[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]
S. Hrg. 102-000 deg.
UNION SALTING OF SMALL BUSINESS WORKSITES
=======================================================================
HEARING
before the
SUBCOMMITTEE ON WORKFORCE, EMPOWERMENT & GOVERNMENT PROGRAMS
of the
COMMITTEE ON SMALL BUSINESS
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTH CONGRESS
SECOND SESSION
__________
WASHINGTON, DC, FEBRUARY 26, 2004
__________
Serial No. 108-55
__________
Printed for the use of the Committee on Small Business
Available via the World Wide Web: http://www.access.gpo.gov/congress/
house
______
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COMMITTEE ON SMALL BUSINESS
DONALD A. MANZULLO, Illinois, Chairman
ROSCOE BARTLETT, Maryland, Vice NYDIA VELAZQUEZ, New York
Chairman JUANITA MILLENDER-McDONALD,
SUE KELLY, New York California
STEVE CHABOT, Ohio TOM UDALL, New Mexico
PATRICK J. TOOMEY, Pennsylvania FRANK BALLANCE, North Carolina
JIM DeMINT, South Carolina ENI FALEOMAVAEGA, American Samoa
SAM GRAVES, Missouri DONNA CHRISTENSEN, Virgin Islands
EDWARD SCHROCK, Virginia DANNY DAVIS, Illinois
TODD AKIN, Missouri GRACE NAPOLITANO, California
SHELLEY MOORE CAPITO, West Virginia ANIBAL ACEVEDO-VILA, Puerto Rico
BILL SHUSTER, Pennsylvania ED CASE, Hawaii
MARILYN MUSGRAVE, Colorado MADELEINE BORDALLO, Guam
TRENT FRANKS, Arizona DENISE MAJETTE, Georgia
JIM GERLACH, Pennsylvania JIM MARSHALL, Georgia
JEB BRADLEY, New Hampshire MICHAEL MICHAUD, Maine
BOB BEAUPREZ, Colorado LINDA SANCHEZ, California
CHRIS CHOCOLA, Indiana BRAD MILLER, North Carolina
STEVE KING, Iowa [VACANCY]
THADDEUS McCOTTER, Michigan
J. Matthew Szymanski, Chief of Staff and Chief Counsel
Phil Eskeland, Policy Director
Michael Day, Minority Staff Director
SUBCOMMITTEE ON WORKFORCE, EMPOWERMENT AND GOVERNMENT PROGRAMS
TODD AKIN, Missouri, Chairman TOM UDALL, New Mexico
JIM DeMINT, South Carolina DANNY DAVIS, Illinois
SHELLEY MOORE CAPITO, West Virginia GRACE NAPOLITANO, California
JEB BRADLEY, New Hampshire ED CASE, Hawaii
CHRIS CHOCOLA, Indiana MADELEINE BORDALLO, Guam
STEVE KING, Iowa [VACANCY]
THADDEUS McCOTTER, Michigan
Tom Bezas, Professional Staff
(ii)
C O N T E N T S
----------
Witnesses
Page
DeMint, Hon. Jim, U.S. House of Representatives (SC-4)........... 3
Jacob, Mr. Clyde H., III, Jones Walker........................... 7
Krause, Mr. Jason, Brubacher Excavating.......................... 9
Newman, Mr. Jonathan D., Building and Construction Trades
Department, AFL-CIO............................................ 10
Cloninger, Mrs. Carol, Construction Electric, Inc................ 13
Cloninger, Mr. Leonard, Construction Electric, Inc............... 14
Mix, Mr. Mark, National Right to Work............................ 15
Appendix
Opening statements:
Akin, Hon. W. Todd........................................... 31
Prepared statements:
DeMint, Hon. Jim, U.S. House of Representatives (SC-4)....... 37
Jacob, Mr. Clyde H., III, Jones Walker....................... 40
Krause, Mr. Jason, Brubacher Excavating...................... 48
Newman, Mr. Jonathan D., Building and Construction Trades
Department, AFL-CIO........................................ 54
Cloninger, Mr Leonard and Mrs. Carol, Construction Electric,
Inc........................................................ 78
Mix, Mr. Mark, National Right to Work........................ 81
(iii)
UNION SALTING OF SMALL BUSINESS WORKSITES
----------
THURSDAY, FEBRUARY 26, 2004
House of Representatives,
Subcomittee on Workforce, Empowerment, and
Government Programs
Committee on Small Business
Washington, D.C.
The Committee met, pursuant to call, at 10:40 a.m. in Room
2360, Rayburn House Office Building, Hon. Todd Akin presiding.
Present: Representatives Akin, DeMint, Udall.
Chairman Akin. I now call this hearing of the Subcomittee
on Workforce Empowerment and Government Programs to order.
I am going to read a statement to begin with, and then I
believe we will probably go directly to the witness.
Good morning, and thank you for coming to our Subcomittee's
first hearing of the 108th Congress, second sessions. For the
first hearing of the year I wanted to choose something very
significant, something very close to small business owners.
When the issue of salting was chosen for this hearing, I
had no idea just how significant it was. Salting, for those of
you who don't know, is the act of deliberately inserting a
union member, or salt, into a not-yet-unionized company. This
salt applies for a position on the worksite, sometimes coming
forth as a union member during his or her application process,
and sometimes leaving that fact off.
This plant, or salt, seeks a position on the worksite in
order to establish a wellspring of support for the union
effort, eventually unionizing or organizing that non-union
company. This salt is often a member of a local union being
paid by that union for his or her services.
Employees often do not know that their new co-worker is
also a paid union organizer, and like all salesmen, this new
co-worker of theirs will collect a fee on selling these
unsuspecting workers on the idea of unionizing.
A salt is often sent in after an honest, forthright attempt
to unionize has already failed.
When an employer is confronted by one of these salts, he is
put in a lose/lose position. If he does not hire the applicant,
the applicant and his union can run to the National Labor
Relations Board and file charges of unfair hiring practices.
These charges often lead to long and dragged-out costly
litigation, which the national unions have plenty of money to
support, but small businesses are not equipped for.
With us today are Mr. and Mrs. Cloninger. They will be able
to tell us their story, which illustrates exactly what I have
explained. Mr. and Mrs. Cloninger should be commended, as well
as the other members who have come forth today. Many have not.
My staff and the staff of related organizations contacted
many people to participate in today's hearing. Most people were
frightened to give testimony. American citizens were frightened
to take advantage of their God-given right to speak the truth
of what had happened to them.
Why? Why were people so frightened that they declined to
appear before the United States Congress?
Actually, they had good reason. It appears that there is
something to this salting, for when these people have spoken up
before, they have experienced just how vital salting is to the
unions. People we have been in contact with told us stories of
receiving numerous death threats, having loved ones threatened,
and even being run off the road.
Now, I have spent my time dealing with unions before. For
years I served in the Missouri State Legislature, and in my
time there, I had my share of dealing with unions and their
tactics. I know what kinds of threats people are capable of,
and understand the concerns and fears of these business owners.
Even members of public office are not above the threats of
people who would intimidate us.
It is for this reason and many others that I applaud my
friend, Congressman Jim DeMint, for proposing this piece of
legislation, entitled ``Truth in Employment Act of 2003.'' That
is House Resolution 1793.
I would like to thank you, Congressman, for coming to this
hearing today and speaking to us about this legislation.
Because of the fact that we have Congressman Toomey here,
also, I would recognize Congressman Toomey, if you would like
to make a comment.
[Chairman Akin's statement may be found in the appendix.]
Mr. Toomey. Thank you, Mr. Chairman. And I would just add
very briefly that I am very eager to hear and read the
testimony of our witnesses today.
This strikes me as a disturbing practice, the salting
practice. It strikes me that way for a variety of reasons, but
one of which is that it seems to me--and we will learn better
today, I hope--but it seems to me that it is often founded upon
a fundamental deceit, a deceit in which an individual
approaches a company with the pretense that he or she is there
to work, to get paid for his work, and to go home when his work
is finished. But in fact, the individual is there with a very
different agenda, which is not consistent with that, and which
is information withheld from the employer, and from his fellow
workers. And I think it ought to be troubling whenever any
systematic effort is undertaken that is founded upon deceit.
So I am looking forward to learning whether or not that is
true. And I would certainly like to learn whether, and to what
extent, individuals are actually frightened or intimidated
about simply telling the truth and testifying in public. There
is absolutely no place for intimidation in public discourse. So
I hope to learn that that is not the case. But in any case, I
am going to be sitting here with open ears to find out.
So thank you very much for having this hearing. And I
welcome my colleague, and commend him for his legislation.
Chairman Akin. Thank you very much, Congressman Toomey. I
appreciate having you, and also Congressman DeMint. It has been
just such a pleasure serving with both of you gentlemen. And I
don't want to take any more time; I would like to give you as
much time as you need, Congressman, to explain your
legislation, and make your opening statement.
STATEMENT OF THE HONORABLE JIM DeMINT, U.S. HOUSE OF
REPRESENTATIVES, (SC-4)
Mr. DeMint. Thank you, Mr. Chairman and Congressman Toomey.
I appreciate the opportunity to review the details of this
bill, and I particularly appreciate the Subcomittee's interest
in the issue.
And I am here today to speak about House Resolution 1793,
which we call the Truth in Employment Act. It is a bill I
introduced last summer to stem the harm being done now to
companies by salting, which you have explained. It is a union
tactic that is causing material economic damage to small
businesses every day in this country.
At the outset, if I could add to some of the definition,
Mr. Chairman, that you mentioned about the definition of
salting. While union supporters and the National Labor Review
Board have defined the term as placing of union members on non-
union job sites for the purpose of organizing, it has been
widely documented that the true motivation of many salts is
simply to increase the cost of doing business for non-union
contractors, regardless of the wishes of the employer's
bonafide employees.
Salting is much more than someone seeking employment for
the purpose of union organizing. It is repeated attempts to
interfere with business operations, harass employees, and cause
economic harm through illegal actions and frivolous legal
complaints against employers.
Union organizers who fail to convince employees to organize
will use salting to shut down non-union companies, often going
to extreme lengths, including preventing deliveries to job
sites and destroying building materials.
In my own state of South Carolina, salting has resulted in
the loss of hundreds of jobs. In Sumter, South Carolina, Yuasa
Exide battery plant was targeted by the IUE CWA union. Union
salts infiltrated the plant, and when employees there did not
unionize, the union retaliated by sabotaging product, causing
work slow-downs, making verbal threats and threatening phone
calls, and putting nails in people's tires.
Union leaders threatened to shut down the plant, and that
is exactly what they did. Six hundred and fifty people were
laid off because the plant could not afford the increased costs
of doing business resulting from the salting.
This plant, which was the first tenant in Sumter's
industrial park, had been there since 1965, and provided high-
tech, good-paying jobs in a rural area, was forced to close its
doors just because of salting.
The impacts of salting are felt by many. Companies see
increased costs from having to defend themselves against labor
relations complaints, as well as lost hours of productivity
having to fight these charges.
Consumers are impacted by salting when they experience
increased costs, reduced competition, and fewer new jobs being
created.
Federal Agencies spend untold sums to investigate claims
that are later found to be without merit, forcing taxpayers to
effectively subsidize union activity.
To put it bluntly, salting is a job-killer. At a time when
we are working in Congress to enact policies which will spur
job growth and ensure future economic prosperity, salting
abuses are standing directly in the way of these goals. We can
no longer allow American jobs to suffer at the hands of
Washington labor bosses.
To prevent salting abuses from causing more harm to
employers, I have introduced the Truth in Employment Act, along
with Representatives Cass Ballenger and John Carter. This
legislation amends Section 8(a) of the National Labor Relations
Act, to make clear that an employer is not required to hire any
person who seeks a job in order to promote interests unrelated
to those of the employer.
This bill in no way infringes upon any rights or
protections otherwise accorded employees under the NLRA.
Employees will continue to enjoy their right to organize. The
bill merely seeks to alleviate the legal pressures imposed upon
employers to hire individuals whose overriding purpose for
seeking the job is to disrupt the employer's workplace, or
otherwise inflict economic harm designed to put the employer
out of business.
Following my testimony you will hear from businesspeople
who are on the front lines of the salting debate, and live with
the effects of it every day. And I applaud them for coming here
today, in spite of potential pressure not to do so.
Mr. Chairman, again I thank you for allowing me to testify.
I would like to submit one testimony from past hearings. It is
serial number 10572. That was the Committee on Education in
Workforce, a testimony by Mr. Cook, a former union salt, of how
he was trained, what his purposes were, so that we make it
particularly clear that this is not a benign problem. It is a
serious problem in American workplaces that we need to shut off
here at the federal level.
So without objection, I would appreciate----
Chairman Akin. Without objection.
Mr. DeMint[continuing]Thank you, sir. And thank you for the
opportunity to testify. And I would be glad to answer any
questions that you have.
[Representative DeMint's statement may be found in the
appendix.]
Chairman Akin. Well, let me start to try to understand a
little bit the nature of how your bill works. You said that the
essence of the bill is that an employer doesn't have to hire
somebody who has some interest totally separate from the
interest of the employer. In other words, the employee is
working for the union, as opposed to for the company that he is
being paid to work for.
How would that be enforced? And isn't that kind of a matter
of judgment as to what somebody's priorities are? I mean,
practically, is there a way to enforce it, I guess is what I am
asking.
Mr. DeMint. It should be our goal to enforce it. And I
think not only should employers have the right to decline
hiring someone who we know to be a union salt, but it would
also allow them, if found that they came to work under false
pretenses, would allow them to terminate that employee without
having to deal with lawsuits from the National Labor Review
Board.
Chairman Akin. So this would give them two outs, then.
First of all, if the guy comes in and says ``I am a salt,''
then they could choose not to hire the person, according to
your legislation.
Mr. DeMint. Exactly, or with a background check it is
determined that the----
Chairman Akin. Okay. Later somebody comes in under the
radar and says ``I just need a job,'' and then it turns out
that they are a salt, then that would be a basis to terminate?
Would that allow them to do that, then?
Mr. DeMint[continuing]That is my intent. And we might have
some counsel here to indicate if there is any disagreement in
that, but that is certainly the intent. If someone is found to
be working under false pretenses, that they have not told the
truth, as Congressman Toomey talked about, the whole purpose of
employment is deceit, then the employer should have the right
not to have that person working for them.
And that is really what we are talking about, is freedom of
employers to hire people who are there to further the goals of
that employer.
Chairman Akin. That sounds straightforward. I guess it
would be interesting to hear whether legally this is
enforceable, whether the language is right, but I trust that it
is.
I would ask my colleague, Congressman Toomey, do you have
any questions about the legislation?
Mr. Toomey. Well, I do. And maybe Representative DeMint
could answer this question.
Are salts typically, when they are working for a
contractor, for instance, are they typically also being paid by
a labor union?
Mr. DeMint. That is my understanding. And I think we may
find out more from some of the other witnesses. But that is
generally, I think, as the Chairman said when he introduced it,
that is often the case.
Mr. Toomey. So they are showing up for work. They are
punching a clock, they are getting paid by that employer. But
they are also getting paid by someone else.
Mr. DeMint. Right.
Mr. Toomey. It only stands to reason that the someone else
who is paying them wants something in return for having paid
them. I mean, they are there for some other purpose.
Mr. DeMint. Exactly. And for the employer to have to pay
someone to disrupt their business, it should not be allowed.
Mr. Toomey. Right. Now, the way I read the summary of your
bill, it says that an employer would not be required to hire a
person who seeks a job in order to promote interests unrelated
to those of the employer.
Is it your intention that it be presumed that if you are on
the payroll of someone other than the employer, that fact alone
would be determinative evidence that you are there to support
some other interest?
Mr. DeMint. That would be my intent. And certainly that is
clear.
Mr. Toomey. Under current law, is an employer allowed to
ask on an application, for instance, when an applicant comes to
look for a job, is it legal to ask whether or not you are
currently, or if you got hired you would be paid by another
entity, including a labor union?
Mr. DeMint. I am not sure if it is or not. Someone else
here maybe could answer that question. But certainly it is
something we need to find out.
Mr. Toomey. It is something that, my understanding is that
it can result in litigation, in any case.
Mr. DeMint. Right. And that is the problem with a small
employer. You will hear from them today. There is no way a 10-
person company has the resources to deal with the National
Labor Review Board, with the attorneys coming in from large
labor unions. There is no way you can sustain that type of
attack.
Mr. Toomey. Right.
Mr. DeMint. In many cases, they have a lose/lose situation.
If they try to fire someone who is working against them, they
end up in litigation. If they keep those people there, they are
likely to shut them down.
And so we have got the American employer, who we count on
to create jobs and prosperity in this country, at a severe
disadvantage to those who want to destroy them.
Mr. Toomey. Thank you very much.
Chairman Akin. Thank you very much. I do not see any other
people to ask questions, although there are some additional
things that we may be able to develop from our second panel of
witnesses.
I don't know what your schedule permits, Congressman, but
if you would care to join us up here for a while, for the
second panel, we would be honored to have you, if you would
care to do that.
Mr. DeMint. I may have to leave, but I will certainly make
sure I get all the testimony today. So I will stay for a little
while. But thank you so much.
Chairman Akin. Thank you very much. Can we have now the
second panel come forward?
I just want to, once again, formally thank all of you for
taking the time, some of you to fly some considerable distance
to join us today. And I understand that there is, I am sorry to
say, some risk even associated with your coming.
Of course, that is the whole point of the hearing. But I do
want to thank you. So I just want to first of all thank you all
for coming.
I think what we will do in terms of the order of procedure
is, I am going to allow each of you to make opening statements.
I am just going to let everybody have their say. And then
depending on the different Congressmen and their schedules, the
ones that come and go, will be able to ask questions. I will
ask questions, as well. I think that is probably a
straightforward way to proceed. I think we can move the meeting
along fairly quickly that way.
So without further ado, I would like to introduce Clyde
Jacob, III, from Jones Walker from New Orleans. I believe that,
Clyde, you are a labor lawyer, and you have fought unions on
behalf of victimized businesses. Is that overstating things, or
is that pretty accurate?
Mr. Jacob. That is pretty accurate. Thank you.
Chairman Akin. We are going to give you each five minutes
for opening statement.
Also, if you would like to just submit something written
for the record, you can do that. And then if you just want to
talk off your notes and communicate whatever, however you want
to handle the five minutes is up to you.
Clyde, would you proceed, please? Thank you.
STATEMENT OF CLYDE H. JACOB, III, JONES WALKER
Mr. Jacob. Thank you, sir. Mr. Chairman, members of the
Subcomittee on Workforce Empowerment and Government Programs. I
am pleased to be here, and thank you for your kind invitation.
I am here today to testify on behalf of the United States
Chamber of Commerce, Washington, D.C. I serve on the Chamber's
Labor Relations Committee, as well as its Subcomittee, focused
on issues specific to the National Labor Relations Act.
I have written testimony that is much more extensive.
Chairman Akin. Excuse me. Could you possibly bring the mike
just a little bit closer? I think they would pick up better.
Even a little more than that maybe. That wire is long enough
you will be able to do it, I think.
Mr. Jacob. How is that?
Chairman Akin. That is great. Thank you.
Mr. Jacob. You are welcome. I have written testimony that
is much more extensive. I would like an opportunity just to
summarize my written testimony, if I could.
I agree very much with the definition of salting that has
been expressed so far in the hearing today. Unions often claim
that salting is about the right of employees to organize.
However, nothing could be further from the truth.
Salting is not about organizing for the employees. It is
about organizing in spite of the employees. It is depriving
employees of secret-ballot elections and information about the
union. It is also about harassing, intimidating, and
eliminating non-union employers.
Salting is particularly harsh on small business owners. I
would like to tell you just one brief story of a case involving
a Mr. Bill Tillinghast, the owner of Custom Fabrication, Inc.,
a small precision fabrication company in Kenner, Louisiana, a
New Orleans suburb.
Bill is a welder by trade, and began his career in 1964
building Chrysler automobiles for the United Auto Workers
Union. In 1974, with $600 in the bank, and wife, two children,
a mortgage, and a lot of determination, Bill left his welding
job to go after a piece of the American dream: to start a
precision fabrication company.
He operated out of a garage for four years, until he had
saved enough money to move into a small warehouse. By last year
he had grown to 16 employees; he was planning to hire three
more employees. So he did what every normal small business
owner does looking to hire workers; he placed an ad in the
paper. Bill never expected what would happen next.
On January 10, 2003, Sheet Metal Workers Local Union
President, Local Number 11, applied for a welding position. Mr.
Lopez's application clearly demonstrated his union affiliation.
Even though he had no precision welding experience, he was
still offered the opportunity to take a welding test, a
requirement of all applicants.
Mr. Lopez took the test and passed one test, but refused to
take the second test. His reply was, ``I don't care. I will
sweep floors. All I want to do is organize this place.''
The foreman replied, ``If you do not want to take the test,
you should leave,'' which he did.
Two days later another Sheet Metal Workers member came, and
did the exact same thing: applied, was interviewed, and refused
to take the test. Both men then filed charges with the National
Labor Relations Board alleging discriminatory failure to hire
because of union affiliation. They also said that the company--
and this was never the case--said the company did not want to
have anything to do with unions.
After three months of investigation, and approximately
$10,000 in attorneys' fees to Custom Fabrication, not a small
sum to a small business--I mean, we may scoff at $10,000, but
for a small business that is a lot of money--the NLRB offered
to settle if Bill would post a notice stating he would treat
all union and non-union applicants equally. Bill was reluctant
to do so, but with mounting costs, he did agree to do that.
The moral of the story is this. Bill Tillinghast worked his
entire life to create a business he could be proud of, a
business that would support his family and the families of his
employees; the type of business that helped make this country
great. And two individuals who had no intention of working were
able to come into Bill's business, refuse to take the tests
required for employment, and then file a charge with the NLRB
alleging discrimination.
The union agents did not spend a cent for the NLRB's
prosecution of their charge. Instead, the American people,
including Bill Tillinghast and Custom Fabrication, Inc., were
forced to foot the bill.
The intent of union salts is not to genuinely seek
employment. In my estimation, we have to question whether it is
appropriate for finding a violation of the NLRA for an employer
for failing to hire an individual who is not genuinely seeking
employment.
In this and in past Congresses, several measures have been
introduced that would address this issue. And Representative
DeMint is one that the Chamber fully supports.
Thank you for your opportunity to testify today. I would be
happy to answer any questions that you might have.
[Mr. Jacob's statement may be found in the appendix.]
Chairman Akin. Thank you very much, Mr. Jacob. And our next
witness is Jason Krause, with Brubacher Excavating,
Bowmansville, Pennsylvania. The company has had consistent
salting from two different unions from 2001 through today. The
majority of the suits have been dismissed by NLRB as frivolous.
Their local unions will not quit, however, and they have been
salted as recently as this past Wednesday.
Is that right, Mr. Krause?
Mr. Krause. That is correct.
Chairman Akin. Please proceed with your five-minute
testimony.
STATEMENT OF JASON KRAUSE, BRUBACHER EXCAVATING
Mr. Krause. First of all, I would like to say thank you for
having me here. And I would like to summarize my statement, and
ask that it be included in its entirety for the record, what I
have passed on to you.
Chairman Akin. Without objection.
Mr. Krause. Once again, my name is Jason Krause, and I am
the Human Resource Manager for Brubacher Excavating. It is a
privately-owned company that has 300 men and women in
Southeastern PA working there.
B.E.I. is a proud member of the Associated Builders and
Contractors, a national trade association made up of
construction and construction-related firms across the country,
all of whom are bound by their common belief in the merit shop
philosophy.
I am here today to share some of my experiences on salting
abuse, to express to you the desperate need for legislation
prohibiting this type of tactic.
Salting has become an instrument of economic destruction
aimed at non-union companies. It has little to do with
organizing.
A publication of the IBEW, one of salting's principal
proponents, has described that salting's tactics are filled
with infiltration, confrontation, litigation, disruption, and
hopefully annihilation of a non-union construction company.
Brubacher Excavating and I have become all too familiar
with this type of disruptive, intimidating, and damaging
pressure tactic.
A little history. Between March and May of 2001, nine
members of the Operating Engineers Local 542 tried salting BEI.
Upon learning that we would not grant them employment, the
union filed an unfair labor charge with the National Labor
Relations Board.
We retained counsel. We made our defense known to the
National Labor Relations Board, at which point the Operating
Engineers withdrew their charge.
Earlier this year, and in the past 2003, a business agent
from the laborer's union informed Brubacher Excavating we were
infringing on their ``union territory,'' and were taking money
out of the pockets of union members by doing business in this
area. He went on to make clear that if Brubacher Excavating
does not choose to have a potential business relationship with
them, they would have no other choice but to launch a union
campaign against our company.
Soon after that conversation, a year-long campaign of union
harassment and intimidation was initiated by the Laborers Union
and the Operating Engineers. We have endured everything from
mass picketing, job shutdowns, picketing of our own open house
for our families, friends, and employees. Meetings were set up
with our customers to try to destroy relationships, long-term
relationships with our customers.
It all became clear to us that we were victims of an
unprovoked union campaign to smear our company's image.
From March through June of 2003, no less than 17
applications for employment were filed by union salts. Some
applications were immediately dismissed by BEI because they
were filed incorrectly, and contained false information. Other
applicants were disqualified for inconsistencies regarding wage
and other employment history, past employment history, which
were later identified.
Over the course of the year the Operating Engineers and the
Laborers Union made frequent trips to our office with the sole
intent to harass our company. In total, 11 organizers were
involved in filing unfair labor charges. The charges were so
clearly based off of a frivolous nature, all but two of those
charges were dismissed.
B.E.I., along with ABC, firmly believes in laws designed to
protect employees. However, these laws are being manipulated by
the labor unions in order to regain their diminishing market
share.
Salting abuse has used corrosive government power to
accomplish union goals, rather than competing fairly and
ethically based upon merit.
In defending ourselves against false and frivolous charges,
we have incurred thousands of dollars in legal fees, delays,
and lost hours. While unions have the right to attempt to
organize workers, open-shop companies and their employees have
the right to refrain from supporting union activities, and be
free from this type of harassment.
I would like to thank you for allowing me to speak.
[Mr. Krause's statement may be found in the appendix.]
Chairman Akin. Thank you very much, Jason, for joining us
today, and for your testimony. We will have some questions in a
few minutes when we finish our other witnesses.
The next witness is Jonathan Newman. I understand, Mr.
Newman, that you are a representative of AFL-CIO. Is that
correct?
Mr. Newman. No. I am here on behalf of the Building and
Construction Trades Department of the AFL-CIO, which is a
separate entity.
Chairman Akin. Okay. The Building and Construction----
Mr. Newman. Trades Department.
Chairman Akin[continuing]Okay. Now, does that mean that you
work for the union, or for the government?
Mr. Newman. I am a lawyer in private practice. Our firm
represents labor unions.
Chairman Akin. Oh, it does, okay. Then I didn't have as
much information as I wanted. You have five minutes for your
testimony, Mr. Newman. Thank you.
STATEMENT OF JONATHAN D. NEWMAN, BUILDING AND CONSTRUCTION
TRADES DEPARTMENT, AFL-CIO
Mr. Newman. Thank you, Chairman Akin, ranking member Udall,
for allowing me to present the views of the Building and
Construction Trades Department on the issue before the
Committee today.
My name is Jonathan Newman, and I am a partner in the law
firm of Sherman, Dunn, Cohen, Lafer, and Yellig here in
Washington, D.C. We serve proudly as the general counsel to the
Building and Construction Trades Department, and have done so
for many years.
The Building and Construction Trades Department is
comprised of 15 national and international unions representing
approximately one million hard-working men and women in the
construction industry, and several million more outside of
construction.
I ask that the more extensive written statement on behalf
of the Building and Construction Trades Department's President,
Edward C. Sullivan, be made a part of the record. And I ask,
Mr. Chairman, that, like the statements of the other witnesses
here, it be made available to the public on that table.
Chairman Akin. Without objection.
Mr. Newman. The Building and Construction Trades Department
has witnessed several attempts over the years to do what this
bill seeks to do. And that is, allow employers to discriminate
against union organizers and supporters with impunity. Those
bills which were introduced and considered in the 104th, 105th,
106th, and 107th Congresses were each defeated, and this bill
should meet a similar fate in this final year of the 108th
Congress.
The bottom line of our position is this. Salting is about
organizing: organizing construction employers, organizing
construction workers, period.
Construction unions use skilled workers as organizers, tell
them to do the best work possible, and to organize only within
the confines of the law. These organizers are often referred to
as salts. Very often they are volunteer organizers. They agree
to hire on with non-union contractors to perform a good day's
work for a day's pay, and help unorganized workers gain better
wages and benefits for their families.
These organizers engage in the type of activity that
Congress, the United States Supreme Court, and the National
Labor Relations Board have recognized as being both protected
and within the central core purpose of the National Labor
Relations Act.
Contractors do not, Mr. Chairman, and should not, as they
often claim, lose control of their jobs or their businesses as
a result of a salting campaign. A salt, like any other
employee, is subject to the employer's direction; must do his
or her work in a satisfactory manner; and must obey all lawful
work rules.
What is really at stake here is whether employers should be
allowed to discriminate against employees on the basis of their
union membership and activity.
Let me address for a moment, if I may, a fallacy I have
heard in connection with this bill. And that is the idea that
it would not curtail legitimate rights that employees currently
have under the National Labor Relations Act. That is flat-out
wrong.
The United States Supreme Court has held unanimously, in a
nine-to-zero decision, that union organizer salts are entitled
to the protections of the National Labor Relations Act, and
cannot be discriminated against. This bill would eviscerate
those rights and allow employers to create blacklists of union
organizers, effectively hanging a sign in every non-union shop
saying ``union supporters need not apply.''
Also, most unions are small organizations. And most union
officers are part-time union officials. This bill would allow
employers to discriminate against those officers, and against
everyone who could be said to be furthering their
responsibilities when they apply for employment.
For example, a union shop steward could be legally
discriminated against when he or she seeks a promotion. With
seeking that promotion, that shop steward may be deemed to be
seeking employment ``in furtherance of his union
responsibilities.''
Thus, under current law, the situation of a salt is no
different from that of an employee who is already on the job,
and who decides to support his or her union. Both are entitled
to the protection of the NLRA.
Mr. Chairman, I understand that those who resist organizing
the construction industry claim that unions seek to drive up
employers' costs, or even run them out of business. There are
two answers to that claim.
First, the goal of organizing in all industries is to
eliminate unfair competition based on substandard wages and
working conditions. If a non-union employer is paying
substandard wages and is organized, it certainly may, after a
collective bargaining agreement is negotiated, have to pay the
higher wages and benefits in the union contract.
Second, salting may result in increased costs to employers
in another way. Many non-union contractors gain an unfair
competitive advantage by violating various laws. When these
contractors save money by violating the wage and hour laws, or
by failing to comply with the prevailing wage requirements, or
by failing to comply with OSHA requirements designed to protect
the health and safety of their employees, it is fair to expose
them, and we make absolutely no apologies for doing so.
Those who violate worker protective laws victimize not only
their employees, but the legitimate contractors, both the union
and non-union, who abide by the law.
Finally, if I may, there is a claim that----
Chairman Akin. You five minutes are up, but finish up. It
is fine, go ahead.
Mr. Newman[continuing] May I have one more minute?
Chairman Akin. Yes.
Mr. Newman. Finally, there is a claim that unions file
frivolous charges with the NLRB to cause employers to incur
legal costs. That is simply not true, and is not borne out by
any of the statistics kept by the NLRB.
In fact, as set forth in our written statement, the number
of unfair labor practice charges filed against employers has
actually decreased since the Supreme Court's Town and Country
decision in 1995, and the percentage of charges that have been
deemed meritorious by the NLRB has held constant for decades.
Thank you, Mr. Chairman.
[Mr. Newman's statement may be found in the appendix.]
Chairman Akin. Thank you for your testimony. Next witness
is going to be--maybe I will just take a moment to introduce
Congressman Udall, who is the minority Chair of this Committee.
And he is going to be making a statement following your five-
minute testimonies.
And it is a pleasure to have you here, Tom, this morning.
Let's see. The next witness is going to be Mr. Leonard and
Mrs. Carol Cloninger. They are Construction Electric, Inc.,
from Helena, Montana. I think you may have the award for
traveling the farthest to get here, but I know you come from
God's country up there anyway.
And you are, as I understand it, a literal mom-and-pop put
out of business by costly salting induced by litigation. I
think that was the case that you are going to make, or the
story that you have to tell us, is that correct?
Mrs. Cloninger. That is correct.
Chairman Akin. If you would proceed, you have five minutes.
Thank you.
STATEMENT OF CAROL CLONINGER, CONSTRUCTION ELECTRIC, INC.
Mrs. Cloninger. Thank you. And I have a prepared testimony
that I would like part of the record.
Chairman Akin. Without objection.
Mrs. Cloninger. My name is Carol Cloninger; this is my
husband, Leonard. We are former officers of Construction
Electric in Helena, Montana. We started this company in 1989
out of a pickup truck, to provide a living for our family.
When we evolved into a larger operation, employing nine
electricians, we had a bookkeeper, office manager, and a shop
complex in Helena.
In October of 1998, up until 2000, the International
Brotherhood of Electrical Workers began targeting our company
by filing frivolous complaints to the Montana Electrical Board,
all of which were dismissed without merit.
In August of 2001, we dismissed two electricians from our
company for unsatisfactory job performance. Both had been
recently hired, and they were on probation. They were
essentially on the payroll, and not working in a productive
manner.
In late September of 2001, we ran an ad in the newspaper
for an electrician, and began receiving job applications
through the mail, through registered mail, from the local IBEW
organizer, who had harassed us previously in the previous
years.
At that time, we contacted a labor attorney in Missoula,
Montana, and acted on his advice. We also received application
from an organizer in Billings, from the IBEW. And Billings is
250 miles from the capitol city, he was interested in coming to
work for us from that far away.
We received a total of five applications, two of those
which were what they called overt salts, and three which were
covert salts. And that is all lined out in the testimony that
we submitted.
In November of 2001, we received notice from the NLRB that
we had been brought up on alleged charges for certain unfair
labor practices by three of those five applicants. We attended
a preliminary deposition in Missoula, to determine if there
were grounds for discrimination, and that was followed by a
hearing in July of 2002. And in September of 2002, judgment was
handed down in favor of the IBEW.
We received notification in March of 2003 of back wages
owed to three of these individuals, for an amount of $42,000.
And we were ordered to offer them jobs to make them whole. I
might add that there were long periods of time, when we had
asked numerous times for this process to be sped up, and we
were told by members of the National Board that there was a
tremendous back load, and that they would get to our case
hopefully in time. But it ended up costing us a large amount of
money because of the delays.
In April of 2003, my husband and I discussed our options,
and we decided to close the company's doors. We could not
continue to do business in that manner and be profitable.
Let me back up. The NLRB confiscated our bank account and
our accounts receivable in June of 2003, for a total amount of
$32,000. Late in July of this last year, we agreed to settle
with the NLRB for that amount of $32,000, and this was to avoid
bankruptcy of our company, and also due to the threat that my
husband could go to jail if he didn't comply.
We provided benefits, such as retirement and health
insurance and dental insurance, to our employees. We had one
electrician who had been a diabetic since he was 19 years old;
had never been able to afford quality health insurance. He was
able to get an insulin pump and all the supplies that he needed
to be a productive worker and live a healthy life.
We had another electrician who had never had health
insurance his whole life. He needed extensive dental work, and
he also had a drug problem, which he was able to go into rehab
with our insurance that we provided, as well as get his teeth
fixed. He is now living in the Seattle area working as an
electrician, and is doing well.
We produced two master electricians, and we had four
apprentices that were able to get out into the community and
are doing well.
This was a terrible loss for us. We were taught when we
were growing up that we needed to be accountable, and that it
was always best to tell the truth. We ask you to, as we share
our story with you, we ask everybody here to consider their
values, and to consider this bill in an effort, and in the
beliefs of our country, that we do things for the right
reasons, and that we be honest.
Thank you very much. And we are always open for questions,
if you have any.
[Mrs. Cloninger's statement may be found in the appendix.]
Chairman Akin. We will do the questions in a little while.
Thank you, Carol, and then Leonard.
STATEMENT OF LEONARD CLONINGER, CONSTRUCTION ELECTRIC, INC.
Mr. Cloninger. The only thing I would like to say is,
everyone testifying here today is right on, except for the
legal representation for the AFL. I feel like he hasn't been in
the trenches, and he really doesn't know what it is like to be
a small businessman.
That is all I would like to say.
Chairman Akin. Thank you for your testimony. Our last
witness is Mark Mix, President of National Right to Work, from
Washington, D.C. You have five minutes, Mr. Mix.
STATEMENT OF MARK MIX, NATIONAL RIGHT TO WORK
Mr. Mix. Mr. Chairman, thank you. I find it difficult to
speak after this story that we have heard from our two
witnesses just now.
I am Mark Mix, President of the National Right to Work
Committee. Mr. Chairman, thank you for the opportunity to be
here. On behalf of the 2.2 million members of the National
Right to Work Committee, we commend you and Congressman DeMint
for shedding light on this issue. This is an important issue.
I want to approach the issue from a little different angle.
I would ask that my statement be included in the record. I am
going to deviate a little----
Chairman Akin. Without objection.
Mr. Mix[continuing]Bit and respond to what has been said
here today.
We, the Right to Work Committee, are dedicated to the
principle that every individual worker should have the right,
but should not be compelled, to join or financially support a
labor union.
We are talking about small businesses, and the devastation
that this particular practice of salting wreaks on those people
that own small businesses.
But there is an element, as well, that needs to be
discussed and considered. And that is the element of the
employees of these companies. These individual workers, in most
cases, have decided, for whatever reason, not to join or
organize a union in their workplace. And the only way that
union officials can get a toehold in these places of business
is to send someone in, who in many cases is paid to do so by
the union.
The labor laws in this country protect an individual to
exercise their rights, vis-a-vis unionization. Section 7, the
preamble of the National Labor Relations Act, states very
clearly that individual employees have these rights. And to
discriminate against someone based on union membership or non-
membership in a union is against the law. And people are
prosecuted for that, and they should be.
The section 7 preamble of the National Labor Relations Act
unfortunately also contains a provision that allows for
compulsory unionism. And that is, individuals can be forced to
pay dues to join a union, or lose their job.
In the cases that we have heard about with these small
businesses, while the small businessmen and women are obviously
devastated by this, what about the employees that work for
these companies? They have and can exercise their rights to
join unions or not to join unions, but they haven't. And now we
allow, through the Supreme Court--the AFL-CIO is correct,
unfortunately the Supreme Court has ruled on this witness. It
is unbelievable to us that salting is currently sanctioned
under the National Labor Relations Act.
As it stands today, salting is interpreted and enforced
based on a flawed interpretation of section 8(a), we believe.
Small business owners and employees are continually brought up
on unfair labor charges for insisting that employees focus
primarily on doing the job they are actually being paid to do.
To give you some real-life examples, and we have heard a
couple of good ones here, I want to take the case of Randy
Truckenbodt, who is the owner of a non-union equipment company
out in Illinois, who had several dozen employees. His business
was attacked. A union salt applied for the job and was given
the job. Within months, using company information provided by
the salt, union officials and agents began following Mr.
Truckenbodt's employees as they delivered their products to
clients' businesses.
They warned customers that they would face picketing and
strikes unless they stopped buying and renting from Mr.
Truckenbodt and his employees. Union members also picketed in
front of Mr. Truckenbodt's offices 24 hours a day, seven days a
week, for months.
This salting campaign cost this company over $600,000 in
lost customers and legal fees.
In addition to the intimidation tactics, Mr. Truckenbodt's
company was vandalized dozens of times during the so-called
organizing drive. Vehicle tires were slashed, electrical cables
were cut, truck windows were broken, all during this effort to
force union control over his employees.
In 23 years prior to this organizing drive, there had never
been a recorded incident of vandalism.
When the destruction was taking place, the union salts
filed multiple false unfair labor practice charges against Mr.
Truckenbodt's company, all of which were eventually dismissed.
The business survived the salting campaign, and he and his
company employees are still able to provide for their families.
But I want to talk about another employer, Charlie Walz,
who runs a masonry company in Nebraska. Charlie started out as
a union man, but he figured he could provide better service at
lower prices for customers by going out on his own, union-free.
Charlie wanted a piece of the American dream. And like many
hard-working Americans, he started his own company to make that
dream a reality.
Before long his company was flourishing, his clients were
happy, and so were his small but growing army of employees. But
his success came with a price. The bigger Charlie's company
got, the more employees he had, the more union officials wanted
a piece of the action.
So when Charlie's employees resisted an unwanted advance of
the union organizers, the salting started. This means that his
employees rejected union organizing, and the union had to hire
someone to come in and organize the company.
Charlie's company was fined by the NLRB. He spent tens of
thousands of dollars on legal proceedings. Yet videotaped
evidence supplied by Charlie's lawyers showed that union salts
had refused job applications that were offered to them by
Charlie's daughter.
Charlie is still in business. He was able to survive. But
many are not so lucky. When small businesses resist salting,
unless they are subjected to potentially ruinous legal costs
and fines, they acquiesce to union monopoly control.
The Truth in Employment Act is an important piece of
legislation. It protects not only the rights of small
businessmen and women to run their businesses, and to hire
employees who have a bonafide interest in working for that
company, but it also protects those individual employees across
the country who have decided, for whatever reason, not to join
or associate with a union. This is important legislation, and
we believe it needs to be supported, debated, and passed.
Thank you.
[Mr. Mix's statement may be found in the appendix.]
Chairman Akin. I think you got the award for the best
timing. You finished right when the little red light went on.
Thank you for your testimony, everybody, and I appreciate
you all taking time to join us here today.
Next in order of business is going to be recognizing the
minority leader of this Committee. And Mr. Udall has been
working with us a number of years, has a great deal of respect
in the Congress, and we are very eager to hear his opening
comments, as well.
Tom.
Mr. Udall. Thank you. Thank you very much, Mr. Chairman.
And I apologize to the Chairman for missing Representative
DeMint and two of the witnesses. But I am here now, and ready
to participate. And I will try to just give a brief opening
statement.
As the economy continues to struggle, we see the toll it is
taking on many workers, as jobs are shipped overseas, wages are
slashed, and benefits, such as health care and retirement,
vanish.
The reality is that a need does exist for unions to protect
and advocate for our nation's workers. It is just as important
now as it was decades ago.
Unfortunately, while the need is great, we are seeing an
overall decline in union membership. Not because of a lack of
interest, but due to a lack of access.
While some employers today allow their workers to unionize,
there are others that construct barriers and engage in covert
campaigns to intimidate and dissuade workers from learning
about the benefits of union membership. Therefore, one of the
only ways for these non-union workers to find out about the
rights and conditions they are entitled to is through the
practice of salting.
Salting is about the empowerment and education of working
people. It is a practice that trains union members to work for
non-union firms in an attempt to gain a foothold and organize
the work force from within. This concept is useful in
industries such as construction, where workers are constantly
moving from one job to the other, and one contractor to the
other. It is the most effective way for union organizers to
communicate with these workers, by hiring them on these
projects, and then finding time to educate them on their
rights.
Unfortunately, there is a great deal of misconception
surrounding salting. Salting does not disrupt the workplace.
These individuals are held to the highest standards of conduct,
meaning they work as hard as they possibly can to contribute to
the company's overall success. There is simply no evidence that
salting hurts small businesses.
Many employers falsely believe that salting results in
frivolous charges being filed by unions. However, this is not
the case. Both large and small companies actually benefit from
salting. Many times it uncovers massive violations of workers'
rights by employers attempting to gain unfair advantages.
While most employers truly want to do what is best for
their employees, the reality is there are bad players trying to
prohibit their workers from earning fair wages and unequal
benefits. That is why unions are important, and salting is a
vital tool.
Because a stigma persists in many areas, having a union
card may mean getting a pink slip. And this cannot be
tolerated.
I know Representative DeMint testified earlier on his bill,
and he has got some serious challenges in his state. And I
would like to work with him on those challenges facing textile
workers. And I hope that we would be able to get strong
protections for the workers in those jobs, and make sure that
there aren't further job losses and turmoil in that particular
industry.
However, HR 1793 affects the basic right of workers to form
and join unions. Simply stated, this legislation allows an
employer to refuse to hire, or fire workers if their primary
purpose for seeking employment is to organize on behalf of a
union. This undermines the intentions of the original National
Labor Relations Act, which was enacted for the purpose of
protecting the right of workers to form and join unions.
As recently as 1995, the U.S. Supreme Court ruled
unanimously to uphold the practice of salting, as one of our
witnesses, several witnesses have noted. HR 1793 tries to
overturn the U.S. Supreme Court decision, and in my opinion
would nullify the essential purpose of the National Labor
Relations Act. We should not attempt to weaken processes like
salting, which are an essential way for working families to
access fair wages, health benefits, and workplace protections.
The National Labor Relations Act has been one of the most
productive, most effective anti-poverty programs in our
country's history, because it allows working people to engage
in collective bargaining in order to elevate their standard of
living.
This proposal is a step back from that commitment. We
should be standing in support of working families, not pursuing
initiatives that weaken their quality of life.
Thank you, Mr. Chairman. And I look forward to
participating in the questioning process.
Chairman Akin. Thank you. I had quite a few questions here.
It will take a minute to try to see where to start.
The first thing is, Mr. Jacob, in that you are an attorney
and I am not an attorney, it is my understanding that in
general--I don't know if this is state law or federal law--that
as a rule, it is an illegal thing to try to intentionally put
anybody out of business. Is that true?
Mr. Jacob. That could be a matter of state law, it could be
a matter of federal law. As far as putting a company out of
business, you can be hit with various business torts. I would
say for the most part it is a matter of tortious interference
with business, which you would find mostly at the state level.
Chairman Akin. That is mostly a state law? Because I think
I remember there was some deal that I was involved in, some
abortion-type situation. And somebody said, I remember an
attorney said, you know, you are perfectly legal if you want to
have this organization not do abortions. That is legal to have
that as your objective. But it would be illegal to have your
objection to say that you want to put someone out of business.
Mr. Jacob. Many states have a tort called tortious
interference with business. And----
Chairman Akin. That is what they were probably referring
to, then. Okay. So if the objective of a union were to actually
put somebody out of business, then that would be in violation
of at least some state laws.
Mr. Jacob[continuing]It could, but you would run into a
preemption problem likely, under the National Labor Relations
Act.
Chairman Akin. In other words, it is okay to do it in that
situation.
Mr. Jacob. It is a very fact-intensive type of question, as
to whether a particular state law is preempted by the National
Labor Relations Act.
Chairman Akin. Thank you. Second question to whoever. Is it
true that there is a large backlog of cases with the NLRB? Is
that true? I think it was part of your experience, the
Cloningers, that you said there was a big backlog?
Mrs. Cloninger. That is what we were told from our
attorney, when he tried multiple times to contact the
compliance officer that was involved in our case. Every time he
talked to the compliance officer, he would say, well, I have
got 30 cases ahead, and I will get to this when I can.
Chairman Akin. Which effectively ran the clock, and ran up
your fees for back wages and everything else.
Mrs. Cloninger. Yes, that is correct.
Chairman Akin. So you were really put right out of business
by that entire situation.
Mrs. Cloninger. The delays. Had it been done in a timely
manner, we could have probably paid the fine and maybe even had
enough work lined up that we could have used these employees.
And we would have, had we had the work. But you know, our
company was in so much crisis, we just lost our productivity
and had difficulty. The economy certainly was a factor in that.
You know, it just became prohibitive for us to stay in business
at that point.
Chairman Akin. Mr. Mix, you made a comment, something about
employees have the freedom not to be unionized.
I think that what you were saying seemed to be pretty much
in contradiction with what Mr. Newman was saying. Mr. Newman's
comment is, you know, we want to use this as a means to allow
laborers to know that they could be unionized, or about certain
rights that they may have legally, that the laborers have no
other way of getting to know.
That seems to be kind of in conflict with what you were
saying, which was they have got the freedom, if they don't want
to be unionized, to be left alone.
Am I correct is seeing there is a complete difference of
opinion on that point?
Mr. Mix. Well, I think there probably is a complete
difference of opinion on that point.
I would say this. In 28 states that do not have right-to-
work laws, workers can be compelled to accept the
representation and pay financial fees to a labor union as a
condition of keeping their job.
What I meant to address, was the example, in the company
that we are talking about here in Montana. It wasn't the
employees that they had hired that were interested in
organizing the union. As a matter of fact, I would guess, I
don't know, but I would say these employees were happy with
their situation, and they weren't intending to organize a
union. And if any one of these employees who was currently on
the payroll would have come to these employers and said, look,
we are going to organize a union, if they would have fired that
employee, that employee certainly had rights under the law,
protected rights under the law. And it would have been illegal
to fire that employee for trying to organize a union.
The fact is, the Cloninger employees didn't want the union.
And the union had to bring somebody in under false pretenses to
get that organizing drive started. And that is outrageous.
Chairman Akin. Thank you. I guess I have got one other
question. And that is, the whole salting thing is somewhat new
to me. But it also seems strange to me. And this is maybe more
of an answer than a question, but I would appreciate it if a
couple of you want to respond.
And that is, in a way, as a Congressman, I am in a way sort
of a small businessman, in that I have 14 or 16 employees that
work for me, some in a district office, some working here in
D.C. And when I hire people, I wouldn't expect them to have a
job that conflicts with the job that I am hiring them to do for
me.
If one of them wants to get a job after hours and works at
a different time or something like that, like they want to get
a job bussing tables or singing in some bar or something, that
is okay with me, as long as it doesn't interfere with, you
know.
So it seems like an odd idea to have the Supreme Court or
some law saying that you have got somebody who is being paid--
because when you are paid, you are working for two different,
separate bosses. I mean, with all due respect to my good friend
Tom over here, if a legislative assistant says, ``Todd, I want
to work for you as your LA, but I am also Tom's LA,'' I would
say wait a minute, you know, which one are you going to work
for?
This seems like a strange situation, where somebody is
being paid by two different employers. And it seems like it
creates naturally a divergence of loyalties.
I guess one thing that you said, Mr. Newman, was that very
often the salts are volunteers. I heard other people say very
often they are paid. Is it ever the case that salts are paid?
Mr. Newman. Sure. But very often they are not paid.
Chairman Akin. Well, let's talk about the cases where they
are paid. Do you think that is appropriate, for somebody to be
paid by two different people?
Mr. Newman. Of course I do. Certainly.
Chairman Akin. And you don't think that creates any sort of
a tension in terms of loyalty?
Mr. Newman. The idea that there is a tension in terms of
loyalty is at odds with 65 years of labor relations in this
country.
There are thousands, tens of thousands, of union shop
stewards that work in unionized plants, that are paid by their
unions. There are thousands and thousands of part-time union
officers that go into the hall on the weekend and do what they
need to do for the union, but spend the time working for their
employer and are loyal, good, hard-working employees. There is
absolutely no conflict, I don't think, at all.
Salts are told and are instructed to follow their
employer's directions, perform a very hard day's work, and show
both the employers and the employees, the non-union employees,
what union trades workers can do. They are the most highly
skilled, highly trained, highly motivated workers in the world,
and that is what they are there to demonstrate.
Chairman Akin. That seems to be at odds with the other
testimony we have heard.
I now would turn to the minority member, Mr. Udall.
Mr. Udall. Thank you very much, Mr. Chairman.
Mr. Newman, some businesses have raised the issue that it
is unethical to go to someone's business as a salt, to seek
employment for the express purpose of trying to organize
employees. Can you respond to those comments?
Mr. Newman. Obviously, I don't think that that is
unethical. I don't think it is unethical to exercise rights
that are protected by the National Labor Relations Act, to
exercise rights that we judge other countries' human rights
records on.
What I do think is unethical is to discriminate against
someone who applies just because they are a union member. What
I do think is unethical is threatening employees that you will
close down their business before you will ever recognize a
union. What I do think is unethical is firing union organizers.
What I do think is unethical is threatening to use physical
violence against anyone that so much as dares organize. And
what I do think is unethical is inferring, both here and
elsewhere, that there are ulterior motives involved, and that
people have been threatened.
I was accused of not being in the trenches. I have been in
the trenches on these matters. I have represented employees
that have been discharged for doing nothing else than putting
on a union button or wearing a union tee-shirt.
So do I think it is unethical to organize? Absolutely not.
In my view, I have seen many unethical practices on the other
side.
Mr. Udall. Mr. Newman, if a non-union contractor hires a
union salt, what kinds of things does the salt do to promote
union organization?
Mr. Newman. First, he will see he does the best job that he
can. Because, number one, he wouldn't want to give anyone a
lawful excuse, which is if you are not doing the job that you
are supposed to be doing, there is nothing in the law that
prohibits that contractor from firing that organizer. And
obviously we don't want that to happen, and we want to
demonstrate to the contractor that if it signs a union
contract, it is going to have access to highly trained, highly
motivated, highly skilled employees. So number one, they are
told to work hard.
Number two, they are told to engage in organizing activity
only within the confines of the law. And that means, for the
most part, during non-work time, and often in non-work areas,
like the break room or a break trailer.
Mrs. Cloninger. May I----.
Mr. Udall. Mr. Newman, is the purpose of salting to force
non-union contractors to spend money defending frivolous,
unfair labor practice claims?
Mr. Newman. Absolutely not. And I think if you look at, and
if anyone did the research and opened the books, and looked at
the statistics that the National Labor Relations Board is
required to keep as a matter of law, you would find that there
has been no increase in unfair labor practice charges. Nor has
there been any decrease in the number of charges that the Board
has deemed meritorious.
Mr. Udall. And let me be more precise there. Do you know
whether the number of unfair labor practice charges filed
against employers has increased in recent years or not?
Mr. Newman. Yes, I do know that. I actually spent a morning
this week at the National Labor Relation Board's library, which
is open to the public, and I encourage anybody to do the same.
They issue a report every year, an annual report, where
they break down the number of unfair labor practices that have
been charged. And just to put everything in context, unfair
labor practice charges average anywhere between about 28,000 to
35,000 charges a year. A little less than a third of those are
charges against unions. So about two-thirds are charges against
employers.
The year before the Town and Country decision was issued,
which everyone thinks was the impetus to this explosion in
salting, you had about 34,000 unfair labor practice charges
filed. Last year, I believe the number was about 27,000. It was
an 18- to 20-percent decrease since the Town and Country
decision.
Mr. Udall. Mr. Newman, in your opinion as a lawyer, would
HR 1793 overturn the U.S. Supreme Court decision in Town and
Country Electric, and effectively nullify the essential purpose
of the National Labor Relations Act?
Mr. Newman. Yes.
Mr. Udall. What would you say to those who argue that
legislation such as HR 1793 is necessary, since it is too
expensive and burdensome for employers to defend themselves
from mere allegations that they may have violated the National
Labor Relations Act?
Mr. Newman. Again, you know, to put everything in context,
I have been on both sides as an attorney, both sides of an
unfair labor practice charge. I have represented charging
parties, and I have responded to charges filed against labor
unions.
The first thing that happens, when you are a charging
party, you are the person that is filing the charge against the
employer, and you file it with the National Labor Relations
Board. The first thing that happens is, the Board does not go
out and get in their National Labor Relations Board police car,
and go to the employer's offices.
The first thing that happens is they contact the union, and
they say, ``You better give us evidence that you have, which
essentially makes out a case of an unfair labor practice,''
before they will even approach an employer. And I say that
because I have been on the other side of an unfair labor
practice charge. I have represented unions on frivolous charges
and charges that have had more culpable merit.
And when the charge is completely frivolous, the work that
is undertaken on that, that is, the person that has been
charged, oftentimes is nothing more than a phone call to the
National Labor Relations Board explaining the fact that the
charge is frivolous, and that is the end of the matter.
So what I am getting at is, in order to even get through
the door of the National Labor Relations Board with your
charge, you better present, and you have to present, enough
evidence to establish that you have more than a culpable claim.
Mr. Udall. Thank you. Mr. Chairman, I see my time is
exhausted.
Chairman Akin. Thank you. Next I call on Congressman
Toomey.
Mr. Toomey. Thank you, Chairman. Mr. Newman, you have made
the point in your testimony and your response to a question
that the idea of a divided loyalty is a phony one.
But yet on page seven of your testimony, you have a
sentence here where you say the participants, and you are
referring to the salts, are willing to work for non-union
companies in order to promote the union's goal of organizing
unorganized employees.
It seems to me you have put it very clearly. These people
are taking this job, they are taking someone else's money--
namely, the employer, the contractor in this case--while
working to promote the goal of an organization that has a whole
different set of agendas. And you don't see any conflict there.
Mr. Newman. I don't. I mean, Representative Toomey, let's
take an example of an employer that someone suspects is
engaging in race discrimination.
Mr. Toomey. But that is not what we are talking about. We
are talking about----
Mr. Newman. Oh, but----.
Mr. Toomey[continuing]No, but I am trying--let me, I have
got a few other questions and limited time.
If someone came to work on my staff, and they were--I am a
Republican--if they were on the payroll of the Democratic
Congressional Campaign Committee as well, while they were
working for me, should I be forced to hire and keep that person
on my staff?
Mr. Newman. Well, there is a huge assumption built into
your question.
Mr. Toomey. But it is the question. Do you think I should
be forced to hire that person? Or should I be allowed to fire
that person solely on the grounds that they came to work for me
while they were being paid by the Democratic Campaign
Committee?
Mr. Newman. Well, as far as I know, the National Labor
Relations Act doesn't protect party status, so I think you
would be safe in not hiring that person.
Mr. Toomey. Let me ask another question. Do you advocate
that salts deceive the employers by not disclosing that they
are, in fact, salts?
Mr. Newman. It depends. And I can tell you why. First of
all----
Mr. Toomey. So sometimes you do advocate that.
Mr. Newman[continuing]Well, I can tell you what happens in
reality, in the trenches. And that is, if you write down on
your application, as folks did that applied to the gentleman on
my left's company and the folks on my right's company, they are
not hired. If you disclose that you are a union organizer, what
happens is you are not hired.
And so oftentimes, that fact is not mentioned on an
application. And there is a decision in the Seventh Circuit
Court of Appeals by a very, very conservative Republican-
appointed judge, Judge Posner, that said that is okay. Because
whether you are a union organizer or not should be irrelevant
to the question of whether you are hired. Because it is
unlawful to discriminate against somebody that is a union
organizer.
Mr. Toomey. So there are times, then, when you do advocate
that that information be withheld. Which I think is inherently
deceptive.
Mr. Newman. If someone goes and applies to a contractor
over and over, and has disclosed that they are a union
organizer, and it happens to be that while they are hiring 20
or 30 people off the street, they have refused to hire the 50
folks that are better trained, better qualified but the only
difference being that on their application they say union
organizer, then yes. I think at the end of the day, in order to
avoid being discriminated against, oftentimes you have to leave
that off your application.
Mr. Toomey. We have got testimony that we heard today.
There is a story about a Mr. Truckenbodt's company. And there
is allegations that terrible things were done. In one case,
part of this testimony says that a company, using information
provided by the salt, sent agents that followed Mr.
Truckenbodt's employees as they delivered their products to
clients' businesses. And when they got there, they warned the
customers that they would face picketing and strikes unless
they stopped buying and renting from Mr. Truckenbodt. Do you
advocate that kind of practice?
Mr. Newman. No.
Mr. Toomey. You do not advocate it. And so I assume that
you certainly do not advocate, and in fact would condemn, the
vandalism that is alleged, the broken windows and the tires
getting nails, and----
Mr. Newman. Yes, of course.
Mr. Toomey[continuing]Which we have heard significant
testimony, though.
Mr. Newman. Well, I can tell you there is, I can give you
significant testimony. Representative DeMint this morning
offered testimony from previous hearings. I would encourage
everybody to go back and look at the previous hearings on this
issue. And you will read testimony from union organizers who
were beaten with pipes, who had suffered similar vandalism at
the hands of non-union contractors.
So I don't advocate it on either side, Mr. Toomey.
Mr. Toomey. Do you acknowledge that it often happens with
salted employees? Or do you dispute that? Do you have any
statistics about the frequency of that?
Mr. Newman. I would acknowledge that union organizers often
suffer physical violence. I would absolutely deny adamantly
that union organizers engage in physical violence.
Mr. Toomey. Mr. Mix, do you have any comment to make about
that?
Mr. Mix. I think the facts speak differently about that.
If you look at the record, the testimony of the former IBEW
organizer that Congressman DeMint submitted into the record,
you will see clearly he states that he was trained not to
organize workers, but to file unfair labor practice charges
against the employer that had hired him.
So I would encourage you to go back and look at that
record. There is lots there, I would agree.
Certainly there are troubles and disputes in the workplace.
But I would suggest that asking these two about their
experience is probably the most beneficial thing we can do.
They are in business, on the front lines, and they are seeing
this.
The theoretical arguments that we are hearing that the AFL-
CIO do not endorse this are totally rejected in the testimony
of Mr. Cook, as a trained union organizer specifically to salt
a company. Specifically to salt a company. Not to organize it;
he admits it in the record.
I think the Cloningers' experience and the practical
reality of this practice doesn't match to the theoretical that
we are hearing today.
Mr. Toomey. Thank you.
Mr. Cloninger. Could I add something to that, please?
Gentlemen----.
Chairman Akin. I think Mr. Toomey would allow you to.
Mr. Toomey. Certainly.
Mr. Cloninger. Gentlemen, I have been an electrician for 27
years. The first nine of those 27 I was a union electrician.
And I chose to leave the union because I didn't like what I
saw, because of things that were not fair, and very, very
intimidating to myself.
I was on both sides of the fence. I was union, and then I
became non-union.
We are clearly talking about a small business versus very
large businesses, where unions do play a role in benefitting
the employees. The point I would like to make is small business
doesn't need another middle-management person interfering
between us and our employees.
And that is what I would like to say.
Mr. Toomey. Thank you very much.
Chairman Akin. Thank you. You know, this is one of the
situations we run into sometimes in the political world, where
you have just got totally completely opposite and diverging
opinions on something.
You know, the testimony of Mr. Newman was that these salts
are great workers. Now, is there anybody else, other than Mr.
Newman, on the panel that wants to say that--did anybody have
great workers that were salts?
Mrs. Cloninger. I would like to comment on that. The two
electricians that worked for us, that we did let go, in their
probationary period, one electrician refused to go into a
crawlspace when he was asked. Well, when you are doing
electrical work, you have to get into a crawlspace to complete
the task at hand.
The other electrician had, we were working on a motel. And
this guy had a tool pouch at one end of the building. And he
was wiring some boxes on the other end of the building. He
would go to his tool pouch on one end of the area, go do the
work with the tool, walk clear back over to the tool pouch and
get a different tool, and walk clear back over to the box that
he was working on.
Chairman Akin. What you are saying is he was not only not a
good employee, but he was an intentionally bad employee in that
situation. That was your experience, Mr. Jacob?
Mr. Jacob. In my testimony, written testimony, I tell the
story of two union members who applied. They were hired. They
knew what the pay was. The moment that they started on the
project, they immediately started protesting the pay, did not
do one piece of work, then said ``we're going on strike,'' then
filed unfair labor practice----
Chairman Akin. So the bottom line is they were not good
workers.
Mr. Jacob[continuing]No, they were not. Their purpose was
to disrupt.
Chairman Akin. Mr. Krause, were your salt workers good
workers?
Mr. Krause. Well, we kind of have a different scenario at
our company that has taken place. We have never had the
opportunity to hire salt workers.
And it is clear to me that I have a different view on this.
And to put everybody's mind at ease, these people do identify
themselves, at least at our company. We are a little bit bigger
company; we have 300-plus employees. They do identify to us who
they are. And there is no mistake about who they are the moment
they come in the door.
Chairman Akin. So you are a little bit bigger operation,
then.
Mr. Krause. Yes, we are a little bit bigger. From the
moment they walk through the door it is very well known who
they are. They have their hats, their shirts. They come in
groups, six, seven employees at a time to fill out
applications. They all know me by name. They know my family.
They know my father, who was a longstanding union worker. Some
of them worked with my father.
So they come to our company in a little bit different
manner.
It strikes me odd how the gentleman aside of me says that
they are the most highly trained and skilled people coming in,
yet they fail to complete the application consistently, and
make errors on their part all the time, to make it usually
pretty easy to rule them out through the hiring process with
just their applications.
We are currently getting ready to go to a hearing now to
discuss two individuals that yet weren't dismissed; however,
all 11 of them from this current 2003 year have been dismissed
for failing to return phone calls, different wage history,
stuff of that nature.
Chairman Akin. So your experience was the same, that they
weren't necessarily the most professional people.
Mr. Krause. No. And they----.
Chairman Akin. That is all I wanted to do on that
particular question. What my point is, I am trying to point out
just, it is really amazing, there is just really a difference
between, you know, the theory and what seems to be going on out
there in the workplace.
I think the thing that concerned me the most was when I
heard that people were afraid to even testify here because of
the rough tactics that have been going on, and that is what a
number of you documented, that those things were happening,
that seems to me so un-American.
Did you want to comment on that?
Mr. Jacob. Yes, sir. I told the story of two clients that
we represented. There were about four others who would not let
me tell their story, ones that have charges pending, ones that
just do not want the kind of trouble that they have experienced
with salting in the past.
Chairman Akin. It seems, from the testimony that we are
hearing, and from the people that don't even want to testify,
that the salting practice is very expensive, overall. It is
expensive to companies. It is expensive to our competitiveness
as a nation, our ability to be competitive.
Mr. Newman. Mr. Chairman, could I address that point, if I
might?
Chairman Akin. You have got about 30 seconds to, yes.
Mr. Newman. To tell you how contractors can make the
salting practice very inexpensive.
Chairman Akin. Unionize, right?
Mr. Newman. Excuse me?
Chairman Akin. Just unionize, right?
Mr. Newman. No, it is not violating the law. And the reason
why contractors are hit with $40,000, $50,000 fines is because
they violated the law. Because Administrative Law Judges, the
National Labor Relations Board, Courts of Appeals who enforce
those orders find that they have violated the Act.
Chairman Akin. Well, it may be that that is part of the
point of our hearing, even. I mean, as I see how it has worked
out, and I hear the logic of what the Supreme Court is saying,
it seems to me that you have got a complete conflict of
interest when you have somebody being paid, you know, to do two
different, separate things.
My time has run out. And I have to run things by the rules
here.
Mr. Udall.
Mr. Udall. Thank you, Mr. Chairman. Mr. Newman, you were
asked by Representative Toomey about the divided loyalties
issue, and I think you wanted to respond. Do you remember where
you were in that?
Mr. Newman. I think I responded. And that is simply that
the idea that there is necessarily this unbridgeable conflict
between a union member and an employer is just completely at
odds with everything this country has stood for, and everything
we judge other countries on, for centuries.
And that is, you can be a good union member and a good
employee at the same time.
Mr. Udall. Are there other issues that have been raised by
witnesses here that you would like to respond to? Charges or
allegations or something that you think have gone unanswered,
that you would like to respond to?
Mr. Newman. Well, I guess I would just say this, and repeat
what I have already said.
First, you know, I am a small business owner. I am a
partner in a very small firm, and I appreciate and support
small businesses, as does the Building and Construction Trades
Department and organized labor.
It is in no one's interest, on the labor side or management
side, to drive anyone out of business. We know and we
appreciate the fact that contractors are the people that supply
our members with jobs. And that is not the purpose of salting,
that is not what we are all about. We support small business,
and we support the efforts in this Congress to continue to
support small businesses in this country.
Mrs. Cloninger. May I comment on that?
Mr. Udall. Well, not on my time. Maybe the Chairman will
give you some time here.
Mr. Newman, what would your response be to the argument
that the Truth in Employment Act simply gives an employer a
level of comfort that someone coming to work for them is truly
motivated to be an employee?
Mr. Newman. I would say that the Truth in Employment Act
gives an employer a level of comfort that they can discriminate
against people that exercise their rights under the National
Labor Relations Act with impunity. That is what it does.
Mr. Udall. Well, I have a little time. Go ahead.
Mrs. Cloninger. I guess I would just like to comment on the
fact that the union organizer who had targeted our company, it
was reported back to us by other union electricians in the city
of Helena that he would go around at his union meetings, and
within the community, and say that his whole goal was to put
Construction Electric out of business.
Mr. Udall. Can you give us the name of that individual?
Mrs. Cloninger. The union organizer?
Mr. Udall. Yes, that you just said did that.
Mrs. Cloninger. Yes. His name was Keith Allen.
Mr. Udall. And, ma'am, all the incidents you are talking
about ended up resulting in a finding that your company had
broken the law, under the National Labor Relations Act, and you
were fined for that, right?
Mrs. Cloninger. That is correct.
Mr. Udall. Sir, did the same thing happen to you?
Mr. Krause. A similar situation occurred to us.
Mr. Udall. First of all, was an investigation conducted by
the National Labor Relations Act, and it was found that you
were in violation of the law?
Mr. Krause. No.
Mr. Udall. No?
Mr. Krause. We have not been found to be in violation with
any of the laws relating to the NLRA.
Mr. Udall. Was there a finding that there was something
frivolous going on by anyone?
Mr. Krause. Enough that the charge, nine of 11 charges were
dismissed, yes.
Mr. Udall. Mr. Mix, you mentioned this individual, Mr.
Truckenbodt. Mr. Chairman, the individual isn't here, and we
have been hearing stories bantered about him. I would like to
submit some questions, specific questions to you, to find out
for the record, and you put in the information of what all the
circumstances were.
Mr. Mix. I can do that for you, Congressman. Absolutely.
Mr. Udall. And the gentleman that also talked about, I
think it is only fair if we are going to talk about people that
aren't here, that we get as full as possible a record about
what actually happened in these circumstances. And I think we--
--
Mr. Mix. Great idea. Yes, great idea.
Mr. Udall[continuing]Thank you, Mr. Chairman.
Chairman Akin. I think probably we have had a chance to let
people get some testimony out.
What I was going to do is just make a brief closing
statement, which is a little broader than the overall subject
even of the salting.
And that is something that I have had a chance to run
Committee hearings all over the country. And one of the things
that we are very concerned about in America is a loss of jobs,
and a loss of opportunities for our American citizens to find
work.
And while the economy is coming back and numbers look good
and everything, yet at the same time there is an erosion,
particularly in the manufacturing. I personally came out of the
steel background myself, and saw what happened when the steel
industry just fell out, and all those jobs went overseas.
The position that I have now as a member now working for
the government, and really working for the citizens of our
country, is to take a look at things that increase the overall
cost of doing business. Because a reason somebody moves jobs
and plants overseas is money. It is as simple as that. It is
money. It is not because they are anti-American, it is the
money.
And so my concern is that anything that adds to our
competitive disadvantage in this country is something that is a
high concern to me. And today, in this Committee, I am
concerned about the fact that we have seen, in spite of the
testimony that in theory this is supposed to be a good
practice, what we are seeing is businesses are being shut down.
And in fact, from our experience, businesses are being
intimidated from even appearing before this Committee, and that
is a grave concern to me.
So that would be my closing comments. I recognize Mr.
Udall.
Mr. Udall. Thank you very much, Mr. Chairman. You and I
both, I think, agree that we, as a country, are in a crisis
situation in terms of jobs being lost overseas. And that part
of it, as you have just said, has to do with the profit motive
and being about money.
I mean, one of the things that we could do that would make
a real difference is examine our tax code. Because right now
taxpayers pay for these companies to move the jobs over.
We give them incentives. We actually encourage them to do
it, through the tax code. And I think we ought to do a thorough
examination, and say to companies, well, if you are going to do
it, we are certainly not going to pay for it, and we are going
to make it more difficult for you. Because we have lost far too
many jobs in your state, in my state, and Representative
DeMint's state I know, and in Representative Toomey's state of
Pennsylvania, in these areas where there are good, high
quality, high paying jobs. And I would like to see us focus on
that, and other Committees in the Congress focus on it. And I
look forward to working with you.
Chairman Akin. Thank you. And I think that makes good
sense. I think all of us don't want to reward people for moving
jobs overseas, and we don't want to create any institutions
that do that.
I thank you all so much for coming in. I appreciate your
testimony. And we will be adjourned.
[Whereupon, at 12:09 p.m., the Subcommittee meeting was
adjourned.]
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