EVERETT, Wash. ( TheStreet) -- The labor movement that helped build the middle class no longer stages popular strikes nor organizes vast numbers of workers. Instead, its greatest victories come in the form of government board rulings, including one that Boeing ( BA - Get Report), a Dow component and one of America's most prominent companies, is now battling.

In an April 20 finding, the National Labor Relations Board general counsel found that Boeing's decision to build some 787s in North Charleston, S.C., violated the National Labor Relations Act, which prevents companies from moving work in retaliation for labor actions.

The first step in the process of adjudicating the ruling comes Tuesday, when an administrative law judge in Seattle will hear the case.
Boeing Co. Machinists picket Monday, Oct. 6, 2008, at a gate in Seattle. The IAM, which represents about 25,000 Boeing workers, complained that Boeing moved work to South Carolina to retaliate for its striking.

The $750 million plant had its grand opening Friday and, at least in the short run, its operation is not threatened. Boeing has promised to fight the ruling. It also has the option of compromising with the International Association of Machinists, which filed the complaint that led to the ruling. Some experts say a compromise is not unlikely, although Boeing has so far indicated absolutely no interest.

At the hearing Tuesday, the NLRB counsel and Boeing will present evidence. The counsel must convince the judge that the charge has merit; the losing party can appeal to the five-member board. After that, if Boeing is still losing, it can appeal to a circuit court or it can wait for the labor board to seek enforcement in court, according to Ohio State University law professor James Brudney, who spoke to reporters recently during a conference call arranged by the American Constitution Society for Law and Policy, a liberal policy institute. Brudney said the case will likely drag out until 2012 or possibly 2013.

A settlement might involve Boeing building agreed-upon numbers of planes in both Everett and North Charleston. "It would surprise nobody if this case ultimately wound up settling," said Catherine Fisk, a law professor at the University of California, who was also on the conference call.

"There's nothing particularly extraordinary about this case as a matter of the legal principals," Fisk said. "What's unusual is that Boeing is a very large company and the plant involves a massive capital expenditure." Additionally, political hysteria is intense. Brudney said Republican members of Congress "have engaged in a series of activities or conduct that one rarely if ever encounters during an adjudicatory proceeding," pressuring NLRB officials and seeking to amend the National Labor Relations Act to immunize Boeing's conduct.

Fiske said it is clearly illegal to transfer work in retaliation for employees "having exercised their statutory right to unionize or bargain collectively or to strike." But it is not at all illegal to move because labor costs are too high or because workers elsewhere are better or for some other reason. The process will have "to determine whether the predominant reason was anti-union hostility, or anti-strike hostility, as opposed to legal motives," she said. It will not be easy, she added.

So far, the controversy has had no visible impact on Boeing stock. Shares opened at $74.21 on April 20, the day the NLRB counsel's ruling was announced. They rose as high as $80.65 in May, then fell back as the market declined, closing Friday at $72.69.
Boeing

Bill Swelbar, a research engineer at the Massachusetts Institute of Technology's International Center for Air Transportation, said the Boeing case -- and one other recent case involving Delta ( DAL - Get Report), illustrated below -- indicates that "the government has become a friend of labor, perhaps the last friend labor has.

"There aren't bright prospects out there for the labor movement," Swelbar said. "The question is 'How does a labor movement work in today's economy?

"Labor's ideas, while terrific, are just not reality in today's manufacturing environment," he said. "They worked 50 years ago because manufacturing was growing and airlines were in their infancy. But now, labor has the problem that fewer workers are trying to take care of more workers in retirement, and the math just doesn't work." Today, only about 12% of U.S. workers are represented by labor unions, down from about a third in 1945.

Delta's Fight

The other major Obama administration regulatory ruling benefitting labor came in 2009, when the National Mediation Board moved to alter the standard for union elections, so that that unions need only win a majority of the votes cast to win a unionization election. Previously, unions needed to win a majority of all those eligible to vote, even those who stayed home.

Delta, which was having union elections at the time, vigorously fought the ruling, even attempting unsuccessfully to recruit the entire airline industry in its cause.

IAM spokesman Frank Larkin said it was time for the NLRB to enforce existing labor laws and for the NMB to correct an injustice in labor law. "The labor boards provide the balance that is necessary for effective labor management relations," Larkin said. "Part of their responsibility is enforcement. Labor law, like civil law or traffic law, is worthless without effective enforcement.

"I think it's refreshing to see the laws enforced," he said. "When enforcement agencies stand up in the face of political pressure, it is inspiring to see. I think most Americans admire that."

Still, in a sad sign of the labor movement's decline, Delta won every election even though the ruling was in place. The NMB is investigating whether Delta violated labor law during the elections.

Labor's Ongoing Slump

Recently, labor's slump has extended beyond the Delta elections to the most prominent labor story of the year, in which governors and legislators in the Midwest, long a labor bastion, have turned against the movement.

Ironically, labor has made gains in the auto industry, where the United Auto Workers worked hand-in-hand with automakers in the industry's massive restructuring. Cost reduction has been so successful that now GM ( GM - Get Report) can build the Cruze, the country's best selling compact car, in Ohio.

The unique deal put together in bankruptcy court to save GM had the government as both lender and principal creditor. That meant the case could be structured in a way that made winners of the automaker and the union, and losers of some secured bondholders, not the way bankruptcy cases usually go.

Saving the U.S. auto industry, now on a hiring binge in the downtrodden Midwest, is one of the principal achievements of the Obama administration. It is a success story, but it is also a story where, once again, labor succeeded only with government help.

It remains to be seen whether, even with government help, labor can succeed in the Boeing case.

-- Written by Ted Reed in Charlotte, N.C.

>To contact the writer of this article, click here: Ted Reed

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