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Take On the NLRB

by Michael S. Greve

It’s a way to uphold the constitutional vision

Much has been said and written about the underhanded attempt by the National Labor Relations Board (NLRB) to enjoin, as an “unfair labor practice,” Boeing’s decision to locate a big production facility in right-to-work South Carolina (instead of further expanding factories in its closed-shop home state of Washington). The insipidly named Job Protection Act, an attempt to block the NLRB’s maneuver recently introduced by Sen. Lamar Alexander (R., Tenn.) and more than 30 co-sponsors, may seem little more than a routine exercise to capitalize on a controversy: As many experts have observed, the NLRB’s position is absurd even under existing law. In fact, however, there are potent political, institutional, and even constitutional reasons for according the bill a high priority.

Start with the politics: Why would the NLRB launch an unfounded attack on a model corporate citizen? While pro-union enthusiasm is surely part of the answer, even zealots are capable of, and in this case probably have entertained, a rational calculation. Suppose they know that Boeing will win the legal battle: It will win only many years and millions of dollars hence, and what counts in the interim is the signal that is being sent. An administration that is willing to press a baseless case against an iconic, well-connected company will surely be ready to make a run at more plausible targets, most of which will henceforth exercise an abundance of caution. Moreover, regulators know how to exploit collective-action problems within regulated industries. While humming a “we’re all in this together” tune to trade associations and industry coalitions, Boeing is singing a very different tune in other forums: We are a good U.S. company, not a global predator. We have never threatened a union, nor replaced union with non-union jobs; indeed, our union workforce in Washington State has grown. We support your watchfulness and mission, dear NLRB: You have simply picked the wrong target. That sort of “defense,” echoed by more than a few pundits, practically invites the NLRB to attack companies that are more vulnerable, down the road.

There’s no sense in blaming Boeing, which is only doing what it has to do. The problem is that regulators play this game day in, day out, on any number of fronts and without a credible deterrent. The proposed legislation provides an all-too-rare opportunity to protect regulated industries from their own opportunistic behavior and, at the same time, to replace the legal murk in which regulators now wield arbitrary power with a clear-cut rule. The prize in the Boeing contretemps is not the South Carolina facility, which will go on line in any event. It is to disrupt regulators’ calculus and to make them lose face. The central virtue of the Job Protection Act is not to protect jobs or even to facilitate a legitimate business decision; it is to leave blood on the floor.

Consider, next, the institutional dimension. Yale law professor Bruce Ackerman, in a characteristically interesting and over-the-top 2010 book titled “The Decline and Fall of the American Republic,” has warned of the modern presidency’s joint tendencies to charismatic “extremism” and bureaucratic lawlessness. True to liberal form, Ackerman finds these traits especially prominent in Republican administrations. But in fact, they perfectly encapsulate the Obama administration, whose signature initiatives (such as Obamacare and the Dodd-Frank financial “reform”) combine lofty, save-the-country ambition with unbounded discretion for administrative agencies. This indulgence of the agencies is also the import of President Obama’s take on the Boeing controversy. When asked about the NLRB’s actions, the president’s press secretary insisted on due deference to the decisions of an “independent agency” (albeit one that the president has attempted to stack with union shills). The president wants to stand with the unions and their designs, and aside from the lawlessness.

The urgent task, on the labor issue as in other contexts, is to demonstrate as vividly as possible that charismatic extremism and lawlessness go hand-in-hand. There is no way to reorganize the American economy in accordance with the administration’s grand plans except through low-level tyranny, from here to eternity. The president must be made to choose: invest his charisma in his lawlessness, or else surrender his ambitions. Presenting the JPA for the president’s veto or approval would be an excellent opportunity to teach that object lesson.

At an even deeper level, the Boeing controversy illustrates the great virtue of American federalism: economic and political competition among the states. If one state overtaxes and overregulates productive citizens or firms, another state may offer a more hospitable environment. The threat of exit disciplines state governments and lowers the cost of doing business in the United States. However, that salutary dynamic is perennially endangered by “harmonizing” federal interventions of the sort now urged by the NLRB.

Contrary to conservative federalism lore, such interventions are rarely imposed on recalcitrant states. State governments are beleaguered by interest groups that clamor for regulatory and fiscal favors, and the only way to accommodate them without suffering a competitive disadvantage is to block the exits. Hence, states persistently demand federal laws that subject citizens and firms to the same onerous conditions in every state. The only force that can arrest this centrifugal tendency, our history has shown, is a sharp sectional division among states, of a kind that is too profound to be compromised (by, for example, a spending program that bribes dissident states into compliance). The necessary condition for protecting the rights of states is a sectional division among them.

Depressingly, the “states’ right” that proved non-negotiable for most of our history was the right to enslave and oppress black people. And for complicated reasons, the states that insisted on that right are by and large the same states that now defend their right-to-work laws. But the southern exceptionalism that has been our bane may now prove a much-needed blessing. While states, collectively and “as states,” will always be a force for a more expansive and expensive government, a cohesive bloc of 16 or so states, with a near-existential interest in a competitive economy and federal system, may yet be able to thwart those designs. Right-to-work laws, vitally important in their own right, are also a pretty good marker for a state’s general regulatory climate and political culture. Let the New South hang together and win on this issue: It may find a unified voice on the environment, health care, and much else besides. A vote for the JPA is a vote for the all-important states’ right to resist the “future” of a social-welfare state that, all across the world, is on its last legs.

Enactment of the JPA would also signal that our political institutions may yet be capable of discharging the tasks that the Constitution, and the times, demand of them. As Sen. Jim DeMint (R., S.C.) noted in commenting on the proposed legislation, the Constitution does not require Congress to do an awful lot. It does, however, entrust Congress with power to “regulate” commerce among the states. For the most part, Congress has used that power to burden commerce; to protect favored industries; and, under Obamacare, to force private citizens into transactions that they do not wish to enter, the better to then “regulate” the compelled commerce. Let Congress just this once put the commerce power to its intended, pro-competitive purpose: It would highlight the difference between the Constitution’s plan and its routine abuse. That is the debate we need, and need to win.

– Mr. Greve is John G. Searle Scholar at the American Enterprise Institute.

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