with the holdings in Lassing and N.L.R.B. v. Rapid Bindery, Inc., 293 F.2d 170 (2d Cir. 1961), and attempting to distinguish the employers decisions in them as being preponderantly due to business necessity).

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right-to-work state, leaving the union shop unchanged. Further, the employer in Bali Blinds and Boeing both feared that they could not meet customer demands if there was a future strike, and therefore feared a resulting loss of customers if the unionized employees struck again.239 Boeing should have been permitted to make decisions with those future strikes in mind just like the employer in Bali Blinds. Rapid Bindery establishes that an employer may legitimately relocate its business if it cannot adequately service its customers due to an influx of new business. Boeings huge backlog showed its Washington plant was unable to service the customers lined up to buy the Dreamliner. Looking at the bottom line when making the decision to expand is permitted; this holds true even when there is animosity between the employer and the union so long as that animosity was not the predominant reason the decision was made. Finally, as in Rapid Bindery, Lassings employer also closed part of its business due to inadequate operational space and increased costs resulting from the advent of a new union. Boeing wanted only to expand its operations in a location where its labor costs would allegedly have been lower240. Looking only at Boeings bottom line, including previous figures showing the losses it sustained as the result of IAM strikes, Boeing should not have had to wait until it actually lost customers or suffered future losses before being permitted to expand elsewhere as the Lassing court said, that would be completely unrealistic.241 Just like the employers in Lassing and Rapid Bindery, Boeing should have been allowed to look at the companys broad financial picture, including the effects the IAM would have on it, in making any future decisions.
239

Compare Gates, supra note 53, with Bali Blinds Midwest, 292 N.L.R.B. 243, 246-47 (1988) (discussed in supra notes 216-220 and accompanying text), overruled on other grounds by Elec. Data Sys. Corp., 305 N.L.R.B. 219, 26162 (1991). 240 See supra note 54 and accompanying text. 241 See supra note 231 and accompanying text.

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As a final point, the IAMs strongest argument was that Boeing executives publically stated that the company took the unions protected activities into account when making the decision to expand in South Carolina; the IAM claimed this was clear evidence that Boeing had an impermissible discriminatory purpose.242 However, isolated statements that are facially incriminating may lose their ominous significance when considered in the broader context of the case as a whole; in the absence of a policy of discrimination, employers may not be held strictly liable for every isolated statement regarding union activity.243 The impact of the employers statement is measured from the employees perspective and looks at the effect it would have on them while working for the employer.244 Importantly, the N.L.R.A. specifically provides that the expression of any views [on the future of the company] shall not be evidence of an unfair labor practice if such expressions contain no threat of reprisal or force or promise of benefit.245 The statements in question made by Boeing executives did not contain any sort of coercive threat or promise of reprisal; they were simply statements that the company could not afford to deal with the economic ramifications of any future strikes. In other words, they were an articulation of Boeings legitimate business purpose in making the decision. While Boeings unionized employees may have felt threatened by Boeings statements, it was more probable that they were concerned about the expansion itself since it was done in a right-to-work state. The statements were not the true issue when looking at the broader context of this story; it was simply that the employees were concerned that their jobs would be affected in the future if
242 243

See supra notes 45-50 and accompanying text. Martel Mills Corp. v. N.L.R.B., 114 F.2d 624, 631, 633-34 (4th Cir. 1940). 244 Jays Foods, Inc. v. N.L.R.B., 573 F.2d 438, 444 (7th Cir. 1978) (Jays Foods II). 245 N.L.R.B. v. Dale Indus., Inc., 355 F.2d 851, 852 (6th Cir. 1966) (citing 29 U.S.C. 158(c)).

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Boeing was permitted to expand where the union did not already have a strong foothold.246 The problem was that the N.L.R.A. does not guarantee employees the right to work upon terms that they themselves prescribe.247 While employees may strike to protest work conditions imposed by the employer, they may not work only under their own notions of what work terms and conditions should prevail.248 If Boeing wanted to expand in a place unaffected by the IAM and its current collective bargaining agreement, it should have been permitted to do so without its unionized employees holding back a potentially bright economic future for the company. Just because the employees belonged to a labor union did not mean they have completely secure jobs for life and that the company could never make reasonable changes to its operations.249 Furthermore, even if Boeings statements were anti-union sentiments (instead of statements simply looking at the companys bottom line), anti-union statements do not automatically provide the requisite anti-union motivation necessary to find a ULP.250 For example, in N.L.R.B. v. Kingsford, the employer made at least three separate statements that could have given rise to the inference that it had hostility to the union, but the court held that animosity toward the union is an insufficient basis for an inference that the employers motive for change is illegal under the *N.L.R.A.+ 251 Again, even if inartfully phrased, the statements must contain implicit threats or coercion, not simply convey facts such as the union being a

246 247

See supra notes 38, 45 and accompanying text. See N.L.R.B. v. Red Top Cab & Baggage Co., 383 F.2d 547, 556 (5th Cir. 1967) (quoting Home Beneficial Life Ins. Co. v. N.L.R.B., 159 F.2d 280, 286 (4th Cir. 1947)). 248 See id. 249 N.L.R.B. v. Doug Neal Mgmt. Co., 620 F.2d 1133, 1136 (6th Cir. 1980). 250 N.L.R.B. v. Kingsford, 313 F.2d 826, 831 (6th Cir. 1963) (citing Rapid Bindery, 293 F.2d at 175). 251 Id.

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factor in making particular decision.252 Here, since Boeing was not threatening the union employees or coercing them, and the statements did not tend to directly discourage union membership, the statements were de minimus in comparison with the evidence that Boeing executives were simply making a statement regarding the companys economic reasons for expanding the company in South Carolina.253 2.) The Exception to Comparatively Slight: Destructive Employer Behavior? What Constitutes Inherently

Courts widely agree that the Supreme Court has not yet clearly defined what inherently destructive behavior constitutes.254 However, cases finding violations under [the inherently destructive+ standard are relatively rare,255 which is itself enlightening.256 In the line of Supreme Court cases finding inherently destructive behavior, the employers actions have an inevitable negative impact on union supporters.257 Because of those unavoidable

consequences that an employer foresaw and must have intended, 258 the employers conduct is so egregious that it carries its own indicia, or at least a strong inference, of anti-union

252 253 254

Robertshaw Controls Co., Acro Div. v. N.L.R.B., 386 F.2d 377, 384 (4th Cir. 1967). See Robertshaw, 386 F.2d at 381. See, e.g., Kan. City Power & Light Co. v. N.L.R.B., 641 F.2d 553, 559 (8th Cir. 1981); N.L.R.B. v. Centra, Inc., 954 F.2d 366, 372 (6th Cir. 1992). 255 N.L.R.B. v. Or. Steel Mills, Inc., 47 F.3d 1536, 1544 (9th Cir. 1995) (quoting Loomis Courier Serv., Inc. v. N.L.R.B., 595 F.2d 491, 495 (9th Cir. 1979)). 256 Intl Bhd. of Boilermakers, Local 88 v. N.L.R.B., 858 F.2d 756, 762 (D.C. Cir. 1988). 257 Contractors Labor Pool, Inc. v. N.L.R.B., 323 F.3d 1051, 1057 (D.C. Cir. 2003); see, e.g., N.L.R.B. v. Great Dane Trailers, Inc., 388 U.S. 26, 34-35 (1967) (finding an employers behavior inherently destructive after employer refused to pay vacation benefits to striking workers while paying the non-striking workers and replacements); N.L.R.B. v. Erie Resistor Corp., 373 U.S. 221, 235-37 (1963) (finding an employers behavior inherently destructive because granting superseniority only to non-striking replacement workers divided the workforce into factions based solely on whether an employee participated in the strike or not); Metro. Edison Co. v. N.L.R.B., 460 U.S. 693, 710 (1983) (finding an employers behavior inherently destructive when employer disciplined union officials more severely than other employees for breaking a no-strike clause in the collective bargaining agreement). 258 Great Dane, 388 U.S. at 33 (quoting Erie Resistor, 373 U.S. at 228).

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motivation.259 Therefore, a Section 8(a)(3) violation is found without any need to refer to extrinsic facts or the employers motivation and anti-union animus.260 Two distinct types of employer actions have regularly been found to be inherently destructive of employee rights.261 The first is when an employer distinguishes between workers based on either their participation in a protected activity or allegiance to the union as a whole.262 Any time an employer confers benefits on one class of employees who are

recognizable only by reference to their union activities or support, it distinguishes between the employees in derogation of their rights to engage in concerted activities.263 Employers may not differentiate between members of the union;264 doing so makes the effect on the employees Section 7 rights not comparatively slight.265 There are numerous instances of this type of inherently destructive behavior. For example, in dictum from American Ship Building Co. v. N.L.R.B., the Supreme Court suggested that permanently firing unionized staff and replacing them with employees known to have violent antiunion animus would be inherently destructive.266 In Kansas City Power & Light

Co. v. NLRB, an employers disparate treatment of striking and non-striking probationary


259 260

N.L.R.B. v. Am. Olean Tile Co., 826 F.2d 1496, 1505 (6th Cir. 1987) (Celebrezze, J., dissenting). Contractors Labor Pool, 323 F.3d at 1057. 261 Esmark, Inc. v. N.L.R.B., 887 F.2d 739, 748-49 (7th Cir. 1989); Local 15, Intl Bhd. of Elec. Workers v. N.L.R.B., 429 F.3d 651, 656 (7th Cir. 2005); Centra, 954 F.2d at 373; Or. Steel Mills, Inc., 47 F.3d at 1544 (Alarcon, J., concurring and dissenting). 262 See, e.g., Great Dane, 388 U.S. at 28-29 (refusing to pay strikers vacation pay while offering it to the non-strikers and replacement workers); Local 15, 429 F.3d at 654 (finding inherently destructive behavior when employer partially locked out workers returning from strike until a new collective bargaining agreement was signed); McGwier Co. v. N.L.R.B., 204 N.L.R.B. 492, 496 (1973) (permanently discharging workers for participating in union activities was found to be inherently destructive). 263 Am. Olean Tile Co., 826 F.2d at 1505 (Celebrezze, J., dissenting). 264 Intl Paper Co. v. N.L.R.B., 115 F.3d 1045, 1049 (D.C. Cir. 1997). 265 Am. Olean Tile Co., 826 F.2d at 1505 (Celebrezze, J., dissenting). See supra Part III.B.1 for a discussion on employer actions that do have a comparatively slight effect on employees protected rights. 266 Am. Ship Bldg. Co. v. N.L.R.B., 380 U.S. 300, 309 (1965); see also Radio Officers Union v. N.L.R.B., 347 U.S. 17, 45 (discharging employees for soliciting union membership because they violated the companys no solicitation rules found to be inherently destructive).

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workers was found to be inherently destructive.267 There, workers were refused seniority if they struck during their probation period but not if they disrupted their probation period for other reasons.268 Finally, in N.L.R.B. v. Lantz, workers who sought the unions aid to enforce the collective bargaining agreement were fired, which was found to be inherently destructive.269 The policy behind finding these types of employer actions inherently destructive is to maintain the integrity of the collective bargaining process and prevent cleavage among the employees that would adversely affect the process.270 Creating division within the bargaining unit puts employees at cross-purposes, making it less likely they can present a united front to the employer in order to effectively bargain.271 The Boeing case clearly did not involve this type of inherently destructive behavior. Boeing made no distinctions between the Washington workers who struck and those (if any) who did not.272 Similarly, there were no allegations in the complaint that Boeing tried to divide the IAMs bargaining unit.273 Instead, the IAM alleged Boeings behavior violated the second type of inherently destructive cases.274 The second and far more amorphous time that courts find employer actions inherently destructive are when the actions taken by the employer discourage collective bargaining in a way that makes the process of bargaining itself seem futile.275 These cases primarily involve

267 268

Kan. City Power & Light Co. v. N.L.R.B., 641 F.2d 553, 560-61 (8th Cir. 1981). Id. at 555-56, 557. 269 N.L.R.B. v. Lantz, 607 F.2d 290, 299 (9th Cir. 1979). 270 Intl Paper Co., 115 F.3d at 1049. 271 Id. 272 All Washington employees are equally affected by the expansion, whether they have previously struck or not; they all are still working at the same jobs in the Washington facility. 273 Complaint, supra note 5, at 7-8. 274 Cf. supra notes 44-45 and accompanying text. 275 Esmark, Inc. v. N.L.R.B., 887 F.2d 739, 748-49 (7th Cir. 1989); Intl Bhd. of Boilermakers, Local 88 v. N.L.R.B., 858 F.2d 756, 764 (D.C. Cir. 1988); see also Stokely-Van Camp, Inc. v. N.L.R.B., 722 F.2d 1324, 1330 (7th Cir. 1983) (conduct can be inherently destructive even if it tend*s+ to discourage participating in concerted activity in some general way rather than by discrimination against individuals who strike).

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conduct that would frustrate the policies of the [N.L.R.A.+ if allowed to stand.276 If the employers action has a natural tendency to frustrate the process of collective bargaining or to discourage future unionization, it thwarts the congressional goals embodied in N.L.R.A. Sections 7 and 8.277 Therefore, by its nature, the action demonstrates anti-union animus and is

inherently destructive.278 This is why actions taken specifically to punish unions for striking or otherwise exercising their Section 7 rights are seen as inherently destructive.279 Furthermore, the employers actions must have more than a temporary effect on the collective bargaining process; instead, it must create a barrier to future collective bargaining by placing visible and continuing obstacles in the way of any future exercise of employee rights.280 Having said that, however, the N.L.R.A. is process-oriented.281 It establishes and protects the employees rights to bargain, not their right to a bargain. Thus, the employer must negotiate, but it need not agree. Employer hostility to the process of collective bargaining is intolerable in this regime, and constitutes a rejection of all that the law requires an employer to accept. Employer hostility to the terms sought by the employees, on the other hand, is to be expected, and is, in any event, the employers right. Contention, combativeness, and conflict are inconsistent neither with good faith collective bargaining, nor with the employers other obligations under the [N.L.R.A.].282

276 277

Metro. Edison Co. v. N.L.R.B., 460 U.S. 693, 702 (1983). Johns-Manville Products Corp. v. N.L.R.B., 557 F.2d 1126, 1144 (5th Cir. 1977) (Wisdom, J., dissenting); see also Fresh Fruit & Vegetable Workers Local 1096, 539 F.3d 1089, 1097 (9th Cir. 2008) (quoting Am. Ship Bldg. Co. v. N.L.R.B., 380 U.S. 300, 312 (1965)); citing N.L.R.B. v. Erie Resistor Corp., 373 U.S. 221, 228 (1963)). 278 Johns-Manville, 557 F.2d at 1144 (Wisdom, J., dissenting). 279 See Fresh Fruit & Vegetable Workers, 539 F.3d at 1097. 280 Kan. City Power & Light Co. v. N.L.R.B., 641 F.2d 553, 559 (8th Cir. 1981) (quoting Inter-Collegiate Press v. N.L.R.B., 486 F.2d 837, 845 (8th Cir. 1973)); Local 15, Intl Bhd. of Elec. Workers v. N.L.R.B., 429 F.3d 651, 656 (7th Cir. 2005); N.L.R.B. v. Am. Postal Workers Union, 618 F.2d 1249, 1259 (8th Cir. 1980). 281 Intl Bhd. of Boilermakers, 858 F.2d at 763 (emphasis added). 282 Id. (emphasis in original).

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Therefore, conduct that simply impacts the employees ability to maintain the strength of their bargaining position does not reach the viability of the collective bargaining process and is not inherently destructive.283 Employers have a bevy of economic weapons at their disposal that are not inherently destructive to the collective bargaining process. These include hiring permanent replacements for striking workers (thereby reducing the number of positions available after the strike for returning strikers),284 hiring temporary replacements for striking workers so as to continue operations during a strike,285 and locking out employees from returning to their jobs after a strike.286 Each of these employer tactics is permissible and increases the economic pressures on striking employees by either dissuading them from adhering to their pre-strike bargaining position287 or by dividing the employees and incentivizing them to either stay at work or desert a strike before its conclusion.288 However, none of these weapons make the bargaining process itself seem to be a futile exercise in eyes of employees, and each of these cease to be an issue after the strike ends and a new collective bargaining agreement is reached.289 Courts have described these employer-friendly economic weapons as furthering an employers substantive bargaining position,290 something that is not violative of the inherently

283

Johns-Manville Products Corp., 557 F.2d at 1144 (Wisdom, J., dissenting) (citing Am. Ship Bldg. Co., 380 U.S. at 300). 284 See, e.g., N.L.R.B. v. Mackay Radio & Telegraph Co., 304 U.S. 333, 345-46 (1938). 285 See, e.g., Intl Bhd. of Boilermakers, Local 88 v. N.L.R.B., 858 F.2d 756, 764 (D.C. Cir. 1988). 286 See, e.g., Am. Ship Bldg., 380 U.S. at 308-09; N.L.R.B. v. Brown, 380 U.S. 278, 283 (1965); Intl Bhd. of Boilermakers, 858 F.2d at 764. 287 Am. Ship Bldg. Co. v. N.L.R.B., 380 U.S. 300, 308-09 (1965). 288 Trans World Airlines, Inc. v. Indep. Fedn of Flight Attendants, 489 U.S. 426, 436-37 (1989) (It is the inevitable effect of an employers use of *available+ economic weapons that these differences will be exacerbated and that poststrike resentments may be created.). 289 See, e.g., Intl Bhd. of Boilermakers, 858 F.2d at 764; N.L.R.B. v. Erie Resistor Corp., 373 U.S. 221, 231 (1963). 290 A substantive bargaining position effectively reflects what a particular side wants to put into the substance of the formal collective bargaining agreement. For example, a unions substantive bargaining position may be that it

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destructive doctrine as long as the employer respects the employees right to engage in [Section 7+ activity.291 Generally, strengthening an employers substantive bargaining position by using allowable economic weapons correspondingly weakens the unions position.292 This may result in devaluing the employees return on their investment in striking, but the employees are not guaranteed by law that collective bargaining will avail them; the only guarantee is that when they go to the bargaining table, with such strength as they can bring to it, the employer will be obliged to meet them there, and to bargain with them in good faith.293 Further, employees fears about the effect of their future demands on an employers decision to subcontract are an omnipresent risk for any employees who collectively bargain. 294 However, that risk is something the union has already calculated when it weighed the possibility that its demands might eventually compel an employer to adopt economicallymotivated changes such as subcontracting work or laying off employees. 295 Therefore, that risk is also not inherently destructive of employee rights because it only affects the substance of the bargain, not the process of bargaining as a whole. Applying this second type of inherently destructive behavior to Boeing is much more difficult because the test is so unclearly defined. The IAM argued that it would have been unable to bargain convincingly with Boeing in future collective bargaining agreements because,
wants 3 wage increases throughout the span of time covered by the bargaining agreement. Courts strongly distinguish between interfering with the process of bargaining and interfering with the substance of the bargain reached; the former is inherently destructive behavior, but the latter is simply an incident of bargaining. See Esmark, Inc. v. N.L.R.B., 887 F.2d 739, 748 (7th Cir. 1989). 291 Id. 292 See Intl Bhd. of Boilermakers, 858 F.2d at 766-67. 293 Id. at 764. 294 Intl Paper Co. v. N.L.R.B., 115 F.3d 1045, 1050 (D.C. Cir. 1997). 295 Id. (quoting P.W. Supermarkets, Inc., 269 N.L.R.B. 839, 841 (1984)).

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if Boeing did not like the terms the IAM was offering, it could move more of the production work to the South Carolina facility;296 however, even if this fear was realized, it only affected the strength of the IAMs substantive bargaining position, not the process of bargaining itself. Furthermore, the IAM argued that this may have discouraged the employees from striking in the future, which would have been a huge interference with their Section 7 rights.297 Again, though, a strike is a calculated risk on the part of the union, and fears regarding the employers future response to a strike simply affected the strength of the IAMs substantive bargaining position.298 There was nothing suggested in the complaint or elsewhere that charged Boeing with interfering with the process of bargaining. As the Supreme Court stated in American Ship Building Co. v. N.L.R.B., employees have a right to bargain collectively, but that right does not entail the right to insist on getting their way free of any economic disadvantage. 299 The IAM was resentful and fearful of Boeings newly-strengthened bargaining position. This was irrelevant though because Sections 8(a)(1) and 8(a)(3) do not allow the Board to assess the relative economic power of the adversaries in the bargaining process and deny weapons to one party or the other because of its assessment of that partys bargaining power.300 As a final point, Boeing argued that the current collective bargaining agreement specifically provides that it may relocate work to a new location if the Washington facility

296 297

Rosen, supra note 3. Id. 298 See Intl Bhd. of Boilermakers, Local 88 v. N.L.R.B., 858 F.2d 756, 766 (D.C. Cir. 1988) (*T+he existence of an arguable possibility that someone may feel himself discouraged in his union membership as a result of an action that his employer may take during a bargaining dispute does not by itself make that action inherently destructive of employee rights.) (quoting Am. Ship Bldg. Co. v. N.L.R.B., 380 U.S. 300, 312-13 (1965)). 299 Am. Ship Bldg., 380 U.S. at 309. 300 Intl Bhd. of Boilermakers, 858 F.2d at 766, 765 (It is clear, however, that any effect on the parties relative bargaining power so long as it does not substantially impair the employees ability to organize and to engage in concerted activity is simply outside the scope of proper inquiry under sections 8(a)(1) and (3).).

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cannot keep up with the current production schedule.301 Conduct which is sanctioned by the collective bargaining agreement is not inherently destructive. 302 If Boeings interpretation of the language in the bargaining agreement was correct, its actions were even more clearly not inherently destructive. Boeing clearly did not differentiate between striking and non-striking employees. It also did not interfere with the process of collectively bargaining with the IAM. Accordingly, its actions cannot be termed inherently destructive.303 Because the IAM was highly unlikely to win on its inherently destructive claims, its efforts would have been better spent arguing Boeings behavior had a comparatively slight effect on the IAMs rights. There is much more uncertainty and room for fact-specific inquiries and results in that area of labor law.304 IV. Future Implications: A Suggestion to Resolve the Problem Since the Boeing case was settled, there were no findings of fact. Therefore, because the holdings in these types of cases are based on such fact-intensive inquiries, it is difficult to clearly state which side of the argument should have prevailed, or even which line of cases Boeing was most similar to. However, regardless of whether or not Boeing (or other

employers) had an anti-union discriminatory purpose, it should have won this case.

301

Motion to Dismiss, supra note 6; Lohr, supra note 1; cf. Boeings Previous Collective Bargaining Agreement, supra note 35. 302 N.L.R.B. v. Am. Postal Workers Union, 618 F.2d 1249, 1259 (8th Cir. 1980) (citing N.L.R.B. v. Wilson Freight, 604 F.2d 712 (1st Cir. 1979)). 303 But see Bridgford Distrib. Co., 229 N.L.R.B. 678, 679, 679 n.2 (1977) (holding that an employers decision to transfer its business was inherently destructive when the employer self-admittedly was influenced by its desire to avoid bargaining with the newly-formed union; the employer, act*ing+ on the mere fear that *the unions+ demands would cause an unbearable increase in its expenses that would have added to *the employers+ bleak economic picture*,+ does not overcome the inherently destructive effect of its precipitate action on the Section 7 rights of its employees.). 304 This is evidenced in part by the uncertainty of the threshold necessary for the affirmative defense to kick in. See supra notes 192-95 and accompanying text.

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As an initial matter, a union can still make a case in the runaway shop context or partial closing context that there is a Section 8(a)(1) or 8(a)(3) violation if the employer has an antiunion discriminatory purpose in making a business decision. Yet especially in Boeings context where the employer is just expanding its operations and leaving alone (or even expanding) the union facility, the employer should be able to take into consideration whether the union has previously caused too many economic problems for the company. When the employer does not discriminate against the union with respect to ongoing operations already contracted for with the union, it should be allowed to expand somewhere where it does not automatically have to deal with the costs and frustrations the union has caused it.305 Since no damage has been done to the Washington plant for now, it was premature for the IAM to file a cause of action claiming it had been damaged, especially since the Washington plants operations are still currently being expanded by Boeing. In order to prevent this type of uncertainty and conflict in the future, perhaps the easiest way to resolve the problem is for the N.L.R.B. to pass an administrative rule.306 This rule should clarify whether the employers legitimate business decision must be the sole or only the predominant reason for its action. By establishing the bar for the affirmative defense to kick in, the N.L.R.B. would be able to more consistently enforce the terms of the N.L.R.A., and

305

Remember that in right-to-work states, the union is not excluded from organizing the employees and representing their interests to the employer. Right-to-work statutes simply prohibit forcing employees to join a union or paying union dues (in lieu of joining the union). The union is not completely shut out it simply has to come in and prove to the employees that it has something to offer to the employees that is worth the employees paying for the unions representation and services. 306 The N.L.R.B. typically has not made many administrative rules formally published in the C.F.R. in the past, although that is changing somewhat in more modern times. Instead, it has primarily set precedent on what behaviors are permissible or not via formal administrative adjudications. Proceeding in this manner allows the N.L.R.B. more latitude on departing from its own precedent without having to go through the normal notice and comment procedures required to change a published administrative rule.

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businesses and employees alike would have more concrete expectations on what actions are permissible or impermissible. If the N.L.R.B. required the employer to act solely for the legitimate business purpose, any employer with any anti-union motivation at all would be unable to act. If this had been the case, the IAM would have had a much stronger argument that Boeing impermissibly considered the unions protected Section 7 rights in making the expansion decision. Boeing could still have won if it could have convinced the N.L.R.B. that the only reason the unions impact was considered was as one of a set of economic factors impacting the company, similar to Lassing and the like.307 Considering the unions economic impact on the company does not necessarily implicate anti-union discrimination, even if the legitimate business purpose must be the sole reason for taking action.308 Therefore, although the IAM would have an easier time of proving their case, it would still need to affirmatively prove Boeing was not just looking at potential economic impacts, and was instead acting at least in part to discriminate against the union. If the N.L.R.B. required the employer to act predominantly with a legitimate business purpose, employers would have more flexibility on what factors to consider before taking action. With this type of rule, employers would certainly be able to take into account the economic effects a union had on their businesses and act in the interest of their bottom line so long as the economic factors were the primary purpose of them acting. Under this approach, Boeing likely would have been acting in accordance with the rule when making its expansion decision, and no ULP would have been found. The IAM and other union challengers would have
307

See supra notes 204-232 and accompanying text (discussing Bali Blinds Midwest, 292 N.L.R.B. 243 (1988), overruled on other grounds by Elec. Data Sys. Corp., 305 N.L.R.B. 219, 261-62 (1991); McLoughlin Mfg. Corp., 164 N.L.R.B. 140 (1967); N.L.R.B. v. Rapid Bindery, Inc., 293 F.2d 170 (2d Cir. 1961); and N.L.R.B. v. Lassing, 284 F.2d 781 (6th Cir. 1960)). 308 See supra notes 241-244 and accompanying text.

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a much harder time proving that the anti-union discrimination was the predominant reason the employer acted, and therefore would have a harder time proving a ULP occurred. Ultimately, I believe the second approach is the one the N.L.R.B. should take. It is a happy-medium that allows both the N.L.R.B. and employers discretion to decide what the right outcome should be. The N.L.R.B. would have the power to look at the big picture of a conflict, instead of having to focus on one out-of-context anti-union statement by one manager, to decide which side is more in the right.309 Employers would be more able to create and maintain jobs how they thought was necessary, a laudable and important goal all the time, but no more so than in the current recessed economy. Employees would still be able to bring a complaint against employers acting arbitrarily or with a heavy anti-union purpose.310 Opponents may argue that this approach gives too much latitude to an N.L.R.B. that is subject to partisan swings resulting in some oscillations in policy, and that therefore a brightline rule like the legitimate business purpose being the sole reason for an employers action is easier and more consistent to apply. It is true that, especially in recent years, the N.L.R.B. tends to lean pro-union or pro-employer depending on the political leanings of the current President, who gets to appoint members to the Board.311 However, the oscillations in policy tend to be relatively small, and there are already checks on the N.L.R.B.s discretion, such as budget cuts
Comment [KMG1]: I deleted this b/c it is just my opinion of how it could play out.

309 310

As the Supreme Court explained in Phelps Dodge Corp. v. N.L.R.B., *l+abor unions were organized out of the necessities of the situation. Union was essential to give laborers opportunity to deal on equality with their employer. Phelps Dodge Corp. v. N.L.R.B., 313 U.S. 177, 183 (1941) (internal marks omitted). This approach allows not only for unions to deal on more equal footing with employers, but for the reverse to be true as well: under this approach, employers are not forced to entirely kowtow to a union and its activities. 311 For example, ever since President Obamas election in 2008, a Democratic majority took control of the N.L.R.B. and signaled a desire to adopt a more liberal, pro-union tilt after years of pro-employer decisions under President Bush. Greenhouse, supra note 46.

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controlled by Congress.312

Additionally, employers already deal with the vagaries of the

constantly changing political scene, so the small policy oscillations caused by the partisan leanings of the majority of the Board are just one more wave in the sea of change. Opponents may also argue that this approach would give too much power to the employers, and that the N.L.R.A. entirely prohibits anti-union discrimination. It is true that this middle-ground approach promises some gains and losses for all sides, but that is always true when compromising. However, this approach also maximizes the potential gains without ensuring only losses for one side. Were the N.L.R.B. to pass a rule requiring employers to act solely for a legitimate business purpose, the employees and unions gain all the benefits, and the employers lose the majority of the flexibility that they have previously operated with. Under the middle-ground approach, employees only lose what is not even a concretely articulated right; considering the N.L.R.B.s inconsistent application of when the legitimate business decision affirmative defense kicks in, employees cannot legitimately expect the N.L.R.A. to completely prohibit anti-union discrimination, nor can they currently expect to win every case in which there arguably is anti-union discrimination. Furthermore, the employers gains are minimal under the middle-ground approach as well they gain the right to take a unions protected activities into account, but only to a certain extent. They still may not act solely or even predominantly to discriminate against a union, and so this middle-ground rule would still proscribe the truly untenable actions by employers.313
Comment [KMG2]: Not sure what to fill in here this is a logical conclusion (I think) from my previous sentence. If the affirmative defense is NA when you have 50% or more anti-union purpose, it seems like the really bad actions (where you are acting 100% b/c you hate unions) are not allowed not sure what to fill in here

312

The Boeing case motivated House Republicans to recommend using this particular control to influence the Board to rule in favor of Boeing; they tried to cut $50 million from the N.L.R.B.s $280 million yearly budget. Big Labors Attack on Democracy, supra note 30.
313

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Furthermore, as Minnesota Representative John Kline recently stated, No government board should have the authority to dictate where a private employer can run a business.314 This was a major concern in this case and in future similar cases because of the sweeping remedy the N.L.R.B. could potentially impose as previously discussed, the remedy the Board was seeking in Boeing was for the new South Carolina plant to be closed, and all operations there relocated to Washington. Many groups were concerned about the potential future implications such a remedy would have.315 While expanding, Boeing could have moved the new plant and jobs overseas, regardless of anti-union discriminatory intent.316 Coming down against Boeing would only have encouraged other big employers to move newly-expanded operations overseas in order to avoid future litigation and fighting.317 Passing a more middleground rule incentivizes American employers to keep jobs and business in America because they are more free to operate their businesses as they see fit without a constant eye on potential litigation.318 V. Conclusion Ultimately, this issue remains unresolved due to the settlement reached between Boeing and the IAM. However, this issue is sure to reoccur due to the inherent inconsistency in
314

Greenhouse, supra note 53; see also Lohr, supra note 1 (*South Carolina Senator Lindsey+ Graham and others say no one should be able to tell a company where it can do business.). 315 See, e.g., Interview with Steven Greenhouse, supra note 49 (South Carolina is concerned about taking jobs away from in-state workers); Greenhouse, supra note 53 (House Republicans tried to pass a bill called The Protecting Jobs from Government Interference Act, which would have prohibited the N.L.R.B. from ordering any employer to close, relocate, or transfer employment under any circumstances.); Kesmodel & Trottman, supra note 40 (Republicans and business groups were concerned that the N.L.R.B. was over-reaching its authority in its efforts to bolster unions). 316 Diana Furchtgott-Roth, NLRBs Boeing Suit Could Send U.S. Jobs Overseas, WASH. EXAMR (May 12, 2011, 8:05 PM), http://washingtonexaminer.com/2011/05/nlrbs-boeing-suit-could-send-us-jobs-overseas/39859 (The NLRB has no jurisdiction overseas. If Boeing had decided to produce more Dreamliners in Mexico, the NLRB would not have been able to close the plant.). 317 Id. 318 See id.

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the N.L.R.B.s case precedents involving comparatively slight employer actions. Therefore, the N.L.R.B. can help clarify the law and its stance on certain behaviors by passing an administrative rule that will dictate the outcome of these inevitable conflicts. By passing a rule that requires a legitimate business decision to be the predominant reason an employer acted, the N.L.R.B. takes a middle-ground approach that promises to maximize the benefits and minimize the burdens suffered by employers, employees, and the agency itself. This middle-ground approach allows itself and employers to operate and make decisions more flexibly, while at the same time allowing employees to hold employers accountable for truly indefensible anti-union discrimination. More importantly, it allows the government to more fully extract itself from private businesses and their management decisions. Because the N.L.R.A. was never intended to interfere with core entrepreneurial decisions,319 the N.L.R.B. should seek to achieve that goal as much as possible in the future. Minimizing the number of lawsuits that can be brought to challenge such ordinary management decisions such as how to most efficiently and economically run the business is a good step in the right direction.

319

See supra notes 178-180, 204-206 and accompanying text.

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