[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]





 EXAMINING UNION ``SALTING'' ABUSES AND ORGANIZING TACTICS THAT HARM 
                           THE U.S. ECONOMY

=======================================================================

                             FIELD HEARING

                               before the

              SUBCOMMITTEE ON EMPLOYER-EMPLOYEE RELATIONS

                                 of the

                         COMMITTEE ON EDUCATION
                           AND THE WORKFORCE
                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                   May 10, 2004 in Round Rock, Texas

                               __________

                           Serial No. 108-57

                               __________

  Printed for the use of the Committee on Education and the Workforce



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                COMMITTEE ON EDUCATION AND THE WORKFORCE

                    JOHN A. BOEHNER, Ohio, Chairman

Thomas E. Petri, Wisconsin, Vice     George Miller, California
    Chairman                         Dale E. Kildee, Michigan
Cass Ballenger, North Carolina       Major R. Owens, New York
Peter Hoekstra, Michigan             Donald M. Payne, New Jersey
Howard P. ``Buck'' McKeon,           Robert E. Andrews, New Jersey
    California                       Lynn C. Woolsey, California
Michael N. Castle, Delaware          Ruben Hinojosa, Texas
Sam Johnson, Texas                   Carolyn McCarthy, New York
James C. Greenwood, Pennsylvania     John F. Tierney, Massachusetts
Charlie Norwood, Georgia             Ron Kind, Wisconsin
Fred Upton, Michigan                 Dennis J. Kucinich, Ohio
Vernon J. Ehlers, Michigan           David Wu, Oregon
Jim DeMint, South Carolina           Rush D. Holt, New Jersey
Johnny Isakson, Georgia              Susan A. Davis, California
Judy Biggert, Illinois               Betty McCollum, Minnesota
Todd Russell Platts, Pennsylvania    Danny K. Davis, Illinois
Patrick J. Tiberi, Ohio              Ed Case, Hawaii
Ric Keller, Florida                  Raul M. Grijalva, Arizona
Tom Osborne, Nebraska                Denise L. Majette, Georgia
Joe Wilson, South Carolina           Chris Van Hollen, Maryland
Tom Cole, Oklahoma                   Tim Ryan, Ohio
Jon C. Porter, Nevada                Timothy H. Bishop, New York
John Kline, Minnesota
John R. Carter, Texas
Marilyn N. Musgrave, Colorado
Marsha Blackburn, Tennessee
Phil Gingrey, Georgia
Max Burns, Georgia

                    Paula Nowakowski, Staff Director
                 John Lawrence, Minority Staff Director
                                 ------                                

              SUBCOMMITTEE ON EMPLOYER-EMPLOYEE RELATIONS

                      SAM JOHNSON, Texas, Chairman

Jim DeMint, South Carolina, Vice     Robert E. Andrews, New Jersey
    Chairman                         Donald M. Payne, New Jersey
John A. Boehner, Ohio                Carolyn McCarthy, New York
Cass Ballenger, North Carolina       Dale E. Kildee, Michigan
Howard P. ``Buck'' McKeon,           John F. Tierney, Massachusetts
    California                       David Wu, Oregon
Todd Russell Platts, Pennsylvania    Rush D. Holt, New Jersey
Patrick J. Tiberi, Ohio              Betty McCollum, Minnesota
Joe Wilson, South Carolina           Ed Case, Hawaii
Tom Cole, Oklahoma                   Raul M. Grijalva, Arizona
John Kline, Minnesota                George Miller, California, ex 
John R. Carter, Texas                    officio
Marilyn N. Musgrave, Colorado
Marsha Blackburn, Tennessee


                                 ------                                
                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on May 10, 2004.....................................     1

Statement of Members:
    Carter, Hon. John R., a Representative in Congress from the 
      State of Texas.............................................     5
        Prepared statement of....................................     6
    Grijalva, Hon. Raul M., a Representative in Congress from the 
      State of Arizona...........................................     4
    Johnson, Hon. Sam, Chairman, Subcommittee on Employer-
      Employee Relations, Committee on Education and the 
      Workforce..................................................     1
        Prepared statement of....................................     3

Statement of Witnesses:
    McGee, Sharon, President & CEO, RM Mechanical, Inc., Austin, 
      TX.........................................................     8
        Prepared statement of....................................     9
    Nesbitt, Tom, Esq., Attorney, Fulbright & Jaworski, Austin, 
      TX.........................................................    38
        Prepared statement of....................................    40
    Runyan, Shelly, Vice President, Titus Electrical Contracting 
      Inc., Austin, TX...........................................    19
        Prepared statement of....................................    21
    Van Os, David, Esq., Attorney, David Van Os & Associates 
      P.C., San Antonio, TX......................................    11
        Prepared statement of....................................    14

Additional materials supplied:
    Gonzales, J.R., Acting President and CEO, U.S. Hispanic 
      Chamber of Commerce, Letter submitted for the record.......    52
    Titus Electrical Contracting, Inc. and United Brotherhood of 
      Electrical Workers Local 520, (Case Nos. 16-CA-21010-2 et 
      al.), 2003 WL 159078 (N.L.R.B. Division of Judges) (January 
      17, 2003), Submitted and placed in permanent archive file..    53

 
EXAMINING UNION ``SALTING'' ABUSES AND ORGANIZING TACTICS THAT HARM THE 
                              U.S. ECONOMY

                              ----------                              


                          Monday, May 10, 2004

                     U.S. House of Representatives

               Subcommittee on Employer-Employee Relations

                Committee on Education and the Workforce

                           Round Rock, Texas

                              ----------                              

    The Subcommittee met, pursuant to call, at 2 p.m., in City 
Council Chambers, Round Rock City Hall, 221 E. Main Street, 
Round Rock, Texas, Hon. Sam Johnson (Chairman) presiding.
    Members present: Representatives Johnson, Carter, and 
Grijalva.
    Staff present: Loren E. Sweatt, Professional Staff Member; 
Kevin Smith, Senior Communications Advisor; Jody Calemine, III, 
Minority Counsel, Employer-Employee Relations.

   STATEMENT OF HON. SAM JOHNSON, CHAIRMAN, SUBCOMMITTEE ON 
  EMPLOYER-EMPLOYEE RELATIONS, COMMITTEE ON EDUCATION AND THE 
                           WORKFORCE

    Chairman Johnson. A quorum being present, the Subcommittee 
on Employer-Employee Relations of the Committee on Education 
and the Workforce will come to order. You all are probably 
wondering what a quorum is. It takes two to tango in Congress.
    We're meeting here today on examining union ``salting'' 
abuses and organizing tactics that harm the United States' 
economy. I'd like to begin by thanking the city of Round Rock, 
and the Mayor, Hyle Maxwell, for hosting this hearing today. I 
want you to know I appreciate their hospitality and I'm pleased 
to be here. I'm eager to hear from our witnesses, but before I 
begin, I ask unanimous consent that the hearing record remain 
open for 14 days to allow Members' statements and other 
extraneous material referenced during the hearing to be 
submitted in the official hearing record. Without objection, so 
ordered.
    I appreciate you all being in the audience today. Thank you 
all for coming. The Employer-Employee Relations Subcommittee is 
holding a series of hearings examining emerging trends in labor 
law in our country. This is the second in our series, and today 
we'll look at the strategies unions use to organize non-union 
workplaces and whether or not these practices are fair to both 
employers and workers.
    In other words, does current law under the National Labor 
Relations Act provide a labor-neutral environment or is there 
room for improvement? Let me say up front that our concerns 
today have nothing to do with individual union members or 
unions in general. The role that Congress intended unions to 
play in the workplace is distinct from the subject of today's 
hearing.
    Our hearing today will focus on the practice of 
``salting,'' and whether this tactic unfairly hinders the 
ability of employers to run their businesses, provide for their 
workers, and thrive in a fiercely competitive economic 
environment. Salting is the practice used by union organizers 
to enter a non-union contractor's company with the sole purpose 
of attempting to organize the employees from within.
    Let's not kid ourselves here. Certain unions use ``salts'' 
to cause deliberate harm to businesses by increasing their 
costs and forcing them to spend time, energy, and money to 
defend themselves against frivolous charges, and sometimes, to 
run employers out of business. An employer has little choice 
but to hire these individuals. If they don't, they will soon 
find themselves defending unfair labor practice charges at the 
National Labor Relations Board, which can be economically 
devastating.
    As a result of court decisions in the early 1990's, 
limiting the ability of unions to organize on or near a 
company's property, union leaders will defend the practice of 
salting as one of the only ways in which union organizers can 
meet with employees. Often, these employees, or salts, are paid 
by the union to organize and have little monetary incentive to 
perform the actual work they were hired to do at a satisfactory 
level. This creates a hardship for the employer for many 
reasons.
    First, the employer is not getting a quality work product 
from his employee. This can put projects behind schedule, over 
budget, and create problems for other employees who must pick 
up the slack of the union salt. Second, because the union salt 
is actively trying to become a problem employee, the employer 
may feel he has no other choice but to fire the salt. This may 
provide the salt the opportunity to file unfair labor practice 
charges and if the employer chooses to fight these charges, it 
will cost him or her thousands of dollars. This negative 
financial impact is exactly the blow the unions are seeking to 
deliver.
    What it comes down to is this: employers have to compete on 
an increasingly global basis against relentless competitors, 
here and abroad. They must compete in the face of high taxes, 
rising health care costs, and burdensome government 
regulations. They should not have to compete against employees 
within their own company, employees deliberately placed there 
by unions out to harm them. That is just plain wrong.
    Our witnesses today have first-hand experience as targets 
of salting. These companies were caught in the crosshairs of 
the unions because they were successful firms. The National 
Labor Relations Act does not protect companies from some of 
these practices. Unfortunately, it may contribute to some of 
the problems. I welcome our witnesses and look forward to their 
testimony today.
    [The prepared statement of Chairman Johnson follows:]

   Statement of Hon. Sam Johnson, Chairman, Subcommittee on Employer-
      Employee Relations, Committee on Education and the Workforce

    Good afternoon. The House Employer-Employee Relations Subcommittee 
is holding a series of hearings examining emerging trends in labor law 
in our country. This is the second in our series, and today we'll look 
at the strategies unions use to organize non-union workplaces and 
whether or not these practices are fair to both employers and workers.
    In other words, does current law under the National Labor Relations 
Act provide a labor-neutral environment or is there room for 
improvement? Let me say up front that our concerns today have nothing 
to do with individual union members or unions in general. The role that 
Congress intended unions to play in the workplace is distinct from the 
subject of today's hearing.
    Our hearing today will focus on the practice of ``salting,'' and 
whether this tactic unfairly hinders the ability of employers to run 
their businesses, provide for their workers, and thrive in a fiercely 
competitive economic environment. Salting is the practice used by union 
organizers to enter a non-union contractor's company with the sole 
purpose of attempting to organize the employees from within.
    Let's not kid ourselves here. Certain unions use ``salts'' to cause 
deliberate harm to businesses by increasing their costs and forcing 
them to spend time, energy, and money to defend themselves against 
frivolous charges, and sometimes, to run employers out of business. An 
employer has little choice but to hire these individuals. If they do 
not, they will soon find themselves defending unfair labor practice 
charges at the National Labor Relations Board, which can be 
economically devastating.
    As a result of court decisions in the early 1990s, limiting the 
ability of unions to organize on or near a company's property, union 
leaders will defend the practice of salting as one of the only ways in 
which union organizers can meet with employees. Often, these employees, 
or salts, are paid by the union to organize and have little monetary 
incentive to perform the actual work they were hired to do at a 
satisfactory level. This creates a hardship for the employer for many 
reasons.
    First, the employer is not getting a quality work product from his 
employee. This can put projects behind schedule, over budget, and 
create problems for other employees who must pick up the slack of the 
union salt. Second, because the union salt is actively trying to become 
a problem employee, the employer may feel he has no other choice but to 
fire the salt. This may provide the salt the opportunity to file unfair 
labor practice charges--and if the employer chooses to fight these 
charges, it will cost him or her thousands of dollars. This negative 
financial impact is exactly the blow the unions seek to deliver.
    What it comes down to is this: Employers have to compete on an 
increasingly global basis against relentless competitors, both at home 
and abroad. They must compete in the face of high taxes, rising health 
care costs, and burdensome government regulations. They should not have 
to compete against employees within their own company--employees 
deliberately placed there by unions out to harm them. That is just 
plain wrong!
    Our witnesses today have first-hand experience as targets of 
salting. These companies were caught in the crosshairs of the unions 
because they were successful firms. The national labor relations act 
does not protect companies from some of these practices. Unfortunately, 
it may contribute to some of the problems. I welcome our witnesses and 
look forward to their testimony today.
                                 ______
                                 
    Chairman Johnson. And before we allow you to begin, I would 
like to allow our Members who are here the opportunity to make 
an opening statement themselves and we normally limit our 
opening statements to 5 minutes each and I hope you all 
understand we'd like you, as well, to limit your opening 
remarks to that.
    Mr. Grijalva, you're recognized for 5 minutes.

    STATEMENT OF HON. RAUL M. GRIJALVA, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF ARIZONA

    Mr. Grijalva. Thank you very much, Mr. Chairman, and first 
of all I'd like to thank Congressman Carter for hosting our 
Subcommittee here in Round Rock today and I especially thank 
the witnesses who have come to provide this testimony. We do 
appreciate the time and effort that all of you took. Hearings 
sometimes require a witness at a moment's notice to make 
adjustments in their schedule and their time and we're all very 
appreciative of that and the role that you're playing today in 
providing us with facts and information is key in this process.
    That is why we are all here today, to gather facts. We must 
do so with open and fair minds. We come to hear all sides on 
this issue.
    I understand from the title of this hearing that the intent 
is to focus on union organizing tactics such as salting. Our 
Subcommittee had a hearing just a few weeks ago on union 
organizing tactics under voluntary recognition agreements such 
as a card check. So this is the second hearing we have had that 
focuses on union practices.
    As we go about examining the state of labor relations and 
worker rights in this country, we must be careful to maintain a 
balanced view, one that puts a fair focus on both union and 
employer practices. I want to make sure, all of us want to make 
sure that we hear the whole story. The jurisdiction of our 
Subcommittee demands that balance and fairness.
    The other side of the story must not be neglected. 
According to the latest number available in 1998 alone, there 
were 24,000 workers who won compensation after having been 
illegally fired or punished because of their union activity. 
This was up from one thousand such compensated workers in the 
1950's. Fear pervades our workforce and stifles the exercise of 
workers' right to organize. A recent poll showed that a 
staggering 79 percent of workers felt they were very or 
somewhat likely to be fired for trying to organize a union. 
Unfortunately, these fears are often justified. Employers 
illegally fire employees for union activities in 25 percent of 
all organizing efforts, according to the latest study. These 
numbers reveal a real crisis in rights, in human rights in this 
country and I think this also merits Congress' urgent 
attention.
    Now, as I understand it, the complaints about union salting 
seem to fall into three broad categories and yet each one of 
these categories implicates a fundamental right. One complaint 
is that union workers disrupt the workplace with their efforts 
to convince their co-workers to organize. At issue, there seems 
to be the fundamental right of association.
    A second complaint is that salting practices are often 
accompanied by very public campaigns against non-union 
contractors. At issue here seems to be the union's freedom of 
speech.
    And the third complaint is that salts file legal complaints 
against their employer for violating organizing rights or 
engaging in workplace practices and endanger workers' health 
and safety. At issue here seems to be the union or the worker's 
right to petition the government, another fundamental right.
    For these reasons we must be particularly careful to take a 
balanced look at the issues being presented today. As stated, 
our very fundamental rights which Congress should not and 
cannot abridge. We must keep in mind that the work to organize 
is a fundamental, internationally recognized human right. The 
rights of workers' self-organization and collective bargaining 
form the core of the National Labor Relations Act. Freedom of 
association is enshrined in our Constitution. It, along with 
the freedom of speech and the right to petition government were 
considered important enough to earn a top spot in our Bill of 
Rights.
    But I am also sensitive to the needs of business owners who 
may complain about unlawful interference with their business 
operations and endeavors. Successful, vibrant businesses, 
especially small businesses are vital to our economy. They 
generate jobs and at the same time, the labor movement has 
served an equally vital role in assuring that the jobs 
generated lift up and maintain our standard of living, provide 
for and protect workers' health and care, and retirement 
security and give workers a fair voice in the workplace.
    Business' role in creating jobs is particularly vital these 
days in an economy that has lost more jobs than any similar 
period since the Great Depression. Labor's role in protecting 
the quality of these jobs and workers' standard of living is 
also particularly vital these days. As our nation has 
hemorrhaged so many good jobs, outsourcing, people leaving, 
taking jobs out of this country, the new jobs pay an average of 
over 20 percent less than the old jobs they're replacing. The 
number of people without health care continues to rise and the 
number of people without access to historically strong 
guaranteed retirement benefits of union pension plans has 
increased also.
    So I'm keenly interested in hearing from our witnesses on 
these issues on how we can improve labor relations in this 
country, resolve legitimate grievances and do so without 
abridging the basic rights of employers, workers and unions.
    Again, thank you, Mr. Chairman. I look forward to the 
hearing. Thank you very much.
    Chairman Johnson. Thank you, sir. We appreciate you coming 
in all the way from Arizona.
    Mr. Grijalva. Enjoyed the trip.
    Chairman Johnson. Texas is a good place to be.
    Mr. Grijalva. Yes.
    Chairman Johnson. I'd now like to recognize my colleague on 
the Education and the Workforce Committee, Mr. Carter, who as 
you know represents this area.
    Mr. Carter, you're recognized for 5 minutes.

STATEMENT OF HON. JOHN R. CARTER, A REPRESENTATIVE IN CONGRESS 
                    FROM THE STATE OF TEXAS

    Mr. Carter. Thank you, Mr. Chairman. And I want to thank 
all of you for coming in here today and joining us in the field 
hearing here in the great State of Texas. I'm especially 
pleased this Subcommittee has chosen to convene here in Round 
Rock which is our Home District.
    The topic today for this hearing is no source of pleasure. 
However, as we examine the problem that has brought us together 
this afternoon, the problem of salting abuse, we discuss the 
damages these tactics are causing employers across the country. 
Salting is a practice in which the union attempts to get hired 
by non-union company in order to organize the company from 
within or simply to disrupt the non-union employer or to put it 
at a competitive disadvantage. It is a very old and widely 
known practice. It places employers in a no win situation. Most 
time employers must hire the union salt or face costly 
litigation that results from unfair labor practice charges.
    Today, we are here to examine the fairness of these salting 
campaigns. I do not wish to delve into the arcane, but it is 
worth noting for the record that why this practice is called 
salting. The one that seems more accurate to me is the 
legendary story of the Roman salting the earth at Carthage to 
prevent anything from growing as punishment for resisting the 
Roman Empire. This, to me, seems especially apt as from many 
people's perspective salting is a practice that prevents 
companies from growing.
    As Members of Congress, we have heard from many of our 
constituents that salting is an unfair practice leading to 
employment of union members who are not interested in providing 
quality work or giving their best to their employer. That is 
why Congressman Jim DeMint of South Carolina introduced and why 
I am a co-sponsor of H.R. 1793, the Truth in Employment Act 
which would prohibit the practice of salting. The Truth in 
Employment Act makes clear that an employer is not required to 
hire someone who is not a bona fide applicant in that the 
applicant's primary purpose in seeking the job is not to work 
for the employer. Simply put, no employers should be forced to 
hire a union salt.
    As we face the challenges of job creation in this country, 
it is time to question a practice that, in fact, destroys 
people's livelihood, companies and demolishes the American 
dream. Our focus should be on helping employers create more 
jobs, not tearing them down and destroying them.
    Our witnesses here today will describe how union salting 
campaigns have adversely affected their businesses and impacted 
their personal lives. And I also look forward to hearing 
recommendations on how the Congress should proceed.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Carter follows:]

 Statement of Hon. John Carter, a Representative in Congress from the 
                             State of Texas

    Thank you all for coming, it's an honor to host this field hearing 
in the great state of Texas, and I am especially pleased that the 
Subcommittee has chosen to convene this important hearing in our own 
district here in Round Rock.
    The topic of today's hearing is no source of pleasure. However, as 
we examine the problem that has brought us all together this afternoon-
the problem of salting abuse, and the damage these tactics are causing 
employers across the country.
    Salting is a practice in which a union worker attempts to get hired 
by a non-union company in order to organize the company from within, or 
simply to disrupt the non-union employer or put it at a competitive 
disadvantage. It is a very old and widely known practice, and it places 
employers in a no-win situation: most times, Employers must hire the 
union salt or face the costly litigation that result from unfair labor 
practice charges. Today, we are here to examine the fairness of these 
salting campaigns.
    I do not wish to delve into the arcane, but it is worth noting for 
the record why this practice is called salting: the one that seems most 
accurate to me is the legendary story of the Romans salting the earth 
of Carthage to prevent anything from growing as punishment for 
resisting the Roman Empire. This to me seems especially apt, as from 
many people's perspective, salting is a practice that prevents 
companies from growing.
    As Members of Congress we have heard from many of our constituents 
that salting is an unfair practice leading to the employment of union 
members who are not interested in providing quality work or giving 
their best to their employer. That is why Congressman Jim DeMint of 
South Carolina introduced, and why I am a cosponsor of, H.R. 1793, the 
Truth in Employment Act, which would prohibit the practice of salting. 
The Truth in Employment Act makes clear that an employer is not 
required to hire someone who is not a ``bona fide'' applicant in that 
the applicant's primary purpose in seeking the job is not to work for 
the employer. Simply put, no employer should be forced to hire a union 
salt.
    As we face the challenges of job creation in this country, it is 
time to question a practice that in fact destroys people's livelihoods, 
companies, and demolishes the American Dream. Our focus should be on 
helping employers create more jobs, not tearing them down and 
destroying them. Our witnesses here today will describe how union 
salting campaigns have adversely affected their businesses and impacted 
their personal lives, and I also look forward to hearing 
recommendations for how Congress should proceed.
                                 ______
                                 
    Chairman Johnson. Thank you, Mr. Carter. You didn't talk 
anywhere near 5 minutes. What happened? Have you ever heard of 
a Texas Judge who wasn't able to talk 5 minutes?
    I think we have a very distinguished panel of witnesses 
before us today and I want to thank you all for coming. I 
understand my colleague from Texas would like to introduce the 
first witness on our panel today and I yield to Mr. Carter for 
that purpose.
    Mr. Carter. Thank you, Mr. Chairman. I'd like to introduce 
Sharon McGee who is the president and CEO of R.M. Mechanical 
based in Austin and established in 1976. The company provides 
heating, ventilation and cooling equipment and is able to 
fabricate sheet metal onsite. Among the many certifications she 
holds, Ms. McGee holds a Class A master mechanical license in 
the State of Texas, is a certified safety and health official 
and an adjunct constructor for Texas OSHA. I'd like to 
introduce Ms. McGee.
    Chairman Johnson. Thank you. I'll introduce the other 
witnesses and then the Members will be advised that the 
witnesses will all testify before we begin the questioning 
process.
    I'd like to introduce the No. 2 witness who is David Van 
Os. Is that correct? He's a union labor lawyer and is the 
managing shareholder with the law firm of Van Os & Associates. 
He represents various unions throughout Texas and is based in 
San Antonio, Texas.
    Shelly Runyan is our third witness who founded Titus 
Electric in 1985 with her now husband, Ty, who is also here to 
answer questions, out of the back of their Dodge Satellite. 
Since then the company has grown to an average of 70 employees 
and is the largest independently owned contractor in Central 
Texas. They were the first independent company to offer health 
insurance. The company has focused on commercial and industrial 
electric services.
    Our last witness is Mr. Tom Nesbitt who received his law 
degree from the University of Texas. You're not wearing an 
orange tie and his undergraduate degree from Baylor University. 
He practices labor and employment law and has first hand 
experience with the impact of the local salting campaign on 
small businesses in the Austin area.
    Again, I would ask the witnesses to please try to limit 
your statements to 5 minutes and your entire written testimony 
and anything you wish to add may be added in the official 
record at the end of the hearing.
    She's got a little clock here and if you hear it going 
beep, beep, beep, that's 5 minutes.
    With that, I'll recognize the first witness to begin.

STATEMENT OF SHARON McGEE, PRESIDENT AND CEO, R.M. MECHANICAL, 
                      INC., AUSTIN, TEXAS

    Ms. McGee. Thank you. Good afternoon, Chairman Johnson and 
Members of the House Subcommittee on Employer-Employee 
Relations.
    My name is Sharon McGee and I am President and CEO of R.M. 
Mechanical, Inc. R.M. Mechanical has been serving Central Texas 
since January, 1976. I currently employ 60 people and perform 
heating, air conditioning, ventilation, design/build projects, 
sheet metal fabrication-retail and wholesale, service-
residential and commercial and refrigeration. My company's make 
up is 80 percent commercial and 20 percent residential. I 
currently serve as the Chairman of the Board for the Central 
Texas Chapter of Associated Builders and Contractors here in 
Austin, ABC, of which R.M. Mechanical is a proud member. ABC is 
a national trade association comprised of 23,000 construction 
and construction-related firms from across the country, all of 
whom are bound by a shared commitment to the merit shop 
philosophy of awarding construction contracts to the lowest 
responsible bidder, regardless of labor affiliation, through 
open and competitive bidding. With 80 percent of construction 
today performed by open shop contractors, ABC is proud to be 
their voice.
    I am here today to share with you my company's experience 
with salting abuse, and to express to you the desperate need 
for legislation prohibiting this nefarious union pressure 
tactic. Salting is the practice of intentionally placing 
trained union professional organizers on non-union jobsites to 
harass or disrupt company operations, apply pressure, increase 
operating and legal costs, and to ultimately put a company out 
of business. The objectives of the agents most often culminate 
in the filing of many unfair labor practice claims with the 
National Labor Relations Board.
    On April 30, 1998, I retained Mr. Lynn Hensley, a labor law 
attorney based right here in Round Rock, Texas to represent my 
firm because R.M. Mechanical because it received word from the 
NLRB that unfair labor practice charges had been filed. In 
1998, R.M. Mechanical, an open shop contractor, performed a 
substantial amount of work, over $7 million, at an IBM facility 
in Austin, Texas alongside other mechanical contractors that 
were signatory to the union. At that time, R.M. Mechanical was 
in need of additional HVAC workers; therefore, I placed a 
``help wanted'' ad in the Austin American-Statesman for 
qualified, skilled workers. Immediately following the placement 
of the help wanted ad, R.M. Mechanical was salted by four union 
representatives who applied for work. These applicants were not 
immediately hired and they subsequently filed charges against 
me for unfair labor practices, discrimination and an 
investigation took place. Adhering to my company policy, I did 
not hire any applicant until I had completed the interviewing 
process with all applicants.
    I, along with three other officers from R.M. Mechanical, 
gave statements to Mr. Armendariz, District Director for the 
NLRB. Our attorney was present for these statements. The union 
representatives continued to appear on my jobsites, talking 
with my employees and generally creating a disturbance on the 
jobsite and in their personal lives. Many of our employees were 
intimidated by the continued presence of the union officials.
    In the hopes of putting my employees' minds at ease, I held 
an open forum for all employees of R.M. Mechanical to 
facilitate a discussion. I explained to them that they have the 
right to join the union. I also shared that if they did so, 
they would be entering into a contract with the union which 
would be negotiated with union officials. It warrants 
mentioning that at that time, R.M. Mechanical employed two 
individuals who had previously been signatory to the union.
    Subsequently, I had announced that R.M. Mechanical would 
hold an election so our employees could choose whether to 
remain open shop or to become unionized. At this time, I was 
still in need of people to perform our work, so I offered the 
union applicants positions with R.M. Mechanical. I then 
proceeded to make the Director of the NLRB aware of my course 
of action.
    I informed Mr. Armendariz that I had offered the positions 
to the four union applicants. They would be performing the 
duties of the position that I advertised about and they were to 
begin work the next day. The four union members did not show up 
for work. I contacted the District Director and informed him of 
the ``no show''. He asked me, in turn, to leave the positions 
open for an additional 10 days, which I did. They once again 
failed to show up.
    It took no less than $15,000 in legal fees to prove that 
R.M. Mechanical had done nothing wrong and had broken no laws. 
The charges were dropped by the NLRB and a statement was issued 
from the NLRB that R.M. Mechanical had operated on a fair and 
consistent basis according to law and did not discriminate.
    I urge Congress to address this unscrupulous tactic by 
passing H.R. 1793, the Truth in Employment Act which was 
introduced in April of 2003 by Representatives Jim DeMint, Cass 
Ballenger and John Carter of Texas.
    Thank you again for my opportunity to testify before you 
today.
    [The prepared statement of Ms. McGee follows:]

   Statement of Sharon McGee, President & CEO, RM Mechanical, Inc., 
      Austin, TX on behalf of Associated Builders and Contractors

    Good afternoon Chairman Johnson, Ranking Member Andrews, and 
members of the House Subcommittee on Employer-Employee Relations. I am 
extremely grateful for the opportunity to testify before you today on 
this issue of great importance to my company. My name is Sharon McGee 
and I am the President and CEO of R.M. Mechanical, Inc. R.M. Mechanical 
has been serving Central Texas since January, 1976. I currently 
employee 60 people and perform Heating, Air Conditioning, Ventilation, 
Design/Build projects, Sheet metal Fabrication-Retail and Wholesale, 
Service-Residential and Commercial and Refrigeration. My company make 
up is 80 percent commercial and 20 percent residential. I currently 
serve as the Chairman of the Board for the Central Texas Chapter of 
Associated Builders and Contractors (ABC) of which R.M .Mechanical is a 
proud member. ABC is a national trade association comprised of 23,000 
construction and construction-related firms from across the country, 
all of whom are bound by a shared commitment to the merit shop 
philosophy of awarding construction contracts to the lowest responsible 
bidder, regardless of labor affiliation, through open and competitive 
bidding. With 80 percent of construction today performed by open shop 
contractors, ABC is proud to be their voice.
    I am here today to share with you my company's experience with 
salting abuse, and to express to you the desperate need for legislation 
prohibiting this nefarious union pressure tactic. Salting is the 
practice of intentionally placing trained union professional organizers 
on non-union jobsites to harass or disrupt company operations, apply 
pressure, increase operating and legal costs, and to ultimately put a 
company out of business. The objectives of the agents most often 
culminate in the filing of many unfair labor practice claims with the 
National Labor Relations Board (NLRB).
    However, salting is not merely an organizing tool. It has become an 
instrument of economic destruction aimed at non-union companies that 
has little to do with organizing. A publication of the International 
Brotherhood of Electrical Workers, one of salting's principal 
proponents, has described that particular union's salting tactics as a 
process of ``infiltration, confrontation, litigation, disruption, and 
hopefully annihilation of all non-union contractors.'' Unions send 
their agents into open shop workplaces under the guise of seeking 
employment when their true intentions are to deliberately increase 
costs to employers through workplace sabotage and the filing of 
frivolous discrimination charges. R.M. Mechanical and I, as well as 
other construction companies based here in Austin, have become all too 
familiar with how disruptive, intimidating and damaging these pressure 
tactics can become.
    On April 30, 1998, I retained Mr. Lynn Hensley-a labor law attorney 
based right here in Round Rock, Texas to represent my firm because R.M. 
Mechanical received word from the NLRB that unfair labor practice 
charges had been filed. In 1998, RM Mechanical (an open shop 
contractor) performed a substantial amount of work--over $7 million--at 
an IBM facility in Austin, Texas alongside other mechanical contractors 
that were signatory to the union. At the time, R.M. Mechanical was in 
need of additional HVAC workers; therefore, I placed a ``help wanted'' 
advertisement in the Austin American Statesman for qualified, skilled 
workers. Immediately following the placement of the help wanted ad, RM 
was salted by four union representatives who applied for work. These 
applicants were not immediately hired and they subsequently filed 
charges against me for unfair labor practices/discrimination and an 
investigation took place. Adhering to company policy, I did not hire 
any applicant until I had completed the interviewing process with all 
applicants.
    I along with three other officers from R.M. Mechanical, gave 
statements to Mr. Armandariz, District Director for the NLRB. Our 
attorney was present for these statements. The union representatives 
continued to appear on my jobsites, talking with my employees and 
generally creating a disturbance on the jobsite and in their personal 
lives. Many of our employees were intimidated by the continued presence 
of the union officials.
    In the hopes of putting my employees' minds at ease, I held an open 
forum for all employees of RM Mechanical to facilitate a discussion. I 
explained to them that they have the right to join the union. I also 
shared that if they did so, they would be entering into a contract with 
the union which would be negotiated with union officials. It warrants 
mentioning that at that time, RM Mechanical employed two individuals 
who had previously been signatory to the union.
    Subsequently, I announced that RM Mechanical would hold an election 
so our employees could choose whether to remain open shop or to become 
unionized. At this time, I was still in need of people to perform our 
work, so I offered the union applicants positions with RM. I then 
proceeded to make the Director of the NLRB aware of my course of 
action.
    I informed Mr. Armandariz that I had offered the positions to the 
four union applicants. They would be performing the duties of the 
position that I advertised and they were to begin work the next day. 
The four union members did not show up for work. I contacted the 
District Director and informed him of the ``no show''. He, in turn, 
asked me to leave the positions open ten more days, which I did. They 
once again failed to show up.
    It took no less than $15,000 in legal fees to prove that R.M. 
Mechanical had done nothing wrong and had broken no laws. The charges 
were dropped by the NLRB and a statement was issued from the NLRB that 
R.M. Mechanical operated on a fair and consistent basis according to 
law and did not discriminate against any applicant.
    R.M. Mechanical Inc., along with the Associated Builders and 
Contractors, firmly believes in laws designed to protect employees; 
however, these laws are being manipulated by labor unions in order to 
regain their diminishing market-share. Salting abuse uses coercive 
governmental power to accomplish the unions' goals, rather than 
competing fairly and ethically based on merit. Additionally, I believe 
it is unfair for the government to compel an employer to subsidize a 
union organizer's disruptive behavior in the workplace; businesses like 
R.M. Mechanical should be able to hire people who truly want to work 
for that company.
    Small businesses are not the only ones that suffer as a result of 
salting abuse. Since federal agencies pay all of the costs to 
investigate and prosecute these frivolous complaints filed by the union 
salts, the American taxpayer is funding the defense of unscrupulous, 
anti-competitive and often extortionist behavior. Moreover, 
investigating frivolous complaints wastes limited federal agency 
resources that could be better spent at the agency. Ultimately, it is 
the America taxpayer who loses, by having hard-earned tax dollars go to 
sustain the union's tactic of generating frivolous charges and 
lawsuits. The government should not be forced to use taxpayers' dollars 
to support a flawed system that allows tens of thousands of cases to be 
brought against employers that are later dismissed as having no merit.
    The unions' efforts against merit shop competitors also result in 
an increase in both the cost of doing business and the cost to the 
consumer. As I stated earlier, these frivolous salting charges have 
cost our company significant time, money and resources in defending 
ourselves against what amounts to baseless complaints. These complaints 
have prevented us from hiring more employees, investing in better 
equipment, securing more work to grow our company, and providing 
additional jobs in the community.
    In defending ourselves against false and frivolous charges, 
employers incur thousands of dollars in legal expenses, delays, and 
lost hours of productivity. Unions and their agents have argued that 
they have the right to organize and to be hired to work on merit shop 
jobsites. While unions have the right to attempt to organize workers, 
open shop companies and their employees also has the right to refrain 
from supporting union activities and be free from unwarranted 
harassment.
    I urge Congress to address this unscrupulous tactic by passing H.R. 
1793, the Truth in Employment Act which was introduced in April of 2003 
by Representatives Jim DeMint (R-S.C.), Cass Ballenger (R-N.C.) and 
John Carter (R-TX). This vital legislation amends section 8(a) of the 
National Labor Relations Act (NLRA) to make clear that an employer, 
such as R.M. Mechanical, 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 bills merely seek 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.
    Again, I thank you for the opportunity to testify before you today, 
and for your willingness to highlight this abusive practice. I am now 
happy to answer any questions the subcommittee may have. Thank you.
                                 ______
                                 
    Chairman Johnson. Thank you. Appreciate your comments.
    Mr. Van Os, you may begin.

   STATEMENT OF DAVID VAN OS, ESQ., ATTORNEY, DAVID VAN OS & 
              ASSOCIATES, P.C., SAN ANTONIO, TEXAS

    Mr. Van Os. Chairman Johnson and Members of the Committee, 
thank you very much for the invitation to appear before the 
Committee in this field hearing. It is an honor to participate 
in the American democratic process of self-government through 
the elected representatives of the people. It is especially an 
honor to participate in a field hearing wherein the people's 
elected representatives leave Washington, D.C., and come out 
here to the people. The Committee is to be commended for 
partaking of this process.
    I have been practicing law as a labor lawyer for 27 years. 
And I am very familiar with the many obstacles that current law 
places against workers' human rights to organize unions in the 
workplace.
    My testimony is offered on behalf of the Texas AFL-CIO. The 
Texas AFL-CIO, a federation of numerous affiliated unions in 
Texas, is the leading voice for the interests of working people 
and their families in the State of Texas. Through its 
affiliated local unions, the Texas AFL-CIO speaks on behalf of 
over half a million organized workers in Texas, as well as on 
behalf of the interests of millions of unorganized workers of 
every trade, craft, and occupation. We are the only 
institutional voice fighting every day, today, for American 
jobs. And I would like to take this opportunity to ask this 
Committee to hold a hearing, another hearing here in Central 
Texas focusing on the massive outsourcing of high tech jobs 
that has devastated the livelihoods of so many Central Texans.
    As long ago as 1941, the U.S. Supreme Court in the case of 
Phelps Dodge Corporation v. National Labor Relations Board, 
addressed the question of whether the National Labor Relations 
Act prohibited employers from refusing to hire applicants for 
employment because of their Union affiliation. There is nothing 
new about the tactic of salting.
    Justice Frankfurter on behalf of the Supreme Court noted in 
pertinent part as follows: ``The denial of jobs because of 
union affiliations is an old and familiar aspect of American 
industrial relations.'' Justice Frankfurter continued: 
``Indisputably the removal of such obstructions was the driving 
force behind the enactment of the National Labor Relations 
Act.''
    Clearly, Congress and the Courts recognized in passage of 
the National Labor Relations Act over six decades ago, nearly 
seven decades ago, that a key component in the ability of 
workers to seek union recognition was the ability of union 
affiliated workers to obtain employment in non-organized work 
places.
    In my written testimony which I am submitting to the 
Committee, I discuss in much further detail the history and the 
practices and dynamics of salting, a history that goes back 
decades.
    We often hear the employer community of employers who argue 
against salting, that salting somehow creates divided 
loyalties. This divided loyalties argument has no basis in 
reality and that fact is borne out by the indisputable truth 
that at this very moment in thousands of workplaces in America, 
there are hundreds of thousands of union stewards who are 
productive and loyal employees of their employer and at the 
same time serve as diligent and respected union representatives 
on behalf of their co-workers. Every day, these hundreds of 
thousands of union stewards, many of which are right here in 
Central Texas, fulfill jointly held loyalties to both their 
employer and their union. They are often among the most 
productive and exemplary employees of their employer. Union 
representation and collective bargaining bring to the workplace 
a productive partnership where both the employers' and 
employees' interests are taken into consideration and 
healthfully balanced.
    It is also a fiction to suggest that union salts do not 
work productively for their non-union employer. For example, 
after Titus Electric Company of Austin, Texas hired union salts 
who were members of the International Brotherhood of Electrical 
Workers, Local 520, Titus' owner, Mr. Ty Runyan, announced at 
an employee meeting that two of the IBEW members whom he knew 
were union members were two of the most productive employees on 
the job site.
    America's unions seek nothing more than good American jobs 
with the self-respect that is obtained by performing productive 
work in return for decent wages, benefits and working 
conditions in the context of a healthy, American economy.
    Far from having any need to change laws so as to lessen the 
protection of workers' organizing rights, what America and the 
American economy need is more protection of those rights and 
more public education about the need for such protection and 
the salutary advantages to the entire economy of union 
organization and collective bargaining.
    Thank you very much, Committee, for your courteous 
attention to my comments.
    [The prepared statement of Mr. Van Os follows:]

 Statement of David Van Os, Esq., Attorney, David Van Os & Associates 
                         P.C., San Antonio, TX

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    Chairman Johnson. Thank you, sir, and you may put those in 
the record, the rest of your comments.
    Mr. Van Os. Thank you.
    (Applause.)
    Chairman Johnson. Normally, in the U.S. Congress we don't 
allow the audience to respond to comments that are made, but 
we're in Texas.
    Ms. Runyan, you may begin your testimony and if you wish to 
have your husband make any side remarks, you're welcome to do 
that.

 STATEMENT OF SHELLY RUNYAN, VICE PRESIDENT, TITUS ELECTRICAL 
                CONTRACTING, INC., AUSTIN, TEXAS

    Ms. Runyan. Thank you very much. I'm Shelly Runyan, Vice 
President of Titus Electrical Contracting and this is my 
husband and business partner, Ty Runyan. Ty and I started Titus 
Electrical with nothing but determination to succeed. Our first 
work truck, as you said, was a 16-year-old Dodge Satellite. In 
the beginning, to make ends meet between draws, I held as many 
as two jobs, while managing Titus Electrical. Ty worked in the 
field from daylight to dark, often 7 days a week. On days he 
needed help pulling wire or building switchgear, I worked 
alongside him as an electrician's helper. With a lot of hard 
work and determination, and by the grace of God, we made it 
through some very tough times.
    Today, we own the largest, independent electrical 
contracting company in Central Texas.
    Having started with nothing, it has always been our first 
priority to take the best possible care of our team mates. As 
our company grew, we added benefits: medical and dental 
insurance, life and accident/disability insurance, a 401(k) 
retirement plan, paid vacations and holidays. Our team mates 
are paid at the top of the industry, which is often higher than 
union scale.
    Having said that, I'd like to take you back to November 
2001 when Ty pulled up at the construction site for the Palmer 
Events Center in Austin. He was there because the original 
electrical contractor, an independent contractor who had been 
unionized through a vicious salting attack and had not 
bankrupted.
    When Ty arrived he was confronted by an IBEW 520 organizer 
who told him, ``This here's a union job. You'd better get out 
of here.'' He told Ty he didn't know the trouble he was getting 
into. That began what the Austin Chronicle dubbed ``Battle on 
Town Lake.''
    Beginning December 2001 and continuing through November 
2003, the IBEW and its agents filed close to 200 ULPs and 
numerous EEOC charges and civil suits against us.
    During construction of the Palmer Events Center, the 
construction economy in Austin was at its most depressed in 
years. Between November 2001 and March 2002, we had over 530 
applicants for electrical positions. We hired 48 technicians 
during that time period, meaning that a given applicant had 
less than a 1 in 10 chance of getting a position with our 
company. In every instance, we hired the best possible 
applicant for each position, strictly adhering to our 
established hiring procedures. Many of the people we hired were 
known union members. We did not and do not discriminate. 
Despite this, in almost every instance where a union member 
submitted their name, the union filed the ULP complaint against 
us knowing fully that we in fact did hire some of their members 
knowing we had only a few positions open and hundreds of 
applicants for those positions. The fact is they were 
intentionally filing groundless complaints in an effort to 
bankrupt us for having the audacity to take on a ``union job.''
    We have spent over a half a million dollars in legal fees, 
not to mention the cost of lost productivity, defending 
ourselves against the malicious and groundless attacks of the 
IBEW. Worse yet, they did so with the implicit cooperation and 
support of the NLRB.
    The NLRB, a government agency which is ostensibly an 
independent arbiter, has been corrupted by the dictates of the 
AFL-CIO. In one instance, after a review of our confidential 
files by an NLRB agent, the agent passed confidential 
information to the IBEW which then filed another lawsuit.
    We have also been through the ALJ court, where the IBEW and 
their attorneys sat with the NLRB's two attorneys and conspired 
in their attempted prosecution of us and yet we are supposed to 
believe that the NLRB is an unbiased arbiter. The union's 
attorney who sat with the NLRB's attorneys was David Van Os, 
the same lawyer who represented the union and its members in 
every one of the close to 200 ULPs filed against us, and who 
filed seven lawsuits, all of which were financed by the IBEW. 
He is the same attorney who now sits before you today trying to 
justify and defend this system.
    Having said this, the problem is not the IBEW. The problem 
is the NLRB and the perverted interpretation and prosecution of 
archaic labor laws.
    Many salts are not legitimate employees. Employees are 
hired and retained by a business to build a positive and 
productive team and work toward the mutual benefit of the 
employee, employer and the customer. Salts have intentionally 
sabotaged and concealed electrical work, in one case causing an 
electrical explosion.
    We have had salts physically assault our team members. 
They've been arrested off our job sites and we've lost 
customers because of them. And yet, when terminated, invariably 
they would file a ULP and the NLRB would attempt to prosecute 
charges against us for legitimate terminations.
    We've had a death threat, vandalism to employee and company 
property during pickets, anonymous threatening phone calls to 
employees' homes at 1 a.m. and intention damage and sabotage to 
our work sites by these salts.
    Legislation should clearly define that an employee is not 
someone who is paid or encouraged by outside organization to 
damage or disrupt a company and anyone who does can be 
terminated or not hired.
    The NLRB should not be allowed to be corrupted. Employers 
should not be guilty until proven innocent.
    If our economy is to revitalize, these NLRB endorsed and 
sanctioned salting attacks must be eradicated from the 
construction industry and our economy as a whole. In so doing 
we will allow American business to focus on efficiency and 
customer service, not problems created by the NLRB at the 
behest of the AFL-CIO.
    Thank you for your time and thank you for taking these bold 
steps to repair a broken system.
    [The prepared statement of Ms. Runyan follows:]

     Statement of Shelly Runyan, Vice President, Titus Electrical 
                     Contracting, Inc., Austin, TX

    Hello, I'm Shelly Runyan, Vice President of Titus Electrical 
Contracting and this is my husband, and business partner Ty Runyan. In 
your handout you have ``An Introduction to Ty Runyan (Narrative)'' and 
an interview from Austin Construction News and Fortune Small Business. 
To summarize them Ty is + Hispanic, + Irish, grew up in South Texas, 
left school in 11th grade and started in construction as a ditch 
digger. With the help of an electrician who he met on a project, he got 
his first job as an electrician in 1981. In 1987, Ty and I started 
Titus Electrical Contracting out of the back of a 1971 Dodge Satellite. 
Today we own the largest, independent electrical contracting company in 
Central Texas.
    Having started with nothing, it has always been our first priority 
to take the best possible care of our Team Mates. As our company grew 
we added benefits: Medical & Dental Insurance, Life and Accident / 
Disability Insurance, a 401(k) Retirement Plan, Paid Vacations and 
Holidays. Our Team Mates are also paid at the top of the industry, 
which is often higher than union scale.
    Having said that, I'd like to take you back to November 2001 when 
Ty pulled up at the construction site for the Parmer Events Center, in 
Austin. He was there because the original electrical contractor, who 
was unionized, had bankrupted. When I arrived I was confronted by an 
IBEW 520 organizer who told us that, ``This here's a union job. You'd 
best get on outta here!'' He told Ty he didn't know the trouble he was 
getting into. That began what the Austin Chronicle dubbed ``Battle on 
Town Lake''. Beginning December 2001 and continuing through November 
2003 the IBEW and its agents filed close to 200 ULPs and numerous EEOC 
charges and civil suits.
    During construction of the Palmer Events Center, the construction 
economy in Austin, was at its most depressed, in years. Between 
November 2001 and March 2002 we had over 530 applicants for electrical 
positions. We hired 48 technicians during that time period, meaning 
that a given applicant had less than a 1 in 10 chance of getting a 
position with our company. In every instance, we hired the best 
applicant for each position, strictly adhering to our established 
hiring procedures. Many of the people we hired were known union 
members. We did not and do not discriminate. Despite this, in almost 
every instance where a union member submitted their name, the union 
filed an NLRB unfair labor practices complaint against us, knowing 
fully that we in fact did hire some of their members, knowing that we 
had only a few positions open, and hundreds of applicants for those 
positions. The fact is, they were intentionally filing groundless 
complaints in an effort to bankrupt Titus Electrical for having the 
audacity to take over a ``union job''.
    We have spent over HALF A MILLION DOLLARS in legal fees, not to 
mention the cost of lost productivity, defending ourselves against the 
malicious and groundless attacks of the IBEW. Worse yet, they did so 
with the implicit cooperation and support of the NLRB.
    The NLRB, a government agency which is ostensibly an independent 
arbiter, has become a corrupt organization whose agents act with a 
hidden agenda, directed by the AFL-CIO.
    In one instance, after a review of our confidential files by an 
NLRB agent, a review which we voluntarily agreed to, this agent passed 
confidential information to the IBEW with which they filed another 
groundless lawsuit.
    We have also been through an ALJ court, where the IBEW and their 
attorneys sat with the NLRB's 2 attorneys and conspired in their 
attempted prosecution of us, and yet we are supposed to believe the 
NLRB is an unbiased arbiter. The Union's attorney who sat with the 
NLRB's attorneys was David Van Os, the same lawyer who represented the 
union and its members in every case, and who filed 7 frivolous 
lawsuits, all of which were financed by the IBEW as part of their 
assault on us.
    Having said this, the problem is not the IBEW; the problem is the 
NLRB and their perverted interpretation and prosecution of archaic 
labor laws.
    Many salts are not legitimate employees. Employees are hired and 
retained by businesses to build a positive and productive team and work 
toward the mutual benefit of the employee, employer and customer. Salts 
are often intentionally disruptive and combative. While employed by us, 
we have had Salts physically assault our Team Members, they have been 
arrested off our jobsites, and we have lost customers because of them. 
They have intentionally sabotaged and concealed electrical work, in one 
case causing an electrical explosion. And yet, when terminated, 
invariably the NLRB would attempt to prosecute charges against us for 
legitimate terminations.
    We have had a death threat, vandalism to employee and company 
property during pickets (trucks, tires, windows, beer bottles in 
parking lot at night, anonymous, threatening phone calls to employees 
homes at 1:00am, and intentional damage and sabotage to our work by 
these salts (wiring at Braker 3, wiring at Palmer Events center).
    We have a ``no other work clause'', but this cannot apply to a paid 
union organizer per NLRB.
    Legislation should clearly define that an employee is not someone 
who is paid or encouraged by outside organization to damage or disrupt 
a company and anyone who does can be terminated or not hired.
    The NLRB should not be allowed to be corrupted by AFL-CIO (sit in 
on trials). The NLRB should not be encouraged to prosecute the agenda 
of unions but rather to enforce clearly defined law on clear cut 
violations. Currently the NLRB takes on every case, no matter how 
ambiguous or obviously frivolous. They then attempt to prosecute us 
with the hostility and contempt of a zealot, no matter how obviously 
groundless. In one instance, we had to then defend ourselves for our 
sprinkler system watering our lawn when picketers arrived at our 
office.
    The way the current labor laws are written employers are ``Guilty 
until proven Innocent.'' We have to defend ourselves against baseless, 
false and frivolous accusations. This costs companies in lost 
productivity and legal fees. In turn, this hurts the legitimate 
employees and the economy as a whole.
    The health of any economy is largely driven by the cost and 
efficiency of its construction industry. The cost and efficiency of 
construction are dictated by labor expense and managerial efficiency.
    When management's primary job is dealing with labor strife 
intentionally and maliciously created by SALTS and union plants whose 
intent is to disrupt, damage or destroy the very companies and industry 
that employs them, our entire economic foundation destabilized. 
Construction costs escalate dramatically and in our global economy, 
manufacturers will look elsewhere to produce the goods that Americans 
buy. We will become the nation of last choice for any company's 
expansion.
    We are far from alone in this plight. As a member of 2 nation wide 
electrical contracting associations, by far the number one issue 
discussed at every meeting is the extreme hardships in hiring that are 
created by union salting practices and the NLRB support and prosecution 
of these cases. The hiring strife is designed to choke down the 
independent contractor so that he cannot acquire needed technicians, 
cannot compete and will be slowly bled to death. Ultimately, the entire 
nation picks up the bill with dramatically higher construction and 
unemployment costs.
    If our economy is to revitalize, these NLRB endorsed and sanctioned 
salting attacks must be eradicated from the construction industry and 
our economy as a whole. In so doing we will allow American business to 
focus on efficiency and customer service, not problems created by the 
NLRB at the behest of the AFL-CIO.
    Thank you for your time and thank you for taking these bold steps 
to repair a broken system.
    [Attachments to Ms. Runyan's statement follow:]

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    Mr. Van Os. Mr. Chairman, may I respond on a factual 
matter?
    Chairman Johnson. After the last man has testified. I'll 
call on you, yes.
    Mr. Van Os. Thank you.
    Chairman Johnson. Mr. Nesbitt.

STATEMENT OF TOM NESBITT, ESQ., ATTORNEY, FULBRIGHT & JAWORSKI, 
                       LLP, AUSTIN, TEXAS

    Mr. Nesbitt. My name is Tom Nesbitt. I am employed as an 
associate attorney with Fulbright & Jaworski in Austin, Texas. 
However, I testify today as an individual, not on behalf of my 
firm and not on behalf of any client.
    I am not here to bash labor unions. Labor unions have 
historically fought for important protections we now take for 
granted: minimum wage laws, overtime laws, job safety 
regulations, family leave. Nor am I here because of any 
ideological alignment with opponents of labor unions. I have 
often supported Democratic candidates for political office and 
have worked for and supported pro-labor Democratic United 
States Congressman Chet Edwards, a statesman whose views I 
commonly share.
    However, I have been asked to describe what I observed when 
one of my clients, Titus Electrical, became the target of an 
aggressive ``salting'' campaign by a labor union.
    Titus Electrical is a small, family owned construction 
business. Its roughly 50 employees have never sought to be 
represented by a labor union. My client had been in operation 
for about 15 years, and by 2001 it had become large enough to 
compete with the typically large union contractors for 
government jobs.
    In 2001, the city of Austin was building the Palmer Civic 
Events Center downtown. My client was not originally the 
electrical subcontractor on the job. Originally, the 
subcontract went to another non-union shop, Guy's Electric. 
During that job, the International Brotherhood of Electrical 
Workers Local 520 salted the job, went out on strike, filed 
unfair labor practice charges against Guy's Electrical, 
threatened to initiate other legal action, and ultimately 
convinced Guy's Electric to sign the IBEW's collective 
bargaining agreement. Guy's Electric soon went bankrupt. The 
electrical subcontract was re-bid, and my client won the bid.
    IBEW Local 520 never sought an election of my client's 
employees to determine whether the employees wanted to be 
represented by a labor union. To my personal knowledge, IBEW 
Local 520 never asked my client's existing employees to sign 
authorization cards. However, IBEW Local 520 did initiate an 
astounding amount of legal action against my client.
    IBEW Local 520 filed somewhere in the range of 200 
accusations of unfair labor practice charges with the National 
Labor Relations Board without, in my view, any apparent regard 
for the merits of the charges.
    The union filed charges alleging that over 40 union 
electricians were discriminatorily not hired. We believe that 
the union filed a charge of unfair labor practices for every 
known union member who applied for a job. The union filed a 
charge alleging that one union electrician was discriminatorily 
refused hire when my client had, in fact, hired the union 
member.
    When the union files charges against my client, my client 
is compelled to engage legal counsel, investigate the matter, 
conduct legal research in many cases, and file a legal 
response. This involves substantial investment of money and 
time. The union often filed charges, waited until my client had 
undertaken the burden of its defense, and then withdrew the 
charges. Many of the charges bordered on the ridiculous; but 
still my client was required to investigate and respond.
    Let me describe a few of the charges filed against my 
client:
    A union organizer crashed a private party thrown by my 
client and was politely asked to leave. The union organizer 
left. The next day the union filed a charge alleging that 
expelling the organizer from the private party was an unfair 
labor practice.
    Another charge: on one of the days that the union picketed 
in front of my client's shop, a paid union organizer set up a 
video camera and proceeded to film the employees, the 
customers, and the vendors of my client who came to do business 
with my client. Believing this to be an attempt to harass and 
intimidate employees, customers and vendors, my client to 
document the action, got a camera, stepped out onto the front 
steps of her own place of business, and took a photograph of 
the paid union organizer while he made a public display of 
videotaping her. The union filed an unfair labor practice 
charge, calling this unlawful surveillance.
    The union initiated other legal proceedings without any 
apparent regard for their merits. The union funded five EEOC 
charges against my client. Although the union had earlier filed 
NLRB charges claiming that most of these employees were not 
hired because of their union support, the union was now 
claiming that the employees were not hired because of their sex 
or disability or some other protected status. Again, the 
apparent goal was not to make accurate accusations, but to 
simply initiate legal proceedings of any kind.
    The union also funded five discrimination lawsuits against 
my client. The union funded a civil lawsuit against my client 
for wrongful prosecution. The union funded three civil claims 
against my client for defamation. The union filed with the city 
of Austin a third party challenge to the woman-owned business 
certification of a business owned by one of the co-owners of my 
client. The union filed a motion for pre-suit depositions as a 
prelude to a lawsuit attacking my client's apprenticeship 
program. The union ultimately brought claims attacking my 
client's apprenticeship program. There is good evidence that an 
active union organizer called the city of Austin hazardous 
material department prompting a visit to my client's shop by a 
city inspector.
    In sum, this was the most massive barrage of litigation I 
have ever witnessed against a small company. I represent 
companies many times the size of this client who do not 
experience a fraction of the litigation instigated by the union 
since late 2001.
    Subject to any questions that may seek confidential 
attorney-client communications, I'd be happy to answer any 
other questions. And I thank this Committee for its attention 
to this very serious issue.
    [The prepared statement of Mr. Nesbitt follows:]

Statement of Tom Nesbitt, Esq., Attorney, Fulbright & Jaworski, Austin, 
                                   TX

    My name is Tom Nesbitt. I am employed as an associate attorney with 
the law firm of Fulbright & Jaworski L.L.P. in Austin, Texas. However, 
I testify today as an individual, not on behalf of my firm or any 
client of Fulbright & Jaworski.
    I am not here to bash labor unions. Labor unions have historically 
fought for important protections we now take for granted: Minimum wage 
laws, overtime laws, job safety regulations, family leave. I am not 
here because of any ideological alignment with traditional opponents of 
labor unions. I have often supported Democratic candidates for 
political office and have worked for and supported pro-labor Democratic 
United States Congressman Chet Edwards, a statesman whose views I 
commonly share.
    However, I have been asked to describe what I observed when one of 
my clients became the target of an aggressive ``salting'' campaign by a 
labor union.
    My client is a small, family owned and run construction-industry 
subcontractor whose roughly 50 employees had never sought and still 
have never sought to be represented by a labor union. In Austin, the 
large subcontractors in my client's field are the union contractors. My 
client has been in operation for about fifteen years, and by 2001 had 
begun to compete with the large union contractors for major 
construction projects.
    In 2001, the City of Austin was building the Palmer Civic Events 
Center. My client was not originally the electrical subcontractor on 
the job. Originally, the subcontract went to another non-union shop, 
Guy's Electric. During that job, the International Brotherhood of 
Electrical Workers Local 520 salted the job, went out on strike, filed 
unfair labor practice charges against Guy's Electrical, threatened to 
initiate other legal action, and ultimately convinced Guy's Electric to 
sign the IBEW's collective bargaining agreement. Guy's Electric soon 
went bankrupt. The electrical subcontract was re-bid, and my client won 
the bid.
    IBEW Local 520 never sought an election of my client's employees to 
determine whether the employees wanted to be represented by a labor 
union. To our knowledge, IBEW Local 520 never asked my client's 
existing employees to sign authorization cards. However, IBEW Local 520 
did initiate an astounding amount of legal action against my client.
    IBEW Local 520 filed somewhere in the range of 200 accusations of 
unfair labor practice charges with the National Labor Relations Board 
without any apparent regard for the merits of the charges.
    The Union filed charges alleging that over 40 union electricians 
were discriminatorily not hired. We believe that the union filed a 
charge of unfair labor practices for every known union member who 
applied for a job. The union filed a charge alleging that one union 
electrician was discriminatorily refused a job when my client had, in 
fact, hired him.
    When the union files charges, my client is compelled to engage 
legal counsel, investigate the matter, conduct legal research in many 
cases, and file a legal response. This involves substantial investment 
of money and time. The union often filed charges, waited until my 
client had undertaken the burden of its defense, and then withdrew the 
charges. Many of the charges bordered on the ridiculous; but still my 
client was required to investigate and respond.
    I have not been allotted enough time to catalog the other 
unmeritorious charges filed by the union. Let me describe a few:
    A union organizer crashed a private party thrown by my client and 
was politely asked to leave. The Union organizer left. The next day the 
union filed a charge alleging that expelling the organizer from the 
private party was an unfair labor practice.
    On one of the days the union picketed in front of my client's shop, 
a paid union organizer set up a video camera and proceeded to film 
employees, customers, and vendors who came to do business with my 
client. Believing this to be an attempt to intimidate employees, 
customers and vendors, my client decided to document the paid union 
organizer's actions. My client got a camera, stepped out onto the front 
steps of her own place of business, and took a photograph of the paid 
union organizer while he made a public display of videotaping her. The 
union filed an unfair labor practice charge, calling this unlawful 
surveillance. What is even more incredible is that an NLRB 
administrative law judge found this was unlawful surveillance. This 
bizarre result is currently on appeal to the National Labor Relations 
Board.
    The union initiated other legal proceedings without any apparent 
regard for the merits. The union funded five EEOC charges against my 
client. Although the union had earlier filed NLRB charges claiming that 
most of these employees were not hired because of their support for the 
union, the union was now claiming that the employees were not hired 
because of their sex or disability or some other protected status. 
Again, the apparent goal was not to make accurate accusations, but to 
simply initiate legal proceedings of any kind.
    The union also funded five discrimination lawsuits against my 
client. The union funded a civil lawsuit against my client for wrongful 
prosecution. The union funded three civil claims against my client for 
defamation. The union filed with the City of Austin a third party 
challenge to the woman-owned business certification of a business owned 
by one of the co-owners of my client. The union filed a motion for pre-
suit depositions as a prelude to a lawsuit attacking my client's 
apprenticeship program. The union ultimately brought claims attacking 
my client's apprenticeship program. There is good evidence that an 
active union organizer called the City of Austin hazardous material 
department prompting a visit to my client's shop by a city inspector.
    In sum, this was the most massive barrage of litigation I have ever 
witnessed against a small company. I represent companies many times the 
size of this client who do not experience a fraction of the litigation 
instigated by the union since late 2001.
    The legal expense and the administrative burden this created for my 
client was incredible. Yet the union never sought an election, and 
never, to our knowledge, genuinely tried to encourage my client's 
employees to support the union.
    In a 2001 NLRB decision, members Liebman and Walsh wrote that they 
found nothing inherently illegitimate about a union's undertaking to 
``driv[e] nonunion contractors out of the market, or even out of 
business, if they did not recognize the Union.'' Aztech Electric, 335 
NLRB 260 (2001). That opinion was issued on August 27, 2001, 
approximately three months before the IBEW Local 520 turned its sights 
on my client.
    I cannot personally testify that IBEW Local 520's objective was to 
run my client out of business because I obviously was not able to 
participate in the Union's organizing strategy meetings. However, what 
I do know is that my client was subject to massive legal proceedings 
initiated without any apparent regard for the merits of the claims, and 
I never saw any evidence of a genuine effort by the union to be 
certified as the bargaining representative of my client's employees.
    Let me conclude by saying that IBEW Local 520 has elected a new 
Business Manager, David Adamson. It is my belief that Mr. Adamson is an 
honest and reasonable man who does not intend to use the kind tactics 
employed by his predecessor. However, the fact that this has happened 
and is apparently sanctioned by NLRB's interpretation of the law, is 
something that I am glad has received the attention of this sub-
committee.
    Subject to any questions that may seek information I am prohibited 
from disclosing due to attorney-client privilege, I would be glad to 
answer any questions.
                                 ______
                                 
    Chairman Johnson. Thank you, sir. I appreciate your 
testimony.
    Mr. Van Os, I would like to ask you a question. You may 
answer if you will. What I'd like to know is you know, you've 
heard from two people that there is union problems out there 
and I'd like to know what you think and whether or not the NLRB 
is doing a good job of controlling this stuff.
    Mr. Van Os. Well, Mr. Chairman, if the NLRB is under the 
control of the unions----
    Chairman Johnson. Under the what?
    Mr. Van Os. If the NLRB is under the control of AFL-CIO----
    Chairman Johnson. Well, nobody said that.
    Mr. Van Os. I believe Ms. Runyan has said that quite 
stridently. If they are, I'm sure not aware of it. Now what I'd 
like to say in response to all of this is that throughout our 
legal system in litigation one party wins and one party loses. 
And the party that wins usually doesn't win everything they 
were after and the party that loses is usually unhappy. And 
every time somebody loses in litigation, whether it's in the 
State Courts, the Federal Courts, the NLRB or any forum, often 
the party that loses is unhappy and has got some sour grapes. 
And I think what the Committee has just heard is a lot of sour 
grapes from parties who lost.
    These charges that Ms. Runyan and Mr. Nesbitt have claimed 
to be unmeritorious were certainly thought to be meritorious or 
at least part of them were thought to be meritorious by 
somebody because an Administrative Law Judge of the NLRB and I 
might add a very experienced Administrative Law Judge who is 
the Deputy Chief Administrative Law Judge for the NLRB after 
extensive hearings found that Titus Electrical Company had 
committed a number of unfair labor practices, violations of 
Federal labor law. And I am going to attach a copy of the 
Administrative Law Judge's decision to my written testimony. 
This is not the appropriate forum to try to re-litigate things 
that the legal system itself has taken care of. And is taking 
care of right now.
    Now with regard to EEOC charges that Ms. Runyan and Mr. 
Nesbitt have chosen to talk about, I am proud, I am very proud 
that my client, Local 520 of the IBEW, went to lengths of 
expenditure of its precious resources to fight for the right, 
the rights of women to obtain employment in skilled 
construction trades. It is often said that that is a 
nontraditional area of employment for women and my client, IBEW 
Local 520, did file and finance EEOC charges on behalf of women 
who had been turned down for employment by Titus Electrical 
Company at a time when Titus Electrical Company had zero women 
working as electricians, in the skilled electrical trade. And I 
don't know, it seems that unfortunately, the witnesses have 
inferred or implied that there was something frivolous about 
those charges. Mr. Chairman, the Titus Electrical Company 
through its lawyers, one of which was Mr. Nesbitt, filed one 
motion for summary judgment at a time when five discrimination 
lawsuits were pending against it. They picked out one that they 
filed a motion for summary judgment which would mean that if 
they won the motion for summary judgment that the case was 
thrown out without a trial.
    The District Judge in Travis County denied that motion for 
summary judgment and I will be glad to provide the Committee a 
copy of that Court order which by definition means that the 
District Judge found and ruled that the lawsuit was not 
frivolous and far to the contrary, was worthy of going to trial 
and being heard by a jury.
    So my response is that the system is working now, Mr. 
Chairman, and the system now has ample capability to defend 
employers, if charges are not meritorious. But if they are 
meritorious----
    Chairman Johnson. Is any of what they said true, according 
to you?
    Mr. Van Os. In terms of----
    Chairman Johnson. Well, for instance, the person that went 
to a party and filed a lawsuit, is that true or false?
    Mr. Van Os. I have absolutely no knowledge of any such 
thing.
    Chairman Johnson. OK, well, I feel like there is some 
substance of what was said and we'll just have to look into it. 
I recognize your side of the motion too, and thank you for your 
comments.
    Mr. Van Os. Thank you.
    Chairman Johnson. Mr. Grijalva, would you care to question?
    Mr. Grijalva. A couple of questions and let me follow up 
with the discussion and the question that you started with, Mr. 
Chairman and maybe direct it at Mr. Nesbitt, since he was 
counsel for the Runyans in a variety of cases.
    In your testimony, you say that those charges that were 
filed had--were filed with no apparent regard for merit, but I 
can count 17 charges that had enough merit for a full on trial 
before an Administrative Law Judge and of those, at least 9 
categories of violations of law by Titus Electric.
    Isn't winning a case, and I just want to follow up on that 
and get some clarity on that, isn't winning a case an 
indication of merit to some extent, counsel?
    Mr. Nesbitt. I would say in answer to your question it may 
be. It may be indication of merit in some cases. I don't think 
it was in this case. First of all, that case is on appeal to 
the National Labor Relations Board and I would urge the Members 
of this Subcommittee to review not only the Administrative Law 
Judge's opinion which is on appeal at the National Labor 
Relations Board, but the briefs filed in that case and I can 
provide those if anybody wants them.
    The 17 that you're referring to is whittled down from the 
original approximately and I don't have an exact count on this, 
approximately 200 allegations.
    Mr. Grijalva. So your response is some merit, but not maybe 
a lot of merit?
    I'm trying to get some clarity because any one of us can 
take one example and use that as a cleavage to talk about other 
charges and then in the process I don't think we should ignore 
the obvious and the obvious is that 9, although they're on 
appeal, had merit enough to be adjudicated in that way against 
your client.
    Mr. Nesbitt. The cases that were adjudicated in this case 
did not have merit. That's why we appealed those to the 
National Labor Relations Board. Let me just give you one other 
example of the kind of charge that the Administrative Law Judge 
sustained, if you'll allow me.
    Mr. Grijalva. I have one question, one other question, so 
if you would----
    Mr. Nesbitt. I'll be very brief. The National Labor 
Relations Act provides that an employer cannot prohibit union 
members or non-union members from discussing union membership 
during break times and during lunch. And there are rules set 
out--we call that a no solicitation policy, what it can say and 
what it can't say. My client has a written non-solicitation 
policy. Nobody at this table contends that it violates the 
National Labor Relations Board. In a meeting with the guys on 
the work site, Ty Runyan in a conversation that was secretly 
recorded by a union member, it used the phrase ``don't do that 
on the job, you can do that when you hit the lot'' which on 
that job was a synonym for on your break and on your lunch 
which they conducted on the lot. But because he didn't use the 
specific phrase ``working hours'' he was found to have 
committed an unfair labor practice, even though in that case he 
specifically referred to the written policy that all employees 
sign off on and even though the union salt also said on the 
audio tape, ``yeah, I understand, the guys know better than 
that'' signifying that he understood that what Mr. Runyan was 
referring to was the lawful written policy. So you've got these 
laws being interpreted in just an incredible way. So that's a 
violation that maybe it is a violation on some technical level, 
but we don't believe it is. And that's why we appealed.
    Mr. Grijalva. And last, if I may, Mr. Chairman, and 
that's--if I may, Mr. Van Os, let's talk about remedies after 
we go through this process because I----
    Chairman Johnson. We'll come back a second time.
    Mr. Grijalva. OK, I'll come back a second time, because 
those questions are more lengthy. Thank you.
    Chairman Johnson. Thank you. Mr. Carter, do you intend to 
question?
    Mr. Carter. A couple of questions. I've got a couple of 
questions I'd like to know about. First off, Mr. Nesbitt, under 
current law, what rights do union organizers have and don't 
have, just on this--as we're talking about this salting issue?
    Mr. Nesbitt. Union organizers, even if they're taking a 
paycheck under current law, they're treated just like any other 
employee that shows up legitimately wanting a job.
    Mr. Carter. So they're treated just like anybody, have a 
union card or not, you're treated the same way and you're given 
certain defined ways that you can organize on the job as you 
just mentioned, the Runyans had a written contract that they 
put before the workers and they agreed to as to when they could 
do their organizing?
    Mr. Nesbitt. Well, they have the same rights. They can do 
their organizing at lunch. They can organize on break time. 
They can stand outside the facility and as people come out of 
the work place, they can hand them fliers, they can hand them 
leaflets, as long as they're not on company property. They have 
the ability to look people's names up in the phone book and 
call them up on the telephone. I mean this idea that they don't 
have avenues to communicate with the employees is, I don't 
think that has any merits.
    Mr. Carter. These 17 out of 200 charges that you were just 
talking about a minute ago, how many of those have reached NLRB 
on the appeal?
    Mr. Nesbitt. All of them are on appeal. All of the 
violations found against my client are on appeal at the NLRB.
    Mr. Carter. Have any of them been ruled on by the NLRB?
    Mr. Nesbitt. No sir.
    Mr. Carter. Is there a problem with timeliness or getting 
rulings out of the NLRB?
    Mr. Nesbitt. I think so. I don't know that even Mr. Van Os 
would disagree with that. It's going to take them a long time, 
we believe, to reach the merits of this.
    Mr. Carter. And how costly, in a general sense, would each 
one of these 17 appeals mean to an employer that's doing it?
    Mr. Nesbitt. You heard Ms. Runyan testify that she's 
incurred half a million dollars in legal expense. I didn't 
check that before I left my office today, but that's--that 
would include all of the civil litigation.
    Mr. Carter. Have any been ruled on by the NLRB in any that 
you all have taken up?
    Mr. Nesbitt. No.
    Mr. Carter. In fact, you haven't gotten appellate relief 
from anybody there and you have to finish the administrative 
hearings and the appellate hearings on administrative law 
before you can reach a courtroom and go to Court?
    Mr. Nesbitt. Once the NLRB renders its opinion, it's 
appealable to the Fifth Circuit Court of Appeals.
    Mr. Carter. Well, so you haven't had any EEO--tell me, how 
many EEOC victories that you had in a case?
    Mr. Nesbitt. There were either five or six EEOC charges 
filed. The first one, the EEOC issued a determination. That's 
what they do. They issue a determination. They determined that 
the charge, that the evidence did not establish a violation of 
the statute. They effectively cleared my client.
    The union then withdrew or the Charging Parties, all of 
whom were being funded by and encouraged by the union, then 
withdrew all of the other charges. They sent a letter to the 
Commission asking the Commission to cease its investigation and 
to immediately issue a right to sue. So the EEOC adjudicated 
one out of those, found in our favor, and then at the request 
of the Charging Parties, ceased its investigations of the 
remaining charges.
    Mr. Carter. If you have a victory in that case, you still 
pay your own attorney's fees?
    Mr. Nesbitt. Absolutely. There's no fee shifting in that 
case. If you're victorious in that case, the Charging Party can 
also file a civil lawsuit which they did in these cases.
    Mr. Carter. Both sides here seem to think they have a 
position of right here and what would you think about a system 
in which the--if the Charging Party makes an accusation as a 
violation in either one of these areas and prevails, then the 
losing party pays the attorney's fees?
    Mr. Nesbitt. I haven't studied this in depth and as the 
Subcommittee has, but I really think that is the answer. I 
frankly believe that the legislation which seeks to define a 
salt as a non-employee under the NLRB, it may go too far in 
some respects, with respect to salts who legitimately who do 
show up to try to prove their merit, but it certainly does not 
go far enough in off-setting the legal expenses that my client 
incurred, for example, in charges that were ultimately 
unmeritorious.
    I mean even if you amend the law to say a salt is not an 
employee, they can still file the charges. They can still drag 
my client through costly legal proceedings to prove himself 
wrong and there's no accountability at the end of the day to 
whoever files or funds the charges. I think a fee shifting 
statute would be really what the doctor ordered.
    Mr. Carter. Well, if the argument is that we have competent 
Administrative Law Judges making rulings at these hearings, 
then they should be able to make--and we have a competent 
appellate process, then somewhere in that process we should be 
able to see whether or not there's a meritorious claim being 
made and if there's not a meritorious claim being made, then 
the attorney's fees should be paid by the nonmeritorious party, 
at least that would be a proposal that I would throw out.
    Thank you for your testimony.
    Mr. Nesbitt. Thank you.
    Chairman Johnson. Ms. McGee and Ms. Runyan, in your 
testimony you talk about poor quality work from some of the 
union salts. Do you have an estimate of how much money you 
spent to re-do work that might not have been quality?
    Mr. Runyan. Chairman Johnson, may I address that question, 
please?
    Chairman Johnson. Sure.
    Mr. Runyan. At the Palmer Events Center, we had several 
instances. One was an electrician that turned out to be what we 
feel is a union salt that terminated conductors underneath 
circuit breakers without stripping them out, thus causing a 
potential electrical fire. Fortunately, we found those before 
we energized that system.
    In another instance, she took and dead shorted several 
disconnects and in one instance caused an electrical explosion 
on another project which she was transferred to. The total 
economic impact with time that we spent in repairs as well as 
our research was probably somewhere in the neighborhood of 
$10,000 to $15,000 in labor on those two projects alone.
    And this does not begin to address any of the other impact 
that we had out on the project, labor impact, due to 
productivity, etcetera.
    Chairman Johnson. Did you try to get rid of that employee?
    Mr. Runyan. I did.
    Chairman Johnson. Did the union come back at you?
    Mr. Runyan. Yes, we did have a ULP filed against us, after 
we determined that she had dead shorted and caused this 
electrical explosion, we did terminate her and the union did 
file against us.
    Chairman Johnson. Mr. Van Os, you shook your head, why?
    Mr. Van Os. I do shake my head. Excuse me.
    Chairman Johnson. That's OK, just leave it on.
    Mr. Van Os. Am I on now? Thank you. The particular 
individual that Mr. Runyan has been talking about was not a 
union salt. She had no affiliation with the union at the time 
that Titus Electrical hired her. After she was discharged, she 
came to the union and asked the union to assist her because she 
felt that she had been discriminatorily discharged on the basis 
of her gender. The union did assist her. That's what unions, 
the unions do help people who believe they have work place 
disputes and there is nothing to apologize for in doing that.
    After the union discovered and found out about her 
incompetence as an employee, the union dropped her case like a 
hot potato.
    Chairman Johnson. Thank you, sir. Ms. McGee?
    Ms. McGee. Chairman Johnson, I don't believe that there was 
anything written, in fact, I'm certain there's nothing written 
in my testimony, there was never an issue of poor quality work. 
In my testimony, the individuals that I hired didn't show up 
for work.
    Chairman Johnson. OK, thank you very much.
    Dr. Grijalva, do you care to question again?
    Mr. Grijalva. Yes, I have a two part question for Mr. Van 
Os.
    First, and let me do both parts so that you have an 
opportunity to respond in the timeframe that we have here. The 
first part having to do with some of the information we've been 
hearing in terms of relief that the National Labor Relations 
Board, that the process takes such a long time, the employer, 
my colleagues have referenced a cost for litigation. Talk about 
the remedy process for the employees involved in that process 
and what's happened to that.
    And the second part of it and I'll leave you with the 
remedy issue so we can get that perspective as well, and then 
I'll leave you with--the second question is H.R. 1793, what 
would, if Congress were to pass this legislation, would 
employees lose any rights they currently have under the 
National Labor Relations Act, a two-part question.
    Mr. Van Os. The first part of the question, Congressman 
Grijalva, for employees who were discriminatorily rejected for 
hiring by Titus Electrical in the fall of 2001, those employees 
are still waiting for relief. And I think it's unfortunate that 
there's been kind of a suggestion here from the witness table 
that there was something, that there's something Mickey Mouse 
or rinky dink about the Administrative Law Judge hearing 
process. The Administrative Law Judge trial is conducted by a 
very experienced Judge, while not an Article 3 Judge, is a very 
experienced Administrative Judge, experienced in the National 
Labor Relations Act, with full opportunities for extensive 
examination and cross examination of witnesses and who is 
experienced in evaluating the demeanor and credibility of 
witnesses.
    Now for employees who were found by the ALJ to have been 
discriminatorily because of their union affiliation rejected 
for hiring, they have been waiting for two and a half years for 
relief. And they are--they have lost tremendously through this 
wait. For employees who were discriminatorily discharged by 
Titus Electrical, because of their union activities, they have 
been waiting for nearly 2 years for relief. And the remedies of 
the National Labor Relations Act are almost--the remedies 
available under the National Labor Relations Act are not 
meaningful enough at the current time to provide real 
deterrence, because even if those employees, if those cases, if 
those findings are ultimately upheld by the NLRB, by the Full 
Board in Washington and then by the Courts, the most that those 
employees can obtain in relief is reinstatement and backpay. 
There are no real compensatory damages to create any real 
deterrence and often 3 years down the road, after 3 years of 
litigation, that employee probably has gone to other things and 
is probably living in another state by then because especially 
in a depressed economy, he or she is traveling to look for 
work.
    Does that answer your question?
    Mr. Grijalva. Yes, the second part about the legislation?
    Mr. Van Os. The second part. If the legislation that has 
been referenced were to pass, it would destroy one of the very 
core purposes of the National Labor Relations Act which is that 
applicants for employment cannot be discriminated against on 
the basis of their union affiliation or union activity. If a 
law were to pass that allowed an employer to say that this 
person is a union--is going to organize for the union and 
therefore I don't--this person does not have the protection of 
the National Labor Relations Act, that would probably increase 
the cost burden on the whole system because it would spawn far 
more litigation than exists now because there would be endless 
litigation over that issue. And there's no need to do that. 
There's no need to carve out an exception and say that certain 
people are not entitled to the protections of the National 
Labor Relations Act.
    Chairman Johnson. OK, we have several ideas here. We're 
trying to come to a solution, if we can and you know, we can 
prevent salting totally, which I'm not sure we want to do. We 
can try to limit the cost by having whoever fails in the 
process pay the legal charges or maybe we could speed up the 
process somehow.
    Can you tell me how you think we could do that? Any of you? 
Or how we should address any of those three options? Anybody, 
feel free.
    Mr. Nesbitt. I believe that the way to end what I have 
observed as the problem in the Titus Electrical case is to 
require that if a Charging Party or a union makes a charge that 
it later either withdraws which is kind of what happens, the 
NLRB investigates and if the NLRB isn't going to complaint on 
it, the Charging Party then withdraws the charge after the 
employer has incurred a lot of expense to file a response, the 
Charging Party that files a charge that either does not go to 
complaint or that goes to complaint and is deemed to be 
unmeritorious ought to have to pay the legal fees of the 
responding party.
    Chairman Johnson. Yes, but what I'm hearing is is that the 
NLRB and the administrative law system is not very rapid. Do 
you think we need to try to speed that system up?
    Mr. Nesbitt. I do think we should.
    Chairman Johnson. It doesn't take you that long to get the 
facts of the case, does it?
    Mr. Nesbitt. No, in fact, the Administrative Law Judge, I 
think, issued his opinion in this case pretty quickly and now 
it's really been at the National Labor Relations Board that we 
have experienced a delay. I don't know the administrative 
issues that they have up there. I'm not here to criticize the 
National Labor Relations Board.
    Chairman Johnson. Do you all have experience with NLRB? Do 
you know if they have trouble getting a quorum for hearings, 
any of you?
    Mr. Runyan. Chairman Johnson, I'd like to respond to your 
initial question.
    Chairman Johnson. Sure.
    Mr. Runyan. And I believe that it would clear the docket 
substantially if we brought financial accountability to the 
process. It would eliminate. We had some 200 ULPs initially 
filed against us and let me clarify this. Only three to 4 
percent of those were successfully prosecuted. Three to 4 
percent. We're talking 3 to 4 out of 100, close to 200 filed. 
If we clear that docket by eliminating all of this frivolous 
litigation, then we will expedite the process tremendously 
simply by making financial accountability an element of the 
process.
    I'm not saying for 1 second that a salt should be denied 
legal due process. I'm simply saying that if it is determined 
to be frivolous or if it is withdrawn, they need to pick up the 
tab.
    Chairman Johnson. Yes sir, go ahead.
    Mr. Van Os. Thank you, Mr. Chairman. Two points. First, to 
mandate fee shifting would burden the constitutional right to 
petition for redress of grievances, because often and I know 
that Congressman Carter knows this from having been a Trial 
Judge, if every party, every litigant to any kind, in any kind 
of legal forum knew in advance whether they were going to win 
or lose, then there would be no need for dispute resolution 
forums. Often a litigant or a Charging Party believes that he 
has or she has a winning case and then finds out later that he 
doesn't. So I think there is a difficulty in suggesting an 
undercutting of the right to petition for redress of grievances 
to the government which a fee shifting requirement would do.
    Secondly, a second point is that, of course, I'm sure that 
Mr. Nesbitt and Mr. Runyan realize that if you--sometimes you 
should be careful about what you ask for, because you may get 
it. Certainly, a fee shifting mechanism would go both ways and 
the many, many, many resources that the union has expended on 
these unfair labor practice charges that I'm confident the 
union is going to end up winning would, of course, with a fee 
shifting statute the employer would have to do the same thing 
and reimburse the union and the government for their legal 
fees. So I think that is kind of a Pandora's Box for many 
reasons.
    Now one thing I will agree with my brother of the bar, Mr. 
Nesbitt, about and I don't know if you call this a collective 
bargaining contract or not, or a labor management contract, I 
would certainly agree that the NLRB process is too slow and one 
very simple reason for it may be budgetary. I think it probably 
needs more staff. It probably needs more Administrative Law 
Judges. It probably needs more resources because it is a very 
important statute that the Board is charged with enforcing and 
administering a very important statute. I don't have any magic 
wand for a solution to suggest except a possibility that it may 
need more resources. I do agree certainly that the process is 
too slow and that works to the disadvantage and the detriment 
of both employers and workers.
    Chairman Johnson. You're right and we'll look into that.
    Mr. Carter, do you care to comment?
    Mr. Carter. Thank you, Mr. Chairman. Mr. Van Os, I agree 
with you. I don't ever want to deny anybody's right to seek 
recourse from the justice system, whether it be the 
administrative justice system or whether it be the justice 
system of the Courts.
    However, we see and you know this and so does every lawyer 
that practices before the bar and if they deny it, then they're 
just not shooting straight with folks, that both sides of the 
docket, when they have the advantage, the economic or the 
positional advantage, it costs the other guy money, will force 
an issue, if it costs him enough money to force him, even 
though he may be right, to force him into a position where he 
has no other choice. And when I hear 17 out of 200 cases that 
have been credible, it tends to look like there's been a 
shotgun approach taken to this particular project, let's fire 
as many shots as we can fire and one or two of those pellets is 
bound to hit something.
    I am offended by that in the Courts, as are most Trial 
Judges that I know and I'm offended by it in the administrative 
law procedure. I think it's the wrong thing to do.
    Answer me something, I understand that the NLRB also is not 
cooperative in bringing up these cases, multiple cases from the 
same parties at the same time. In other words, you're making 
lots of trips to the NLRB. Is that your experience? For 
instance, if you have 17 cases pending against these folks, you 
make 17 trips before the NLRB or will they say we're going to 
hear 9 of your cases today and 8 of your cases tomorrow?
    Mr. Van Os. If part of what Mr. Nesbitt is talking about is 
failure of the Board to consolidate more when there are 
multiple cases, I would certainly agree.
    Mr. Carter. One of the complaints I've heard is that you're 
making multiple trips on basically the same job.
    Mr. Van Os. Well, for example, one of the charges that the 
IBEW filed in this case was a charge claiming that several 
applicants for employment with Titus Electrical had been 
rejected discriminatorily. I don't know whether or not the 
Board required Titus Electrical and its attorneys to piecemeal 
the responses to that because it was all in one charge because 
I'm not, as the union's advocate, I wasn't privy to the other 
side of the investigation. At the investigative stage it's done 
ex parte with both sides.
    If the Board required Titus Electrical and its attorneys to 
piecemeal that and make 17 different trips as you've alluded 
to, I would agree that that's inappropriate. It certainly, for 
example, the economic----
    Mr. Carter. Let me interrupt you just a minute. I 
understand where you're coming from. On 200 cases, each one of 
those cases, from your standpoint, what's the cost of the union 
to try one of those 200? You had 183 that didn't find--didn't 
reach that level anyway, so----
    Mr. Van Os. First of all, with all due respect to Mr. 
Nesbitt who is an honorable lawyer and with all due respect to 
you, Congressman, I don't necessarily agree with that figure of 
200.
    Mr. Carter. Well, then let's make it a hundred. I'll cut it 
in half. So then if you've won 17 out of 100, you've got 83 
cases. Do you have any idea what it's costing the union 
individually for each one of those cases, those 83 cases that 
are not going up to the NLRB?
    Mr. Van Os. In some of those cases, the union retained 
legal counsel which, if they did was my law firm and in some of 
the cases the union did not retain legal counsel.
    Mr. Carter. I'll address Mr. Nesbitt. What does it cost 
your client for each one of those cases, roughly?
    Mr. Nesbitt. For each one that goes to complaint and we put 
on a case about--I'm just ballparking this, Mr. Carter, but 
$10,000.
    Mr. Carter. So those 83, that would be $83,000?
    Mr. Nesbitt. That's probably right. I mean a lot of this--
--
    Mr. Carter. So it's $130,000. Ms. Runyan, do you have an 
answer?
    Mr. Nesbitt. No, the $83,000, it's not $10,000 per 
allegation, just at the investigative level. It's hard for me 
to answer your question because you participate in an 
investigation and that costs money no matter what. That's 
something that if Mr. Murphy, the organizer sends a charge by 
fax to the NLRB, that costs him nothing, it costs him the price 
of a fax to San Antonio. It costs my client, it may be $500, if 
it's just blatantly ridiculous. It may cost him $3,000 just to 
respond at the investigative level. And then you go to a full 
blown trial if they go to complaint and then it's very hard for 
me to answer your question because then you've got 15 issues.
    Mr. Carter. Just like any other trial.
    Mr. Nesbitt. That's right.
    Mr. Van Os. I would have to say, Mr. Carter----
    Mr. Carter. I think Ms. Runyan wishes to respond.
    Mr. Van Os. I'm sorry, excuse me.
    Ms. Runyan. Let me clarify something for Mr. Van Os and for 
you all. When Mr. Murphy faxes a deal to San Antonio and there 
are 20 different names of people that they're claiming we fail 
to hire, we have to respond why we didn't hire that person, who 
we hired, what the qualifications were and all of this has to 
go through our attorney and it's not just once we have to 
respond. We have to respond on each and every individual listed 
on that charge. And the time and money involved in that I don't 
think we've done one of them that's less than $2,000, except 
for the one where the following month it was the exact same 
names, minus one and we could pretty much just get Tom to kick 
out the same information, but we still had to pay for it to be 
responded to. So each and every individual name that's on there 
has to be addressed. You can't just say well, they're wrong and 
let it go at that. It's automatically we are guilty until we 
prove ourselves innocent.
    Mr. Carter. Thank you. I think my time has expired.
    Chairman Johnson. I want to thank you all for being with us 
today. We appreciate your testimony and your valuable time. 
I've got a letter from the Hispanic Chamber of Commerce that 
I'd like to enter into the record which thanks us for doing 
this hearing and without objection it will be entered.
    Do you have something you want to enter?
    Mr. Runyan. Chairman, I wanted to extend thanks to 
Congressman Carter and extend thanks from Mr. Jerry Gonzales, 
Chairman of the United States Hispanic Chamber of Commerce, an 
organization that represents $200 billion in business annually 
in the United States and Puerto Rico and he thanks you for your 
gracious hosting of our time there in Washington with you. We 
thank you for coming down here.
    Chairman Johnson, of course, the letter is addressed to 
yourself and we thank you.
    Congressman Grijalva, we appreciate your contribution as 
well.
    Chairman Johnson. You got three of the core of the Congress 
right here.
    (Laughter.)
    And we thank you all for your attention, your testimony and 
if there's no further business, the Subcommittee stands 
adjourned.
    [Whereupon, at 3:23 p.m., the Subcommittee hearing was 
concluded.]
    [Additional Material submitted for the record follows:]

  Letter from J.R. Gonzales, Acting President and CEO, United States 
                      Hispanic Chamber of Commerce

[GRAPHIC] [TIFF OMITTED] T3621.021

   Submitted and Placed in Permanent Archive File, Titus Electrical 
 Contracting, Inc. and United Brotherhood of Electrical Workers Local 
    520, (Case Nos. 16-CA-21010-2 et al.), 2003 WL 159078 (N.L.R.B. 
                 Division of Judges) (January 17, 2003)

                                 
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