[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
Available via the World Wide Web: http://www.access.gpo.gov/congress/
house
or
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______
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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)