[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]
FREEDOM IN THE WORKPLACE--AN EXAMINATION OF A NATIONAL RIGHT TO WORK
LAW
=======================================================================
HEARING
before the
SUBCOMMITTEE ON WORKFORCE, EMPOWERMENT & GOVERNMENT PROGRAMS
of the
COMMITTEE ON SMALL BUSINESS
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
__________
WASHINGTON, DC, SEPTEMBER 8, 2005
__________
Serial No. 109-30
__________
Printed for the use of the Committee on Small Business
Available via the World Wide Web: http://www.access.gpo.gov/congress/
house
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COMMITTEE ON SMALL BUSINESS
DONALD A. MANZULLO, Illinois, Chairman
ROSCOE BARTLETT, Maryland, Vice NYDIA VELAZQUEZ, New York
Chairman JUANITA MILLENDER-McDONALD,
SUE KELLY, New York California
STEVE CHABOT, Ohio TOM UDALL, New Mexico
SAM GRAVES, Missouri DANIEL LIPINSKI, Illinois
TODD AKIN, Missouri ENI FALEOMAVAEGA, American Samoa
BILL SHUSTER, Pennsylvania DONNA CHRISTENSEN, Virgin Islands
MARILYN MUSGRAVE, Colorado DANNY DAVIS, Illinois
JEB BRADLEY, New Hampshire ED CASE, Hawaii
STEVE KING, Iowa MADELEINE BORDALLO, Guam
THADDEUS McCOTTER, Michigan RAUL GRIJALVA, Arizona
RIC KELLER, Florida MICHAEL MICHAUD, Maine
TED POE, Texas LINDA SANCHEZ, California
MICHAEL SODREL, Indiana JOHN BARROW, Georgia
JEFF FORTENBERRY, Nebraska MELISSA BEAN, Illinois
MICHAEL FITZPATRICK, Pennsylvania GWEN MOORE, Wisconsin
LYNN WESTMORELAND, Georgia
LOUIE GOHMERT, Texas
J. Matthew Szymanski, Chief of Staff
Phil Eskeland, Deputy Chief of Staff/Policy Director
Michael Day, Minority Staff Director
SUBCOMMITTEE ON WORKFORCE, EMPOWERMENT AND GOVERNMENT PROGRAMS
MARILYN MUSGRAVE, Colorado Chairman DANIEL LIPINSKI, Illinois
ROSCOE BARTLETT, Maryland TOM UDALL, New Mexico
BILL SHUSTER, Pennsylvania DANNY DAVIS, Illinois
MICHAEL FITZPATRICK, Pennsylvania RAUL GRIJALVA, Arizona
LYNN WESTMORELAND, Georgia MELISSA BEAN, Illinois
THADDEUS McCOTTER, Michigan GWEN MOORE, Wisconsin
JEB BRADLEY, New Hampshire
Joe Hartz, Professional Staff
(ii)
C O N T E N T S
----------
Witnesses
Page
Wilson, Congressman Joe (SC-2), U.S. House of Representatives,
U.S. Congress.................................................. 4
Mix, Mr. Mark, President, National Right to Work Committee....... 5
Baird, Mr. Charles, Ph.D., Professor of Economics, California
State University, East Bay..................................... 7
Feinstein, Mr. Fred, Professor, University of Maryland, College
Park........................................................... 9
Galley, Mr. George, Electro-Mechanical Technician, Colt
Manufacturing.................................................. 10
Butcher, Mr. Michael R., Lead Engineer/DER, Boeing Commercial
Airplane Group................................................. 12
McNicholas, Mr. John, CEO, Penloyd, LLC.......................... 14
Leef, Mr. George, Executive Director, John William Pope Center
for Higher Education Policy.................................... 16
Appendix
Opening statements:
Musgrave, Hon. Marilyn....................................... 27
Prepared statements:
Wilson, Congressman Joe (SC-2), U.S. House of
Representatives, U.S. Congress............................. 30
Mix, Mr. Mark, President, National Right to Work Committee... 32
Baird, Mr. Charles, Ph.D., Professor of Economics, California
State University, East Bay................................. 43
Feinstein, Mr. Fred, Professor, University of Maryland,
College Park............................................... 48
Galley, Mr. George, Electro-Mechanical Technician, Colt
Manufacturing.............................................. 51
Butcher, Mr. Michael R., Lead Engineer/DER, Boeing Commercial
Airplane Group............................................. 54
McNicholas, Mr. John, CEO, Penloyd, LLC...................... 60
Additional material:
Greer, Mr. Stan, Senior Research Associate, National
Institute for Labor Relations.............................. 63
Poulson, Mr. Barry W., Ph.D., Professor of Economics,
University of Colorado, Boulder............................ 72
Spencer, Mr. William B., Vice President, Government Affairs,
Associated Builders and Contractors, Inc................... 96
(iii)
FREEDOM IN THE WORKPLACE - AN EXAMINATION OF A NATIONAL RIGHT TO WORK
LAW
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THURSDAY, SEPTEMBER 8, 2005
House of Representatives
Subcommittee on Workforce, Empowermentand
Government Programs
Committee on Small Business
Washington, DC
The Subcommittee met, pursuant to call, at 10:04 a.m. in
Room 2360, Rayburn House Office Building, Hon. Marilyn Musgrave
[Chairman] presiding.
Present: Representatives Musgrave, Lipinski, Sodrel, Udall,
Westmoreland
Chairwoman Musgrave. Good morning. This hearing will come
to order. I thank you all for being here, and I would like to
extend a special thank you to our witnesses, especially those
who have traveled long distances. The topic we are going to
talk about today is the establishment of a national right-to-
work law.
I am very pleased that we have Congressman Joe Wilson here.
I consider him a friend, a wonderful colleague to have, and I
am a co-sponsor of your legislation, and I thank you for being
here. We also have an excellent panel before us of policy
experts, authors, and individual workers, and all of you have
extensive experience, and we are looking forward to your
testimony today.
I want to be brief in my remarks because I am very eager to
hear the testimony, and I also just want to say up front that I
am a very enthusiastic supporter of the National Right To Work
Act. While this is certainly a labor issue, I think that it is
also a constitutional issue.
The First Amendment of the Constitution guarantees American
citizens the freedom of association, and that freedom must
extend to the workplace. If one does not wish to join an
organization, such as a labor union, the federal government
should not force you to do so under the threat of losing your
job. Yet due to a fatal flaw in the National Labor Relations
Act, many workers are prevented from getting a job unless they
agree to pay union dues. This is fundamentally wrong.
Forcing someone to join a union as a condition of
employment is a very real and unfair burden on working
families, many who might disagree, or often do disagree, with
the views of labor leaders.
I really believe that adopting a national right-to-work law
will strengthen our economy. A free and open market is the key
to productivity, growth, and stability in our nation's economy,
which works best when individuals have the freedom to choose
from a wide array of products and services. I sincerely believe
these principles have made our economy the strongest in the
world.
This belief must also apply to the workforce. It is at its
best when individuals are free to make informed choices about
the conditions of their employment. I find it ironic that just
earlier this year, several of the unions under the umbrella of
the American Federation of Labor, Congress of Industrial
Organizations, decided that its leaders were not representing
their interests sufficiently, so they did what individual
workers are not allowed to do: They disassociated themselves
with the AFL-CIO to represent themselves.
Why is it that unions are allowed to disassociate
themselves from each other, but when an individual worker wants
to leave a union, he should face termination? It is a double
standard that we can correct. Enacting H.R. 500, sponsored by
my friend and colleague, Representative Joe Wilson, will do
just that. The companion legislation in the Senate, S.370, has
been introduced by Senator Trent Lott.
I thank you all for being here today as we look at this
very important issue, and I would like to yield to the
distinguished Ranking Member, Mr. Lipinski, for any opening
statement that he might have.
[Chairwoman Musgrave's opening statement may be found in
the appendix.]
Mr. Lipinski. Thank you, Madam Chairman. I think we all
agree that we need to do more than improve the competitiveness
of America's small businesses in the poor economic climate that
we have, but it is wrong to suggest that organized workers are
responsible for the problems faced by our small businesses and
for our faltering economy.
We should not be looking for an undeserving scapegoat to
blame for our economic problems. We should not try to weaken
the rights of workers to organize under the National Labor
Relations Act. Unions are not responsible for skyrocketing gas
costs or the rising cost of the health insurance. They are not
responsible for the burdensome federal regulations that
continue to increase on our nation's small businesses, and they
are also not to blame for China's trade and currency policies.
Instead, unions contribute to the well-being of American
workers.
Last night, I attended a dinner of the National Electrical
Contractors Association, [NECA], where they gave an award to
the chairman of the full Committee, Don Manzullo. Don was here
earlier, but unfortunately he is not here anymore. I attended
this dinner of NECA and honored Don, but NECA members who
talked to me about how good their relationship is with the
union that they deal with, the IBEW, and I know this is a
unique situation, but I think it is a good example, and we
should learn from this about how much better off everyone could
be made when there is cooperation between management and
unions. Everyone can be much better off.
But today, we will hear from a number of witnesses who will
claim there are laws in effect in favor of unions, employees
are being forced to join unions, and this is causing problems.
You will hear terms like ``freedom of association'' and
``compulsive unionism.'' The reality is that no one can be
forced to join a union against their will. A union cannot take
action against those who decide not to join their union. In
fact, a union has a legal duty to represent every employee,
whether or not they are a member of the union. Since unions
must represent everyone, not only in collective bargaining for
better wages and benefits, but also in any grievance the worker
is involved in, nonunion employees must pay agency fees, not
union dues, to the unions for services they provide. These are
not union dues; no one is forced to join the union.
You will hear testimony today how states with right-to-work
laws create a better business environment. However, statistics
show that prebargaining states have a proven record of lower
poverty rates, higher wages, lower rates of workplace
fatalities, and better health care benefits as compared to so-
called ``right-to-work states.'' In fact, one might say that
the latter group of states should be known as ``right-to-work-
for-less states.''
Employers are better off without these laws. At the same
time, there is no evidence that these advantages are
inconsistent with a strong business environment. If anything,
they are an indication of a vibrant business climate. I find it
hard to believe that the governors and the state legislatures
of free-bargaining states would not want the best business
environment. Strangely enough, when we talk so much in
Washington about states' rights, what this bill would do would
go against that standard by depriving states the right to
determine how businesses operate. Right now, states do have the
right to be so-called ``right-to-work states.''
Our common goal on this Committee is to improve the
economic environment for small businesses so we can create
better jobs for Americans. Unfortunately, a failure to address
critical small business issues has hurt the ability of our
small businesses to grow and create jobs. We all want to work
together. We all want to work together to help small
businesses, Democrats and Republicans. It is best that we do
all work together.
Now, in closing, we have to note that we need to work right
now to ensure that we do everything we can to help the victims
of Hurricane Katrina, whether it is through SBA loans,
technical assistance, or other means. There are Small Business
Administration programs that can be used to help the thousands
of small business owners who will be struggling to get back on
their feet, and this is something that I know we all agree on
and we are all going to work together on.
I look forward to today's discussion and testimony, and I
thank the chairwoman.
Chairwoman Musgrave. At this time, I would like to welcome
Congressman Joe Wilson. Thank you for being here with us today,
and, of course, he is the bill sponsor.
STATEMENT OF HON. JOE WILSON (SC-2), U.S. HOUSE OF
REPRESENTATIVES, U.S. CONGRESS
Mr. Wilson. Madam Chairman, colleagues from Illinois and
Indiana, I want to thank you for the opportunity to testify
today. I appreciate the Subcommittee's interest in the issue of
compulsory unionism. Madam Chairman, I particularly appreciate
your personal courage to articulate the issue. It means a lot,
and they are very positive, the statements that you have made.
I believe that compulsory unionism violates the fundamental
principle of individual liberty, the very principle upon which
this nation was founded. Compulsive unionism basically says
that workers cannot and should not decide for themselves what
is in their best interests. I can think of nothing more
offensive to the core American principles of liberty and
freedom.
The National Right To Work Act [H.R. 500], which has 90 co-
sponsors, will address this most fundamental problem of federal
labor policy. Does America believe that working men and women
should be forced, as a condition of employment, to pay dues or
fees to a labor union? I believe that no one should be forced
to pay union dues to get or keep a job.
This bill would not add a single word to the existing
federal labor law. Rather, it would repeal those sections of
the National Labor Relations Act and Railway Labor Act that
authorize the imposition of forced-dues contracts on working
Americans.
Every worker should have the right to join or support a
labor union. This bill protects that right. But no worker
should be ever forced to join a union. H.R. 500 will strike
that balance, and the vast majority of Americans agree.
According to a March 2004 poll by Research 2000, 79 percent
of Americans support Right To Work, and over 50 percent of
union households believe workers should have the right to
choose whether or not to join or pay dues to a labor union.
That should come as no surprise. People want the freedom to
decide what is in their best interests, and Right To Work
expands every working American's personal freedom.
Of course, compulsory unionism is not just a freedom issue.
Right To Work brings economic benefits as well. I am happy to
say that my own state, South Carolina, is one of the 22 states
that has a right-to-work statute, and this has been in place
since 1954. Over the past decade, right-to-work states have
held a significant advantage in job creation, employer-provided
health insurance, and real purchasing power over their
compulsory unionism counterparts.
According to University of Colorado economist Barry
Poulson, after adjusting for cost of living, household income
in right-to-work state metropolitan areas in 2002 was $50,571,
nearly $4,300 higher than the average in forced-union-dues
state metropolitan areas. But the sad fact is, even though
South Carolinians have enjoyed the protection of a state right-
to-work law for decades, it is simply not enough. Railroad
workers and those employed in federal enclaves are exempt from
a right-to-work law's protection and must pay union dues or
fees or be fired.
Madam Chairman, that is why it is time for Congress to act
and return to all American workers their rights as citizens of
this country.
In 1935, Congress chose to enact legislation that forces
American workers to accept Big Labor's so-called
``representation'' just to get or keep a job. It is now our
responsibility to end compulsory unionism once and for all.
Passage of H.R. 500, the National Right To Work Act, would not
only give individual freedom back to America's working men and
women but would help our nation's economic output as well. That
is why I urge my colleagues to support this legislation which
expands the freedom of hard-working Americans and gives them
the freedom to choose whether to accept or reject union
representation and union dues without facing coercion,
violence, and workplace harassment by union officials.
Madam Chairman, thank you and my colleagues for this
opportunity to testify.
[Congressman Wilson's testimony may be found in the
appendix.]
Chairwoman Musgrave. We appreciate you being here today,
and I know that you have other commitments, so we thank you
very much. Stay as long as you can, or do what you need to do,
and thank you, Congressman.
Mr. Wilson. I have got a pesky staff that is asking me to
go to the next meeting.
Chairwoman Musgrave. I sensed that. Thank you very much.
Mr. Wilson. Thank you very much.
Mr. Lipinski. We may not agree on this, but I thank
Representative Wilson for coming to testify today.
Mr. Wilson. Thank you so much.
Chairwoman Musgrave. I will call our next panel at this
time. Gentlemen, we have a five-minute limit on testimony, and
so if you can, pay attention to the lights. When you get to the
yellow light, it is getting time for you to sum up, if you
would. So I will try to keep you on schedule out of respect to
all of you.
[Pause.]
Chairwoman Musgrave. Our first witness is Mark Mix. He is
the president of the National Right To Work Committee. Mr. Mix,
welcome.
STATEMENT OF MARK MIX, NATIONAL RIGHT TO WORK COMMITTEE
Mr. Mix. Thank you, Madam Chairman, and thank you for the
opportunity to speak in front of this Committee. Having been
here before and been silenced by your gavel, I will stay within
my time constraints.
Chairwoman Musgrave. Flattery will get you nowhere. Well,
actually it will, yes.
Mr. Mix. It is a privilege to be here to testify on behalf
of the National Right To Work Act, H.R. 500. It is important
that we understand what we are talking about here. The change
in the National Labor Relations Act that is being contemplated
by this legislation does nothing to restrict workers' rights to
join or associate with unions. We need to get that out up
front.
It is a very simple piece of legislation. As Congressman
Wilson stated, it does not add a single word to federal law. It
simply repeals those provisions that authorize the firing of a
worker for failure to pay fees to a union as a condition of
employment.
As Congressman Wilson said, America was established as a
free society, and all working men and women should be
guaranteed the right to decide for themselves whether a union
deserves their financial support. That right is guaranteed in
the American Constitution, and legislative attempts to deny it
must be nullified. That is what H.R. 500 would do.
Because of its complexity, our federal labor law is not
understood by most Americans, but the issue of right to work
could not really be any simpler. Every worker must have the
right, but no one should be compelled to join or financially
pay dues to a labor organization as a condition of getting or
keeping a job.
The National Labor Relations Act abuses the freedom of
working people to earn an honest living for themselves and
their families. Under this so-called ``Magna Carta'' of
workers' rights, employees who never requested a union, never
voted for one, never asked for one, are then forced to accept
its representation and then, to add insult to injury, forced to
pay for that unwanted representation.
The National Labor Relations Act is often perceived as the
greater charter of freedom. That was not entirely unintentional
by its drafters. In fact, it contains some of the most
deliberately misleading language human beings could devise.
Let me read just the essential portion of Section 7, the
preamble of the Wagner Act under ``Rights of Employees.'' It
says: ``Employees shall have the right to self-organization to
form, join, or assist labor organizations, to bargain
collectively through representatives of their own choosing, and
to engage in other concerted activities for the purpose of
collective bargaining or other mutual aid or protection, and
shall also have the right to refrain from any or all such
activities....''
Now, what could be fairer than that: the right to, the
right not to, the right to refrain? But let me finish the
sentence that I just read. It says: ``Employees shall have the
right to refrain except to the extent that such right may be
affected by an agreement requiring union membership as a
condition of employment....''
Now, union membership, actual union membership, has been
struck down by the courts. We are now at a point where they are
required to join and be a ``member in good standing'' and can
be forced to pay up to 100 percent in dues. So we do not
contest the fact that no one is required to join a union; we
are contesting the fact that they may be required to pay 100
percent of the dues to keep their job, and we would see very
little difference.
The National Right To Work Act legislation that has been
introduced by Congressman Wilson would end this cynicism by
simply repealing those provisions in the act. Even the most
avid promoters of compulsory unionism are forced to defend
compulsory unionism on the basis of pragmatism and not
principle.
No less of an authority than former Secretary of Labor
Robert Reich put this most succinctly. As a Harvard lecturer in
1985, Mr. Reich gave the following explanation of federal labor
law to an Associated Press reporter, and I quote his exact
words. He said, ``In order to maintain themselves, unions have
got to have some ability to strap their members to the mast.''
Continuing the quote: ``The only way unions can exercise
countervailing power is to hold their members' feet to the fire
... otherwise, the organization is only as good as it is
convenient for any given member at any given time.''
Former Secretary Reich has accurately, if callously,
described the basic principles of federal labor law, that the
convenience of union officials, i.e., the union security
clause, must take precedent over the freedom of employees who
wish to earn a living for themselves and their families.
Indeed, it is high time that we go directly to the heart of
the matter. Are the merits or demerits of congressional-
sanctioned compulsory unionism; freedom or coercion? This is a
real issue: Should union membership be voluntary or compulsory?
The underlying philosophy of those who believe in the right-to-
work principle can be best summed up in the words of Samuel
Gompers, the founder of the American Federation of Labor, who
urged, ``a devotion to the fundamentals of human liberty--the
principles of volunteerism. No lasting gain has ever come from
compulsion. If we seek to force, we but tear apart that which,
united, is invincible.'' That is Samuel Gompers, the former
president of the AFL.
The most perceptive observers, both inside and outside
organized labor, have long recognized that compulsory
membership in unions is not necessarily beneficial to rank-and-
file workers but beneficial to union officials themselves. The
National Right To Work Act, as I have said, would not add one
word to federal law. I would simply repeal the provisions
authorizing compulsory payment of dues as a condition of job
employment.
I thank the chairman again for the opportunity to testify,
and I think I will yield my 12 seconds back.
[Mr. Mix's testimony may be found in the appendix.]
Chairwoman Musgrave. Our next witness is Dr. Charles Baird,
professor of economics, California State University, East Bay.
Welcome.
STATEMENT OF CHARLES BAIRD, CALIFORNIA STATE UNIVERSITY, EAST
BAY
Mr. Baird. Thank you. Chairman Musgrave and Ranking Member
Lipinski and members of the Subcommittee, thank you for the
invitation to testify on the national right-to-work bill, and I
am doing so on my own behalf.
Chairwoman Musgrave. Dr. Baird, could you move the mike a
little closer? Thank you so much. It will help us to hear you.
Mr. Baird. The argument that it is proper to force workers
who are represented by a union to pay the union for its
services lest some would become free riders is, in a word,
absurd. Economists define a ``free rider'' as one who receives
net benefits from a collective action and can avoid paying for
them due to the inherent nonexcludability of some goods. There
is nothing inherent in any employment relationship that gives
rise to a free rider problem. Congress created the free rider
problem in labor relations when it enacted the principle of
exclusive representation into law in 1935.
Under the National Labor Relations Act, a union cannot
bargain just for its voluntary members. It must bargain for all
workers in the bargaining unit. Individual workers are even
forbidden to represent themselves. If the union represented
only its voluntary members, only they would receive any
benefits that emerged from that representation. Other workers
could choose individually to be represented by some other
organization, or they could choose to represent themselves.
Put another way, if unions want to eliminate the
possibility of any worker being a free rider, they should join
with me and advocate repeal of exclusive representation.
Without exclusive representation, there would be no need for a
National Right To Work Act because the question of union
security would be moot. The argument that exclusive
representation is justifiable as workplace democracy is
vacuous, as I explain in my written testimony, but I do not
have time here to state.
Given exclusive representation, the unions' free rider
argument amounts to saying that since Congress has agreed to
override individual workers' freedom of association and choice
of workplace representatives, Congress must also override
individual workers' freedom of association in deciding whether
or not to support a particular workplace representative.
Opponents of right to work argue that one violation of freedom
of association compels another violation of freedom of
association.
I argue that given the first trespass against freedom of
association, which is exclusive representation, a National
Right To Work Act is necessary to prevent the second trespass.
Many argue that exclusive representation is a fact of life
which we all must accept. Therefore, forcing workers to support
unions is necessary to prevent free riding. However, it can
never be proven that any worker free rides on any collective
bargaining agreement. A forced rider is one who suffers net
harms from some collective action who is compelled to pay for
them. Even if one grants that unions can raise the wages and
salaries that are paid to some workers, it does not follow that
even those workers, on a net basis, gain from union actions.
Costs and benefits are inherently subjective.
Suppose a worker gets a $10 increase due to a union's
activities. No third party can prove that the $10 increase
benefits that worker either more than, less than, or the same
as the cost that is imposed on that worker by, for example, the
disutility the worker suffers from being forced to associate
with the union. Any worker accused by a union of being a free
rider can argue with just as much rigor that he or she is a
forced rider. It is a conceit to argue that Congress or any
other third party can make that determination for any worker.
The argument that a National Right To Work Act would be a
trespass against the rights of states to choose their own union
security regulations is both disingenuous and silly. It is
disingenuous because those who make it are exactly the same as
those who advocate repeal of Section 14[b] of the National
Labor Relations Act which permits states to have right-to-work
laws in the first place. It is silly because the only reason
that states have to concern themselves with a right-to-work
question at all is because Congress imposed the National Labor
Relations Act on all states.
Congress trespassed against worker rights with the National
Labor Relations Act, and Congress surely has the right to make
amends, even the partial amends offered in the nation right-to-
work bill. For these and other reasons, I wholeheartedly
endorse H.R. 500 and recommend its speedy enactment. Thank you.
[Mr. Baird's testimony may be found in the appendix.]
Chairwoman Musgrave. Thank you, Dr. Baird.
Our next witness is Fred Feinstein, and he is a professor
at the University of Maryland. Welcome.
STATEMENT OF FRED FEINSTEIN, UNIVERSITY OF MARYLAND
Mr. Feinstein. Thank you. My name is Fred Feinstein, and I
am very pleased to be appearing before this distinguished
Subcommittee today. In addition to currently serving at the
University of Maryland, School of Public Policy, from 1994 to
1999, I served as general counsel of the National Labor
Relations Board.
The basic law on union security agreements, I believe, is
clear and has been in effect since enactment of the Taft-
Hartley law more than 50 years ago. Federal law prohibits
compulsory unionism. No individual can be forced, as a
condition of employment, to join a union. This is well
established and does not require further legislation. The only
question raised by this legislation is whether it is sound
federal policy to place additional limitations on the ability
of employers and unions to negotiate voluntary arguments about
how a union can be compensated for services it is, as many have
indicated, required under federal law to provide.
The law is also clear, again, as has been suggested, that
unions do not have the option of declining to represent
employees who do not wish to pay for union services. Under the
law, a certified union must provide fair representation to all
employees in a bargaining unit, regardless of their views about
the union. Now, we can disagree about this provision of the
laws,--the previous speaker has--but it is the law. Once it is
certified that a majority of employees seek union
representation, the union must fairly and even-handedly
represent each employee, whether or not an employee supports
the union and whether or not the employee is, indeed, a union
member. The union must represent each employee with the same
degree of diligence, which is not a trivial obligation.
Regardless of the obligation to represent all employees
with equal diligence, under current law, Section 14[b] of the
National Labor Relations Act restricts the freedom of employers
and unions to enter into a contract requiring employees to
contribute to the cost of representation expenses.
The bill being considered today would impose this
restriction on the 28 states that have chosen not to adopt
these provisions, the so-called ``right-to-work laws.'' It
would establish a national prohibition on the ability of
employers and unions to voluntary negotiate agreements
requiring employees covered by that agreement to compensate a
union for reasonable representation expenses. Union security
agreements would be prohibited not just in the 22 states but
nationwide.
This further restriction on the ability of unions to charge
for representation services would, in my view, undermine the
ability of unions to improve the working conditions of those
they represent. There is significant evidence that the benefits
of union representation are, indeed, substantial, and these
benefits are available equally to all workers covered under a
union contract, whether or not they are union members. For
example, according to BLS, wages of workers covered by union
contracts are 28 percent higher than wages of workers that do
not have union contracts.
It is also important to note that under federal law today,
again, as has been suggested, the fee that a union can charge
all employees includes only actual representation expenses.
This includes expenses for such things as grievance and
arbitration representation or the negotiation of collective
agreements. It cannot include expenses for activities that are
not representational in nature, such as expenses to support
political candidates or activities to promote legislation, and
unions are, indeed, required to maintain extensive records
apportioning all of the resources that they expend.
But I think, finally, it is important to view this
legislation in the broader context of concerns about labor law
today. Passage of this bill would add to the burdens, I
believe, that workers already endure when they seek to form
unions and bargain collectively. According to Human Rights
Watch, workers in the United States today routinely face
significant obstacles when they try to form a union, even
though it is their fundamental right to do so. The National
Labor Relations Act explicitly guarantees a worker's right to
form a union and bargain collectively, but in far too many
instances today, attempts by workers to gain union
representation are met with intense employer opposition that
lead employees, quite understandably, to conclude that they
lack a meaningful right to union representation.
According to reputable sources, approximately 50 percent of
workers today say they would join a union if they had the
chance, yet only approximately one-quarter of that number is
actually represented by unions. I suggest that this
representation gap is our most serious problem in terms of
examining federal labor policy.
In conclusion, then, I believe the right of employees to
decline union membership is adequately protected under existing
law, and a more pressing concern not addressed by the
legislation under review is protecting the rights of employees
who seek union representation.
Madam Chairman, again, I appreciate the opportunity to
appear today.
[Mr. Feinstein's testimony may be found in the appendix.]
Chairwoman Musgrave. Thank you, Mr. Feinstein, and at this
time, I will recognize George Galley, and he is an electro-
mechanical technician from Colt Manufacturing. Welcome to the
Committee today.
STATEMENT OF GEORGE GALLEY, COLT MANUFACTURING
Mr. Galley. Good morning, Madam Chairman and members of the
Subcommittee. Thank you for the opportunity to testify before
you today to share with you my personal experiences with the
issue of forced unionism and to explain why I hope Congress
will pass a national right-to-work law.
Chairwoman Musgrave. Mr. Galley, would you pull the
microphone just a little closer? Thank you so much.
Mr. Galley. I am employed as an electrician for Colt
Manufacturing Company in Hartford, Connecticut, where I have
worked for 44 years. As you know, Connecticut does not have a
right-to-work law to protect Constitution State citizens.
Workers like myself pay the price.
From 1961 until 1985, I was a member of the United Auto
Workers of America Union, [UAW], the union that represents
workers at Colt. In 1985, the UAW called a strike against Colt.
I followed the strike orders for one month and two days. After
this time, I decided that I needed to get back to work in order
to provide for my family. I believe there is no question I made
the right decision. Had I not decided to get back to work, I
would have been on strike for approximately four years with the
rest of the UAW members.
At the conclusion of the strike, Colt rehired all striking
employees. It was during this period when Colt handed out
cards, which they asked each employee to sign, the cards
authorizing the company to automatically deduct union dues.
Because I was aware, unlike many of the employees at Colt, that
there was an alternative to paying full union dues, I refused
to sign the card and requested information about any other
options available to me.
Despite my refusal to sign the union card, Colt kept
deducting full union dues from my paycheck. The situation
persisted for some time, and on more than one occasion, I
demanded information on my alternatives from Colt. Despite my
requests, I was never informed of my Beck rights and never
received any response other than I had to sign the union dues
authorization card.
Eventually, Colt stopped taking union dues from my paycheck
because I had continually refused to sign the union dues
authorization card. I was fired later that year.
After my termination, I filed a charge with the National
Labor Relations Board. After considerable delay, the regional
director issued a complaint. I was reinstated to my employment
at that time but was not reimbursed for the pay that I had
lost. My case was grouped with several other charges filed
nationwide. Rather than being heard by an administrative law
judge, the case went to the NLRB on motions for summary
judgment. However, once briefing was completed, the case
languished for nearly seven years. Ultimately, the board ruled,
but only after my attorney filed a petition for a writ of
mandamus with the D.C. Circuit Court seeking to force the board
to rule. However, I lost my case when the board finally made
its decision. Later, I appealed my case to the D.C. Circuit
Court and received a new trial in Hartford, Connecticut, which
I won.
I am now back on the job as a Beck objector, which
supposedly grants me the right to withhold the portion of my
union dues that would go to activities unrelated to collective
bargaining. I am still forced to pay 72 percent union dues as a
``fee'' to the UAW in order to keep my job. Every month, under
the threat of being terminated yet again, I am forced to write
a check to the UAW brass for the so-called ``privilege'' of
working at Colt.
Unfortunately, my experiences with the UAW have made me
realize that once a worker becomes a Beck objector, that worker
has no control over anything, even with the payment of union
dues, or so-called ``fees,'' that are demanded by union
officials. I have found that if a worker does not march in
lockstep with the union dogma, that worker's concerns are not
taken into account.
Federal labor law continues to force me to fund an
organization that purports to provide services--services that I
do not want. Worse yet, despite the fact that I pay what they
call my ``fair share,'' I am given no voice in how my money is
spent.
What I want is simple: I want nothing to do with the union.
That is why I am urging Congress to pass the National Right To
Work Act.
As I stated before, I have worked for Colt for 44 years. I
am proud of the work I do and enjoy working for the company. I
resent very much the fact that I can be fired for refusing to
support an outside, private organization. I do not believe that
any American should be forced to pay a private organization
just to hold a job and provide for his family.
Passage of the National Right To Work Act would give me the
freedom to do my job without the threat of being fired for the
refusal to pay union dues and decide for myself whether or not
a union deserves my support. I believe that decision is mine.
Union officials claim that they provide a service to
workers, but it should be up to individual workers whether or
not they want that service. Union officials are also very
political, so no worker should be forced to fund an
organization with beliefs contrary to his or her own.
[Mr. Galley's testimony may be found in the appendix.]
Chairwoman Musgrave. Thank you very much, Mr. Galley. I
appreciate your testimony.
We now have Michael Butcher here. He is an engineer with
Boeing. Welcome to the Committee.
STATEMENT OF MICHAEL BUTCHER, BOEING COMMERCIAL AIRPLANE GROUP
Mr. Butcher. Thank you, Chairwoman Musgrave and members of
the Subcommittee. Thank you very much for the opportunity to
share with you today my personal experience as a professional
employee with the federally approved practice of forced
unionism.
As one of millions of Americans that has been forced to pay
union dues, or so-called ``agency fees,'' as a condition of
employment, many of us against our will, I can tell you it has
been my hope for some time that Congress would work to pass the
National Right To Work Act.
Let me briefly introduce myself. I am an engineer employed
by the Boeing Company in Washington State where I have been
continuously employed since shortly after receiving a bachelor
of science in aeronautical and astronomical engineering from
Purdue University in 1986.
When I joined Boeing, union membership was completely
voluntary. That all changed in August of 2000, which was
shortly after the Society of Professional Engineering Employees
in Aerospace [SPEEA] union became an affiliate of the AFL-CIO.
The first thing the AFL-CIO did was send Richard Trumka out to
personally take over contract negotiations with SPEEA. I know,
based on a personal conversation I had with the director of
union relations at Boeing, that Trumka's number-one demand was
that Boeing require every professional employee to pay union
dues, or so-called ``agency fees,'' as a condition of
employment. He made it clear to Boeing management that no
contract without agency fees would be acceptable, no matter how
good the offered wages and benefits were.
From this point on, in order to receive a paycheck every
other week, I was forced to pay dues just for the so-called
``privilege'' of trying to earn a living. I was not unique
either because almost 6,000 of my fellow co-workers who had
historical not been SPEEA members were also forced to pay union
dues. Regardless of whether or not I thought the union
membership benefitted me, regardless of whether or not I agreed
with the union's policies, I was forced to pay union dues, or I
would have been fired. In fact, several engineers at Boeing,
including a friend of mine, had their employment terminated by
union request because they refused to pay union dues. I think
this is just plain wrong, and that is why I am here today.
Like many engineers at Boeing, I was recruited from out of
state, and I did not know there was an engineering union until
my first day on the job. As a professional employee, it was
never my expectation to be part of a union; therefore, I
consistently declined the union membership. Nothing has
happened during my career to change my initial impression
concerning the so-called ``benefits'' of union membership. In
fact, it has been my experience that the union has only been a
detriment to my career, and the services they claim to provide
are of absolutely no value to me. Furthermore, I find the
nonrepresentational activities of the union and its AFL-CIO
affiliates to be inconsistent with my beliefs and values. I,
therefore, have no interest in funding those activities.
It is true that under the U.S. Supreme Court Communications
Workers v. Beck decision, union officials cannot force me to
pay for politics or other activities unrelated to collective
bargaining. My person experience, however, is that this
protection is next to useless. You see, as a Boeing employee, I
learned that Beck is rarely enforced; therefore, SPEEA had
little incentive to abide by the law. When given the
opportunity to force myself and thousands of my co-workers to
pay full union dues, SPEEA failed to comply with its
obligations under Beck. In the case of SPEEA, I had to file two
complaints with the National Labor Relations Board, and it took
two years of legal process before SPEEA was forced to minimally
comply with Beck.
Initially, the union attempted to discourage potential Beck
objectors by unlawfully notifying myself and others that Beck
objections were subject to approval by the union and that an
objector would have to state your reasons for objecting.
Furthermore, they told us that they we would not be provided
any services of the union, including answers to simple things
like contract questions.
As a Beck objector, I was also forced to go through a
frustrating scheme that discouraged me from challenging the
union's expenditures, including repeatedly giving me a
breakdown of union expenses that was not performed by an
independent audit, as the law requires.
Despite continued and repeated violations of SPEEA's
obligations under Beck, the union received only a minor slap on
the wrist from the NLRB, which led me to conclude that
enforcement penalties for unions caught cheating on Beck are
negligible.
I have also found that even if unions have a lawful and
``legitimate'' audit performed by an outside organization, the
audit basically just ensures that all of the union's expenses
are accounted for. An auditor relies on the union to determine
which expenses are chargeable, and the bulk of that is based on
union timesheets which employees fill out which are not audited
at all. Therefore, the union can set the fee at virtually any
value they want.
Three years ago, I gave up on the Beck process and became a
religious objector. Since then, SPEEA has tried to have me
fired twice. Again, I am not unique, since personally I know
several other religious objectors that the union has tried to
have fired as well.
I have come to the conclusion over the last five years that
the current system is inherently corrupt because basically the
federal government has empowered the people who run the unions
to legally extort money from the workers of America. That is
right. The so-called union ``agency fee'' is widely referred to
in my office by the people I work with as the ``union extortion
fee.'' Even many of my co-workers who supported the union when
union membership was voluntary describe the union agency fee as
a mistake because they have seen how it has corrupted the union
and made it much less responsive to their needs.
The simple American freedom to choose who you want to
associate with is such a fundamental right, whether it be a
church, charity, or club, that there is absolutely no excuse
that this same right should not exist when it applies to
individual workers deciding whether or not to support or
associate with a union. Unfortunately, federal labor law
assumes that people like me are incapable of making that
choice.
[Mr. Butcher's testimony may be found in the appendix.]
Chairwoman Musgrave. Thank you very much, Mr. Butcher. I
appreciate your testimony.
Our next witness is John McNicholas, and he is the CEO at
Penloyd. Welcome to the Committee.
STATEMENT OF JOHN McNICHOLAS, PENLOYD, LLC
Mr. McNicholas. Thank you. Madam Chairman and members of
the Subcommittee, I appreciate very much the opportunity to
testify before you in favor of H.R. 500, the National Right To
Work Act.
There is no doubt in my mind that this legislation is
important. I agree with the statement, no worker should be
forced to pay union dues, or so-called ``fees,'' to a labor
union just to get or keep a job. That is why it is my hope that
Congress will work to pass H.R. 500.
I believe that Right To Work is good for employers and
employees alike, and I believe my experience has CEO of Penloyd
supports this viewpoint in a very tangible fashion. If Oklahoma
was not a right-to-work state, I might not be testifying before
you today as CEO of Penloyd.
In 2003, I became aware that Oklahoma Fixture Company in
Tulsa, Oklahoma, had filed for Chapter 11 bankruptcy. The
company employed workers represented by the carpenters union
and the painters union. I joined the team and considered
investing in the turnaround opportunity. After an extreme due-
diligence process, our team decided we could become profitable
again with good management decisions and some structural
changes. But before we make an investment, we assess risk
factors that could lead to failure. We identified a risk that
our workforce would not be willing to adapt quickly to changes
required to survive international competition because they were
union members. I do not believe we would have accepted that
risk if Oklahoma was not a right-to-work state.
On June 25, 2003, our team purchased the assets of Oklahoma
Fixture Company and created a new company, Penloyd, LLC.
Penloyd immediately hired most of the existing employees of
Oklahoma Fixture Company.
Since the purchase of the assets of the Oklahoma Fixture
Company, Penloyd has grown from approximately 250 employees to
500 employees. Several months after our acquisition, a very
important event for the company's future success, our employees
chose to decertify the existing unions in a free and fair
election at their workplace.
Penloyd specializes in retail fixture manufacturing. We
design, produce, warehouse, and ship products to retail stores
throughout the United States. Some of our well-known clients
include Dillard's Department Store, Federated Department
Stores, and Eddie Bauer.
I can tell you that Penloyd is looking for additional
opportunities to rehabilitate and develop existing
manufacturing businesses. If we are successful in this effort,
we will create more jobs for the American economy.
So at a time when many right-to-work states are losing
manufacturing jobs, Penloyd is seeking to create new American
manufacturing jobs. There is no doubt that taking on a business
that has previously struggled is no easy task, and this is also
well known to our lenders and our customers.
In acquiring the assets of Oklahoma Fixture Company, we
needed to have as many positive factors going for us as we
could before committing capital. One of those positive factors
was that Oklahoma was a right-to-work state. If we had faced
union officials who were militant and confrontational,
championing arcane work rules, and decreasing management's
decision-making flexibility, we could not have been successful
in saving the business and creating about 250 new jobs.
I believe the ability of union officials to force rank-and-
file workers to pay union dues, or so-called ``fees,'' in non-
right-to-work states sometimes leads to this militancy, support
of arcane work rules, and unnecessary confrontation with
management. It is certainly reasonable to deduce that union
officials that can force all of their members to pay union dues
have little or no incentive to take all of their members'
concerns completely into account. As long as the union
officials keep 51 percent of their membership happy, the
interests of the remaining 49 percent may be considered a low
priority.
That is why I believe that rehabilitating an existing
business is much easier, much cheaper, and much more efficient
in states with right-to-work laws, which create an environment
where union officials work with management to help achieve
goals common to both business and rank-and-file workers.
In right-to-work states, I believe union officials are much
more likely to be concerned with keeping their members happy
and may not oppose a much-needed management decision that
workers see as benefiting everyone in the long run. This is the
way it should be, and if Congress would pass a national right-
to-work law, it would be a huge step in the right direction.
I know I am not just one of a handful of business leaders
who feel this way. I know many other CEOs and business owners
who have similar outlooks and experiences. I feel that union
officials should have to earn the rank-and-file members' union
dues. This way, members might be given more control over their
union's activities. A union official may temper confrontational
opposition to common-sense change, knowing that rank-and-file
members would be able to withhold payment of union dues if they
feel union officials were not acting in the workers' best
interests.
I believe that when individual workers are given liberty,
it is good for business and employers alike. In my experience,
I can tell you that Oklahoma's right-to-work law was a major
factor in our decision to acquire the assets of Oklahoma
Fixture Company and helped make it possible for the creation of
approximately 250 jobs in a little over two years.
My experience as CEO of Penloyd and my personal belief in
freedom leads me to support the National Right To Work Act. I
hope Congress will work to pass this important legislation.
[Mr. McNicholas' testimony may be found in the appendix.]
Chairwoman Musgrave. Thank you very much.
Our last witness is George Leef. He is the executive
director of John William Pope Center for Higher Ed. Policy.
Thank you for being here, Mr. Leef.
STATEMENT OF GEORGE LEEF, JOHN WILLIAM POPE CENTER FOR HIGHER
EDUCATION POLICY
Mr. Leef. Thank you. Representative Musgrave and members of
the Committee, my name is George Leef. I am the director of the
John William Pope Center for Higher Education Policy in
Raleigh, North Carolina.
Long before I took an interest in higher-education issues,
however, I was interested in the labor law, and I thank you for
the opportunity to address the Committee today on the state of
federal law on labor relations. That was a subject I paid great
attention to when I was in law school, and it is one that I
have subsequently written about on several occasions.
Back in 1990, I wrote a paper entitled ``The Case for a
Free Market in Labor Representation Services,'' which was
published in Cato Journal and a copy of which, I believe, has
been provided for you. Much more recently, I wrote a book on
the history of the right-to-work movement, entitled Free Choice
for Workers, which explains what our labor relations statutes
say and why I find it to be inappropriate for a free society.
The book has just been published by Jameson Books.
In my testimony, I would like to discuss the origin and
provisions of the National Labor Relations Act, the keystone of
federal labor relations policy.
Historically, laws pertaining to labor, including union
representation, were matters for state government. That is
because the Constitution limits the power of Congress to the
regulation of interstate commerce, and the particulars of the
relationship between employer and employee were not regarded as
falling under the founders' meaning in the phrase ``interstate
commerce.'' The states, for the most part, and in my view,
correctly, left questions of labor relations policy to the
common-law principles of contract, tort, property, and agency.
During the Great Depression, the idea that labor relations
law was not properly a concern of the federal government was
abandoned. Organized labor had strongly backed Franklin D.
Roosevelt in the 1932 election and, once in office, FDR was
quite willing to repay the favor with legislation desired by
union officials. The result was the passage of the National
Labor Relations Act, the NLRA, in 1935, which federalized labor
relations law.
Just in passing, I would like to say that some very eminent
legal scholars regard the NLRA as both unconstitutional and
extremely bad policy.
The NLRA created a host of unique powers that take freedoms
away from both workers and employers in order to assist union
officials in organizing and maintaining their unions. For the
present, I will mention just two of them. First, the law
establishes a procedure for union elections wherein workers may
vote for representation by a union, sometimes with a choice
between unions, or no union representation.
Under the law, the winning union becomes the exclusive
bargaining representative of all of the workers in the
bargaining unit, thereby compelling those who wanted a
different union or no union at all to accept the victorious
union as their representative. Furthermore, the results of that
election are binding indefinitely and cover subsequently hired
individuals.
Thus, the law transforms that which had formerly been, and
should be, a matter of personal choice into a collective
decision which is quite difficult to reverse. Nowhere else in
American law is a person denied the freedom to choose whether
he will represent himself or to decide exactly who he wants to
represent his interests.
Second, the NLRA makes it a legal offense, an unfair labor
practice, for an employer to fail to bargain ``in good faith''
with the certified union. Almost always, one of the first
orders of business once a union has been certified is for its
officials to negotiate a union security agreement with
management, and we have heard some testimony to that effect
just recently. Those agreements state that workers in the
bargaining unit must pay the union's dues and obligate the
employer to terminate anyone who does not. While employers are
not legally compelled to consent to the demand for such a
mandatory dues payment provision, refusal to do so can lead to
costly legal proceedings with the NLRB. This is, therefore,
bargaining with one side holding a gun. Combined with exclusive
representation, we can see how the law promotes compulsory
unionism.
Widespread abuse of union power during World War II led to
the passage of the Taft-Hartley Act in 1947, amending the NLRA
in several ways, most significantly in recognizing that states
could choose to enact what are called ``right-to-work laws''
shielding workers against union security agreements. Today, 22
states have enacted such legislation, and the question for the
Committee is whether a National Right To Work Act would be
wise. I believe that it would be.
First, as a moral proposition, I maintain that no one ought
to be compelled to pay for the services of any private
organization that he has not voluntary agreed to join or
contract with. Many union-represented workers object to the
political uses of their dues money, for example, and others
feel that union officials do little or nothing that is
beneficial to them in their jobs. Compelling them to pay dues
is just as objectionable as compelling someone to pay fees for,
let us say, Internet service that he does not want.
And second, as a practical matter, right-to-work protection
helps to make union officials more accountable. Where workers
can simply stop paying dues if they become disenchanted with
what the union is doing, the discipline on union officials is
much stronger than if the worker has no recourse other than to
quit his job.
Passage of a National Right To Work Act would be an
important step toward the restoration of a labor policy that is
consistent with a free society. Further steps would need to be
taken to reach that goal, but this is a useful one that I
enthusiastically endorse.
Chairwoman Musgrave. Thank you very much, Mr. Leef.
I have been told we are going to have votes right away, so
let us restrict ourselves, Members, to just five minutes.
Mr. Mix, I think I will start out with a question for you.
Is it true that unions must represent every employee in the
workplace, or do they have the freedom to forego the privilege
of exclusive representation and bargain only for their members?
Mr. Mix. Thank you for that question. I think that we have
talked a lot about that. The fact is, according to former
Chairman of the National Labor Relations Board William Gould in
his book, Agenda for Reform, he states very clearly, and I
consider him to be an expert on labor law, he says federal law
``permits members-only bargaining without regard to majority
rule or an appropriate unit and without regard to
exclusivity.''
So the fact is here you have a Clinton appointee, William
Gould, saying that exclusivity is not, indeed, the law of the
land under the National Labor Relations Act, and union
officials could choose to represent only their own members. And
there are several other pieces of information that address this
issue, and I would like to, with your permission, Madam
Chairman, submit a study on union representation that is
foisted on workers, not vice versa, for the record that answers
this question considerably.
But the fact is, when we have asked union officials--as a
matter of fact, in 1993, a bill was introduced in this Congress
to repeal that exclusivity in the law to allow voluntary
bargaining where it would codify the fact that unions would
only represent their workers. We invited Lane Kirkland, we
invited Ted Kennedy to join Dick Armey to sponsor the bill to
endorse that bill and to wipe out this so-called ``problem''
with workers who are not paying ``representational fees,'' and,
of course, there was deadly silence from the other side. The
fact of the matter is, we believe that if unions would
represent only those members that wanted their representation,
this problem would go away.
I think it is interesting to note, in a couple of
developments just recently in the paper--one is a CSN News
Service story regarding an AFL-CIO--this was around Labor Day.
It says: ``AFL-CIO nonaffiliate tops one million members.''
They have got this organization out there that allows people to
join the AFL-CIO in a nonunion membership status, and they are
crowing about how successful it is that these workers who want
to join them voluntary have signed up, and they are growing in
support.
So I would say that, no, under the law, a union official is
not required to become the monopoly bargaining agent. They
could negotiate a clause in a contract that would say they
would represent only their members and those that wanted their
representation.
Chairwoman Musgrave. Thank you very much.
Mr. Lipinski, do you have questions?
Mr. Lipinski. Thank you. I will try to do it quickly. I
have a lot of questions.
Mr. Feinstein, can you respond to what Mr. Mix just said?
Mr. Feinstein. I must say, I am intrigued by it. I do not
really understand it. It is my understanding of the law that
there is an obligation. The union does have an obligation, at
the risk of having charges filed against it if it fails to do
so, to represent all members of the unit in terms of
grievances, in terms of arbitration, and in terms of any other
interests that the union represents with equal diligence, as it
represents any other member of that unit.
Now, I am not honestly sure what the quote that you are
referring to, but I must say about this whole question of
exclusive representation that it has wide ramifications because
are we talking about, and are people suggesting, that if less
than a majority of a unit seeks representation, that that is
consistent with the perspective being suggested here? Let us
say 35 percent or 45 percent of the workers seek union
representation. Of course, under the prevailing interpretation
of labor law, they do not have a right to do so, and, again, I
would question, are people here, other members of this panel,
in favor of an arrangement which does exist in other countries,
I have to say, where the whole notion that you need a majority
before you get any form of representation, which is the
principle of our law, should be abandoned? I think that that is
an interesting proposition. I think that is a proposition that
perhaps some unions today or some advocates for unions today
might consider discussing.
Mr. Lipinski. Okay. I just want to move on because we do
not have much time. We can come back to that. I want to ask Dr.
Baird, who talked about the free rider problem--you are an
economist, and as a professor of political science, also
familiar with free rider problems, I am sure you acknowledge
free rider problems do exist, and you are saying now--my
understanding is that there are those who are nonunion members
who are in a union shop, that they are not receiving benefits
for what they have to give.
My understanding is you are saying, and Mr. Feinstein had
talked about how there are higher wages when you have a union--
there is also a lot of evidence that there are better medical
benefits, better pension benefits--it is my understanding you
are saying that this is not true, that there is not any benefit
from having a union. Is that what you were saying?
Mr. Baird. No, sir. That is not what I am saying. I am
saying two things. I am saying, first of all, that it is only
because of exclusive representation that there can be any kind
of free rider problem in labor relations. There is nothing
inherent in the employment relationship between an employee and
employer that gives rise to any free rider problem, but because
of exclusive representation, yes, there can be free riders.
There can be.
Now, as to the empirical question of whether unions, on
balance, benefit workers relative to their nonunion
counterparts, that is arguable. There are several empirical
studies which suggest that unions do not, on average, benefit
workers--make them any better off than comparable workers in
comparable industries in comparable circumstances that are
union free.
Mr. Lipinski. There are certainly situations, and I will
not argue with Mr. Galley or Mr. Butcher--they have had their
experiences, and I am not going to say that there is never any
problem that one sees, but I think it is akin to saying people
who say they do not agree with things the government is doing
and saying, I am not going to pay my taxes. The idea is that if
people band together, they can get a better deal than an
individual can do. If anyone would go out and try to negotiate
for themselves, it is much more difficult because--do you think
there is an uneven power between an individual who is going out
to bargain for themselves and an employer?
Mr. Baird. No, I do not. I think that whole idea of labor's
bargaining-power disadvantage is a hoary myth, and that goes
back to the 19th century, and I can point you to a study that
was published in the Journal of Labor Research written by
Morgan Reynolds which, I think, substantiates that, or at least
makes it an arguable position.
But I want to get back to the first thing that you started
saying. You were making an analogy between the union question
and government. Can a taxpayer refuse to pay because it
disagrees with what the government does?
Chairwoman Musgrave. I am going to cut you off, and if
votes are not called, we will come back to that question, if we
may. Thank you.
Mr. Sodrel, do you have questions?
Mr. Sodrel. Can I make a 30-second statement beforehand?
Chairwoman Musgrave. You can use your five minutes however
you want to.
Mr. Sodrel. Well, thank you, ma'am.
In my view, unions represent working people. They are
professionals. They give advice and provide service to the
working people. In my professional life, I have employed the
services of professionals to represent me. I have employed
attorneys, accountants, and some other professionals directly.
I belong to several trade associations as well, but all of
these associations were voluntary and mutually beneficial. If I
thought I could do the job myself, I was free to do so. I
believe the U.S. Constitution guarantees me that right, and I
do not know how I can deny that right to my fellow Americans.
To me, the issue is about liberty. It is solely about
liberty. We fought a revolution over 200 years ago over the
issue of individual liberty. The only question I have is I am
curious, Mr. Butcher, how much did you have to pay, the agency
fee versus union dues, in other words, as a percentage. Did you
get a 20-percent discount, or did you get a 30-percent
discount, or do you remember?
Mr. Butcher. Over the two years I was a Beck objector, it
varied. As I mentioned, the first couple of breakdowns of
expenses that they gave us were totally phony. They had not
been verified by an audit, and those hovered towards 90
percent. When they were finally forced to give us a legitimate
breakdown of expenses that was verified by an audit,--keep in
mind, the auditor is only merely adding up the expenses to make
sure that he has done the numbers correctly--a half a million
dollars of expenses suddenly appeared which were not previously
there, okay, mainly affiliate fees, and the Beck fee was
lowered down to 85 percent, and it floated down in the 82-to-
83-percent range. Since then, it has been gradually creeping
up.
Mr. Sodrel. So you got anywhere from a 10-to-20-percent
discount off standard union dues.
Mr. Butcher. Yes, yes.
Mr. Sodrel. Thank you. I yield back the balance of my time,
Madam Chairman.
Chairwoman Musgrave. Thank you very much. Ms. Moore, do you
have questions?
Ms. Moore. Thank you so much, Madam Chair and Mr. Ranking
Member. I can tell you that I am just quite stunned by this
testimony, being the daughter of union members. My mother was a
teacher, and my dad was a member of the UAW.
I guess I want to ask a couple of questions. There were
some references to studies regarding the well-being or lack
thereof of union members versus nonunion members, but I am
looking at the United States Bureau of Labor statistics, which
I think we all, in the public and private sector, rely upon,
the Census Bureau, to give us accurate data versus private
studies that there may be some mission involved, and what they
have said is that 88 percent of private sector union workers
have access to retirement benefits in their jobs compared with
only 56 percent of nonunion workers. Seventy-three percent of
union workers have access to defined pension plans, which we
know is a very critical benefit these days, 73 percent versus
16 percent of nonunion workers, and that 92 percent of union
workers have access to job-based health care benefits, a real
crisis of 48 million uninsured workers, compared with 68
percent of nonunion workers. So these are Bureau of Labor data.
I guess my bottom-line question to Dr. Feinstein, number
one, is, are people forced to join a union?
Mr. Feinstein. As I indicated in my testimony, and as, I
think, the other testimony here today suggested, no, people
cannot be forced to join a union. People can be required to
reimburse the union for expenses expended in doing the
representational services that a union is obligated to do for
all of the people in the relative bargaining unit.
So membership really here is not the issue. The question
really is, can employers and unions voluntary negotiate a
provision in a contract which says that the union has the
ability to cover its expenses in part by charging reasonable
expenses to each member that it is obligated to represent?
Ms. Moore. So the expenses would be actually negotiating,
you know, pension benefits, health care benefits. You know, I
have 59-percent unemployment among African-American men in my
district. They would love one of these UAW union jobs that you
guys are eschewing at this point.
I can understand the employer's perspective, the
turnaround, the gentleman who turned the company around in
Oklahoma--you said specifically that a risk in this investment
were very well-paid carpenters and painters and that in order
to be competitive internationally, you had to reduce these
risks and that they chose to decertify the union.
I am just wondering, because I am very concerned about
globalization and international economics in my service here in
Congress, do you really think that with global competition that
we are going to win what I call this ``race to the bottom''
where, you know, say folk in China working for 61 cents an
hour? Are these who you regard as your competitors? You know,
what wage would carpenters and painters have to be paid in
order for you to regard yourself as competitive with places
that produce products at 60 cents an hour and use child labor?
Mr. McNicholas. China is definitely our biggest competitor.
We are not changing the wage we pay. What we look at before we
commit capital and make an investment is can we work together
with the workers to be more flexible, creative, smarter, use
our advantage of short lead time to win amongst competition in
the U.S. as well as international competition? Before we invest
that capital, our view is that we get more cooperation in
states that have right-to-work laws. Before we employ that
capital, we want to get the best environment possible because
it is extremely competitive and extremely difficult.
Ms. Moore. Well, North Carolina is a right-to-work state,
and they have lost more manufacturing jobs than anybody else,
so I just am failing to see the connection. But the real
question I guess I want you to respond to, the highest cost of
any investment, as you know, is the workforce, so if your
competition is someone who makes 60 cents an hour, it does not
matter what economies of scale you are able to realize on
infrastructure and equipment and all of that. If you cannot
bargain--they do not have a union anymore, so you would not
have to bargain with the union, but you would have to negotiate
60 cents an hour in order to be directly competitive with the
global economy.
Chairwoman Musgrave. Thank you, Ms. Moore, very much.
Ms. Moore. Thank you so much.
Chairwoman Musgrave. We will see if we have time for
another round before we are called to vote. I will start with
Mr. Mix. Tell me about trends in union membership.
Mr. Mix. Well, the trends in union membership are that they
only represent about 7.9 percent of the private sector
workforce in America today. The actual number of union members
is not down that much, but the union density is down, and that
is what the AFL-CIO is complaining about. I would suggest to
you that the good news is that jobs are growing, and so the
union density is down while the number of actual union members
is down, I would say, a million or so from some peak union
density periods.
But the fact is, is that workers are saying no to organized
labor out in the workplace. The number of certification
elections is dropping dramatically at the National Labor
Relations Board. I think union statistics are that only about
80,000 workers were unionized through union-certification
elections last year and that the bulk of new union members came
through so-called ``card-check certification,'' which is
another whole topic that we could get into.
But the trend has been that union density is diminishing,
and I think it is reflective of what we have heard in our
testimony today that union officials are unresponsive to rank-
and-file workers, and the fact is that, as the distinguished
former general counsel says, this is an agreement between
employer and unions. It says nothing about employees and their
rights. And I would suggest to you that like the AFL-CIO--as a
matter of fact, Linda Chavez Thompson, the vice president of
the AFL-CIO, after quoting publicly in a battle in a Tennessee
after several years of trying to repeal the right-to-work law,
she admitted publicly that it probably make sense for them to
go out and try to get workers to join them voluntarily, and we
wholeheartedly agree.
In Idaho, when we passed the right-to-work law up there, a
TV reporter stuck a microphone in front of the AFL-CIO
president's face that night and said, ``What are you going to
do now?'' and he said, ``I guess we are going to have to go out
and sell our services to members, something we have not had
much practice with.'' Those are compelling statements by union
officials.
In the State of Iowa, a union official for the teacher's
union, the NEA affiliate out there, when asked about taking a
position on one of the radical stands that the parent-teacher
union had taken at their convention, was asked, on a 50,000-
watt, AM station, whether or not they were going to agree to
that, and the union president said, ``No, we are a right-to-
work state. We would lose all of our members.''
So these, I think, are anecdotes that are reflective of the
employee choice that we believe should be part of the law that
currently is not, and I think if unions would take the advice
of Samuel Gompers and adhere to voluntary institutions, they
would be better off. As we see from the statement from CNN News
Service on Labor Day saying they have created a million new
``nonunion members'' to the AFL-CIO, that is an exciting
development. We have another quote from a union official in
Arizona who said the right-to-work law actually has led to
increased unionization in the State of Arizona because they
have to work a lot harder to get union members.
So those are exciting anecdotes, and I think a system of
volunteerism is the secret to organized labor's success.
Chairwoman Musgrave. Thank you. Mr. Lipinski, do you have
another question?
Mr. Lipinski. One question for Mr. McNicholas. You talked
about the decertification of the union and how helpful that
was. Could that have happened in any state? Did that rely on it
being a right-to-work state?
Mr. McNicholas. I do not know the answer to that.
Mr. Lipinski. A union could be certified even if it is a
free-bargaining state. Is that correct, Mr. Feinstein?
Mr. Feinstein. Yes. That is correct.
Mr. Lipinski. I will come back to Dr. Baird because you
have been wanting to jump back on this. My understanding now,
from your view, is that there is no benefit--there can be no
benefit to workers joining together--
Mr. Baird. I did not say that.
Mr. Lipinski. --to negotiate because an individual is not
at any disadvantage.
Mr. Baird. I did not say that there are no benefits to
union representation. I would never say that. That can only be
decided on a case-by-case basis. The question I am addressing
is whether there can be free riders, and, again, there can only
be because of the perversity of the law, Section 9[a], that
creates exclusive representation. That is the only reason there
can be free riders. Now, on a case-by-case--
Mr. Lipinski. Why is that the only reason there could be
free riders?
Mr. Baird. Because if a union represented only its
voluntary members and no one else, it would be bargaining for
only those voluntary members, and only those voluntary members
would get the union-generated benefits.
Mr. Lipinski. Create multiple, as many as possible, so
different workers could be getting different--you have your
union members, and then you have everyone else there who is not
a union member is a free agent who negotiates--has their own
benefits.
Mr. Baird. Not necessarily. If you want a good, modern
example of legislation that is not based on exclusive
representation, that is based on members-only bargaining, I
would point you to New Zealand and its 1991 Employment Contract
Act where workers can decide whether to be represented by a
union, whether to be represented by a third party who is not a
union, or whether to represent themselves, and, yes, under
those circumstances, there can be different pay being paid to
people who are doing similar work simply because of the
different outcomes of bargaining, and I do not find anything
wrong with that whatsoever.
Mr. Lipinski. Mr. Feinstein, do you think that that could
work here?
Mr. Feinstein. Well, it is certainly a system which is
vastly different from the one we have in place where, again,
you need a majority to support the collective bargaining
process before members have any ability to sit down and
negotiate with an employer. Again, I pose the question that I
posed before: Are we talking about a situation in which any
number of workers less than a majority can come together and
request negotiations, and a meaningful process of negotiations
would proceed even if a majority do not support it in the
workplace? Again, that is a system which prevails in many
places in Europe, and many have suggested that it might work in
this country, but it is very different, and under our laws, the
union is, indeed, required to represent all of the workers in
the units for which they have been certified. The majority
representation, exclusive representation, that we have been
hearing about is the requirement here, and the suggestion of
doing away with that would be something that is vastly
different than the system we have in place.
Mr. Baird. Could I respond to that briefly?
Mr. Lipinski. Go ahead, Mr. Baird.
Mr. Baird. I am fully in favor of having a situation where
if 10 percent of the workers want to have a union represent
them, that is perfectly okay with me. I am arguing against
monopoly bargaining, which is exclusive representation. I want
members-only bargaining, which is the form of unionization we
had in this country under Section 7[a] of the National
Industrial Recovery Act passed in 1933, and it is the most
common form of union representation in the developed world.
Mr. Lipinski. Okay. Mr. Leef, I was just informed that you
want to be recognized. I did not see you there. Go ahead.
Mr. Leef. If I could comment just briefly on the question
we have been discussing here about exclusive representation, I
came across an interesting passage in a very pro-union
publication called Working USA recently. The article was
entitled ``Toward a New Labor Rights Movement.'' The authors
are James Pope, Peter Kellman, and Ed Bruno, all known to be
vigorous advocates of unionism. Here is what they said. ``Under
Section 9 of the NLRA, the presence of a majority union
extinguishes the right of dissenters to bargain as individuals
or to form their own minority unions. Thoughtful, pro-union
analysts contend that when a majority union is insulated
against competition, its officers may tend to ignore the
interests of minorities. The fact that the overwhelming
majority of industrial countries rejects exclusive
representation should give us pause.''
I think they are right. Exclusive representation was a bad
mistake in 1935. The National Right To Work Act we are
considering does not get rid of that, but I think that is
something that we should be thinking about, even more radical
change in our labor laws.
Chairwoman Musgrave. Thank you, Mr. Leef.
Mr. Lipinski, anything else?
Mr. Lipinski. Mr. Feinstein?
Mr. Feinstein. Yes. As I suggested, I do think that there
are many supporters of unions--I am sure it is not a unanimous
view--who would be interested in pursuing further conversation
and thoughts about this whole question of minority unions and
exclusive representation.
I think it is important also to understand some of the
other concerns, I think, that need to be addressed in the
context of talking about that kind of fundamental change. They
do also, I believe, relate to the rights of workers in the
workplace. For example,--
Chairwoman Musgrave. Thank you. We are going to wrap it up
now. We have been called to vote.
Gentlemen, I want to thank you all for your excellent
testimony today. I appreciate your time and your expertise, and
thank you for being in this hearing, and we are now adjourned.
[Whereupon, at 11:28 a.m., the Subcommittee was adjourned.]
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